Challenges and Opportunities in the Low Point of the Encryption Industry

Recently, major social media platforms have been filled with criticism and mockery of the current state of the encryption industry, including some individuals 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 and indiscriminately attack just because the industry is in a downturn. After all, it is the existence and development of this industry that has made their current status possible.

Currently, the encryption industry is indeed facing a downturn similar to that of 2018 or 2022. This is not only due to price issues but also stems from people's doubts and hesitations about the industry's prospects. The past two years were seen as years of hope, but now most people scoff at this hope, mainly because the long-awaited "altcoin season" has yet to arrive, coupled with the fact that the industry seems to have failed to cultivate new narratives in the past two years, or that some new narratives have proven to be fleeting.

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. It is understood that in the past year, many practitioners, especially developers, have turned to the AI field, which has become the last straw that broke the confidence of the industry.

When the "Shanzhai Season" disappears without a trace, comments about the "lack of new narratives" arise, and coupled with the crazy rise of AI, it seems that all that is left for the encryption circle are the sighs of practitioners. In addition, the recently emerging "coin-stock" track has also directly diverted a portion of market funds.

Faced with the combination of these subjective and objective problems, the encryption industry has once again fallen into a low period. But as the saying goes, without a low, where would the high come from? So, where are the current and future opportunities in this industry?

First, regarding the issue of "Shanzhai Season", we do not need to be overly focused on predicting whether we will see a crazy market like in 2017 or 2021 again. In fact, there have still been many wealth creation myths in the past two years, but they are no longer widespread "full bloom", rather they are concentrated in 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 it increased by more than 600 times in the following 20 years, far exceeding the peak at that time. Therefore, finding the "Amazon" in the encryption industry has become a new investment opportunity.

Secondly, regarding the new narrative, the recently much-discussed stablecoin 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. Meanwhile, mainstream media have also started to introduce content related to stablecoins.

The influence of stablecoins should not be underestimated; their success in breaking out may be comparable to the launch of Alipay back in the day. Alipay solved the security issues of online payments and promoted the development of e-commerce and various online transaction activities. Perhaps when we look back in 10 years, we will find that the transformation occurred in this very year.

The prosperity of stablecoins is expected to significantly expand the user base of the encryption circle, bringing new vitality to the market, and may become the industry's "iPhone moment". However, this process may still require 1-2 years of accumulation.

Finally, regarding AI, blockchain is likely to become a native tool for AI, addressing the issues of information transmission between machines and genuine interaction between machines and humans. As AI agents develop, ensuring that communication between machines is secure, reliable, and verifiable by humans seems to make blockchain technology an indispensable solution.

Currently, blockchain is still in the early stages in this direction. It is worth noting that the combination of AI and blockchain discussed here is not the kind of concept that was hyped at the beginning of this year, but rather a deeper technological integration.

In the face of these changes, we should accept and adapt to the trends with an open mind. Complaining and cursing do not solve problems, but rather show resistance to change. After expressing our emotions, we still need to move forward. Rationality will eventually triumph over emotion, and the encryption industry will not remain in a downturn forever. Why not rise against the wind again and embrace the new opportunities in the industry?