Article written by: YANCEY STRICKLER

Article translation: Block unicorn

Cryptocurrency is dead, and only a few will lament it. Now that the bubble has burst, the real revolutionary work can begin.

In 2022, people witnessed the collapse of the cryptocurrency world.

Few, except those who have lost large sums of money during the pandemic or whose Twitter avatars have been blasted with laser eyes, are mourning the fall of cryptocurrency, whose excesses have become an expensive, grotesque example of scams and empty money (assets with no substance to back them up) in recent human history.

This period and the craze could not last forever, and it did. The cryptocurrency era is now coming to an end. Not because of SBF (although he certainly contributed), but because of the accumulation of many things we are all familiar with: the wild price fluctuations of cryptocurrencies, making them almost impossible to use as a practical currency; offshore tax planning to circumvent regulation and financial controls; the securitization of everything; and so on.

The end of the cryptocurrency era marked another major event: the incorporation of a new, proof-of-stake version of Ethereum. This evolution created cheaper, less energy-hungry infrastructure and ushered in a new chapter in blockchain history: the on-chain era.

The cryptocurrency era

The cryptocurrency era began with the release of the Bitcoin white paper in 2008 and ended in September 2022 when Ethereum switched to a proof-of-stake validation model.

The cryptocurrency era is characterized by the creation of the blockchain technology vision and its first applications: cryptocurrencies, especially Bitcoin and Ethereum.

The benefits of the cryptocurrency age include the invention of the blockchain and the widespread diffusion of the ideas behind it; the creation of new forms of digital value; and the power to reshape institutions and financial norms.

The defining products of the cryptocurrency era are cryptocurrencies themselves — cryptocurrencies, crypto infrastructure, crypto investments, crypto organizations, and finally, infrastructure derivatives like non-fungible tokens (NFTs).

The downside of the cryptocurrency age is that human greed is amplified through cryptocurrency - Ponzi schemes, scammers, charlatans, and endless hype are creating and inflating assets on a massive scale, sometimes even using illegal means.

The eventual collapse of cryptocurrencies will be mourned by almost no one except those directly affected, and cheered by almost everyone else. Cryptocurrency Era: 2008 - 2022 (R.I.P.).

On-chain era

In September 2022, Ethereum successfully switched to a proof-of-stake model, significantly reducing its energy and financial costs, making Ethereum close to a practical (rather than theoretical) world computer for the first time. With this merger, the on-chain era began.

The on-chain era will be defined as a period in which most of the world’s innovation and cultural output, shared history, and information infrastructure are built, stored, and accessed on-chain.

The benefit of the on-chain era is that it empowers individual users and user groups to maintain digital sovereignty, they can move freely between various markets and spaces without being trapped in a single platform, and they can control their own works, data, and context. This allows various creators, consumers, and institutions to securely connect with each other and access key information in a much simpler and more powerful way than the isolated systems of the past and present.

The defining product of the on-chain era will be that digital history and identity become more secure, more useful, and less centralized—but also more decentralized than ever before, ending the true killer app of Web2: platform lock-in. A work or content minted on-chain will establish provable provenance of the source of that information or work; distribute that work through the shared ledger of a public blockchain; store and maintain it through a decentralized network of computers and code; and allow it to be useful across the web and in our daily lives.

The downside of the on-chain era will be the limitations of blockchains themselves. How big can blockchains scale? How fast can they get? How cheap can they get? Can they handle larger amounts of information? How complex can decentralized applications get? What about zk-proofs? And, as always, there’s the problem of getting started.

For consumers, the convenience and sovereignty of on-chain systems are the killer apps, not some hyped currency that promises it might be valuable someday if everything goes well. In the cryptocurrency age, all the hoopla was about increasing cryptocurrency usage. In the on-chain age, the goal will be more practical and useful: making information more durable and permanently accessible.

Where the cryptocurrency era relied on sometimes deceptive promises of future utility value to sustain itself, the on-chain era will create utility now and in the future.

Technological Revolution and Financial Capital

The idea that blockchain infrastructure may be going through different stages is not just a narrative device. Past technological revolutions have followed a similar pattern. In Technological Revolutions and Financial Capital, British-Venezuelan economist Carlota Perez observed an important evolution in technological change: they occur in stages, and bubbles often create real applications in the later stages.

During the railroad era of the 19th century, local crowdfunding was used to build regional rail lines based on their technological potential, with promises of great wealth. These projects almost always failed, leaving the landscape littered with useless rail tracks and leaving local true believers destitute.

These entities eventually understood that it was not enough to just build a rail line. There needed to be activity, commerce and industry to support it. In the absence of those, it was (say it with me) too early.

Later, Perez observed, another generation of entrepreneurs and projects took advantage of the infrastructure built during the bubble and started using it. The core rail infrastructure became cheap enough, and the rails were plentiful enough, that they began to have practical value. Perez found that bubbles often create markets, just not in the way the initial promoters imagined, and certainly not on the timeline they falsely promised.

Notably, Perez’s book was published before the dot-com meltdown of 2002 and its late-dot-com recovery, and the stages of the internet itself have evolved at strikingly similar levels to the predictions of her model.

Railways and blockchain

So what does this mean for the end of cryptocurrencies? How are blockchains like railroads? These are questions Odd Lots’ Joe Wiesenthal recently asked in a tweet and an excellent podcast. His own answers listed a few things — all financial, all representative of the cryptocurrency era — but didn’t come off as a strong case for conviction.

Does blockchain have a utility similar to that of railroads? What infrastructure in the cryptocurrency age is actually useful for a new era of innovation?

It’s not complicated: it’s the blockchain itself. The blockchain is an invaluable and increasingly useful and usable infrastructure for storing and transferring information, assets, and ideas.

By storing information on-chain, information gains a provable provenance, identifying its source, its collaborators and supporters, and its context in a permanent and publicly accessible way without the need for approval or maintenance by any institution. This system of independent verification and dissemination of knowledge — whether it be ideas, artwork, or personal information — is truly revolutionary. The way children see the internet as a magical, unique thing that contains everything is not far from the experience that the on-chain era will bring.

Making information provable, infinite, and built on a shared public database sounds mildly interesting, but mostly mundane — hardly worth a cultural fight. As the cryptocurrency era fades from memory and its excesses and frauds continue to be revealed, the on-chain era running in the background will grow.

In Web2, publishing information and ideas will generate content. In the on-chain era, publishing information and ideas will create history.

Today, a project I co-founded called Metalabel is launching a new product that shares our vision for creative work in the on-chain era: a new format called "records". Records are digital containers for creators to issue and sell versions of their work, and can contain any creative media (art, writing, music, performance, video, design, games, ideas, etc.) and any form of creation (physical, digital, conceptual, ephemeral, live, exclusive, mass and niche). Once purchased, records exist permanently on the chain, so even if the platform disappears or changes ownership, creators will not lose their work (or as a collection for supporters). For us, this is what an on-chain product looks like.

Zora is not alone in bringing culture on-chain. The growth of Sound.xyz, the many creators who have begun cataloguing their work on-chain, and countless other projects are all examples of the shift to on-chain.

In the future, projects like this won’t talk about cryptocurrencies. They’ll talk about information, media, and other digital elements becoming secure and portable because they’re on-chain. As a result, we’ll have more control over our digital lives. Our identities will follow us the way we want them to, not the way Facebook and Google want them to. We’ll pay for these services not only with cryptocurrencies, but also with credit cards and digital options. It may not be perfect, but it will be more convenient than the maze of usernames, passwords, and accounts that everyone is dealing with now.

In the end, this new era will have cryptocurrencies to thank for getting us here. The past decade led to a huge bubble that has now burst, but it also paved the way for a very different future.