Let's make crypto more boring. And more useful.

2021 and 2022 were indeed exciting years in crypto. The euphoric bull market of 2021 proceeded by the supernova-like implosion led by the downfalls of super projects FTX and Terra LUNA have left the industry reeling and observers wondering whether it was all just a hype-fueled illusion.

While there will always be the gamblers among us who revel in the quick returns, megaphonic personalities and high drama, here's my (very unexciting) take on the crypto and web3 industry: let's make crypto more boring. Let's focus less on speculation and making fast money and focus more creating quality software that creates real value for people over the long-term.

Vitalik Buterin, the founder of Ethereum, shares this sentiment. In a recent blog post , he urges the crypto industry to focus on building useful software for the sake of their utility while shunning projects that narrowly focus on quick profits:

Many of the more stable and boring applications do not get built because there is less excitement and less short-term profit to be earned around them: the LUNA market cap got to over $30 billion, while stablecoins striving for robustness and simplicity often get largely ignored for years. Non-financial applications often have no hope of earning $30 billion because they do not have a token at all. But it is these applications that will be most valuable for the ecosystem in the long term, and that will bring the most lasting value to both their users and those who build and support them.

Despite the noise, core crypto and web3 software development and usage has remained steady.

As hurricanes raged overhead last year, core blockchain activity continued to steam forward. Although growth rates abated, throughout 2022 startups and developers were still building and many people continue to utilize web3 services.

Through 2022's turbulence, the number of active Ethereum wallet addresses has remained relatively steady as people continue to use core crypto services in verticals such as DeFi, cross-border transactions, prediction markets as well as for emerging use cases like web3 music.

Blockchain, at its core, is just software that can be applied to solve real world problems.

The challenges we face as a global community seem to become more vexing over time, only to be met by our ingenuity and ability to create tools and technologies to surmount them.

From a first principles perspective, blockchain is just software. More specifically, it's a set of protocols that extends the internet's ability to transmit not just information, but concepts of money and ownership. "TCP/IP for money " is one phrase I use to describe blockchain. For the first time, real economic activity and trade can happen natively on the internet, without a bank or financial institution ever being involved.

We face growing challenges ranging from rising inflation and hyperinflation, unprecedented political division, digital misinformation, excess power lying in the hands of powerful technology firms, to an inefficient global monetary system and lack of access to effective lending and financial facilities across various parts of the world. Crypto, blockchain and web3 are just tools that can be applied at scale to start to try solving some of these issues.

Crypto is being used as an alternative to cash where needed, globally

In Argentina, hyperinflation wreaks havoc on the average consumer's ability to survive economically.

"Money here is like ice cream," said Marcos Buscaglia, an economist in Buenos Aires, the capital. "If you keep a peso for too long, it melts in terms of how much you can buy with it."

Crypto has been a lifeline for citizens of countries facing hyperinflation. In Venezuela and Argentina, Bitcoin has become a popular alternative to holding cash, as cash can lose value on virtually a daily basis.

Additionally, crypto is by far the most efficient and cheapest way to send money across borders. Bitcoin has become an indispensable tool for many migrant workers to send cash back to their families back at home.

As a cash equivalent and store of value, crypto is playing a real role in real people's lives.

Using crypto to fix social media

Today's social media landscape is dominated by powerful centralized companies that have complete control over our personal data, our social graphs (friend connections), and the policies that govern our speech. As a result, social media companies exhibit monopolistic behavior, with slow innovation and low responsiveness to user needs, and enforcement of opaque censorship and visibility policies such as shadowbanning.

One of the most promising verticals within crypto and web3 is decentralized social networking. New protocols are being developed that offer social networking functionality, but in which the data ownership model is reversed such that users own and control their data and connections and can freely move their data to participate in different apps and platforms.

The next big thing in 2023 is decentralized social networking. We're finally beginning to see users waking up en masse to the risks of centralized social networking companies, not least catalyzed by the recent threatened ban of TikTok and Twitter's capricious?suspensions?and prohibiting?linking out?to other platforms. Users, creators, and businesses have realized that it's dangerous to invest in building an audience on these platforms when there's a looming risk that the rug gets pulled out from under them ... I think we'll see a decentralized social network start to gain steam in the next year that allows users to own their social graph and content and port it across various applications. -- Li Jin , Variant Fund

In this world, we would no longer become locked into platforms and increased competition would force social networking applications to be responsive to user feedback and continuously improve their services to remain relevant (rather than focusing on user lock-in via the social graph).

Using crypto to create more vibrant online communities

Web 2.0 brought with it the ability to connect with other people online, and peer-to-peer sites such as Reddit, Wikipedia, Kickstarter and Airbnb became flourishing digital communities.

Just this week, Reddit introduced a major change and incorporated blockchain into its core community points and user reputation system. Now, members earn tokens on the blockchain for their participation in their communities. These crypto points are stored in their crypto wallets, and belong exclusively to each member, and cannot be touched by Reddit or any other entity.

Imagine the difference between earnings points or rewards that can be erased at the stroke of a button, compared to earning points that you own exclusively, secured in a cryptographically locked vault. As well, Reddit members with greater reputation on the blockchain will be granted greater voting weight in important polls and will be able to vote and drive decisions over how their communities are run.

I believe we're entering an era in which web2 companies that run online communities will increasingly hand ownership, control and power over to their community members, and these communities will be stronger, more authentic, and more vibrant than their web 2.0 predecessors.

Using crypto to revamp the economics of the music industry

Today's music industry, dominated by streaming platforms such as Spotify and Apple Music, is characterized by convenience for consumers - but musicians still struggle , with all but the biggest stars all but scraping by financially. Streaming revenues are simply not adequate to fund a vibrant music industry - your $10 monthly subscription payment only goes so far to fund an entire ecosystem of creators, labels and publishers.

On average, however, artists earn little per stream.?Spotify, which controls?nearly one-third?of the worldwide market share for music streaming, pays artists an average of just $0.0038.?To earn a single dollar through Spotify, an artist would need around 229 streams. - OnLabor.org

Innovative music artists like RAC are already finding the economics of web3 music monetization to be far superior to streaming revenues. RAC sums it up nicely like this:

A lot of people seem to miss that the entire point of NFTs is to make content FREE while making ownership scarce. scarce ownership empowers artists to make WAY more income without stupid ad based models. it eliminates the exploitative models of Spotify, Apple, Amazon, etc. Unit based / per play economics in an infinitely copiable medium makes no sense whatsoever. This is a drastic economic shift and it flips the entire model that we've grown accustomed to. -- RAC

The web3 music industry is poised to grow substantially this year, and we'll begin to see the early signs of how the music industry can be fundamentally transformed by a new economic model driven by blockchain. Services such as Sound.xyz , Audius and Royal.io are enabling musicians to sell digital editions of their songs and albums, and even sell "shares" (tokens) representing a stake in their music and business.

This is driving a new dynamic in which music fans are becoming more like venture investors in and promoters of their favorite artists, investing substantial sums to be early owners of exclusive digital assets that can appreciate in value as the musician grows in popularity. Musicians are earning orders of magnitude more revenue from these nascent platforms already compared to their streaming incomes, and almost certainly continued innovation will drive this monetization higher and higher over time.

Crypto in 2023: Let's move towards quality, utility and sustainability

While the "get rich quick" ethos will always be endemic to crypto, I think we'll start to see a shift towards quality, utility and sustainability in society's perspective on crypto in general, or any new software or internet ventures that involve blockchain and digital assets. We'll continue to see new tokens, new NFT projects, and new schemes enabling digital ownership, but increasingly we'll be asking the following questions about these:

• What real world utility does this project offer to real people?
• Does this token have any use beyond basic price appreciation?
• Are the economics of this token sustainable? Or does it present Ponzi dynamics, requiring new people to buy into it to sustain itself?

As the web3 ecosystem recovers and repairs itself from the Great Implosion of 2022, we'll enter an era where blockchain software starts to weave itself into our daily lives and become useful for increasingly important, everyday applications.