We are already seeing the crypto industry shifting into high gear.
The idea of move fast and break things is going to be the norm. For those unfamiliar with this phrase, it is an idea that developers tend to operate by. The idea is that nothing happens until you flip the switch to live. That is when all the bugs are truly found in software.
Thus, it means to simply push as much stuff live as possible and then run around fixing what is broken.
At the core, the idea is to keep developing and adding to the software. The world of bits can move at an incredible pace, something we are about to see with crypto.
Over the last 4 years, led by Gary Gensler, we saw an administration that was anti-crypto in the United States. There were numerous lawsuits as Gensler operated from the standpoint of enforcement rather than providing clarity to the industry.
Since the new administration took over, the handcuffs are off.
The Acceleration of the Crypto Industry
The mess Gary Gensler created is being unwound. Many lawsuits are being dropped, seemingly on a weekly basis.
On Thursday, the firm said that the SEC agreed to end its lawsuit against Consensys, pending commissioner approval. The announcement echoed those from other major firms like Coinbase, Robinhood, Uniswap Labs, and OpenSea in recent days as the SEC closes investigations and kills active lawsuits against crypto firms en masse.
Moves like these are a positive for the industry. To truly provide a field where businesses can thrive, clarity is needed. This does not come from enforcement, suing companies to comply with laws that were written almost 100 years ago.
Joe Lubin, one of the Ethereum co-founders and head of Consensys, is optimistic about the moves. This is something that could lead to a crypto explosion. We saw the United States basically on the sidelines for the last 4 years. Major projects were either stalled or moved offshore.
According to Lubin, U.S. agencies have become increasingly receptive to learning about blockchain and staking cryptocurrency since Trump has taken office.
“Other parts of the government are recognizing our technology and exploring ways to support it,” he said. “Whether that is through stablecoins, market structures, or David Sacks' work on crypto and AI—the acceleration is definitely on.”
Even though markets have decided to sell off, the underlying industry is gaining momentum. With the US government removing itself as a major obstacle, software developers can do their thing.
For the last couple years, I harped on the fact that infrastructure is required. We are missing some fundamental tools to really advance the industry. Part of the delay could have been the fact that developers (companies) were nervous about what the government would do.
It seems that, with the pullback, there is a new sentiment among those looking to build and develop.
The Pace of Innovation
To me, the relationship between crypto and AI is crucial. Since they are going to be linked, the pace of crypto will need to parallel that of AI. Here is a major challenge since the latter is operating at warp speed.
Fortunately, AI can help with the advancement of crypto since the models are expanding their ability to code.
Crypto had a built in advantage. For years, a lot of what was built was open source. This provides a strong foundation when networks are expanding. The future is an abundance of networks, as servers multiply, more data is housed (and used), and agents are built on top to perform all kinds of services.
Another shift that is taking place is that crypto is no longer competing against Wall Street or the traditional financial system. That was the focus for a long time, exemplified by the output of financial applications and services. However, things are changing in this realm also.
To start, traditional finance is moving into tokenization. They still seek to remain gatekeepers so we will see how that works out. But a more important move is afoot.
Big Tech will be involved. X is already bringing out X Money. It is uncertain whether this will involve crypto but it is likely that will be added at some point.
The other path I see being taken is the fact that US stablecoin regulation will happen. This is going to open up the gates for companies to bring out their own currency. It would not surprise me if Google and Meta jumped on the bandwagon, bringing tokens to their platforms.
Why is this important? We know both of these companies have major platforms and are development AI models is being incorporated into all their services.
This is going to be the battle in my opinion. It is evident that Big Tech has no interest in decentralization. Even their idea of open source is limited, such as Meta with Llama. They opened up the weights but the datasets are under wraps.
Fortunately, as we saw with Deepseek, open source models can show up at any time. With the accelerating decline in the cost of GPUs (per performance) along with other advancements such as algorithms, the tentacles of AI are going to keep spreading horizontally.
The question is whether anyone uses them. With so much traffic going to the bigger platforms, the integration of AI and crypto means these services will be in front of billions. Are they going to seek something else out?
Crypto offers the ability to incentivize activity. Of course, there could be a chance that Big Tech also incorporates this idea into their platforms.
The answers to these dilemmas will start to unfold as the US government is removing itself as a roadblock. It is like a powder keg ready to blow.