a16z Partner: Long-Termism in Cryptocurrency

Author: Chris Dixon, Partner at a16z; Translated by: Shaw, Jinse Finance

A popular saying goes: "The non-financial applications of cryptocurrency are dead." Others claim that the "read-write-own" model has failed. These conclusions misunderstand both the core concept and our current stage of development.

We are clearly in the financial era of blockchain. But the core vision has never been: that all crypto applications will appear overnight, or that the financial sector won't be the first to develop. The core concept of blockchain has been, and remains, that it introduces a completely new foundational capability—coordinating people and capital on an internet-scale basis and embedding ownership directly into the system (and increasingly, coordinating AI agents).

Finance is the most natural verification scenario for this foundational capability, which is why we always mention finance first in our use case studies of token utility.

Finance is not separate from the overall vision, but rather an integral part of it—the foundation and testing ground for all other applications. This philosophy has guided the work of a16z crypto from the very beginning. Many of our investments have a clear focus on the financial sector: including Coinbase, Maker, Compound, Uniswap, and Morpho. As I wrote in the book, "Blockchain networks can make financial infrastructure a public good, upgrading the internet from processing information to processing value and money." We anticipated that the financial sector would play a significant role first, and we have always believed that other sectors will eventually follow suit. At a16z and a16z crypto, we uphold long-termism: our fund has an investment horizon of 10 years or more because building entirely new industries takes time. The order of development is crucial. So why haven't non-financial applications seen widespread adoption yet? First, the order of development is crucial. Infrastructure and adoption often precede new application categories. The internet didn't begin with social media, streaming media, or online communities; it started with packet switching, the TCP/IP protocol, and basic network connections. New cultures and economic models only emerged after hundreds of millions of people were connected. The crypto industry is likely to follow a similar path. Perhaps we'll first bring hundreds of millions of people into the on-chain world through financial applications like payments, stablecoins, savings, and decentralized finance (DeFi), before we see truly large-scale adoption in more distant areas like media, gaming, and AI. Many applications rely on wallets, identity, liquidity, and trust systems maturing first. There are other factors as well. One of crypto's core strengths is giving the community ownership through tokens. However, years of scams, predatory practices, and regulatory shocks have severely eroded market trust in tokens. This has likely exacerbated the recent market downturn—in an environment rife with skepticism and distrust, it's difficult to build a truly owner-driven community. Policy is a crucial missing link. This is why we've been pushing for a clear regulatory framework for tokens for over five years. Good policy achieves two things simultaneously: it provides a clear roadmap for builders while establishing risk-based safeguards to protect consumers and rebuild market trust. Market structure legislation like the CLARITY Act introduces disclosure and transparency standards to prevent "runaway" schemes and self-serving transactions—standards that are already commonplace in other markets but have long been absent from the crypto space. For emerging technologies, policy progress is often slow and gradual, until it suddenly accelerates at some point. For years, much work, including my own writings, has been laying the foundation for this: explaining the value of crypto and blockchain to policymakers and the public, providing a pragmatic framework to help people understand how this technology might evolve in the future. We often hear that this rhetoric is helpful to policymakers in Washington. Years of popularization, debate, and refinement accumulate silently behind the scenes, only to erupt when the political or institutional window opens. The market's reaction to GENIUS powerfully confirms this logic. Almost overnight, stablecoins went from being questionable to legal and compliant in the eyes of finance, technology, and government. This seemingly sudden shift is actually the culmination of years of effort by builders, policymakers, and advocates at the right time. I had expected a positive response, but the speed and scale of this technology's adoption still exceeded my expectations. This makes me optimistic about market structure legislation—from a macro perspective, it will bring similar legalization and standardization to other types of tokens as GENIUS achieved for stablecoins. The True Look of Long-Termism Great things take time. The breakthroughs in artificial intelligence we see today stem from decades of continuous work by countless outstanding talents (the first paper on neural networks was published in 1943). The internet originated in the 1960s, and the emergence of the commercial internet was inseparable from the visionary builders and prudent policy actions of the 1990s. Building a completely new technological system is a marathon, and the reality of long-termism is precisely this: a **long period of foundational work, followed by a sharp inflection point.** If you want to enter a more mature industry, that's perfectly fine. But if you want to build a completely new industry from scratch, the process may be chaotic and frustrating, but it is incredibly meaningful. It is precisely those chaotic and dormant years that made the later, natural, and universally visible golden age possible.