Will the Crypto Meltdown Impede the Next Web Revolution?
Ethan Buchman, the co-founder of blockchain network Cosmos, is attempting to sound solemn. Since January, the drop in cryptocurrency prices has wiped off 80% of the value of the atom tokens that power Cosmos, slashing $10 billion from their overall value.
Some people are startled, some are afraid, says Buchman of the token price decline. Others, on the other hand, see it as an opportunity to double down on what they believe in.
However, the market crash and predictions that it would not derail the crypto revolution are reminiscent of another watershed point in recent digital history: the dot-com boom and bust at the turn of the century.
Both bubbles came from an allegedly revolutionary technology. It will weaken the political and commercial establishment’s grip over online activity. The new tech will usher in a decentralized online society in which power would flow to the people. In the case of crypto, what began as a vision of digital money centred on bitcoin has grown into the Web3 movement. It believes that the same underlying blockchain technology that records and tracks crypto assets will enable a new generation of user-controlled internet services.
Parallels in Financial Crises
The overall worth of all cryptocurrencies peaked in November of last year. Afterwards, it plummeted by about 70%, erasing $2 trillion from its value. Bitcoin accounts for around 42% of the remaining $900 billion. However, the crypto world has numerous other digital assets.
The potency of the crypto boom came from new technology, anti-establishment social movements, and enormous financial incentives. These combined in an era of loose money form an explosive cocktail. With that era seemingly finished, it is now entering a difficult new phase.
The new technology infrastructure on top of blockchains should make them easier to use and capable of handling a greater number of transactions. However, it also threatens to erode their decentralized nature.