What does it mean for crypto to go “mainstream?”
Well, obviously, lots of people buying cryptocurrencies is one way to measure it.
And, of course, institutional money flowing in is another mark of going mainstream. (And on that point, you should read this story about how former “Odd Lots” guest Aaron Lammer ended up going to work for a new crypto trading venture backed by Steve Cohen).
So yeah, crypto is going mainstream by all kinds of measures.
There’s another one that’s a bit harder to quantify, and that is the changing ideological perceptions. For a long time, there’s been a perception that it’s rooted in some kind of anarchy, with Bitcoin specifically often associated with right-wing, anti-Fed, gold-bug types. The fact that Bitcoin uses a lot of electricity to secure the network has helped cement the perception of “crypto” as a kind of antithesis of popular, liberal, ESG-ish ideals.
But things are changing on that front, and mainstream commenters who previously turned up their noses at the space are capitulating.
In the last few days, two notable, mainstream pundits announced their 180s. In a Substack piece last week, the writer Will Wilkinson wrote: “I regret to inform you that it’s totally legit and crypto/blockchain networks really might be technologically, economically, and politically transformative. Ugh.” Things like DAOs (decentralized autonomous organizations) and crypto-based games have prompted him to admit that the space actually matters.
Prior to Will’s piece, Adam Davidson (the creator of the NPR hit podcast “Planet Money”) wrote a post titled: “From contemptuous to indifferent to curious to pretty damn excited: my journey to web3.”
Both Will and Adam are excited about the potential for blockchain-based networks to be more decentralized and democratic and make the internet better in one way or another. And again, both Will and Adam are pretty different than the laser-eyes Fed hater you might still associate with the space.
Anyway, people take their cues from influential figures in the media, so it seems very likely that people will look to folks like Adam and Will as de facto “permission” to indulge an interest in crypto and maybe do a 180.
There’s something important here, though, which is that for this new wave of converts — and they are converts — Bitcoin specifically offers them very little. There isn’t much gaming or DAOs or metaverse stuff being built on the Bitcoin network. There’s some, but most of it is happening on chains like Ethereum, which currently offer more expressive smart contracts.
What’s more, the energy intensity of Bitcoin mining is going to remain a turnoff to this new crop, even if it gets greener over time. Adam admitted to me as such over Twitter that his enthusiasm for crypto does not extend to proof-of-work coins.
It should be noted here that Ethereum is also proof-of-work, just like Bitcoin. However, at some point a transition is planned for a different mechanism (proof of stake). So if that appears to be on track, then it gets a hall pass, so to speak, for the amount of electricity it’s consuming now.
There was a point, previously, where Bitcoin was *the* gateway to crypto more broadly. But for a new crop of people, who are enthusiastic about “crypto” or “Web 3.0,” their stance toward Bitcoin may be indifference (because it doesn’t offer advanced smart contracts) or outright hostile (because of Bitcoin’s electricity consumption).
Tension between Bitcoiners and the broader crypto world has been escalating for awhile. Expect it to keep rising.
-Read original story on Bloomberg