Offchain: Four Big Trends For 2024
A quick tour through four areas that could really give this bull run something to holler about.
Last issue I was writing about the arch-cynic’s take on the coming bull run. The basic argument was that crypto tech and culture hasn’t sufficiently advanced since the last cycle, leaving this one to coast to new highs on vapours and the dumbest of dumb money. Click the green button and stop asking questions.
But that’s over-simplifying things. A year of scandals couldn’t kill crypto and it certainly didn’t slow down the pace of launch and innovation coming from the developer community. And hey, what can I say, I’m an optimist at heart – there’s a reason why we can’t pull ourselves away from crypto and I still get a kick from seeing the strange and unexpected ways the story unfolds.
So here are four things that I’m keen to see more of in 2024. Roll slides!
AI
There’s been more than a whiff of cryptomania to the “add AI to everything” frenzy of the last 18 months, so it seems only fitting that crypto is swinging back around to demand its share.
It didn’t take long for the AI hype to give way to the realisation that the absolute slop produced by these engines was going to destroy the internet and possibly the notion of truth entirely. But you know what gets truth? The blockchain. For the Crypto x AI true believers, it’s also a way of pushing back against centralisation and curation of LLM training data.
With that said, the vast majority of these AI plays are the equivalent of the Long Island Iced Tea Corp rebranding as the Long Blockchain Corp in late 2017. So, do your research, read uncle Vitalik and step carefully.
Gaming
In many ways crypto gaming was the public face of the 2022 metaverse fiasco and so the whole field carries a fair amount of baggage. The pure crypto games were either atrocious, boring, or both, and usually had uber-cringe names like ETH Commando: Moon Mission, while attempts to gently insinuate NFT tech into mainstream games were greeted like a guy arriving drunk and pantsless at a 5-year-old’s birthday party.
Two years on though and things are starting to change. The survivors of the last run have welded on userbases and vastly improved tech. Gaming powerhouses like Take-Two and Square Enix are starting to weave NFTs into their offerings. Pureplay gaming tokens like BEAM are on an absolute tear. Experiments in Autonomous World building are strange and thrilling.
The reason for the hype is simple: by some estimates around 2 billion humans regularly play games. It’s not a reach to think that the thing that could drive crypto mainstream could be an otherwise unremarkable game that hits the zeitgeist and just happens to introduce a whole world to the joys of decentralised non-fungibility.
DePIN
DePIN sounds for “decentralised physical infrastructure” and the dullness of its name can only be matched by the power of its idea.
Basically DePIN networks allow those forms of physical infrastructure that could only be previously controlled and sold by powerful centralised bodies – think power generation, cloud computing, AI data training, processing power, wireless infrastructure – to be deployed across decentralised marketplaces. People provide the data or energy or bandwidth or whatever, while other people buy what they need, when they need it.
DePIN lives in the Goldilocks zone of crypto. It provides a much-needed, readily understandable service that could only possibly be feasible with blockchain technology. The barriers holding it back are those facing most crypto projects: poor user experience, token economy abstraction and reaching the critical user density that allows it to start undercutting the AWS and Googles of the world. Oh and also a 10 word summary that doesn’t make the listener instantly fall asleep.
RWAs
I feel like I’ve been talking and reading about RWAs for half a decade now. They’ve always been the thing that’s gonna blow up in “the next 3-6 months” without ever quiiiiiite getting there.
But now it feels as if the planets may finally be coming into alignment. As the tech matures, more and more players are coming into the space, focussing on everything from carbon credits to real estate, debt, art, venture capital, commodities and a whole lot more.
The promise of RWAs can be summed up in one word: liquidity. When you buy a house you basically pour all your liquidity into it and then cover it with sand. With an RWA you could tokenise your ownership of the house to unlock capital – without the punitive and arbitrary rules put in place by your friendly neighbourhood bank.
But the consumer focus is just a smokescreen for the real feeding frenzy. The prospect of opening illiquid assets to partial investment and trade is the kind of thing to make Wall Street traders quiver in anticipation. And once it starts, there’s no reason to stop. The Boston Consulting Group sees the assessable market for RWAs in 2030 as somewhere between US$4 and US$16 trillion. Yes, with a T. And if that doesn’t qualify as real world adoption (RWA!), I don’t know what would.
Luke for CoinJar
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