The Low Point and Opportunities in the Encryption Industry

Recently, social media has been filled with criticism and mockery of the current state of the encryption industry, including voices from those who have previously found success in this field. As a practitioner in the industry, I believe there is no need to stand on a moral high ground to blame others because of the current downturn. After all, it is the existence and development of this industry that has led to their achievements today. This also reminds us not to forget our initial intentions and motivations.

Currently, the encryption circle is indeed facing a downturn similar to that of 2018 or 2022. This is not only due to the price drop but also because people have become skeptical and shaken about this industry. The past two years were seen as years of hope, but now most people have scoffed at 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 not produced any new narratives in the past two years, or some emerging narratives quickly became a flash in the pan.

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 the encryption industry. In the past year, many industry insiders, especially developers, have turned to the AI field. This has become the last straw that broke the camel's back for the encryption industry.

Nowadays, with the decline of the altcoin craze, the lack of new narratives, and the rise of AI, the encryption circle seems to be filled only with the sighs of practitioners. In addition, the recently emerging "coin stocks" track has further dispersed the market's liquidity.

In the face of these challenges, the encryption industry has once again fallen into a trough. But as the saying goes, without experiencing the trough, how can one reach a peak? So, where are the opportunities for this industry now and in the future?

First of all, regarding the issue of Shanzhai seasons, although we cannot predict whether there will be another crazy market like in 2017 or 2021, there are still quite a few successful cases in the past two years based on price and yield multiples. It’s just that it’s no longer blooming all over, but rather concentrated in certain specific fields or sectors. This trend is likely to continue, and we need to adjust our mindset and expectations.

Analogous to the Internet era, Amazon's stock price plummeted by 90% when the Internet bubble burst, but over the next 20 years, it increased by more than 600 times, far exceeding its previous peak. Therefore, finding the "Amazon" in the encryption industry has become a new opportunity.

Secondly, regarding the new narrative, the stablecoin that has recently garnered much attention is a great example. Whether in the West or the East, stablecoins have become a hot topic. At the recent Shanghai Lujiazui Forum, the central bank governor mentioned stablecoins for the first time, highlighting their importance. At the same time, mainstream media has also started to introduce stablecoins.

The influence of stablecoins should not be underestimated; their successful breakout could be as milestone as the launch of Alipay back in the day. Alipay addressed the security issues of online payments, promoting the development of e-commerce and various online transactions. The popularization of stablecoins may greatly expand the user base of the encryption circle, bringing new vitality to the market and potentially triggering the industry's "iPhone moment." However, this process may still require 1-2 years to settle and develop.

Finally, regarding AI, blockchain technology is likely to become an important tool for AI, addressing the issues of information transmission between machines and genuine interaction between machines and humans. With the development of AI agents, ensuring secure and reliable communication between machines that can be verified by humans, blockchain technology may be the best solution. This direction is still in its early stages for blockchain, but the potential is immense.

In the face of these changes, we should accept and adapt to the trends with an open mind, rather than resist or criticize. Rationality will eventually triumph over emotion, and the encryption industry will not remain in a downturn forever. Let us once again face the wind and explore this field full of opportunities.