The Reforging of Crypto: A Substrate for Global Coordination
How Digital Assets and Distributed Systems Will Solve Our Biggest Coordination Failures in an AI-Accelerated World.
In 2020, COVID underscored a fundamental paradox. We had the ability to sequence the virus within days, develop vaccines in months, and mobilize trillions in resources. Yet hospitals ran out of basic protective equipment. Some nations hoarded supplies while others faced shortages. Data stayed locked in silos.
The scientific community displayed incredible feats of collaborative optimization but also revealed a deeper failure by others: even with the best tech, vast resources, and shared goals, our systems for aligning incentives and distributing assets (capital, information, talent, etc.) at scale remain severely fractured.
It was a failure of coordination. And it’s about to get worse.
The Invisible Superpower We're Losing
Coordination is one of our greatest superpowers. It shapes everything from political power structures to our collective response to global challenges.
The Apollo Program coordinated 400,000 people, 20,000 companies, and billions in funding toward a single, audacious goal. We put humans on the moon… in 1969. Today, we struggle to slow the rise of global temperatures, curb the explosion of chronic diseases, and stop social media from fracturing society. We have more technology than ever, more wealth than ever, and more knowledge than ever—the disconnect is palpable.
This is the hidden crisis of our time: while our technological capabilities grow exponentially, our coordination systems are collapsing. Institutions and top-down solutions can’t keep up with the speed and complexity of a fully digital, networked world. The infrastructure that enables trust and organizes collective action is breaking down precisely when we need it most.
The Unraveling
Trillions flow to fossil fuel subsidies and zombie companies while breakthrough and innovative projects starve from limited capital. In its latest estimate, the IMF found global fossil fuel subsidies reached $7.0T in 2023, 7.1% of global GDP, and is projected to continue growing. Capital formation remains captive to gatekeepers who extract massive rents for the privilege of connecting resources to opportunities. Even while taking as much as they can off the top, outdated payment rails can’t handle real-time, borderless demand. In The Mystery of Capital, Hernando de Soto famously exposed how “dead capital” arises when people own assets but can’t formalize or deploy them, creating a massive drag on economic development. While his original estimate in 2020 of $9.3 trillion focused on just untitled real estate, the figure in 2025 encompassing all “dead” capital (e.g., dormant financial assets, idle corporate and government resources, industrial stranded liquidity, etc.) may well be over $50T.
The 2008 financial crisis wasn’t some fluke—it was a foreseeable result of rent-seeking systems that reward short-term gains over long-term resilience. Nations from Argentina and Venezuela to Lebanon and Turkey experienced currency devaluation over the years not from resource scarcity but governance failure. Regulatory frameworks increasingly protect incumbents rather than markets, as bureaucracy becomes a competitive moat. Distrust spreads as everyone questions whether decision-makers really have the public's interests at heart, or if regulatory capture ensures the few thrive at the expense of the many. As geopolitical friction intensifies, supply chains crack under stress because optimization favors efficiency over resilience and the consequences trickle down to the individual. Recent economic disruptions and market performance as a direct consequence of escalating tariff disputes indicate just how fragile the architecture is.
Most fundamentally, we sense it each and every day, through living, breathing, and creating in digital space. Platform dependency grows as the economic structure of the internet centralizes power in unprecedented ways. After years of filling an echo chamber vying for change, outsourcing trust to big tech remains the norm. This friction makes modern life harder than it should be. But no one really cares—they’re just minor inefficiencies.
Until now.
We’ve entered an era where technology has outpaced our ability to govern, regulate, and coordinate at scale across the board. But a new accelerant is about to widen this gap into an abyss: AI.
“AI will be able to outthink and outmaneuver us. We do not have the coordination mechanisms in place to control its deployment.”
AI doesn’t care that institutions have slow adoption cycles. AI doesn’t care that laws traditionally take years to draft and approve. AI doesn’t care that financial systems rely on trust-based gatekeepers. AI doesn’t care about geopolitical fragmentation by national interests.
The real inflection point comes when agentic systems begin transacting, managing resources, and making economic decisions autonomously. At that moment, the financial system and governance structures must also be automated, transparent, and scalable—otherwise, we risk total institutional obsolescence.
“AI will cause civilization-scale shifts before governments even begin discussing how to regulate it. Coordination will fail by default.”
-Elon Musk
That’s why digital assets and distributed systems (read: crypto), for many, represent a new substrate for coordination—one capable of tackling the very bottlenecks that sabotage our collective potential or total destruction.
The Emerging Substrate
This new substrate is permissionless, trustless, meritocratic, and composable—properties legacy institutions fundamentally cannot replicate.
Today, crypto skeptics dismiss the industry’s volatility and speculative bubbles. As they should. Even the capital allocators and builders currently dwelling within its scarred walls acknowledge just how extractive the arena is in which they reside. We have done the same thing, over and over again. Each cycle, lessons from prior years are ignored and we press the mental “replay” button to have another go using the same playbook. If it feels like the industry has long crossed the event horizon of the financial nihilism black hole, you’re not wrong. Short-termism and value-extraction objective functions have taken precedence. Thankfully, there is now a new north star: reforging global coordination infrastructure. It is the unlock to an expansive solution space that has been largely misunderstood and missed.
Crypto doesn’t just offer incremental improvements. It represents a complete rearchitecting of how humans can organize and cooperate. For most of history, we've had two coordination models: hierarchies (governments, corporations) that don't scale without becoming corrupt, and markets that don't function without trusted intermediaries. Both models will hit their limits in a machine-led economy.
First we must realign ourselves with the first principles and core set of crypto’s native capabilities:
Verifiable Scarcity: trustless ownership and value transfer without intermediaries
Fault Tolerance: systems designed to withstand corruption by bad actors or other single points of failure rather than depending on screening them out, creating resilience against both institutional corruption and systemic failures
Composability: open innovation layers that allow anyone to build on existing systems without permission; ideas and capital combine effortlessly, creating exponential rather than linear progress in solving coordination challenges
Immutability: transparent, tamper-proof mechanisms that make commitments credible without requiring reputation or enforcement; this creates trust in the system rather than specific participants.
AI won't slow down and legacy systems cannot handle what's coming. With these properties, crypto is the only viable coordination mechanism that scales with AI-driven acceleration. Its rules are enforced by mathematics rather than authorities, enabling collaborative frameworks to evolve without permission from existing power structures.
The Infrastructure Markets of Tomorrow
As we enter this new era, we believe the most significant opportunities lie in infrastructure markets that underpin multiple trillion-dollar industries, not just vertical-specific sectors. These markets are foundational layers of the global economy that will experience massive coordination bottlenecks as AI, automation, and geopolitical conflicts progress. Entire industry sectors will be rebuilt around these primitives. The scale will be enormous.
Data & Cryptographic Proof Markets ($100T+): When data becomes verifiable and attributable, its value compounds. Industries from healthcare to logistics will shift to systems where critical information can be proven authentic rather than merely trusted. Cryptographic proofs create objective, tamper-proof methods for establishing facts—fundamentally changing how decisions are made across domains.
Digital & Programmable Property Rights ($100T+): Property isn't just what you own, but what you can do with it. Programmable rights create fluid, frictionless ownership that moves at the speed of information rather than bureaucracy. This transforms not just digital assets but represents the biggest expansion of property rights since the industrial revolution.
Decentralized Talent & Machine Labor Markets ($50T+): Work is increasingly digital, yet hiring, verifying credentials, and paying remain stuck in pre-internet paradigms. Borderless contribution, algorithmic reputation, and instant compensation unlocks human potential regardless of accidents of geography or institutional gatekeeping.
Global Payment, Liquidity & Credit Coordination ($200T+): Finance today is a patchwork of incompatible systems with artificial borders. Crypto’s only product-market-fit thus far. Not much more to say here; we’ve been at it for 17 years.
Supply Chain & Industrial Coordination Markets ($50T+): Today's supply chains optimize for efficiency over resilience, prioritize dominant players over fairness, and create opacity rather than transparency. Distributed coordination enables fault-tolerant, transparent systems where incentives align naturally across organizational boundaries.
Decentralized Infrastructure for Compute, Energy & Storage ($50T+): As AI and automation accelerate, we face coordination bottlenecks in deploying and accessing the physical resources needed. Trustless networks enable resource sharing and dynamic allocation that centralized approaches simply cannot match in responsiveness or efficiency.
More details to come on how these markets are the focal point of Reforge’s investment thesis.
The Path Forward
Crypto’s early limitations and flaws have driven significant negative sentiment over the years. Scalability remains a work in progress. Energy consumption concerns are legitimate, though rapidly evolving. Fault tolerance protects the system itself, but not from the games being played on top of the system. And yes, speculative excess has outpaced practical implementation and use cases.
But focusing exclusively on these growing pains misses the forest for the trees. The most transformative technologies historically faced similar dismissals during their formative years.
In the coming decades, the true measure of crypto won't be market capitalization or transaction volumes of individual tokens. VCs won’t race to underwrite a project because of the team’s close relationships with centralized exchanges or ability to win special contracts with market makers. It will be the global, systemic coordination failures using these new primitives—from multi-stakeholder data commons to trustless supply chain verification to financial inclusion. What's at stake is no longer incremental progress but our collective ability to successfully address the defining challenges of our time.
Coordination is breaking down. Crypto is the only system built to scale with the chaos. Either we forge this new substrate now—or let the old world collapse under its own weight.
Reforge is an early-stage frontier tech investment firm backing software that leverages digital assets and distributed networks to solve critical coordination failures. Reforge writes the first institutional check for founders rebuilding trillion-dollar industries where legacy systems are failing under technological, economic, and geopolitical pressures.