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Why I Left Ethereum, Bitcoin, and Dogecoin for Tezos

Why I Left Ethereum, Bitcoin, and Dogecoin for Tezos

written by ryangtanaka

20 Jan 202410000 EDITIONS
1 TEZ

Background/Context

As the title says. I was successful in getting enough returns from my crypto investments to support myself living in the middle of a fairly expensive city (Los Angeles) but the last few years prompted me to make major shifts in my portfolio in ways that has bewildered some people, I think. After doing some mining for a year, I converted basically all my Bitcoin in 2014 to get into Ethereum's ICO, and was an avid supporter of Dogecoin prior to its "insane" 100k%+ jump. I also bought a CryptoPunks for about $100 or so, back when it was worth that much. I have exited all 3 projects in its entirety since then, because I largely consider all 3 projects to be "zombie chains" at this point - not quite dead, but not quite alive, either. At the risk of angering a few maxis out there, I will lay out very clearly the reasons why I made that leap from the more "popular" projects into heavily leaning into a relatively small, obscure project like Tezos (XTZ).

If you need proof for any of the stuff said here, just look up ryangtanaka.eth and ryangtanaka.tez and the receipts are all there. (Most people in "Web3" don't actually check ledgers which is part of the problem, but I digress.) The vast majority of people on the internet talking about this stuff are gaslighting both others and themselves to cover up the fact that they are probably hugely in the red right now. If you think about it carefully - all those people who suddenly "emerged" during the market highs probably weren't in during the lowest of lows.

People who made actual money in this space typically don't trash talk nearly as much, anyway - they know they did well and don't feel like they need to prove themselves at every turn like the grifters typically do. That's kind of the problem with the internet or the world as a whole, isn't it? The smart ones tend to be more quiet than the loud, very very wrong ones out there. (Not even necessarily dumb - just misinformed and lacking judgment from the pain of being deeply in the red.)

Crypto Has Regressed, Not Progressed

Been hearing some doubts about Tezos lately so I figure it was time to do another "Why XTZ?" post again, from the perspective of someone who left the Ethereum ecosystem entirely after being with them since the ICO. (Yes, I did make money from crypto - it is what is paying my bills now.)

The tl;dr is that the crypto industry as a whole is still very early and it doesn't make sense for coins to compare themselves to each other right now. The bigger challenge is mass-adoption by the mainstream (99% of actual money) - which will happen only if the dApps actually start providing real "utility" in the space.

We're not there yet - let's look at NFTs as an example - sure, there were a few celebs who gladly took VC and foundation money as a one time gig, taking advantage of their desperation for status and prestige - but do you actually see any of them using this stuff in their day to day work? Not at all.

I'm of the opinion that the industry actually regressed, not progressed, in its path towards mainstream adoption since 2016 or so. The proof is in the money - Web3's flagship product - CryptoPunks, is more or less the same thing it was back then - it hasn't seen any major updates or upgrades since they either got complacent or lost their appetite for taking things all the way since the option to cash out was sitting right there - and they took the money and ran. (Though I do think Larva Labs did the right thing selling it to Yuga - who's now stuck with a thing they largely don't know what to do with.)

If you need more proof, just look at all the dog-based, DOGE-clone coins you see popping up, even today, on some very "popular" platforms. It blows my mind how shameless a lot of these projects are in terms of lack of originality - and the thousands of dog coins popping up all the time, even today, is just insulting the intelligence of potential users at this point.

It's maybe time the industry does a bit of reflection on itself and realize that we are the beggars, not choosers, in this scenario. If you can approach this stuff with more humility, success will follow. But not when you have people unironically telling the normies "have fun being poor". Oof. Out of all the dumb things that happened in the industry in the last few years, I think that was probably the dumbest. Keep in mind that most people saying this stuff were people who were probably deeply in the red themselves - talk about projection, yikes.

Issues of Cultural Compatibility

Culturally speaking, keep in mind we already had celeb projects as early as 2016 that experimented with crypto - Bjork's Utopia (she was way ahead of her time as usual), Zoe Keating (her story is very tragic 😢), Imogen Heap, Stephen Curry's CryptoKitties collab, to name a few. So that stuff has been tried before and failed - most stories of "collabs" between artists/celebs and crypto platforms have been mostly disasters or underwhelming so people who do this stuff professionally have largely learned to avoid crypto projects as a whole. But instead of learning from the mistakes, most places just doubled-down on the wrong thing since 2020 and poured millions into ideas that we already knew wouldn't work.

I know people - who knows people - with hundreds of thousands and millions of followers just waiting to get in on the crypto thing. The smart thing to do would have been to focus on acts with small/mid-sized followings and try to take their careers to the next level (Low-hanging fruit: they need the help, are more open to working with new ideas, can convert their followers into users), which is what the promise of blockchain technology is anyway.

But what happened instead was after 2020 the industry spent most of their budgets on getting A-list celebs, who - let's be real - couldn't have cared about crypto either way. After reading off word-for-word from the script from marketing they were given, they took the money and ran, basically. Sure, a few people might've tried it out after hearing someone they recognize endorse it...but I suspect the data says that most people who actually took the leap probably tried it out the crypto thing for a little while, found it underwhelming, and then left shortly thereafter.

You see, there's a very simple reason why the celeb thing didn't work - A-list celebs already have lawyers and teams of people who take care of the administrative and accounting stuff for them, so the need for smart contracts aren't nearly as strong as those struggling in the middle or lower ranks of the influencer game right now. And that mostly involves talking to creatives whom hiring a lawyer to do the deals they need to maintain fairness is too cost-prohibitive - that is where the need is, not at the very top. Vanity Metrics 101, basically.

I still believe in the potential of the tech itself, of course - a few smart contracts tweaked in the right way, with the right feedback, and things can change drastically overnight. (Bless those who willingly charged into crypto stuff trying to experiment, though. They are the unsung heroes of Web3. 🙏)

The idea of artists being able to own their own work, in perpetuity, is actually a very appealing idea, especially for late-career artists who are already thinking about what their "legacy" will be. But issues like these - ideas that touch on real pain points that both creatives and people as a whole are having - aren't really being talked about right now.

So what is the utility, or at least potential utility of crypto right now? Although cynics will probably say "nothing", but there are at least a few things that blockchains are objectively good at. We'll look at a few of them below:

What are Crypto's Competitive Advantages (i.e. Why is it better than fiat or traditional databases?)

When you compare currently existing crypto products with fiat services - a lot of the "benefits" of the technology itself actually falls short, even as digital money. The UI is not very intuitive (everyone complains about it but nothing actually changes), high fees (especially for BTC/ETH), a lot of the security features crypto used to have got watered down due to bridges and L2s (arguably less secure than fiat than the average person now - at least with banks you can get a refund), no fraud prevention, no reverse transactions (other than a few exceptions) and due to FTX and a few rug pulls out there people no longer trust the word "decentralization" right now.

These things most people consider to be pretty basic, especially if you're asking them to potentially put in a large sum of their hard-earned money. When you put it all in a list like that, it becomes clear that there is actually no reason for the average person to use crypto right now, and the market is actually exactly where it should be.

But again, the potential of the technology is still there - and there are actually a few things that crypto does very well. Having been through a few of these cycles already, putting it into historical context might help to break it down a bit better.

You see, in past cycles, crypto projects used to actually talk about what their chain was good at (at least occasionally), as opposed to why the other projects were worse. Here is a list of each chain's former "identities".

- Bitcoin (Being a Store of Value, Is Simple and Does One Thing Very Well)

- Ethereum (Smart Contracts, Mint Your Own Token)

- Dogecoin (Fun/Art, Culture of Decentralization)

Others:

- Depends on the project, but staking rewards generally outperform interest rates at banks. (This is actually a bigger deal than most people think because this is where the banks decided to attack politically, at least in places like California.)

- DAOs (Decentralized Autonomous Organizations) are actually a legitimate way to tally votes without having to rely on third-party vendors.

I put former in italics there because up until 2020 or so these projects were largely "known" for these things and people talked about them accordingly. Yeah, those 3 projects fought all the time (CHAINWARS! ⛓️) even back then but I feel like they at least respected each other's "domain" somewhat - they would disagree, but at least you could occasionally learn something from the arguments because they actually stood for something back then.

These days I feel like most of the debates are pretty pointless since with the introduction of mainstream money the projects have become more similar to each other - and most people are rehashing the same arguments over and over - just louder and more confused. A few examples:

Each project had respective reasons why they became successful - or at least the markets believed that they believed in what they stood for - enough to take the journey with them. I don't think that's really the case any more, though - what happened was that in each of the projects was that there was a "middlemen" takeover - the people they were trying to "disrupt" (the fee-takers) saw an opportunity to do what they do (take fees) and basically sabotaged the project from within. I recently saw a guy somewhere actually bragging about how some ordinals on Bitcoin were going to cost upwards of a $1000 to mint - he had that "middleman" smile there, salivating at the prospect of finding some sucker to put up that much for a tech that's basically still unproven. He wasn't thinking about the artist, customer, the product, or even the chain itself, really - all he knows is that fees = good. I know this sort of thing happens all the time but I honestly didn't expect the ecosystem to cave in to the status quo so quickly!

So as far as impressions go, the reputation of crypto right now is in the gutter and there is a big hole to climb out of if we want any chance of it seeing the light of day again. I mean, the whole FTX thing did not help of course, but if it was just one crook here and there, it wouldn't have mattered because most adults actually do realize that the world is not a perfect place. Some of the problems of the industry right now, however, are in pretty fundamental parts of how the products actually work - which honestly hasn't been the focus of the ecosystem for a while now. (MARKETING MARKETING MARKETING - market what? Honest question.)

So again - beggars can't be choosers and we are basically still starting from scratch. Anyone who claims that a certain coin has already "won" has no idea what they're talking about - what does "victory" look like, anyway? If some project graduates from its "testing" phase, found a reliable product-market-fit and someone signs a 10-year, multi-billion contract with a certain chain, please let me know - until then, as far as I'm concerned that it's anyone's game at this point.

There are some pretty concrete reasons why the big coins are in trouble in the upcoming years:

If you came to this article expecting Tezos stuff, the next section is where I'll talk about why I chose this project over the others instead. Can you make money investing in Bitcoin/Ethereum in the short-to-medium term? Maybe - but most of it will be politically driven and very risky in its own way because it has mostly to do with people's feelings and how people will react to the upcoming recession in the West. (My conclusion: who knows?) This is too messy and unpredictable for me, so instead of sticking around I just left and focused on the project with arguably the best product out in the market right now - which is XTZ.

Why Tezos (XTZ) is Ahead of the Game

Before I start singing the praises of my blockchain of choice, I'm going to start with a disclaimer that I don't actually think that even Tezos is quite "there" yet, either. It had most - if not all - of the same problems that other chains did during 20-22', and was not immune to the allures of fast-money-hype-cycles either. But what saved the ecosystem from turning into a complete joke is the fact that the platform is actually legitimately decentralized, which helped it from going through a complete collapse. As far as I'm concerned, it's the closest to being neutral (the lesser of evils) in a industry full of projects which are actively in full regression mode.

Maybe this might explain why even though Tezos people probably don't have too many moments of "good feelings" (I sympathize, really), even though they are technically "ahead" the race - it's more that they are "losing less", than actually "winning". Does it make you feel better that other competitors are buying high-powered Lambos with the millions that they have, but accidentally put their gears in reverse? Well it's maybe kind of funny in its own way, but it's sort of a mixed feeling at best, since it doesn't actually help your own situation all that much.

When I say "collapse", I don't mean like the price of it going to 0, which usually never actually happens. (Even Ethereum Classic is still around, despite experiencing literal 51% hacks, several times. How does it stay alive? Who knows.) I mean the collapse of culture - the beliefs and ideals of the blockchain in other project more or less were killed off after a little money came in - which is unfortunately a pretty common thing to happen, even in startup culture. The belief of a decentralized world where individual actors are respected, however, still continues to linger on in Tezos - though relatively small in number - at least right now. Other places? They basically gave it up - and the proof that they did so...well, it's not subtle, to say the least.

This pivot into "who cares about decentralization" also came from the "middlemen", who correctly did their market research and correctly assumed that the average person out there probably doesn't really care about whether something is decentralized or not - they cut every corner possible, justifying their decision based on "that's what people want". But here's the problem - especially for a product that claims it is "disrupting" the financial industry, it needs to have some sort of differentiation from fiat that is actually tangible and real. Otherwise you might as well just use fiat money, which is much more convenient and easier to use. It's a sort of approach that undermines itself and automatically puts a deadline on its own relevance. (This is why I consider most of the top coins up on the charts right now "zombie chains" - they're not quite dead, but not quite alive, either. Life is measured in its potential for future growth, not past accomplishments.)

Of course, I've posted many lists of reasons like this before, but I'll try to focus on a few that might be unique from my experience:

Now the biggest complaint is market size - yes, Tezos is a very small, niche product at least compared to some of the more prominent projects out there. Dipping into my previous experiences of having been part of early-"movements" having started small then grew into mainstream trends (Yes-In-My-Back-Yard, Universal Basic Income) - the one thing you do notice is that most of these movements started with just 3-4 people meeting regularly about a thing, just because they cared enough to do so.

You could technically run a blockchain off of a handful of people running a few nodes off of a few computers - that's all you really need at the fundamental level. Quality > quantity, and you don't really need a whole lot of people to run an ecosystem in an effective way. What crypto as a whole is waiting for is for the dust to settle (especially from stuff like FTX, which is still in the news right now), and for people to take another chance. This might take some time, but I do think that XTZ is still the best positioned to do this right now, as long as it keeps its current practice of transparency and honesty going as it has.

In a few paragraphs, this is how I see things turning out over the next few years in the financial/crypto sector.

1) Fiat markets go into a recession, people start seeing their real-estate and pensions evaporate, crypto starts looking better for people looking to escape the downward pressure.

2) Most "top coins" main selling point right now is that it's "not fiat", since it have very few features and use-cases that can stand on its own merit. Web3 and fiat orgs are already at war with each other right now - this will intensify as the economy goes further into the recession. Most of the news you hear about finances will be extremely negative, even more than it is now.

3) Tired of all the fighting people will be looking for alternatives that "work" - and this is where Tezos has the potential to shine, along with a few other alts that have been working on their product in good faith up until now.

4) Because Tezos is small, it will do well even with less money coming in, because it just needs a small percentage of a small percentage of total funds coming in for it to 10x or 100x in value. This is how you make money - not by picking projects that are already winning, but picking projects that have the potential to win at some later date.

In a nutshell - and no offense to the folks working on various chains out there - is that I really just don't trust any of the major coins' intentions and practices right now. With Bitcoin, I have to worry about whether people might realize that "Store of Value" really means nothing, Ethereum - that their gas fee/L2 problems basically make their chain useless, Solana having another "oops" moment (on top of getting caught blatantly lying about a lot of important things), DOGE...not having a major upgrade ever again (plus that guy popping in and doing who-knows-what), and SHIB...is...why does that coin even exist?

Well, you get the point. A good exercise is imagine removing all the money - even potential money - from ever coming in, would people still be there? Tezos (and past-ETH, past-DOGE) passed this test for me already - but the others? I don't know. And I can't put money into "I don't know".

So the fact that Tezos will do well is already a done deal to me at this point - the idea that it's ever "going to 0" is pretty silly, especially since it's historically always performed at least comparably compared to other coins. (If Tezos goes to 0, that means that the crypto industry as a whole is "done" and we would have bigger problems at that point.) The concern I have for Tezos is not so much that it'll do well in the medium-term, but whether or not it can resist the temptations of quick cash and zombify itself before reaching its true potential. We'll see, either way. (I won't lie - if it zombifies, I'll be out of here too. So far it still seems to be run by humans, though. Maybe even a little too human. 🤣)

But it's more along the lines of whether people are willing to wait around for that long for that moment to happen - I know lots of people who dropped out of ETH and DOGE early and regretted it later - but hey, we have all our decisions to make.

I'll admit that the market cycles this time hits me harder than usual because the last time I was just a HODLer and was busy doing other things in my life in the meantime. (I worked regular jobs, did politics, art, having a life.) But the pandemic plus making the decision to start a business (teia.cafe) on XTZ really ramped up the stakes a lot this time around! But I'm still doing the same thing as before - just that time seems to move a lot slower now that I'm waiting around for the future more intentionally now.

Lastly, I will say that this is NOT FINANCIAL ADVICE. I've never pressured people into making the same decisions I did and am not about to start, even now. If you want to sell all your XTZ and buy a doggy-coin clone token instead - go ahead. But I hope you have your reasons for doing so - I'm just another random musician on the internet just trying to make things work, after all - and I do have to be smart about things if I want to stay ahead of the game, after all. 🙏

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