The Low Points and Opportunities in the Encryption Industry

Recently, social media has been filled with criticism and ridicule of the current state of the encryption industry, including from some individuals who have succeeded in this field. As a practitioner in the industry, I believe it is unnecessary to criticize from a high position due to the current downturn. After all, it is the existence and development of this industry that has enabled them to achieve what they have today. We should not forget our original intention and maintain our enthusiasm for the industry.

It is undeniable that the encryption circle is facing a downturn similar to that of 2018 or 2022. This is not just a price issue, but also a shaking of people's confidence in this industry. The past two years were seen as years of hope, but now most people have lost interest in that hope. The main reason is that the long-awaited "altcoin season" has not arrived as expected, coupled with the fact that the industry seems to have failed to give birth to new strong narratives over the past two years, or that some emerging concepts have been fleeting. These factors combined have become a heavy burden on the minds of participants.

However, the real impact on the industry may still come from external factors. In recent years, the rapid development of artificial intelligence has captured most of the investors' attention, including that of the encryption industry. It is understood that in the past year, many practitioners, especially developers, have turned to the AI field. This has become the last straw that broke the industry's confidence.

When the "Shanzhai Season" disappears without a trace, and comments about the "lack of new narratives" arise, coupled with the AI frenzy sweeping the market, the crypto space seems to be left with only the sighs of practitioners. In addition, the recently emerging "Coin-Stock" track has also directly diverted a large amount of funds.

In the face of these challenges, the encryption circle has indeed entered another low period. But as the saying goes, the peaks turn and the roads twist, and the mountains and rivers are heavy. So, where are the current and future opportunities in this industry?

First of all, regarding the issue of "Shanzhai Season", we do not need to get too caught up in whether we will see a crazy market like in 2017 or 2021 again. In fact, in the past two years, there have still been quite a few investors who have achieved considerable returns through accurate judgment. However, the market is no longer blossoming all over, but is instead focused on specific sectors or projects. This trend is likely to continue, and we need to adjust our mindset and expectations.

Similar to the internet bubble period, Amazon's stock price plummeted by 90% when the bubble burst, but over the next 20 years, it increased by more than 600 times, far exceeding the peak of the bubble. Therefore, finding high-quality projects in the encryption industry similar to Amazon has become a new investment opportunity.

Secondly, regarding the new narrative, we can focus on the development of stablecoins. Whether in the West or the East, stablecoins have become a hot topic of discussion. At a recent important financial forum, senior officials mentioned stablecoins for the first time, highlighting their significance. If we say that stablecoins are just a small application in the industry, we are greatly underestimating their influence. Their success may be comparable to the launch of Alipay back in the day, which solved the problem of online payment security and subsequently promoted the development of e-commerce and various online trading activities. Perhaps when we look back in 10 years, we will realize that the real change happened this year.

The prosperity of stablecoins is expected to significantly expand the user base of the encryption circle, thereby truly opening up the market, bringing in new users, and ushering in the industry's "iPhone moment". However, this process may still require 1-2 years of accumulation.

Finally, regarding AI, blockchain is likely to become a native tool for AI, solving the issues of information transmission between machines and the real interaction between machines and humans. With the development of AI agents, ensuring secure and reliable communication between machines that can be verified by humans seems to make blockchain technology an indispensable choice. Otherwise, we may face uncontrollable AI agents. Currently, this direction is still in the early stages for blockchain, but the potential is enormous.

When some changes have already occurred or are about to come, what we can do is not resist, but to gladly accept and follow the trend. Criticism and complaints do not solve problems, but rather show an inability to adapt to change. After expressing our emotions, we still need to look forward. Rationality will eventually triumph over emotion, and the encryption industry will not remain in a downturn forever. Why not rise to the challenge again and embrace new opportunities?