🎶 "Relax, " said the night man. “We are programmed to receive. You can check-out any time you like, but you can never leave. 🎶

The greatest inventions in history are the results of someone, somewhere, wanting something that has never before existed. In the process of going from zero to one, they manifest a new reality for themselves and the world around them. These historical inflection points are somewhat of a paradox, often arising from an individual or group solving a what seems to be a local problem that turns out to be inherently global in scale. After all, if I’m having an issue, odds are high that someone else on this giant blue and green sphere is experiencing the exact same problem. By solving our own problems, we often solve those of others.

Yet innovation is not merely about solving the problems of today - it is also about expanding the problem sets of the future. Progress is an accumulative phenomenon, such that innovation x leads to innovation y, which leads to innovation z, on and on, ad infinitum. The creators of today are building on the foundations of those before them, in turn adding their own layers that will be built on by those of the future. We truly stand on the shoulders of giants.

In this equation of the future, time is the limiting reactant. Innovation y fails in a world where it is necessitated by innovation x, but where innovation x is yet to exist. Each innovation is thus a spark for innovations of the future, such that it acts as a branching point on a tree, each spawning many new innovations in its wake.

Take for example the internet and its subsequent development track from Web 1.0 (read only) to Web 2.0 (read and write) to Web 3.0 (read and write and execute). Both Web 1.0 and Web 2.0 have spawned thousands (if not hundreds of thousands) of new ideas and innovations. Web 1.0 was the spark needed for Web 2.0, providing the “read” functionality first and foremost so that the “write” functionality could later be added. Yet it was also the spark for many ideas, products, and companies built on the back of Web 1.0 itself.

Which brings us to crypto - the paradigm shift of paradigm shifts.

For years, open, permissionless networks unable to be hampered by gatekeepers or coerced by kings were but a figment of the imagination. For such a grand ambition to become reality, the world needed a spark. That spark came in 2008, when a pseudonymous cypherpunk named Satoshi Nakomoto solved the Byzantine General’s problem and created a mechanism for decentralized consensus in absence of a trusted third party. Satoshi then applied their findings to create an electronic, peer-to-peer cash system dubbed Bitcoin and posted them online, for the world to see, in what will be remembered as one of the most revolutionary white-papers in all of human history.

But this is not an article on Bitcoin’s merits, per se - whether or not it is hard money, whether or not it is digital gold. This is an article about ideas and innovation and the places they take us. And the places that Satoshi has allowed us to go are merely in their infant stages of discovery.

We have walked into the digital Hotel California, and we will never leave.

Akin to the many great inventions of history, Bitcoin will be defined as much for the path it has paved for new innovations as it will be for the value it provides alone. And while Bitcoin is the seminal blockchain of the crypto ecosystem, the overwhelming majority of these new innovations will not be built on the backbone of Bitcoin the blockchain. But they will be built on the backbone of Bitcoin the idea - that consensus in absence of a third party is not only theoretically possible, but concretely possible. Today.

It is this idea that Vitalik Buterin expanded upon in his creation of Ethereum. If Bitcoin is sound money backed by a blockchain, then Ethereum is programmable money backed by the same technology. In a sense, Ethereum is to Web 2.0 (read and write) as Bitcoin is to Web 1.0 (read only). It takes the Bitcoin idea and adds new functionality to it - a native programming language, a zero to one process in and of itself, such that new innovations can take the Ethereum idea and add new functionality to it.

The majority of future crypto innovations will not be built on top of Bitcoin the blockchain. But they will be built on top of Bitcoin the idea.

Yet it has not been all roses for Bitcoin, Ethereum, and the crypto ecosystem. Doubt is a frequent companion of hope, and crypto is living this reality daily. For every problem that a crypto-technology purports to solve, there are hundreds (if not thousands) of naysayers and opponents standing in its path. Such obstacles range from ‘experts’ that pronounce Bitcoin’s time of death with each 20%+ drawdown - 90 ‘deaths’ in 2018 after 125 in 2017 - to nation states such as China ‘banning crypto’ for the nth time in 'September of 2021.

While intuition suggests we proceed with caution, history tells us that crypto technologies are in good company for a simple fact - the most revolutionary ideas in human history frequently face stark opposition in their infancy stages. Take the printing press, for example, invented in the mid 1400s by Johannes Gutenburg. It found a formidable critic at the turn of the 16th century in the Roman Catholic Church, who recognized the press’s power to democratize the spread of information and subvert the Church’s ability to control the flow of religious content. Or how about the internet, perhaps the most revolutionary technology in history? In 1998, during the early stages of its adoption, a Nobel-prize winning economist made the following quote: “By 2005, or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.”

Things are not until they are. And like the middle school recess bully, critics love to take shots at emerging technologies before problems of puberty are fleshed out.

But no matter. At the same time that skeptics are screaming into the wind, the market is speaking through a megaphone. In the past two weeks, the total crypto market cap reached all time highs as Bitcoin broke out to a new peak of $67K while Ethereum did the same to a tune of $4.4K.

Bitcoin is slowly (and programmatically) chipping away at the market cap of gold, while Ethereum, whose smart contract functionality provides a base layer infrastructure on which to create a decentralized financial system (‘De-Fi’, ie Decentralized Finance), just surpassed the market cap of the world’s largest bank - JP Morgan. What the critics mistake for fragility is in actuality its opposite. In an anti-fragile process, weaknesses brought to light quickly become strengths due to the velocity of information and creativity inherent in these open crypto networks. Constraints breed creativity, and each time crypto-networks are threatened the communities rally at lightening pace.

The immune responses inherent in crypto networks allow for the creation of a rock solid foundation upon which to build. We intuitively understand that a skyscraper is only as strong as its base, and those built on top of sand will inevitably succumb to the pressures of time. Yet with each FUD attack survived by Bitcoin and Ethereum, grains of sand morph to rock-solid concrete, enabling us to build higher - and see further -than we ever imagined.

Hotel Cryptofornia

As we stand today, it is as if each of us has been given all-access keys to the future. Each section of the crypto ecosystem represents a different room of the digital Hotel California, and you can choose the door through which you enter while having full autonomy of where you go once inside.

First, on entry points. One of the great strengths of the crypto ecosystem it that it is inherently non-discriminatory. Bitcoin and Ethereum (and any other cryptocurrency, for that matter) care not how you got there. They operate in binary 1s and 0s - you either own or you do not. This is perhaps the simplest description of the manner in which they have bootstrapped themselves into dominance - BTC and ETH turn 0s into 1s by incentivizing new users with the strongest value proposition in the world - financial upside. Buy at x, and at some time in the future you’ll have x + y.

Viewed from inside the hotel, the manner in which you entered is irrelevant. Check in at the front desk (Bitcoin)? Welcome! You’ll find there is much more to explore. Or perhaps you prefer to operate through the concierge (Ethereum)? Benvenuto, I love optionality myself. Did the DJ from the pool party (Dogecoin) show you in? Nice to see you, I can tell that roller coaster experiences are your idea of a good time. Oh, it was the art wing of the hotel (NFTs) that brought you in? You’ll find that we are just getting started.

Reality is such that most of the traffic entering the crypto-ecosystem comes via the same on-ramps - the same cryptocurrencies (BTC/ETH) and the same exchanges (Coinbase). But while the entry points may have high similarity, the interior of Hotel Cryptofornia is anything but uniform. In fact, there is a massive “Under Construction” sign in the middle of the front lawn with a progress bar on that shows well below 1% completion.

The interplay between open for business and under construction is a key distinction for what makes crypto so unique in its early stages. Few other industries in history have sold construction passes to the general public at a higher clip than what is happening in crypto right now. Anyone, regardless of how old or how wealthy, can can grab a hard hat and get to work in the hotel due to the space’s permissionless nature.

And as each new person walks through the door, the base layer of the crypto ecosystem continues to solidify like grains of sand being turned to rock solid concrete. Bitcoin and Ethereum are proxies for the strength of the foundation, and as they continue to assert their dominance the possibility set of future floor plans expands.

Hotel Cryptofornia itself represents an intersection between the future and the present, a place that each of us inhabits by nature of walking through its doors. We can participate today in any number of ways - such as buying coins on exchanges like Coinbase, browsing NFTs on OpenSea, or maybe even sending Bitcoin via the Lightning Network. And while each of these actions are opportunities to participate in the economy of now, they are inherently shaping the economy of the future as well.

What that economy of the future will look like, however, we can only guess. While each of us can gaze upwards from the ground floor to get an idea of what elevator stops we will be able to make, the clouds begin to obscure our vision the higher we look. In current state, we are merely re-designing the world’s pre-existing infrastructure. We are looking for the decentralized alternatives to Web 2.0 that are enabled by blockchain technology and Web 3.0. Take BlueSky, for example - Jack Dorsey and Twitter’s attempt to create a new standard for decentralized social media. Or Mirror (the site on which this article is published) - the first decentralized publishing platform that is built and run by its contributors.

As innovative as both of these platforms are, they are both following the same roadmap by leveraging crypto technology to reimagine a Web2 idea - “create the decentralized, Web3 version of the centralized, Web2 platform” (‘skeuomorphic' design’, as coined by Steve Jobs and adapted to web3 by a16z’s Chris Dixon). But what happens when we start building new floors of the hotel that have no pre-existing blueprint? Through this lens, the outline of the future becomes less clearly defined the higher we look. So while the current construction of Hotel Cryptofornia is nothing short of remarkable, we have much, much more to build. The Google and Facebook moments of the space have yet to arrive. And while I am not sure what they will look like, I am sure that they will change the world in ways that we have never before seen.

But in order to build the dreams of the future, we must deal with the realities of the present. And one such reality is that in order for the crypto ecosystem to grow and create the future we dream of, more people must come through the door. The good news, however, is that the entryways of Hotel Cryptofornia are as plentiful as they are large. “Permissionless” means that no one will be turned away, and that includes you. Perhaps the doors through which you enter will shape your perceptions and experiences inside, but feel free to enter in any way you like. Because what matters isn’t the way your individual crypto path winds, but simply that the path itself exists. More 1s, less 0s.

So come one, come all - Hotel Cryptofornia is open for business. Enter however you like and don’t be afraid to explore once you are inside. The floor plan is currently under construction, but with each day you’ll better understand where everything is. Except for the exit, that is, because there’s no such thing to be found. Technology is a one way street and Hotel Cryptofornia is no exception. You can check in any time you like, but you can never leave.