Decrypting Crypto: James Diorio on Blockchain, Myths, and the Age of Autonomy
James Diorio has spent the last five years immersed in the world of blockchain, and he’s now on a mission. His goal is to dispel the myths and misinformation surrounding the blockchain industry and explain why crypto is here to stay, along with how this technology is poised to drive the next major economic boom.
Understanding the untapped potential of blockchain and crypto, Tradecraft Capital operates as a conservative, multi strategy, thesis driven blockchain focused investment firm, investing in what the firm classifies as the next long wave economic cycle, the Age of Autonomy. While Bitcoin continues gaining traction as a new form of currency, considerable confusion, doubt, and misinformation still surround blockchain technology and this emerging asset class more broadly, particularly the fact that Bitcoin represents just one small piece of a much larger picture. Diorio’s focus at Tradecraft centers on decrypting crypto, helping people understand the underlying technology so they can better harness the value this next economic cycle is set to create.
James Diorio’s other passion is The BELLA Organization, a 501(c)(3) he co-founded to honor the life of his daughter, Bella Diorio, who was diagnosed on the autism spectrum and whose life was unexpectedly cut short in 2020 at age nineteen. Recognizing the unique needs of neurodivergent teens, The BELLA Organization offers mentoring programs, scholarships, and support for highly functioning autistic high school students as they begin their college journey.
Tell us about your new book, Crypto Decrypted, coming out in May 2023.
I co-authored this book with my business partner, Jake Ryan, and its primary focus is dispelling many of the myths surrounding the space, understanding the blockchain breakthrough, and explaining why that breakthrough matters so much. Most people don’t really discuss this side of it, and we believe everyone should have at least a basic understanding of a technology that will ultimately affect all of us, especially if they’re considering it as a potential investment.
The book has been well received, and we’re proud to have endorsements from SkyBridge Capital founder and managing partner Anthony Scaramucci, former CFTC Chairman Chris Giancarlo, the so called Godfather of Crypto Michael Terpin, and many other respected figures in the space. The first thing most people misunderstand about blockchain is that it’s simply a technology, not just money. People tend to assume it’s all about currency, and that’s simply not the case. Understanding that distinction opens up an entirely new perspective, but for us, it’s not just about blockchain in isolation. We believe the real power lies in how blockchain connects with three other transformative technologies: artificial intelligence, robotics, and the Internet of Things. Together, these define what we call the Age of Autonomy. This concept is grounded in a century of economic theory, built on the premise that long wave economic cycles are driven by revolutionary technologies. Oil, gas, railroads, electricity, and the internet were all breakthrough technologies that sparked major economic booms following their deployment.
AI, robotics, and IoT can give us a self driving car. That’s interesting on its own, but add blockchain, and suddenly you have the ability to build a self driving business. That’s the real breakthrough, and that’s where we’re headed. There’s simply too much data in the world for humans to process alone, which is why we need these technologies working together. As all of them continue growing rapidly, the eventual market cap becomes almost impossible to forecast, because this convergence will touch every business and every aspect of our lives. We’re already seeing this play out clearly, for example, in the rise of tools like ChatGPT, which take enormous amounts of data and distill it into something digestible, almost as if speaking directly with a person. Since blockchain is both a technology and a core pillar of the Age of Autonomy, we encourage investors to view it through that broader lens as well. Autonomy is ultimately the greatest competitive advantage available.
What do you think is the potential size of the blockchain market?
It’s massive, comparable to trying to predict the eventual size of the internet back when it was just emerging. Blockchain technology solves one of the ten most significant problems in computer science history, known as the Byzantine Generals Problem. Put simply, if ten generals are trying to coordinate an attack on a city with no central authority and no counterparty in charge, how do they work together effectively as peers without anyone directing the action? That’s exactly the breakthrough blockchain provides. It allows us to operate as true peers in the digital world without needing to rely on a counterparty.
Consider money for a moment. Everything in the digital world is typically managed by some governing authority, and in the case of money, that’s usually a bank. The recent turmoil we’ve seen across the banking sector has made it painfully clear that individuals don’t actually control their own money, banks do. And if those banks are overleveraged without sufficient reserves, real problems follow. This is exactly why technology like blockchain matters, since it allows individuals to actually possess and manage a digital asset like Bitcoin themselves, without depending on a counterparty. This concept expands further, since it now allows us to operate in the digital world the same way we operate in the physical one. In the physical world, I can hand you twenty dollars, a book, or a cup directly. In the digital world, that kind of direct exchange simply wasn’t possible before, at least not without routing through a controlling entity. Now, with the ability to exchange digital assets, whether money or otherwise, peer to peer, while maintaining provable uniqueness and ownership, remarkable possibilities open up, including the metaverse. Without going too deep into that, I’ll simply say it’s going to change how business gets done. Many share that belief, which is why Dubai is investing billions of dollars into becoming the metaverse capital of the world, with Japan close behind.
Do you think regulation could pose a threat to the blockchain industry?
Rather than a threat, we actually believe regulation will benefit blockchain technology significantly. Over the past few years, we’ve watched a landscape emerge and then crumble under the weight of flawed projects like Terra Luna, centralized finance platforms like Celsius, and most recently FTX, which amounted to outright fraud. We’ve clearly demonstrated that the industry hasn’t been able to regulate itself effectively. Thoughtful regulation will establish necessary guardrails. We believe there should be a clear separation between banks and exchanges, along with a requirement for qualified custodians. These are basic protections, but they matter, because institutional capital largely hasn’t entered this space yet, and we need that capital to fuel continued growth. Regulation is what will finally make that possible.
What are some of the biggest myths surrounding crypto investing?
One of the biggest myths is that blockchain technology is primarily used for criminal activity, and that simply isn’t true. In fact, it’s about the worst possible system a criminal could choose, since everything on the blockchain is transparent and highly traceable.
According to a 2022 report from Chainalysis, criminal activity accounted for 3.4 percent of all cryptocurrency transaction volume in 2019. By 2020, that share had fallen to just 0.62 percent, and it dropped further to 0.15 percent in 2021. There is far more criminal activity tied to traditional dollars, it simply isn’t new or sensational enough to make headlines. Criminal networks continue to rely heavily on traditional fiat currency and cash transactions, largely because cash can’t be tracked online the way digital transactions can.
What measures should investors always apply when investing in blockchain and crypto?
Real diligence is essential. Just as you’d research a company before purchasing equity or making a direct investment, that same scrutiny needs to apply in the crypto world. Does the project have a team capable of execution? Does it offer something genuinely unique that adds real value to the marketplace? Does it have an appropriate market cap? Does it have actual users? Does it have a clear mechanism for creating value? Unfortunately, many investors fall victim to FOMO and jump into crypto purely for crypto’s sake, without understanding any of the fundamentals behind the underlying blockchain. What’s important to recognize is that crypto assets simply represent blockchains, it’s the blockchain itself that warrants genuine investment consideration. That brings us to the concept of liquid venture investing. You can participate in a blockchain you believe in by holding its token, but because tokens remain liquid, you’re not locked in for years waiting on a single transactional event the way traditional venture investors often are. It’s a compelling concept, and one we believe will reshape the face of venture investing over time.
Above everything, education remains central to what we do. We want to cut through the noise and give investors a genuine understanding of what this technology actually is. That clarity allows people to make informed decisions and determine, based on facts, whether and how they want to participate. We consider that absolutely critical. Even walking people through the basics, we’ve watched countless lightbulb moments happen, and that matters. This shift is already underway. Adoption is quietly happening all around us. The simple truth is that the Age of Autonomy has arrived, and we don’t want people to miss this opportunity.
tradecraft.capital To preorder Crypto Decrypted click here
