This week the combined network value of all crypto assets surpassed the $500 billion mark (based on circulating supply).
 
The speed at which it arrived there is absolutely mind-boggling: two weeks ago we were just above $300 billion, a month ago just over $200 billion, $18 billion in January. We'll admit it, we're feeling a little dizzy up here. We knew the masses were knocking at the door, but the brute force of this movement took everyone's breath away.
 
So much so that a few people took this significant monetary milestone as the time to delve in sobering reflections, daring to ask some good hard questions.
 
Vitalik himself took the stage first with a powerful thread:

 1/ So total cryptocoin market cap just hit $0.5T today. But have we *earned* it?
 2/ How many unbanked people have we banked?
 3/ How much censorship-resistant commerce for the common people have we enabled?
 4/ How many dapps have we created that have substantial usage? Low added value *per user* for using a blockchain is fine, but then you have to make up for it in volume.
 5/ How much value is stored in smart contracts that actually do anything interesting?
 6/ How many Venezuelans have actually been protected by us from hyperinflation?
 7/ How much actual usage of micropayment channels is there actually in reality?
 8/ The answer to all of these questions is definitely not zero, and in some cases it's quite significant. But not enough to say it's $0.5T levels of significant. Not enough.

This is effectively a list of the many promises the blockchain revolution set off to fulfil. I don't think he's saying that we've horribly failed at the ultimate mission, it's undoubtedly still very early days. What he is doing though is ringing the alarm bell as prices (and therefore expectations) may be getting way out of hand, at a much faster rate than real utility is being delivered. On that very note it's worth going through Kyle's tweetstorm rant, literally drafted as he was scrolling through Coinmarketcap (someone please teach him how to thread tweets though!).

What arguments are being made?
 
There is the argument that the steep price appreciation has created a lot of wealth at the edges of society, and that such wealth is getting broadly redistributed. And it's obviously great that many early believers in something crazy at the time got handsomely rewarded and that they themselves re-invest in the ecosystem (when not buying Lambos). But that's a little shortsighted, it certainly wasn't the original plan to create a greater fool's money making machine. The plan was to deliver real world utility, and it's very significant that Vitalik himself is questioning if we've delivered enough of that to justify a $500 billion network value tag.
 
Then there is the argument that speculation is the Mother of all technological progress, that the promise of quick profits attracts the best minds alongside the speculators and that the former end up building great long lasting things from the ashes of a bubble pop. Maybe this is what we just have to accept, the inevitable trajectory that all the foundational technologies need to go through. We have undoubtedly seen some of the smartest folks we've ever met devoting their careers to this industry, but we've also seen ruthless speculators and the worst scammers. And we are definitely seeing the institutional flow on money pouring in, with over $30 billion in daily volumes traded most days this week.

Lastly, there could be a reason not to panic, at least for some of the 'store of value' crypto assets out there, bitcoin of all with it's +$300B market cap. For bitcoin, price could actually be totally irrelevant. Yes, if you are buying bitcoin for its censorship resistance properties, you should not care about its price being $1k, $18k, $180k or $1m, you are getting your censorship insurance regardless. The price volatility is there anyways at all prices, and in fact it is trending downwards over time as price rises and liquidity increases. So it could in fact be the case that the higher bitcoin's network value, the more it fulfils its SoV/censorship resistance promises. But as Vitalik wonders, how many common people are getting this value?

Vinay Gupta took the stage next, with another heart-felt and widely shared thread, later summarised in a standalone post. While Vitalik's was a retrospective, Vinay's looking ahead at some possible future regulatory scenarios.

He elegantly navigates the hard fought borders between the status quo, the Governments and Regulators' turfs, and the Future, the libertarian dream that has animated much of the crypto movement. He gives the latter very little chances of success in its current form, and ends up outlining a handful of 'plays' that could make blockchain indispensable to society and therefore appease the Leviathan Regulator:

1/ a near zero-waste society where everything is priced
2/ banking for the unbanked
3/ crypto-protected biometric ID
4/ microtransactions
5/ crypto currencies backed by natural resources
6/ C2C insurance

$500 billlion is a big number, there are lots of promises and expectations in it. But we are here now, and the regulators are all looking. Now is the time to solve some real, pressing societal issues with this amazing piece of technology.

So, “build like hell, it’s the only thing that gives us a right to exist” (Vinay's words).

-YR

Token Economy is written and curated by Stefano Bernardi and Yannick Roux.

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