Cryptocurrency — despite nearly 14 years of history dating back to Bitcoin’s 2008 and Ethereum’s 2015 launches — remains today a highly controversial, confusing and contested concept to experts and lay people. The crypto world has been a spiritual battle space between its believers and haters, and more recently, those who exploit the differences for private gain. The battle is so fierce that it divides believers into camps (e.g., BTC vs. ETH vs. SOL vs. ADA vs. XTZ) that loathe each other and fight for supremacy.

To the believers of traditional finance (TradFi), fiat is the only trusted medium of exchange, store of value, and unit of account. It is endowed with the proof of authority by governments, which are the “trusted public face” that all market participants can relate to. Fiat is a social contract that comes with terms and conditions of engagement among participants, with governments as its guarantor. To TradFi believers, crypto is rather an incoherent, absurd concept rooted in the “greater fool theory,” appearing to be based solely on hype and empty promises. Nothing else. “How can just anyone create money out of thin air?” they question.

To the believers of decentralized finance (DeFi), crypto is practically useful and rooted in the “greater good theory.” Most crypto evangelists attack “fiat” for its detachment from the gold standard, whose history goes back to the Bretton Woods agreement that decoupled the U.S. dollar from gold in the 1970s. Hence, crypto is not different from fiat as their values are merely a social construction. Another attack by crypto’s proponents on the status quo is over the intermediaries that drive higher transaction costs for participants and create market inefficiencies. Moreover, the public’s data is exploited by the few for profit. But intermediaries are a more efficient model for oversight, creating lower monitoring costs for regulators. Without oversight, there is no public trust. The two worlds are irreconcilable.

Crypto’s social contract — anonymity, trustlessness, permissionlessness and decentralization — is a strength as well as weakness. However, to gain legitimacy, crypto can no longer afford to be a clandestine sector. With crypto, what has been utterly lacking so far and yet requisite is an open discussion of its public responsibility. Crypto cannot escape public responsibility ideals because its existence — all the ICOs (initial coin offerings), IDOs (initial decentralized exchange offerings), IEOs (initial exchange offerings) and INOs (initial node offerings) — affects the lives and assets owned by millions of people: the “public interest.” The word “public” here is used to differentiate crypto used for private or closely-knit groups such as families and friends where trust already exists. Therefore, the crypto sphere should embrace public responsibility to realize its social contract. There are many ways to do this, but let me illustrate the 3S strategy: self-regulation, self-protection and self-cooperation.

First, self-regulation. The thorny issue is for the crypto world to decide on the need for a public guarantee for crypto projects to prevent frauds of all kinds. How will crypto be guaranteed in adverse events?

There are a few questions to be considered. For example, how long must a crypto project operate well before it can launch to the public, does it have a clear business model, and is its operator qualified to manage it? Should crypto projects rely on existing legal structures (e.g., LLC or general partnership), or if a new type of legal structure is needed, what should it look like? Do all crypto projects need a legal entity even though they are launched by individuals instead of organizations?

To self-regulate, the crypto sphere can take a leaf from other self-regulatory initiatives that have been quite successful such as “Certified B Corporation,” a voluntary standard for ESG practices placing public interest at the heart of modern corporations. The advantage of crypto self-regulation is that the crypto actors know better what works, what does not, and why and thus would have an edge over regulators to determine crypto’s future.

Through self-regulation while protecting its own interests vis-a-vis regulators’ interests, the crypto world can decide the criteria for who is allowed to launch a cryptocurrenty to the public (criteria), the legal basis for crypto to operate in the public (legality), and the accountability mechanisms for crypto that serves the public (accountability).

A self-regulated crypto sphere might be a better avenue than waiting for it to be governed by regulators, as it is happening right now across various countries. Even though anonymity is the culture, there is an advantage to having someone act as the public face to ensure good self-governance, some form of self-reporting of what a crypto project does and achieves, and the state of the crypto founders’ wallet.

Second, self-protection. Self-protection is another crypto public responsibility question as hacking is a common threat for crypto projects. Crypto is basically a bunch of codes that can be hacked. The 2016 hack of The DAO, one of the largest for an Ethereum project, and the attack on Axie Infinity’s Ronin chain earlier this year caused losses in the hundreds of millions of dollars. The list of other big crypto hacks is endless.

However, many hacking cases are also not entirely due to technical problems but rather behavioral problems, such as a lack of due diligence by participants. Code audits are a common practice but still often fail to live up to a safe standard. As a self-regulated, self-governed sector, the crypto world needs to continuously invent better ways to guard itself and the public funds.

Lastly, self-cooperation. The crypto players — from kings, knights and bishops to pawns — need to ditch their egos and start getting united to pursue three common goals: survival, legitimacy and mainstreaming. Key to this is the realization that crypto is still in the nascent stage of its life cycle. Whether crypto can be the next currency or a store of value is unknowable and debatable. Only time will tell. However, there is a general consensus among crypto actors worldwide that it is the “use case” of crypto that makes it valuable. “Use case mindset” — or what I call ”affordance orientation” — is a safer bet for the future of crypto as it can reconcile the differences between the fiat and the crypto camps and entice the broader public to embrace crypto in a more persuasive fashion.

Think of the cool futuristic ways that crypto can be used for: as a digital key to open and pay for Airbnb homes or Uber rides; as an affordable and verifiable identifier for vehicles, real estate and university certificates; as assets for market exchange inside the metaverses, and an efficient way to automate tasks in smart organizations such as decentralized autonomous organizations (DAOs). Imagine if an All Crypto DAO — composed of all competing crypto camps and their elected group of leaders as public face — could be formed as an alternative governance structure that can offer proof of authority to crypto of all kinds and allow collective action.

Crypto needs a rebirth, re-baptism, reframing and a new identity. It is the public — the decentralization ethos — that gives way to its rise but also possibly its demise. This crypto winter is a perfect time for all stakeholders to rethink crypto’s alternative history and chart its plausible future. It’s not too late to embrace public responsibility to discipline the sectors and rebuild trust, while still supporting the spirit of innovation and equal opportunities.