Challenges and Opportunities in the Encryption Industry: Stay True to Our Original Aspiration and Continue Moving Forward

Recently, social media has been filled with criticism and ridicule of the current state of the encryption industry, including from those who have benefited from it in the past. As a practitioner, I believe there is no need to stand on a moral high ground and blame others just because the industry is in a downturn. After all, it is the existence and development of this industry that has created their achievements today. The phrase "stay true to the original intention" precisely conveys this meaning.

Currently, the encryption circle is facing a downturn similar to 2018 or 2022. This is not just due to price issues, but also because people's confidence in the industry has shaken. The past two years have been called the "Year of Hope", but now most people scoff at this hope. The main reason is that the long-anticipated "altcoin season" has not arrived as expected, coupled with the industry seemingly failing to nurture new strong narratives in the past two years, or some emerging narratives quickly becoming fleeting.

However, the real impact on the industry may not come from within, but rather from an external factor—the rapid development of artificial intelligence. AI technology has captured the attention of most investors, including those in the encryption industry. It is understood that in the past year, many practitioners, especially developers, have turned to the AI field, which has undoubtedly become the last straw that broke the confidence of the industry.

Nowadays, as the "shanzhai season" disappears without a trace, and with comments about the "lack of new narratives" flooding in, coupled with AI crazily seizing market share, it seems that all that is left for the crypto circle is the sighs of practitioners. In addition, the recently emerged "coin stocks" track has directly siphoned off the last portion of liquidity.

In the face of the concentrated outbreak of these subjective and objective problems, the encryption circle has once again fallen into a low period. However, we must remember that without a trough, there can be no peak. So, where are the opportunities in this industry now and in the future?

First, regarding the issue of "Shanzhai Season". While we cannot predict whether there will be another crazy market like in 2017 or 2021, if we only look at prices and returns multiples, there are still many wealth creation myths in the past two years. However, these opportunities are no longer a large-scale "full bloom", but rather concentrated in certain specific sectors. This trend is likely to continue, and we need to adjust our mindset and expectations.

Analogous to the internet era, Amazon's stock price plummeted by 90% when the internet bubble burst, but over the following 20 years it increased by more than 600 times, exceeding 40 times its peak at that time. Therefore, finding the "Amazon" in the encryption industry has become a new opportunity.

Secondly, regarding the new narrative. The recently spotlighted stablecoin is a great example. Whether in the West or the East, stablecoins have become a hot topic. At the recent Shanghai Lujiazui Forum, the central bank governor mentioned stablecoins for the first time, which is enough to demonstrate their importance. At the same time, a certain authoritative media outlet also rarely published an article introducing stablecoins.

The influence of stablecoins should not be underestimated. Its successful promotion could be as revolutionary as the launch of Alipay back in the day. Alipay solved the security issues of online payments, thus driving the development of e-commerce and various online trading activities. Perhaps, when we look back in 10 years, we will find that the transformation happened in that year.

The prosperity of stablecoins will greatly expand the user base of the encryption circle, truly opening up the market and bringing long-awaited new users, ushering in the industry's "iPhone moment". However, this process is still in its early stages and may require 1-2 years of accumulation.

Finally, regarding AI. For many years, I have believed that blockchain is not just a technology that serves humanity; it could largely become a native tool for AI, addressing the issues of information transfer between machines and real interaction between machines and humans. It seems that this direction is gradually being realized.

With the development of AI agents, ensuring secure and reliable communication between machines that can be verified by humans seems to be achievable only through the use of blockchain technology. Unless we want future AI agents to be completely uncontrollable and disconnected from the real world.

Currently, this direction is still in a very early stage for blockchain. Of course, the combination of AI agents mentioned here with blockchain does not refer to the kind of concept that was hyped up in January of this year; that was more of a short-term speculation and should not be overly emphasized.

Therefore, when some changes have occurred or are about to come, what we can do is not resist, but rather embrace and adapt to the trend.

Criticism is not a form of compliance, but a struggle against the inability to accept the status quo. After expressing emotions, we still need to move forward. Because reason will eventually triumph over emotion, the encryption industry will not remain in a slump forever. Why not face the challenges again and embrace new opportunities?