How the crypto skeptics changed their minds

That is a Walter Frick feature story at Quartz, the other answers are interesting throughout, here is my contribution:

What was your original reaction to cryptocurrencies and blockchain?

Just for a bit of background, I wrote a series of papers on monetary economics, and then a book (Explorations in the New Monetary Economics, with Randall Kroszner) which argued that technological changes were going to fundamentally revolutionize monetary institutions and finance over the next few decades. Those papers start in the mid-1980s and the book comes in the early 90s. So I was primed to see this coming, but in fact utterly failed.

I just wasn’t expecting crypto!

When bitcoin first came out, someone sent me the link and I put it on my blog Marginal Revolution —we were one of the first places to report on it.

But after that, the thing seemed to sour. It looked like a bubble. I didn’t see the use cases for bitcoin. So I became pretty crypto negative. Perhaps I was also turned off by the dogmatism shown by many crypto advocates.

What changed your perspective on blockchain’s potential?

A few things. First, in decentralized finance (DeFi) I began to see viable and important use cases. Superior returns for depositors might now drive broader crypto adoption

Second, after a market price crash, prices came back. That suggested to me this was not just a bubble. Crypto had its chance to go away and never come back, but it didn’t. Third, I have seen incredible energy and vitality in the crypto community. Many of the best discussions are held there, it attracts amazing talent, and the conversations are overwhelmingly positive. All big pluses and signs of a movement that is going somewhere. I am still broadly agnostic, but now see the positive scenarios as more likely than the negative scenarios.

What projects or trends in crypto are you most excited about right now?

DeFi, or Decentralized Finance.

NFTs, not only for the art world but also as a new system of property rights for the metaverse, and as a new method of fundraising.

Use of crypto to lower the costs of sending remittances abroad to poorer countries.

What would you recommend our readers watch / listen to / read / follow to better understand crypto’s potential?

I am learning the most through conversations, meetings, and WhatsApp chatter—I am not sure how that easily can be replicated!

Books and most articles on this topic are simply too out of date, even if they are factually accurate, which is not always the case. The fact that the field is moving so fast is another reason for optimism.

The symposium is a good way to catch up quickly on many different views.

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