The Prisoner’s Dilemma of Crypto Entrepreneurs: You May Not Care About Regulation, But Regulation Must Care About You

author:Mario Laul

Compiled by: Xiaobai Navigation Coderworld

publicBlockchainThe foundation of the crypto industry was laid by the Cypherpunks. Although the crypto industry was destined to accommodate diverse ideas and practices from the beginning, decentralization, open source software, cryptographySafetyCore principles such as security, privacy protection, and self-sovereignty have always been the cornerstone of its most disruptive achievements.

However, this field also faces a core problem: the lack of support for innovation and recognition ofBlockchainAs a regulatory framework for administrative infrastructure with unique functions, crypto entrepreneurs have to face a difficult choice - whether to adhere to the ideals of purism, thereby making the structure and operation of the project more complicated; or to compromise on the original ideals in exchange for regulatory recognition and a more traditional mainstream path to success.

I call this dilemma the Cryptopreneur's Dilemma.

sinceBlockchainSince its birth, it has carried a grand vision: to achieve the separation of currency and state, to establish a censorship-resistant global payment and coordination network, to develop software services without single point of failure, and to create a new form of digital organization and governance. To promote such a revolutionary change, a special era is needed.

For the crypto industry, this backdrop was shaped by the aftermath of the global financial crisis and the evolution of Big Tech’s data and business models. At the same time, the global adoption of digital technology and built-in token incentives provided nearly ideal conditions for the rapid development of the crypto industry’s early ecosystem. Since then, with the emergence of individualBlockchainWith the accumulation of social capital and financial capital within the network and the industry as a whole, the crypto industry has gradually become a force to be reckoned with, which was particularly evident in the 2024 US presidential election.

However, promoting revolutionary change requires not only courage but also a certain degree of “sociological naivety.” Any attempt to subvert social structures, especially those based on law, is more likely to fail than to succeed.

The crypto industry has indeed seized on the public's dissatisfaction with the traditional system by challenging existing institutions, but this confrontational stance is difficult to reconcile with the goal of building a digital platform that serves global users. Similarly, blockchain transactions attempt to bypass the regulatory requirements of the jurisdiction in which they are located (whether the operator of the underlying infrastructure or the transaction party), and this narrative always faces the risk of intervention by local law enforcement agencies.

If the crypto industry is to achieve real growth and influence, it must accept the formalization of its regulatory status and all the consequences that come with it. As a famous quote goes:“You may not be interested in the country, but the country must be interested in you.”

While many aspects are still in flux, this is what we are seeing in practice. From taxing crypto-related activities and classifying tokenized assets to enforcing anti-money laundering and counter-terrorism financing (AML/CTF) rules and regulations, DAO By clarifying legal responsibilities in governance, the crypto industry is gradually integrating into the existing regulatory system centered on national jurisdiction.

However, what is more noteworthy is that this process has also given rise to new case laws and customized regulatory frameworks.These frameworks have become a critical battleground in defending the original values of the crypto industry from being ignored or destroyed (either intentionally or unintentionally) in ideological and political games.This “cryptopreneur’s dilemma” exists because, like any far-reaching innovation, the process of legitimization is slow and contentious. For the crypto industry, this process is particularly difficult because the actions of some malicious opportunists have led to a misunderstanding of the industry’s image and unnecessary collateral damage.

Another notable trend is the increasing integration of blockchain with traditional business and financial systems.For those who see the crypto industry as a parallel system designed to replace traditional institutions, this fusion blurs the boundaries between the two and may cause cognitive contradictions and internal conflicts. For others, this fusion is precisely a sign of success.Xiaobai NavigationIt is also the only sustainable path for blockchain to become a systemically important infrastructure. As the industry matures and de-risks, its practitioners, operators, and user groups will continue to expand and diversify. While this trend has attracted the attention of traditional enterprises, it may also further exacerbate the ambiguity of the crypto industry narrative, especially when traditional institutions try to control ostensibly neutral infrastructure. The risk of this "institutional capture" will increase in proportion to the popularity of the crypto industry.

So how should the “crypto entrepreneur’s dilemma” be repositioned as public blockchains enter the next phase of their adoption curve?

on the one hand,The mainstream success of the crypto industry seems to rely more on deep integration with existing systems, rather than clinging to some idealistic, fully decentralized vision. It is not unacceptable to accept that most "crypto projects" may ultimately be no different from traditional enterprises or open source software initiatives, or that most blockchain users are unlikely to fully accept the cypherpunk ideas or even use them as the main basis for consumption decisions. As long as these systems can remain openly verifiable and more resilient than existing alternatives, there is little practical significance for "decentralized performance", and there is nothing wrong with centralized enterprises utilizing and operating public blockchains. Therefore, once the regulatory status of the crypto industry is clarified, this dilemma may no longer be important for most entrepreneurs.

However, it would be incorrect to think that this marks the end of the original vision of the crypto industry. Things like autonomous robots and artificial intelligence (AI) are injecting new and profound impetus into the digital revolution, andThe need for powerful computing and information management services is greater than ever.

As an innovation platform, blockchain offers an alternative to traditional systems that are vulnerable to corruption, mass surveillance, and single points of failure. Blockchain will only persist if enough entrepreneurs and backers persist on the difficult path of building truly decentralized, privacy-preserving, and control-resistant systems. While the commercial success of the crypto industry may no longer depend on these ideals, its long-term social impact undoubtedly still does.

The article comes from the Internet:The Prisoner’s Dilemma of Crypto Entrepreneurs: You May Not Care About Regulation, But Regulation Must Care About You

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