If it seems to you that the much-hyped world of cryptocurrencies and non-fungible tokens has slipped out of the zeitgeist, you wouldn’t be far from wrong. For a while, it felt almost daily we’d be told that “Web3” was going to change how we lived, but currently, the crypto hucksters seem to have fallen silent.
There are a few reasons for this, the first and most obvious being the calamitous collapse of crypto exchange FTX towards the end of last year. Its unexpected downfall laid bare the cracks in the crypto facade and set off a chain reaction of bankruptcies and other failures that are continuing today.
Then there was the steep decline in the price of almost all major cryptocurrencies which occurred in tandem with FTX’s unravelling, which not only sapped investor confidence but discouraged any would-be crypto buyers. And finally, a global crackdown by regulators after a run of scams and collapses that have cost investors nearly $US12 billion ($17.3 billion).
However, confront any crypto-focused company about this downturn and you’ll be met with the same response: it’s all fine, crypto is still healthy, we’re just using this lull in the market as an opportunity to “build”.
But build what exactly? A list of staff lay-offs to present to their HR department, maybe? Or possibly a teetering stack of dubious investments in half-baked crypto start-ups? In the seven years I have reported on the crypto industry, I struggle to think of a single thing “built” that could be considered useful in the real world.
A quick snapshot of the most popular cryptocurrencies shows projects that are just purely investment opportunities (bitcoin, BNB), blockchain-centric development tools (ethereum, cardano), memes (dogecoin), or stablecoins used to facilitate crypto trading and investment (tether, USDC).
It’s a harsh truth that after more than a decade of development and billions of dollars poured in from investors, the so-called Web3 industry has so far failed to cement a single “killer app”.
This isn’t for a lack of trying – at first people thought that the programmable nature of ethereum would transform the world of software, which it didn’t. Then decentralised finance (DeFi) took off in an effort to uproot financial markers, which it hasn’t and likely never will (especially not the ASX). And finally, there was 2021’s collective delusion that NFTs could replace art, collectibles, and one day represent all of our digital assets in the definitely-real-and-not-made-up metaverse.
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