It's still too early for the full development of cryptocurrencies—why finance needs to serve as the foundation

Chris Dixon, a key leader at a16z Crypto, has offered noteworthy insights into the long-term outlook of the industry. He argues that the cryptocurrency ecosystem is still in its early stages and that its maturity will require financial applications to lay the groundwork first. While it is common to focus on the application of cryptocurrencies outside the financial sector, Dixon points out that this view underestimates the developmental stage.

Finance as the Foundation for Cryptocurrency

The core concept Dixon emphasizes is that blockchain has the ability to embed ownership rights directly into the system, enabling a new way to coordinate human and capital resources. This fundamental value first manifests naturally in the financial sector. This is merely a primary use case in the near term and is not separated from a broader vision. Rather, finance provides the foundation for all other application areas and serves as a testing ground.

By bringing hundreds of millions of users on-chain through payment systems, stablecoins, savings, and DeFi, only then can genuine adoption in other fields become possible. For media, gaming, AI, and other sectors to leverage the benefits of cryptocurrency, basic infrastructure such as wallets, identity, liquidity, and trust mechanisms must first mature.

Learning from the Stages of Internet Development

To better understand this perspective, it helps to look at the stages of internet development. The internet did not start with social media, streaming, or online communities; it began with infrastructure like packet transfer, TCP/IP, and basic connectivity. Only after hundreds of millions of people went online did new cultural and economic categories emerge and expand explosively.

Cryptocurrency may follow a similar path. Financial applications will drive on-chain adoption first, and once a solid foundation is established, innovative use cases in other fields will emerge one after another. In other words, the development of cryptocurrency is still in its early stages, and the priority now is to steadily build the infrastructure through finance.

Long-term Perspective and the Importance of Infrastructure Building

a16z and a16z Crypto have a fund structure targeting cycles of over ten years, recognizing that building new industries takes time. For new application categories to emerge, their infrastructure and distribution networks typically need to come first. This is not something achieved overnight; long-term investment and patience are required.

For example, the recent breakthroughs in AI are the result of decades of foundational research by talented individuals. Building new technological systems is a marathon, and after a long period of laying the groundwork, rapid turning points often occur.

Why a16z Supports a Token Regulation Framework

a16z has supported the development of a clear token regulation framework for over five years, rooted in this long-term strategy. Proper regulation creates a more robust financial infrastructure for cryptocurrencies, providing a foundation upon which applications in other sectors can be built.

This steady groundwork is precisely what makes investing in cryptocurrencies so crucial now, when the industry is still in its early stages. The challenging years involved in this process are paving the way for future significant achievements.