Navigating Cryptocurrency Narratives: A Guide to Distinguishing Hype from Utility

Most crypto investors are thinking about narratives, but they’re going about it the wrong way. So let’s talk. There is a big difference between the narratives that are generating speculative hype and those where crypto actually matters. It serves a purpose.

For example, most AI crypto projects have absolutely no need for blockchain or a token. Contrast this with gaming. We’re already seeing games start to integrate blockchain. We’re seeing people start to integrate community rewards, token incentives in novel ways that enhance the experience of everyday gamers. But in AI, most of these projects are using their tokens as a mechanism for raising funds for some sort of AI solution they’re building. They’re not actually using blockchain or crypto to add some sort of necessary value to AI, like verifying what is true and what is fake, distinguishing real people online from bots, which is absolutely something crypto will do for AI, but not in the context of these projects. This Bull Run using blockchain to tokenize real world assets is an awesome use case. But honestly, in terms of the rules and regulatory hurdles that RWA would have to clear to come to fruition in a meaningful way, tokenize everything that Black Rock is touting, that is years and years off. Most of these projects that are putting RWA in their name with that as their goal, are also simply attaching a crypto token to a hot narrative in order to generate funds for the future d size like this too, I think of popular projects like VXV or Research Coin, paying researchers or buying data with their crypto token. But they’ve made the fatal flaw of attaching a volatile asset to a use case that they hope many people will adopt. Researchers aren’t gonna want to buy a token or get paid in a token that goes up and down and up and down in price. And inversely, speculators are not gonna wanna speculate on a token that researchers use so much its price becomes stable.

C V chain, C chain link, for examples of this. It doesn’t mean they won’t go up in value. I think they almost certainly will because story is everything. And most crypto investors are not experts in science or infrastructure or artificial intelligence. They just have enough savvy to see that the market is paying attention and number therefore will likely go up. But when you’re investing in a project because it’s hype, because the narrative is relevant, then really what you’re doing is tying your bags to a very difficult future. Be ready to get out when that project doesn’t come to fruition. And if you don’t, I mean, it’s not coming back. It’s not like Google or Microsoft or apple where they’re building real things. And if they have one bad launch, it doesn’t mean their company is doomed because they’ve got other products people use. They’ve got a war chest of funding, a team of developers and plans to bring actual value in their niche in the future. People betting on memes, are betting on gaming, are betting on an actual utility that could come to fruition and attest to the value of a token. Right now, people who are speculating on AI, crypto or real world assets that don’t actually have a use case beyond raising money. They’re just like gamblers at a horse track. We’re investing based on what we read in the newspaper, what we see online and think is going to be interesting. That’s the narrative hype. Then you have the people who write for the newspapers. These are your TikTok influencers, bookies, who have a little more access to the inside information, but make no mistake, they too are speculating. Then you’ve got people who are at the racetrack professionally. They’re jockeys, there are owners, there are people who are building the protocols that crypto will bring to the masses. And finally, you have people like Henry Ford, circa 19, standing in a horse racing track and dreaming about the assembly line and how it will bring not only automobiles, but highways and ambulances and grocery stores and infrastructure that will support entire economies to the world. Those are the people who are building products that blockchain can add utility to. Right now, the people who make the real money, the people who are gonna be standing on the yacht next to the Oscar Mayer wiener guy and the guy who invented the toothbrush. Those are the people who looked at these narratives and decided to bet on the people who were actually building infrastructure that would change the future.

So questions to ask yourself as you consider whether or not to invest in a project could be, does this really need a crypto token? Is this just hype? Is there an actual product attached? Is blockchain likely to make this thing better in some way? And if so, what’s the time horizon for that? Like, is it happening right now or are they promising it will happen in some future? If I invest and trust them, bro?