Expert Predicts Decline of Cypherpunk Values in Blockchain

The cypherpunk values that inspired the first smart contract platforms are likely to gradually disappear over the next decade, according to Jesse Walden, managing partner at Variant Fund. 

He believes institutional adoption is driving the optimization of protocols to speed up operations and meet regulatory requirements. 

Walden explained that the first decade of blockchain development was based on the original cypherpunk principles—”censorship resistance, open source, permissionless access, and a new glimpse of building a democratic and fair internet on top of a global computer.”

Now, smart contract platforms are more focused on values of “performance, cost, profitability,” and legal compliance rather than the nobler ideals of the past, the expert asserts. 

Walden noted that many popular blockchain use cases—stablecoins, RWA, or DePIN—no longer need to be decentralized or publicly accessible. Instead, they only need to use the underlying network for “openness, interoperability, and settlement.”

While the current situation does not spell the complete end for blockchain cypherpunks, it likely marks its beginning, emphasized the Variant Fund partner. 

Walden concluded that cryptocurrency is becoming commercialized, and the market is currently facing inevitable trade-offs, such as slightly relaxing strict decentralization to accelerate product release. 

“If you feel that the values that brought you to cryptocurrency are being diluted by the mainstream market (I’ve heard this), try looking at it from another perspective. From an impact standpoint, the commercialization of cryptocurrencies likely only marks the beginning of real opportunities,” he clarified.

Back in December 2023, Vitalik Buterin proposed reviving the “cypherpunk” revolution that was envisioned for Ethereum at the dawn of the network’s inception.