§26. Adoption Curve & Ecosystem Dynamics

Jason St George. "§26. Adoption Curve & Ecosystem Dynamics" in Next‑Gen Store of Value: Privacy, Proofs, Compute. Version v1.0. /v/1.0/read/part-vi/26-adoption-curve/

§26. Adoption Curve & Ecosystem Dynamics

The stack is not adopted by “the market” in one step. It’s pulled in by different constituencies, each with their own pain.

26.0 The Transition Window: Hard Assets as Bridge

Before the triad stack is operational, rational actors face a dilemma: soft guarantees are visibly failing, but the new infrastructure isn’t yet robust enough to absorb serious capital. Gold and silver—time-tested, non-digital, seizure-resistant in physical form—remain sensible bridge assets during this window.

This thesis does not argue against holding them. It argues that once VerifyPrice, VerifyReach, and VerifySettle are live and healthy, the triad offers superior properties for a dense digital civilization:

• Verifiability: Gold’s purity requires assay; proofs verify in milliseconds on a laptop.
• Programmability: Gold cannot enforce conditional logic; Work Credits can encode SLAs, escrow, and policy.
• Portability under surveillance: Physical gold is detectable at borders; shielded settlements are not.
• Divisibility and settlement speed: Gold settles in days with intermediaries; privacy corridors settle in minutes without custody.
• Yield on utility: Gold earns nothing unless lent (introducing counterparty risk); triad assets earn fees from structural demand.

The question is not whether to hold hard assets, but when the new stack becomes robust enough to migrate. The adoption curve below provides the metrics: once Phase I gate conditions are met (VerifyPrice dashboards live, corridors refund-safe, receipt volume non-trivial), the rational rebalancing can begin. Until then, gold and silver remain what they have always been—stores of value that do not require trust in any single institution, even if they lack the programmability and verification properties of the triad.

Gold is the bridge; the triad is the destination. The bridge is still load-bearing while the destination is under construction.

26.1 Four Phases of Adoption

We can sketch the curve as four overlapping phases. These are metric-anchored, not calendar-anchored—the transitions happen when telemetry shows they have happened, not when a date arrives:

• Phase I: Cypherpunk-led — Plumbing proves out publicly; loop works without permission.
• Phase II: Demand-led — Budgeted workloads close the fee loop; capacity becomes a line item.
• Phase III: Composability-led — Receipts become default integration; invisible infrastructure.
• Phase IV: Policy-led — Receipts become recognized evidence; jurisdictional differentiation.

These phases overlap and vary by geography and sector. The pattern is robust: early idealists, then necessity-driven budgets, then invisible defaults, and finally institutional and policy recognition. Calendar horizons are intentionally omitted—they age badly and invite cheap dunking. What matters is whether the phase gate metrics (below) are met.

26.0.1 Phase Gates and Failure Gates

The following table makes the adoption curve auditable. Each phase has entry gates (observable thresholds) and failure gates (conditions that falsify the phase or regress to a prior phase).

Phase Entry Gates:

Failure Gates (Phase Regression or Thesis Falsification):

Phase regression logic:

Phases can regress. If Phase II metrics collapse (fee coverage falls, budgeted workloads disappear, corridors fail stress tests), the system slides back to Phase I. This is not failure of the technology—it’s failure of adoption. The telemetry makes it visible so stakeholders can respond.

26.1 Adoption Curve To Expect

The adoption curve for this new monetary substrate will not be a single “flip” moment. It will unfold in discernible phases, each with its own constituencies, failure modes, and telemetry. The risk scenarios sketched earlier are the ways this can go wrong; the adoption curve is what it looks like when we get it mostly right.

The through-line is simple. Under Bretton Woods II, you ran money by buying reserves, hiring lawyers, and trusting gatekeepers. Under Verification, you run money by buying capacity: privacy capacity, proof capacity, verified FLOPs. Budgets stop paying for promises and start paying for work that anyone can check.

In what follows, “Phase I–IV” are not just vibes. Each phase has rough, observable thresholds in the same metrics we have already defined (VerifyPrice, VerifyReach, VerifySettle, FERs, Work Credit utilization). The point of the curve is that you can tell, from dashboards and receipts, which world you are in.

26.1.1 Phase I: Cypherpunk-led (prove the plumbing in public)

Phase I belongs to the people who already live in the future: open-source cryptographers, hardware hackers, privacy-chain communities, and early AI+ZK builders. Their job is to prove that the loop (Create/Compute → Prove → Settle → Verify) can be made real without permission.

In this phase, the main artifacts are reference implementations and receipts:

• Open-admission prover markets stand up on top of existing chains and zk networks. They publish live VerifyPrice dashboards for canonical workloads: PROOF_2^20, MATMUL_4096, basic PoL fingerprints.

• MatMul-PoUW testnets (Duplex-style patterns) show that verification overhead can remain r(W)=v/p ≤ 0.3 on commodity hardware and that miners without favoured hardware profiles can still win blocks.

• PoL pilots (Ambient-like patterns) demonstrate hybrid verified inference with honest-output rates that can be measured and contested, not marketed.

• zk-PoW networks (Nockchain-style patterns) act as public receipt ledgers (places where proofs from many domains can be anchored and timestamped).

(Note: “Duplex-style,” “Ambient-like,” and “Nockchain-style” are referenced as design patterns, not endorsements of any specific project or ticker. The thesis is about the pattern, not the brand.)

• Non-custodial BTC↔XMR/ZEC swaps with refund-safe UX move from GitHub curiosities to tools that people actually use to pay one another privately.

Nothing is “mainstream” yet. Most users are still speculators and hobbyists. But a few things become hard facts rather than hopes: you can buy proofs as a service from permissionless markets; you can pay for them over privacy rails without custody; and anyone with a laptop can verify the receipts. That is enough to move from thought experiment to working substrate.

Phase I telemetry and triggers

In practice, you can say Phase I is real (not hypothetical) once:

• VerifyPrice exists for a small set of canonical workloads. At least a handful of public markets publish VerifyPrice(W) dashboards for W in {PROOF_2^20, MATMUL_4096, INFER_LM_70B_256TOK} with months of history, and p95_t(W), p95_c(W), and fail(W) stay within stated SLOs under stress.

• VerifySettle is measured for at least one serious non-custodial corridor. For some BTC↔XMR or BTC↔ZEC corridor C, VerifySettle(C) is public and hits targets like success(C) ≳ 0.95, refund_safe(C) = 1.0, and p95_t(C) within a few hours over adversarial mixes.

• VerifyReach is non-degenerate. At least one verifier network publishes VerifyReach(N, R) for major regions, with succ₁(N,R) and succ₂(N,R) meaningfully above zero (real multi-path reachability, not a single benevolent server).

• Receipt volume is non-trivial. Receipt ledgers (Nockchain-like) anchor a steady flow of PIDL receipts per day across multiple workloads, not just test transactions.

Once those metrics are visible, the question is no longer “can this exist?” but “can it scale?”

26.1.2 Phase II: Allocator-led (proofs and privacy become budget lines)

Phase II begins when allocators (fund managers, corporate treasuries, exchanges, and large web platforms) start to treat privacy and proofs the way they once treated bandwidth: as recurring operating costs, not science projects.

By this point (after Phase I gate metrics are met, not by calendar date), a few things are in place:

• Proof and compute networks publish open VerifyPrice and reliability dashboards with historical data. You can see, month by month, how p95 verification times, costs, and failure rates behave under load.

• The Proofs-as-a-Library SDK and settlement adapters have been integrated into at least a handful of serious applications: analytics pipelines, custody stacks, compliance tooling, provenance layers for media.

• Privacy corridors (particularly BTC↔XMR/ZEC) have polished GUIs, reference libraries, and documented latencies. Refund failures are statistical outliers with post-mortems, not routine hazards.

Allocators do what they always do when facing repression and technological change: they reclassify. Instead of framing privacy and proof capacity as speculative tokens, they treat them as line items required to keep operating:

• A bank’s AI risk model must be run on verifiable compute with audit-friendly receipts, because regulators now ask for them.

• A media platform must attach cryptographic provenance to high-stakes content, because the liability of not doing so is too high.

• A trading venue must use private settlement rails to avoid leaking its entire order book and client graph.

They do not buy these capacities because they have suddenly converted to cypherpunk ideology, but because compliance and risk management now require math, not memos. Under Verification, “do nothing” is no longer the conservative option; it is reckless.

At this stage, a small but steady fraction of block rewards and prover revenues are funded by real workloads: audits, analytics, provenance, private settlement, not just speculative arbitrage. The revenues are still small in absolute terms relative to global capital, but they are denominated in obligations that recur each quarter, independent of token price. The feedback loop (work → proofs → budgets → more work) begins to close.

Phase II telemetry and triggers

You know you have crossed into Phase II once:

• Fee+burn covers a meaningful slice of security budget. For at least one serious PoUW/proof network N, fees and burns tied to real workloads (tagged in receipts: audits, provenance, settlement, etc.) cover a non-trivial fraction of the security budget over a trailing window (e.g., 20–50% of miner/prover revenue over 12–24 months).

• Budgeted workloads dominate speculative ones in volume (if not yet in value). In receipt analytics, the number of proofs and verified FLOPs purchased by enterprises, exchanges, and platforms grows steadily, and their share of total workload volume rises even if speculative volume remains higher in nominal terms.

• VerifySettle stays inside SLOs through at least one policy shock. For at least one high-volume corridor C, VerifySettle(C) remains within advertised bounds (success, refund_safe, p95_t) across a visible policy or regulatory event (delisting, new KYC rules, sanctions scare) without catastrophic liquidity or safety failure.

• Capex/OPEX lines reference verification capacity explicitly. In public disclosures or private budgets, at least some institutions begin to treat Work Credits or equivalent capacity as a line item (verification spend, privacy spend), not as a speculative asset bucket.

At that point, the triad is no longer “crypto” from the allocator’s perspective; it is infrastructure they have to pay for.

26.1.3 Phase III: Composability-led (the stack disappears into infrastructure)

Once Phase II gate metrics are met and sustained, composability becomes second nature. Developers no longer think in terms of “ZK project X” or “PoUW chain Y”; they think in terms of the loop.

Provenance, verified compute, and private settlement start to resemble TLS on the web:

• New applications default to emitting claims and receiving receipts via the SDK, simply because it is easier than hand-rolling trust.

• Major frameworks and toolchains ship with verification modules and privacy adapters bundled: verifying a receipt or routing a private payout feels as ordinary as opening an HTTPS socket.

• Chains and rollups routinely outsource heavy computation to PoUW or proof factories and anchor receipts on shared ledgers, rather than reinventing custom VMs or oracle arrangements.

From the outside, nothing dramatic happens. There is no “flippening.” What changes is the default:

• Sensitive data is processed either under enclaves with open silicon profiles or under ZK, and accompanied by attestations.

• Payments that cross borders or touch politically exposed persons quietly route over privacy rails, with receipts that satisfy auditors but not censors.

• AI systems whose outputs matter are either run with PoL-style verifiable inference or backed by helmets of audits and shadow runs, with failure rates visible rather than buried.

Networks that can demonstrate a clear, measurable link between work and value, paired with credible scarcity and decentralization telemetry, begin to trade at a durable store-of-value premium alongside Bitcoin. Their tokens no longer trade purely on reflexive narratives; they represent metered access to capacities (proofs, privacy, verified FLOPs) that budgets keep buying through rate cycles and regulatory shifts.

By then, Privacy, Proofs, and Compute no longer show up as “emerging primitives.” They show up the way electricity or bandwidth does: as invisible layers of the economy that only reveal themselves when the bill is due or the service goes down.

Phase III telemetry and triggers

Phase III is where the triad starts to behave like a macro asset. Signposts include:

• Non-trivial collateral and reserve usage. Work Credits or the base asset of at least one triad-aligned network appear as collateral and reserves in multiple independent venues: lending markets, derivatives, structured products, custody mandates, possibly even ETFs or wrapped instruments. A visible share of supply is locked in long-duration roles.

• Macro sensitivity flips. Price and flows react as much to changes in workload budgets (AI capex, compliance requirements, settlement volume) as to crypto-native news. For example, increases in mandatory provenance or proof requirements show up in demand for Work Credits or proof capacity.

• VerifyPrice and VerifySettle stability through macro stress. During interest-rate shocks, liquidity crunches, or geopolitically driven capital controls, VerifyPrice(W) for core workloads and VerifySettle(C) for major corridors remain within SLO bands; volatility may spike in price, but the underlying utility, capacity, and safety metrics do not collapse.

• Duration-neutral holding behavior. Holder data and on-chain analytics show a meaningful cohort who hold primarily for access to future capacity and SoV properties, not to farm short-term yields, with holding periods measured in years.

When these show up in the dashboards and market structure, the triad has joined the shortlist of things serious allocators treat as monetary base, not just tech.

26.1.4 Phase IV: Policy-led and path-dependent (verification as public good)

Once Phase III gate metrics are sustained through macro stress, the curve becomes more path-dependent and political. If the stack delivers on its risk promises (decent decentralization, cheap verification, robust privacy corridors that are visibly abuse-resistant), states and institutions will begin to treat parts of it as public goods rather than threats.

Some jurisdictions will move first. They will:

• Codify cryptographic receipts as acceptable evidence in courts and regulatory filings.

• Mandate provenance proofs for certain classes of media or AI systems rather than ad hoc labelling.

• Recognize privacy rails with viewing-key regimes as compliant infrastructure rather than as dark pools.

Others will resist, preferring the comfort of chokepoints and legacy gatekeepers. That is where the anti-repression design matters. If privacy rails remain non-custodial and censorship-resistant, if proof and compute markets remain globally addressable, capital and talent can route around laggard jurisdictions the way data routed around telcos.

In the best case, the monetary role of the triad becomes self-reinforcing:

• Each wave of repression (negative real yields, capital controls, information crackdowns) pushes more savings and more workflows onto rails where verification is cheap and permission is irrelevant.

• Each wave of adoption increases the depth and liquidity of proof and compute markets, which in turn makes it cheaper and more obvious to use them for new domains.

The triad earns a store-of-value premium not because everyone suddenly shares a philosophical vision, but because the world has learned, through trial and error, that capacities which are verifiable, censorship-resistant, and continually demanded are safer long-term anchors than promises that can be administered or revoked.

The institutions that back this stack are not buying memes; they are funding the Bell Labs of verifiable compute and lawful privacy, an R&D factory whose output is receipts, corridors, and machines that make Privacy, Proofs, and Compute behave like money.

Phase IV telemetry and triggers

Phase IV is messy and political, but even here there are measurable milestones:

• Legal codification of receipts and corridors. Multiple jurisdictions explicitly recognize PIDL-style receipts, or equivalent cryptographic attestations, as valid evidence in regulation and courts; some codify acceptable VerifySettle(C) or provenance requirements into statute or guidance.

• Regulatory reliance on cryptographic proofs. Policies and enforcement actions reference proof primitives (ZK proofs, PoL audits, receipt formats) rather than merely “records” or “reports.” Verification becomes part of the regulatory language.

• Public-sector participation. Public institutions (development banks, treasuries, public broadcasters, critical-infrastructure operators) use triad-aligned rails and publish their own receipt and corridor metrics.

• Geographical differentiation. A measurable share of volume and capital migrates toward jurisdictions and networks that respect lawful privacy and verifiable compute, as seen in regional splits in VerifyReach, settlement volume, and Work Credit usage.

This adoption curve is not guaranteed. Verification cost can creep; hardware or router oligopolies can re-centralize control; regulation can pinch on- and off-ramps harder than expected. The risks below exist precisely because these failure modes are real. But if we anchor the stack in verifiable machines, keep verification cheap and public, treat privacy as infrastructure rather than as a vice, and force our own claims through telemetry and receipts, this is the curve we can plausibly aim at: a world where Privacy, Proofs, and Compute quietly graduate from technical curiosities into the monetary base layer of a digital civilization.

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