1confirmation Newsletter - Issue #100
Purists and Tourists in Crypto
Satoshi published the Bitcoin white paper and open source code in 2009 and the crypto industry has had an open ethos ever since. From the beginning anyone could copy the code, change the marketing and launch their “own” coin and network. Tens of thousands of coins and networks have followed and some of them have gone on to have copycats of their own.
The open ethos in crypto goes against conventional business wisdom which suggests that when you create a product that people find useful, you should protect it and prevent others from copying and competing with it. The open ethos prioritizes collective progress over short-term profits for any one group – by making it easy for anyone to copy and build upon a product, you foster the intelligence and creativity of the entire world, which leads to more progress in theory. This open ethos has worked well and I’d argue crypto would not be relevant in the world today without it - though it comes at a cost.
The benefit of an open ethos is that anyone can build upon existing products and make them better, bringing more utility to the world. The cost of an open ethos is that anyone can simply copy a product, co-opt a narrative with marketing tactics and contribute nothing to progress while extracting profits from people. There’s an argument to be made that the copycat value extractors contribute to progress in the long-term – even if unsuspecting retail gets duped by a flash in the pan copycat chain (Terra/Luna) or investment charlatans (3AC), perhaps it increases the awareness and long-term staying power of the space anyways. But the value extractors are clearly hurting a lot of people (and the perception of the industry) and I think it’s important to explore whether the cost of the open ethos can be mitigated.
Some suggest that gatekeepers (regulators, trusted brands) are the best way to mitigate the cost of the open ethos. But this doesn’t just mitigate the cost, it kills it. Gatekeepers hinder progress - we’ve seen that in every industry including finance until Bitcoin. I think understanding the open ethos and purist and tourist mental model is the best way to mitigate the cost and the goal of this essay is to help anyone start thinking about the concept.
Purists and Tourists
The purist is the person steeped in knowledge of the history and nuance of the craft – they understand the nuance and build with all of what has come before in mind, showing appreciation to the authentic and bringing something genuinely new to the table. Products built by purists can be too niche for mass market, but they are original and built in earnest.
The tourist is the person who doesn’t care about history or nuance and just wants to create a product that resonates with people. What they’re building may resonate for a moment in time, but tourists can be easy come, easy go. If a product is too tourist, there’s no long-term staying power and what is hot one day disappears the next.
The tourist - purist mental model was created by fashion designer Virgil Abloh. He articulated it beautifully here. His perspective was that the biggest impact in design comes at the intersection of purist and tourist. He created and led some of the most impactful consumer brands in the world, like Louis Vuitton and Off-White, based on this mental model. When I learned about his approach, I realized it was the same approach I had been using in crypto for the past decade.
Below is how I view the current landscape of purists, tourists, and the intersection of the two from a crypto company, cryptocurrency, NFT and founder perspective:
Purists
Blockchain.com is the OG self-custody wallet company. The founders believed that the real utility of BTC was it’s ability to allow people to be their own bank and maintain censorship resistance and to this day their core product stays true to this and demonstrates deep understanding and appreciation for the space. They’ve struggled to grow beyond a niche user base though and failed to adapt when Ethereum came along – it turned out that hosted wallets that offered easy buy/sell functionality (Coinbase) and the ETH self-custody wallet (Metamask) were bigger ideas.
Bitcoin is the OG cryptocurrency. It catalyzed an industry and is the reason we’re all here today. It works great as a scarce store of value that doesn’t change, but hasn’t evolved much beyond that. The BTC maximalists correctly called out many scams that followed BTC but also incorrectly called “scam” on genuine innovations that pushed the space forward, like Ethereum.
Rare Pepe was created as a collection of NFTs on Bitcoin in 2016, predating all NFTs on Ethereum. Rare Pepe NFTs were created on Counterparty, a protocol on top of Bitcoin that never broke out beyond a niche user base for many reasons including lack of interoperability with BTC wallets.. Rare Pepe still has a strong brand and collector base within crypto natives but in terms of mainstream attention it was surpassed by collections built on Ethereum like Cryptopunks and BAYC.
Hal Finney was an early Bitcoin user and received the first Bitcoin transaction from Satoshi on January 12, 2009. He also was a core engineer on the most important cryptography company that predated cryptocurrency, PGP Corporation and arguably the most important early contributor to the cypherpunks listserv and BitcoinTalk forum. His work was immensely important to getting the space where it is today but a small fraction of the users in the space have heard of him.
Tourists:
FTX is an exchange founded in 2019. The company hasn't offered anything new and additive to the space, but they were aggressive in marketing and capturing mindshare during the 2020-21 bull market. There’s a questionable history here given that the team that built the exchange was also operating a trading firm called Alameda Research and they’ve pumped many coins on their platform but few question this. For now there seems to be a powerful media narrative behind the company.
Solana is an “Ethereum killer” that launched in 2019 and markets itself as a “blockchain built for mass adoption.” The project brought no original ideas to the table but they’ve made some design tradeoffs that make it a cheaper and faster chain than Ethereum in the short-term. I believe these design tradeoffs have allowed Solana to have success in a bull market when retail money pours in, but ultimately they will prevent it from being successfully long-term. When a blockchain is purely about efficiency optimization and there’s nothing interesting culturally or socially and there’s been a real lack of new products pushing the space forward, the upside is limited.
Bored Apes Yacht Club is a profile pic (PFP) project launched in 2021. It came after thousands of other PFP projects but was able to get early grassroots adoption and then tremendous support from celebrities like Justin Bieber, Jimmy Fallon, and Steph Curry.
Michael Saylor came on the scene promoting Bitcoin in the 2021 bull market. He hasn’t built anything interesting in crypto and doesn’t have anything interesting to say about crypto – he just parrots what the Bitcoin community has been saying for over a decade. But his MicroStrategy firm got attention for buying BTC and he’s become a media personality.
Purist x Tourist:
Coinbase is an exchange founded in 2012. It was the first product that made it simple for users to link a bank account and buy BTC, and has been at the forefront of making crypto innovations accessible to the masses for almost a decade. The company made a decision early to take custody of crypto on behalf of users, which adds some centralization that purists don’t love, but there’s no denying the product has been massively important in onboarding new people to crypto.
Ethereum launched in 2015, 6 years after BTC. Without Ethereum, we wouldn’t have decentralized finance or non-fungible tokens. There’s some sacrifices that Ethereum made on decentralization relative to Bitcoin but there’s no denying that most of the innovation in the space over the past 7 years has come out of the Ethereum blockchain and developer ecosystem that emerged on top.
Cryptopunks is the OG 10K PFP collection that helped catalyze the revolution in creative empowerment that NFTs are leading today.
Vitalik Buterin is the founder of Ethereum. He’s an inclusive founder that has led the blockchain ecosystem pushing the space forward in the public and exudes all the qualities that you’d want out of a crypto leader.
I’m not suggesting that my perception of what’s purist, tourist, and the intersection is what everyone should believe to be true. I know many will take issue with my perception and claim their bags lie at the intersection. The truth is that most of the public discourse on crypto revolves around what bags people own. But I believe that thinking about the concept and coming to your own conclusion can greatly help you build and invest in a space with a lot of noise, and the intention here is just to get more people thinking about the concept.
Required reading
No one is doing more for the open metaverse than Webaverse — twitter.com
Webaverse sold $10M in NFTs earlier this year and the community is strong ahead of the launch of the first game built with the Webaverse tools, upstreet
Aspect is the leading NFT marketplace on Starknet — twitter.com
Watch this space
Track value of NFTs with DeepNFTValue — twitter.com
NFT volumes have declined with broader market but CryptoPunk sales have been relatively strong
Farcaster is a crypto native social network
The Farcaster network is growing and offers great perspectives from many of the most interesting minds in crypto
Stride is bringing liquid staking to Cosmos ecosytem
Stake and LP on Osmosis at the same time with Stride
Rated offers Ethereum staking analytics
Learn more about the data behind Ethereum 2.0