Numerous significant market participants experienced failure in 2022, yet cryptocurrency is still alive and well. In actuality, it has just begun.
The Terra-Luna ecosystem, BlockFi, Celsius, Voyager Digital, 3AC, and Alameda-FTX all failed in the previous year. The era of cryptocurrencies is not over, though. Cryptocurrency is still in its infancy, much like the Internet following the Dot Com crash.
Yes, a number of cryptocurrency businesses indeed failed in 2022. However, the news reports make things appear worse than it is. The failure tales are being used as a standard for the whole sector by cryptocurrency’s detractors in traditional banking and the media.
The prevalence of unfavorable cryptocurrency news is referred to in the cryptocurrency ecosystem as “FUD” (fear, uncertainty, and doubt). In terms of attentiveness, openness, and danger detection, that is, in some ways, normal and comprehensible.
A crypto news item or social media post that increases impressions and sentiments of fear, uncertainty, and doubt is referred to as a fud. While the FUD may spark debates on Twitter or YouTube and increase interest, it seldom provides information on current dangers and vulnerabilities.
Instead, it frequently overtalks about them, which gives participants in these debates a predisposition toward emphasizing them in their analyses of the market and the sector. In addition, none of the FUD highlights the fantastic goods the cryptocurrency sector is developing.
Anyone knowledgeable about cryptocurrencies, as well as the most recent methods and goods used in the international financial market, finds it difficult to deny the inevitable ascent of cryptocurrencies at this time.
Consider this recent Politico article regarding the perception of cryptocurrency at Davos as an example. It writes:
Scaramucci is one of a slew of crypto junkies — executives and staffers from high-profile exchanges, intermediaries and tech companies — who are here in this Swiss ski resort town to try to convince investors and potential backers that, despite the nearly complete collapse of the industry this fall, everything is just fine.”
The phrase “nearly complete collapse” has no accurate meaning. Last October, the cryptocurrency market did not nearly entirely collapse. Another firm in the bitcoin sector, a new venture startup business in a cutting-edge digital field, closed its doors.
There will be more failed cryptocurrency projects and altcoins in the future. Blockchain is no different from any other area of the economy because of this. In 2022, the price of Bitcoin and other cryptocurrencies was also severely down. But given the circumstances, that came after a bull run that was equally steep through November 2021.
However, despite the crypto winter of 2022, crypto network production did not completely collapse. They were successful. They were unflappable even. Through the crypto winter, the hash rate and difficulty of Bitcoin kept increasing. Every 10 minutes on average, the network’s miners locate a new block and process transaction requests for addresses.
The Bitcoin network continued to see strong activity. The picture of a thriving, globally-scaled digital platform utilization was daily new active BTC addresses. The most well-liked alternative currency, Ethereum (ETH), had a similar rapid increase in staking and network usage.
Therefore, it is just false to claim that the bitcoin market almost crashed in 2022. Many individuals with a limited grasp of cryptography may believe that to be the case.
Cryptocurrency, however, did not almost vanish last year and is not a “pet rock,” as Jamie Dimon of JP Morgan recently mocked.
Prospects for cryptocurrencies resemble those of the Internet in 2000. even after several dot com stocks lost all their value in an extensively covered media spectacle. The similarities are uncanny nearly.
The Internet faced similar media criticism in 1999 as cryptocurrency does now. They said that it was only a trend. They remarked that it was excessively cumbersome and challenging to use. The Internet was first seen by the general population as a cool tool for computer geeks.
But they failed to recognize its world-connecting potential of it. Additionally, they do not yet see the predicted future benefits of structuring that global link to be more equitable and safe.
Even after everyone and every business started having the Internet at arm’s reach 24/7 within roughly a decade following the dot com crisis, the majority of consumers still did not invest in “tech stocks.”
The Internet was littered with fud fragments in 2000. They said it was a hub for swindles, wire fraud, and over-hyped companies that produced nothing. Not that what they were saying was completely false.
Although they were providing factual information, they did not organize it well or place it in a larger perspective to enlighten their readers.
The Y2K bug caused some slight panic among followers of the media, who were led to believe that it would spell the end of the Internet.
These days, they circulate over the Internet. However, the same companies formerly mocked the Internet on large, folded sheets of paper that were trucked to people’s homes.
At the height of the dot com frenzy, many investments made in the late 1990s economy, which was booming with money and low-interest financing, were unwise. When the stock market corrected, they went up in flames.
However, it wasn’t difficult to see some of the Internet businesses that would succeed over the following two decades. Some dot coms have paying clients and income. Others had a dot com website with a few images and an email address, but they had no clients or sales.
For instance, back when the Internet was just emerging, Amazon was a well-reported Internet success story. Its founder and business concept are both excellent. More books were made available to clients by this dot com than by any other retailer ever did. Following that, they delivered your product directly to your home and provided excellent customer service.
In 2021, just $1,000 of AMZN stock, purchased at $18 per share during its IPO in 1997, had a market value of more than $2 million. That happened not even two decades after that.
Similar scaling has already occurred for several cryptocurrencies in a lot less time than it did for Amazon shares.
In 1999, all aspiring young developers yearned to create video games and dot com websites. By the late 2000s, they were all eager to create video games and mobile applications.
By the late 2010s, they were all looking to create cryptocurrency and DeFi applications (and video games).
Exceptionally gifted computer science students, innovative business owners, and astute venture investors are as enthusiastic about cryptocurrencies now as they were about the Internet twenty years ago.
The development of the digital network itself sparked a revolution in worldwide connectivity. That was distinguished by the availability of so many digital copies of various objects. Additionally, digital computer copies were extremely economical, rapid to transport throughout the world, and extremely immediate. Digital abundance was in abundance.
The next development in that connectivity revolution is cryptocurrency. By consistently creating digital scarcity and protecting it for its owners, the blockchain sector sustains the world’s computer network.