The Future of Cryptocurrency: Learning from Mistakes of the Past
On March 18th, Zhu Su, co founder of Sanjian Capital, stated on social media that most of the recent mistakes in the cryptocurrency industry are due to the introduction of tradfi ideas, such as “shadow banking” and “process internalization”. The next round of cryptocurrency bull market will be driven by people who are aware of these issues. The underlying cryptocurrency infrastructure itself is a new paradigm.
Zhu Su: Most of the mistakes in the encryption industry are due to the introduction of traditional concepts such as “shadow banking”
Analysis based on this information:
In recent years, the cryptocurrency industry has witnessed significant growth, but it hasn’t been without mistakes. Cryptocurrencies initially attracted attention for their decentralized nature and anonymity, allowing users to send and receive funds without the need for intermediaries. However, with rapid growth came the influx of traditional finance (tradfi) ideas, leading to severe mistakes in the industry.
Zhu Su, co-founder of Sanjian Capital, recently took to social media to state that the primary reason for most mistakes in the cryptocurrency industry is due to the integration of tradfi concepts, such as “shadow banking,” and “process internalization.” These ideas, developed primarily in traditional finance, have made their way into the cryptocurrency industry without being properly adapted, leading to major inefficiencies and increased risk.
“Shadow banking” refers to a type of traditional finance practice where non-bank financial institutions perform bank-like activities, such as lending and investing, without compliance with formal banking regulations. “Process internalization” involves the integration of different workflow processes into a single enterprise. When these existing tradfi ideas are applied directly to cryptocurrency without careful adaptation, they can cause technical and regulatory inefficiencies.
However, Zhu Su believes that the future of the cryptocurrency industry is still bright. He believes that the next bull market in the industry will be driven by people who understand the potential future challenges of the industry and learn from mistakes of the past. Furthermore, the underlying infrastructure of cryptocurrencies is a new paradigm that will lead to increased efficiency and security.
In conclusion, as the cryptocurrency industry continues to grow, it must learn from its mistakes of the past and adapt traditional finance concepts for better use. Applying the traditional finance practice concepts directly could lead to inefficiency and risks. The key to success in the industry’s future growth will be to develop an adaptive and flexible mindset to leverage the infrastructure’s new paradigm. Keywords for the future of cryptocurrency are tradfi, bull market, and infrastructure.
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