Perspectives from a new generation of crypto/Web3 builders - Interviews with college students focused on industry (Part 2)
If you missed last week’s post, we interviewed 7 incredible college students building in the crypto/web3 industry. This week is the 2nd part of these interviews - we focus on their perspectives on building in a fully insular crypto world vs. connecting to the traditional financial world, what they see as the major challenges for the industry and how they think their generation will change the world.
Axial Studio: Do you believe that the future of crypto/web3 is a fully insular world, separate to (and perhaps replacing) the traditional financial world? Or do you believe that both worlds will be connected?
I think in the short term it will be more integrated into the existing financial world. People, by nature, don’t want to take full responsibility and at the end of the day if you lose your keys you’re going to be fully responsible right now. There’s a benefit to existing financial systems, you can often get your funds back most of the time if something goes wrong. However, as issues start to pop up such as bank failures people might start realizing that they want to have control of their funds.
I think there definitely will be some kind of parallel structure. Eventually we’ll see some fully decentralized ecosystems, but that will take some time. Right now, you see some DAOs having to operate with some level of centralization as they get started, but you can see how they will gradually get more decentralized. On the other hand, you see large financial institutions also continuing on their crypto projects - like Fidelity or Amazon. It will definitely be more like Web2.5 for the foreseeable future.
I go back and forth on this question. Connecting to the traditional systems and doing things like tokenizing real world assets are interesting use cases. I see the value of onboarding actual assets and things in the physical world to bring tangible value. But I think it can be better to keep insular and keep building out these products with the message of inclusivity and building an alternative financial system that is open to anyone. Its going to be important to keep experimenting in different areas until we’ve fully figured things out as an industry.
I have opinions on both sides. Right now, I think its important we are insular. We are building up the ecosystem, testing use cases and figuring it out. In that phase of experimentation, being insular can help us figure out what works. Once we have those little cases studies that show working systems, then its going to be important to go out and connect with the existing financial world and slowly get them onboard.
I think that ultimately the answer to that question isn’t going to really matter. Its very difficult to predict the future, but what is great is that regardless of what use cases actually come along - there will be more long-term robust and resilient systems. That's the overall goal in my opinion.
I think we need to take a balanced approach between being insular vs. being dependent on pre-existing financial systems. There have been fully crypto projects like Terra Luna that have crumbed, party because of how insulated it was. And on the other end, you have something like USDC which is connected to existing financial banks - but that dependency became a weakness when those banks failed. So its a hard balance to strike.
I think that the development of the technology needs to be insular. Building the core blockchain tech, cryptography, security, etc. can be complicated and should be kept internal to the industry as its developed. But ultimately, with applications its really important to intertwine with not only the existing financial systems but the broader web and the day-to-day world. I envision a world more like a Web2.5, where things like identity or wallets are integrated into our daily lives.
Axial Studio: What do you see as the biggest challenges to the industry?
Education is going to be important, then ease of use. If you take my Dad as an example, hes not going to understand keys other than keys that unlock his doors. Making things one click, or something close to that is going to be important. There are recent innovations such as social logins for wallets that are promising to address the ease of use issue.
The bigger problem down the road is privacy. There is a tension between privacy and performance / efficiency. I would like to see fully private applications, but I think we’ll have to make some trade-offs in terms of atomic composability or generalizability of a smart contract platform.
I think the biggest issue is going to be security and scams. The everyday investor doesnt’ want to risk getting rugged on an NFT project or losing their crypto. I lose a lot of money in Terra Luna, that lead me to want to learn everything about the technology. But I don’t think you can get to mass adoption if everyone has to learn about the technology in depth to be secure.
I also think education and the UI of the technology is going to be some of the biggest challenges. The UI has to be a lot more simpler to interface with. A lot of information that is unnecessary has to be abstracted away from the user - so its easier to digest. I also believe regulation is going to play a big role. With the right regulation, it will drive the actions of the consumers. More enforcement is also going to help as the bad actors are taken out.
To build off of Rutvik’s point on regulation, I think that is the key battle right now. Just look at the projects in the US - people are terrified to properly use crypto and token because of what is happening. Everyone is scared of accidentally issuing a security so they’re building a bunch of useless workarounds. Projects aren’t able to realize their full potential because of this. Without clarity, the US is not going to be a place for companies/projects to succeed. Right now, it feels like we’re losing badly so that is a primary concern over the next 1-2 years. Adoption will just be constrained, even as the technology itself continues to mature and develop.
I want to go back to UI/UX - There’s a lot of friction even with people who are pretty smart. Many of them have issues just setting a wallet up, and the concept of seed phrases. It's going to be a big issue for an industry in its infancy.
I agree with that, its pretty difficult to use right now and its pretty difficult to onboard. People don’t want to take responsibility, even if its easy to learn. The product people want more resembles having a Chase account where it is simple to onboard and any issues can be addressed. There are few good consumer products right now that really justify the use of blockchain. Many people are using blockchain for the sake of blockchain, as opposed to something that is leveraging the technology.
Axial Studio: How do you see your generation changing the future of finance/technology
Our generation is changing the concept of work. It used to be that you interview, you get hired and then work at a place for a few years before jumping to something else. With Crypto, and decentralized projects, you can change the way you contribute to an initiative. If you find an interesting project, you can join the governance forum and start leading. That is going to change the way technology is built.
I see our generation as fixing many of the things that are broken with our current system. It could be things like faster wire transfers or transparent banking. Which will lead to vastly improving legacy businesses. There’s many companies that have been around for 40 years, they are the largest companies int he world, but have brought very little innovation.
Its been so much easier for our generation to have an immediate impact and access to meaningful technical projects. We are able to quickly contribute to projects and shape the way that the future of finance/technology will look. Its easier for our generation to interact and understand code - so we can change the world faster.
This generation is particularly self-motivating. When our existing institutions such as universities couldn’t provide the information to learn, we self-organized and created clubs, educational content for blockchain and crypto. It was all driven by the students - that led to a large number of students learning and growing
Our generation has been given all the tools and information needed to build. All that is allowing us to both have a more personalized learning, but also build personalized products. So from shopping to financial products, there’s way more personalization based on who you are and what you want to do.
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This wraps up our 2 part student interviews. Thank you to all the students who participated. I’ve linked their preferred social media pages to their names if you are interested in reaching out and connecting with any of them.