My view has been, and is, that we are in the “infrastructure phase” of the crypto market development cycle.
To elaborate, I believe that we need better infrastructure (e.g. better base chains, better interchain interoperability, better clients, wallets and browsers) before we can see a robust application development environment and so I have stated many times that right now is a time to focus on building (and investing in) that infrastructure. That view has been the prevailing wisdom inside of USV for quite a while now.
Well a couple of our colleagues at USV decided to poke holes in that argument and spent a few weeks doing research and then writing this post.
The post is called “The Myth Of The Infrastructure Phase” and it was researched and written by Dani and Nick.
I have a feeling that this post may be headed to similar territory as Joel‘s now famous Fat Protocols post because, like that one, it takes a conventional wisdom and turns it on its head.
Dani and Nick argue that there are no distinct phases but in fact, a virtuous cycle of apps>infrastructure>apps>infrastructure that brings a new market/technology into its own.
Read the post, as this argument is well researched and well made.
However, as much as I agree with their arguments, I continue to believe that for investors, the best bets right now are infrastructure bets. It remains too hard, too expensive, and too frustrating, to build decentralized apps and the big value unlock will come when that changes. I think the returns on investment on infrastructure will be higher in the phase we are in right now. There will come a time when apps development will have a better ROI, but I do not think we are there right now.
USV has made investments in decentralized apps, like OB1 and CryptoKitties, and we will continue to do that. But our primary focus is on infrastructure right now.
