It’s 2pm on a Thursday on a sweaty spring day in Ramat Gan in 2030. The smell of freshly cut shawarma hangs in the air as I enter the Israel Diamond Exchange. I’m there to meet one of the early crypto entrepreneurs. Shifting from foot to foot, he nervously scans the entry hall until he spots me. He rushes forward, proffering a shaky hand in greeting. He prefers that we not use his real name, so I decide to call him Shmueli.
“It wasn’t meant to end like this”, Shmueli says when I ask him about what went wrong. We are sitting down in comfortable chairs sipping herbal tea. “It’s good for the nerves”, he says under his breath, tapping his cup, “but I guess it was inevitable once the news came out”, he adds, switching topics as he stares down into his trembling hands. He is referring to the news that had broken two weeks earlier that Satoshi Nakamoto was, in fact, a gang of savant monkeys kept chained in Tim Draper’s basement. “It was kind of a wake-up call for the whole community”, he adds glumly.
So, what’s next for crypto? He launches into a frank, if jargon-filled, assessment of the future. “In the grand scheme”, he says, looking dramatically up at the ceiling, “there are three use cases for crypto: the philosophical, the theoretical and, lastly, the practical”. “We have finally arrived at a point where focus is determinedly on the practical and that will be the making or breaking of crypto”, he adds.
The philosophical use case he refers to is the libertarian or anarchic case for crypto: a currency to compete with (if not replace) national currencies, to undermine the money monopoly of national governments and empower the individual. “That game is over”, Shmueli spits, “Sure, non-government crypto currencies will persist as an asset class, to be held for speculative gain, but the idea that it will be used by every Chaim-Yankel Pimpsenholz to buy his weekly challah is over”. If their own inherent volatility and susceptibility to fraud hadn’t been enough to kill them off, governments getting in on the game - here he refers to the recent launch of CBDC – Central Bank Digital Currencies – by the Fed and the Bank of England – was, he says, “the final nail in the coffin”.
The theoretical or “because we can” use case is exemplified by the large number of projects where crypto was being used not because it was necessary or even desirable, but merely because it was possible. For example, using crypto for things like fractional ownership of assets, which while possible using block-chain technology is, ultimately, Shmueli notes, “a solution in search of a problem”. “We saw a lot of projects like this, started by people who were enamoured by the technology and keen to put it to use, but who weren’t addressing any real pain point, any real need”.
This brings us then to the practical use cases for crypto – where problem and solution meet - Shmueli rattles of a list of projects in which he has personally invested, until he finally mentions a platform for fractional ownership of pets - implemented via smart contracts setting out and automatically assigning the rights (custody/visitation rights) and obligations (share of grooming/food/medical costs) of each fractional owner. He sees the surprise in my eyes. “Yes, maybe it is”, he admits, “but it is pretty cool too!” He sees that I am far from convinced. He smiles and says, “And the best thing of all is that the company managed to buy the URL: pets.com”