Crypto's big split?

The US government's successful sanctioning of Tornado Cash set an interesting precedent — the government may never be able to stop the code on a blockchain, but it can easily censor the companies and people interacting with it. That precedent could split crypto into two groups: a 'state-less' camp that wants censor-resistance without caring about the law, and a 'compliant' camp that wants to use crypto within the bounds of the law.

State-less crypto is more ideology than technology use case — radical, and if it becomes dominant, it won't lead to billions of users, since the law will be paramount everywhere. Compliant crypto treats blockchain as a technology primitive — 2.0 versions of fintech, collectables, and more — and can scale to billions of users precisely because it's compliant.

It's early to say which group wins. My best guess: state-less crypto collects around assets like Bitcoin, and compliant crypto forms around other chains. The trillion-dollar question is where Ethereum itself ends up — a state-less core chain with compliant L2s on top, or something else entirely. Time, and a lot of US regulation, will tell.