The aim of Illuminated is to become a shared collection of resources and synthesized guides, illuminating the ever-evolving path for a budding community of newcomers and veterans in crypto/web3.

As my own crypto/web3 journey has accelerated, I’ve compiled reems of notes, written pages of reflections, and synthesized early learnings. Many synthesized resources that I hope to share are aimed at guiding and supplementing the journey that we’re all on together.

But instead of just dumping pages and pages of resources into the world, I felt it was important to take a moment of personal reflection…where did this journey begin, what were the important inflection points along the way, where does it land me today, why am I drawn to this space…particularly in light of how rapidly the crypto/web3 ecosystem is evolving.

Early 2014: My crypto journey began in 2014 as a young, overly confident analyst working for the Chief Investment Officer of a well-known Wall Street bank. Among the wide range of responsibilities and tasks - that often felt insurmountable for a 23-year old - we were responsible for weekly research on a widely distributed investment research piece (readership was 150,000+ at the time).

Enter Bitcoin: After beginning 2013 in the mid-teens, Bitcoin ripped throughout the year, peaked in early December at over $1,100 before quickly losing half of its value by February 2014. Investors and analysts across the spectrum of traditional finance (who were paying attention at the time) collectively laughed at this “digital vaporware” that seemed to walk on water throughout 2013 before quickly and relatively quietly drowning…or so it seemed.

Throughout the early part of 2014, we attempted to learn all we could on Bitcoin, form a “house view”, and begin sharing to the broader investment community. What was a digital currency, was Bitcoin worth investing in? Was it a digital store of value and inflation hedge like proponents preached, or a tool for illicit activity that avoids government oversight and meddling? Or was it something else altogether?

We wrote:

“What do you make of Bitcoin?”

A lifeline for the financially oppressed, operational challenges, and the risk of it actually working

The ingenuity behind the digital currency Bitcoin is that it replicates the supply limitations of gold. Its architects might have thought that was the hardest part, but on any road to broader acceptance, it may turn out to have been the easiest. Our Investment Bank wrote a piece on Bitcoin and focused on whether it represents a “store of value” the way fiat currencies and precious metals do. The authors concluded it does not: it is illiquid (daily turnover of the Mauritius Stock Exchange; massive ratio of value in circulation to daily float), volatile (20x more than the Yen; largest one-day drops to-date: 38%, 36%, 33%) and it offers no means of interim return to holders (e.g., cash yield). These are of course all static observations that could change if Bitcoin were much more broadly used.

There is a constituency for whom Bitcoin may make sense even with this backdrop: the financially oppressed. Examples: businesses and individuals in countries with capital controls, dual exchange rates and persistently negative real deposit rates on savings (yes, there are countries even worse than the US; in Venezuela, real interest rates have been negative for 25 years). Whose citizens are in such a predicament? There’s an academic measure of capital controls on businesses and individuals that attempts to quantify this, and the worst two categories appear in the box below. Around half the people on the planet fall into this box, and they represent 28% of World GDP.

Other (legal) uses could include cross-border trade, individual remittances to developing countries, small-denomination transactions for which processing fees are usually high, and a variety of small business transactions. So far, however, Bitcoin is the Esperanto of currencies: an elegant idea to transcend national borders that attracts a community of intensely avid followers, but which hasn’t yet achieved broad acceptance. Ignore its price for a moment; actual purchase transaction growth has been low compared to the rise in trading activity. This could be a function of Bitcoin’s challenges.

Facepalm #1: It’s clear that the volatility of Bitcoin quickly moved us past the “store of value” arguments, and we myopically narrowed on Bitcoin as a currency for remittances and small transactions. With 20/20 hindsight, we missed the forest from the trees, and it certainly didn’t help that many ardent Bitcoin holders and believers at the time had no interest in sharing their insights with a large financial institutions who stood at the center of the ecosystem a peer-to-peer Bitcoin network was aiming to disrupt.

Facepalm #2: At the time, we were also prohibited from buying securities or investment products outside the close watch of our compliance department; as an ambitious young person less than two years into their career, my reputational risk-aversion took over and I stood on the sidelines as I listened to stories about colleagues arranging meet ups with tech-savvy Bitcoiners who were helping set up hot and cold BTC wallets over the weekends…now up 60-100x since then…oops…

Mid 2014-2016: Throughout the remainder of 2014, into 2015, and for most of 2016, we saw Bitcoin continue to bump along, swinging up and down in the mid-hundreds, before building some price momentum into the end of 2016.

As my banking career deepened, I casually kept watch of the action happening across crypto markets with the ever-watchful eye of compliance peering over my trading accounts, doubly compounded by my aversion to doing something that might jeopardize my stable, growing career.

But something was happening, both in the markets and within my own journey. New cryptocurrencies were emerging - Ethereum and Litecoin, among others…a wave was emerging on the horizon.

And I was growing increasingly unsatisfied with the idea of being an investment banker for the rest of my life, it was time for a change.

Early 2017: I was deep in the middle of an intense M&A deal and ready to be done with banking once and for all. At the time, my role focused on advising banks, specialty lenders, and the blossoming fintech industry on all things M&A and capital markets, and the growing swath of peer-to-peer and fintech lenders were catching my eye; banks were slow, these fintechs were new, fast, and poised to disrupt what I thought were a bunch of sleepy giants. It was time to tap the entrepreneurial roots that I began to form when I started and scaled a house painting business in my early college days. It was time to join an early stage fintech start-up…let’s disrupt these sleepy giants.

For the first time in my career - now within BD & Partnerships - I was sitting elbow to elbow with a group of incredibly talented, ever-curious product leaders, software engineers, and crypto-forward peers. We were collectively building an app, tech stack, and marketplace that helped small businesses access loans and other financial products. And in parallel, I began to pick up on the tech trends and interests that our team and partners were drawn to; an entirely new world began to unfold in front of me.

Enter CryptoKitties: December 2017 - I hear from across the row of desks “woah, CryptoKitties broke the Ethereum network” …. my response …. “wut” ….

The conversation may as well have been happening in a different language, but nevertheless, there I was, sucked into the latest, ‘squint to understand’ craziness happening in crypto. As I later grew to understand, these Non-Fungible Token cats were able to breed with each other…on the Ethereum blockchain…and ‘birth’ another Token cat….double “wut”

…but I had to learn, and deeper I went…

Enter 2018: In hindsight, the ensuring crypto bear market and crypto winter was obvious. Despite the mania and promise of world-changing technology, more than 90% of projects that completed an Initial Coin Offering (ICO) never shipped a project. Projects immediately flopped and the more prominent cryptocurrencies began their precipitous decline. Without realizing it, I was fortunate that I had picked trustworthy podcasts and was generally surrounded by a group of rationale people who were smarter than me. Instead of getting completely wiped out on vaporware projects, I rode the crypto rollercoaster, strapped onto some projects that turned out to have enduring value…eventually.

And with any frothy market that quickly turns on its least committed builders and speculative entrants, many people washed out and returned to their “normal jobs” again. But I was hooked - through a combination of novel curiosity, and a group of crypto-interested peers, I kept reading, learning, and trudging along through my first crypto winter.

Spring 2020: The world was grappling with COVID, and after the March/April whipsaw in traditional and crypto markets, many wondered where the world was headed. But within the crypto ecosystem, the committed builders were still building, and with trillions of dollars of government stimulus looking for additional sources of investment return, “DeFi Summer” began.

Rewind a second…throughout my 2017/18 exploration, I found Chris Burniske through my podcast listening and Crypto Twitter scrolling. As one of the most astute and balanced minds in the space, he became an early source of guidance and dived deeper. To his unknowing credit, a 2020 crypto inflection point for me was a casual Chris tweet…“no one is paying much attention, but something is happening here, $ETH”…he cut through the noise, saw increasing development and adoption velocity, and told the world, DeFi Summer is coming.

And like many others, I fired up YouTube, searched “how to use MetaMask”, transferred some ETH, and my DeFi journey began. While I’d love to say that I had it all figured out, I quickly realized I was beyond my depths. Yield Farming, Liquidity Pools, Impermanent Loss (!!), Lending Protocols, Algorithmic Stablecoins.

But I was beginning to draw parallels from my traditional finance days. I was able to draw lines through new primitives and be able to say, “oh, this is the crypto version of peer-to-peer lending”. The pieces were beginning to fall into place, and my mental models started to crystalize.

2021: Dapper Labs - creator of CryptoKitties - reemerges on my crypto horizon with NBA Top Shot. As a kid who collected binders of sports cards and still have every ticket from memorable events I’ve attended, NFTs started to click for me. Top Shots are the new “pack of cards” that I used to ask my parents to buy me in the grocery store checkout line; digital trading cards are here. Digital tickets enabled by NFTs are going to eventually reduce fraud, and significantly reduce the “take rates” that online ticket brokers charge. Any digital good can be codified and verified through standards like ERC-721. Mental models continued to crystalize a bit more.

As we continued to make our way through 2021, things started to become a little whacky. Memecoins…your cousin’s NFT drop…how many Layer 1 protocols do we need…the signal-to-noise ratio seems to be going haywire. Or, was this simply the world rapidly changing before us?

https://twitter.com/hockenbrocht/status/1391832225621086211

As I’ve grown older, I’ve seen myself skew more and more towards the “early adopter” end of the tech lifecycle curve, and with that shift I’ve begun to better hone my ability to suss out what’s a fad versus enduring - particularly when living in a lifecycle zone where many projects won’t “cross the chasm”. But whew, do I have a long way to still go, and so much to learn…though I’ll give myself a brief pat on the back for nearly calling the top of $doge.

With so much to learn, and with 2021 coming to a close, my personal aim for 2022 was to jump more heavily into crypto/web3, with a two-parted aim.

First, during a moment of self-reflection, I realized that throughout the growing exuberance of 2020 and 2021, I quicky blew past first principles thinking on crypto/web3. I needed to rewind a bit and begin asking myself the bigger questions such as “why does this technology need to exist?”….”does decentralization matter, if so, why?”…“what economics incentives and innovative business models can we unlock?”

Second, I wanted to meet a diverse group of smart and passionate crypto/web3 people. Among several principles that I aim to align my professional life with, one of the most important is, “Do all you can to put yourself in ‘rooms’ with people who are way smarter than you”

2022 - Enter Kernel: Like many serendipitous moments in my life, Kernel entered my life in a small unexpected way, this time through a quick plug that an interviewee made in a crypto news article I was skimming over Thanksgiving weekend.

I was immediately struck by the learning community, first principles thinking, and entrepreneurial spirit that the Gitcoin-backed community fostered; and as serendipity would have it, I applied for the upcoming cohort *the day* that applications closed.

https://twitter.com/KERNEL0x/status/1466124019665711111

Fast forward a few weeks, and I was accepted into the Block 5 cohort, and in early February 450 Fellows from 46 different countries kicked off our journey together. Through a combination of digital sessions and IRL dinners, we covered an enormous amount of ground through guild-style sub-communities - from NFTs to DAOs to DeFi and Tokenomics.

Throughout our conversations, I was struck by the diversity of people and perspectives - this provided a rich and tangible means through which we could explore an emerging technology and ecosystem. The lived experience of someone born and residing on the other side of the world provides a perspective that enriches crypto/web3 development, and I’m hopeful means that we’ll be able to create products and technology that better serve a diverse, global community.

While I don’t know exactly where my journey will lead - or for that matter - precisely what comes next, I’ve learned that there is joy in the exploration. This adventure has taken twists and turns that I could’ve never imagined, and it leaves me optimistic about my individual, and our collective future.

New technology is unfolding before us and I’m excited that we’re continuing on this illuminating adventure together.