Seems like the crypto world is at it again!
I blogged briefly about the denial phase of crypto back in 2018. The valuations went back to more “normal” levels after that post, but after a period of consolidation, it seems like we’re at it again.
Has something changed in the technology? From a usability perspective, not a whole lot, really. Most crypto currencies are still just not really good at replacing fiat transactions. VISA and PayPal and a few others have decided to step-in and start “accepting” payment in crypto, mind you, always converting it to/from some sort of fiat or fiat-linked asset. So there’s buzz around that. Ethereum is moving to proof-of-stake, which is great, time will tell whether this is the way to go, at least we can stop wasting so much power. The DeFi ecosystem is trying to re-invent finance, but it’s hard to discern the good working ideas from the casino style games of dubious high yield savings, lotteries and decentralized, gamified token swap systems. It’s a big game of “I don’t trust you”, which makes the experience for the end user just painstaking, with phishing alerts, non-refundable transactions and the thrill of not knowing what the heck is going on as your coins flow through a peer to peer network. The terminology you encounter would make any cult leader proud.
There’s always been and there still are a lot of shortcomings in crypto. The biggest one is probably that by definition, a currency that appreciates in value by design is destined to rarely be used for actual payment of stuff. If my $1 is worth $2 in three months, I might hold off from buying that nice new laptop.
I’m actually cheering a lot for crypto to succeed. I think it’s empowering. It’s bold. And it’s a challenge to the status-quo in the finance industry. But it needs to grow up and it’s not quite there yet. Maybe it never will.1