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Complexity of Technology
Given that every project is build on cryptography, fast iterations are challenging. Cryptography doesn't allow incremental adjustments easely. You can't have a semi-functional blockchain or smart contract – it either operates as intended, or it doesn't.
This contrasts with other software types, which can be improved upon incrementally while in use. For instance, if you're developing blogging software, you can release initial versions within days and refine it during users using it. In crypto just migration from one version to another is a major undertaking.
Misleading Signals in Product Usage
Crypto represents the merger of code and money. It's an industry standard to monetarily reward users. For instance, when you mine Bitcoin, you're often driven by the financial incentive rather than bitcoin beeing of use for you.
Many crypto projects heavily compensate their users. This leads to wrong data about the usage of the product. Users may engage with a product primarily for the payout, not its utility. Consequently, many projects never truly achieve a product-market fit, and those that do find it challenging to iterate swiftly due to the underlying technology.
Regulatory Hurdles
The fusion of code and money in crypto brings it into the arena of financial regulations, many of which are ill-suited for this new technology.
This misalignment often diverts innovation as projects modify their approaches to navigate these regulatory waters. A significant portion of the industry's energy goes into lobbying for regulatory adjustments. Traditional financial institutions leverage these regulations to protect their interests.
While older fields like AI aren't burdened by such legacy regulations, they have more influnce in crafting new ones. If you view crypto from a monetary business perspective, it operates within one of the world's oldest industries.
Limited Public Funding
Blockchain technology is one of the few fields where government public funding hasn't invested millions. In contrast, AI research, which spans more than 50 years, has benefited from extensive publicly funded research. Billions have been poured into AI over the past half-century. This hasn't been the case for crypto, with most successful projects being privately financed.