Why A Real Crypto Crash Is Precisely What Everyone Should Be Hoping For In 2022

A true crash is not what we want but it is what we deserve. It might seem counter-intuitive but I believe we need a crypto winter like those that have come before.

At this point in a Bitcoin BTC/USD cycle, we start to see all the doom and gloom articles and posts about crypto being a Ponzi scheme. Countries begin to declare they are banning crypto. It was China in 2017; this time, it's Russia.

We read articles about how NFTs are a disaster for our planet. They contain soundbites such as "a French artist [was] taken aback to learn that their "release of six crypto-artworks consumed in 10 seconds more electricity than [their] entire studio over the past two years". These seem extraordinarily ominous but wholly missing the mark via selective journalism. We often get journalists and critics with just enough knowledge of the technology to be dangerous within most media. They will see proof-of-work and proof-of-stake blockchains as interchangeable or acknowledge that some blockchains are proof of stake as a token gesture.

Mainstream articles on blockchain technology, or the projects built upon it, are rarely written by someone who truly understands it. It is possibly down to extremes getting more clicks and, therefore, more advertising revenue. Still, there is a lack of knowledge and understanding that comes with it. 

Many of the articles written about blockchain today remind me of posts that often appear on Reddit's Popular tab going back to before 2000. Headlines that slammed the internet's staying power or PCs excessive power usage are comical to look back at now. Jake Wakefield even said in a Zdnet.com article in 1999, "So it should come as no surprise to us that people are failing to see the point of the Internet." Sound familiar? How often do we hear that NFTs are "just JPGs that I can save or screenshot to my phone"? Articles talking already talking about the fall of blockchain and NFTs, in particular, will age just as poorly.

The thing is, blockchain is a complicated technology to understand. It took me years to properly understand it. No matter how often I read a definition, I kept forgetting how that applies to anything other than bitcoin. I remember the first time I read about traditional companies building blockchain into their tech stacks. It was an article about how Santander explored using blockchain technology within parts of their infrastructure. I didn't see how crypto and IT systems were interlinked… and this is coming from someone with an extensive tech and IT background.

When disruptive and revolutionary technologies first appear, the world will never wholly embrace them. The mainstream is not actively looking to understand new concepts and ideas. People listen for just as long as they need to confirm the conclusion they made before they start to read or listen. We live in a world of mass ignorance, impatience and stubbornness. So whilst the internet may have won, it does not necessarily mean that we have. Part of this may be down to the extreme centralisation of the media we consume. Between Facebook and the major networks, few stakeholders exist between us and what we consume. With blockchain, we can change that.

For me, blockchain is a ray of light and a symbol of hope for a better tomorrow. At present, much of the focus is on how crypto can make you rich quickly and with little effort. Notably, this relates to how many people are desperate to improve their lot in life. After the past two years, much of the world needs a break, and crypto seems like it could be that winning lottery ticket to many people. Unfortunately, this cannot be the case. Not everyone can win the lottery, and if everyone did, the rewards would be tiny. Blockchain, crypto or meme-coins will not change the quality of life of those struggling overnight like many dream it will. However, it is the beginning of a decentralised world where truth, honesty, integrity and growth can thrive. 

Blockchain technology offers a transparent and verifiable method to build systems. While many of the most significant crypto projects are currently relatively centralised, this is not true of all of them. It also does not mean all future successful projects will be. Ethereum ETH/USD, for example, is already trending towards solid decentralisation. Often ignored, the article highlights the biggest flaw of the decentralisation debate. Over 25% of Ethereum nodes run on Amazon AWS servers. Amazon AWS is the biggest bottleneck, closely followed by Cloudflare, for the argument for decentralisation. Just as we promote decentralisation in the blockchain technology itself, we should also be promoting bare metal methodologies to development. We cannot be entirely reliant on Amazon.

With decentralisation comes a new possible world for technology, the internet and connectivity. Meta (nee Facebook) are already scrambling to take ownership of the Metaverse because they see the power of this coming wave of innovation. They know that they cannot be the centre of technology anymore. You only have to read their website to see this. Language such as "a future made by all of us" and "the metaverse will be a collective project that goes beyond a single company." They know decentralisation and blockchain will take over the world, so why are we still arguing about the point of an NFT? The fact is that it is the start of a new world free from the privacy issues that have plagued the first part of the 21st Century.

I believe that Meta's goal is to secure its place as the hub of connectivity via SSO with Facebook Login. You already need a Facebook account to log into Oculus (which will be a Meta account as soon as brand awareness hits its target number). Meta is preparing the resources to acquire Gen Z and Y users through the back door. Whilst a 12-year-old cannot have a Facebook account, they can have an account to log into Oculus. Do we really believe that Meta won't start tracking their data the moment they turn 13?

The evolution from Bitcoin can be easily summarised:  2009 – Bitcoin whitepaper released by Satoshi Nakamoto 2011 – New cryptocurrency projects start to emerge from forks of Bitcoin 2015 – Ethereum launched as blockchain companies begin to emerge 2018 – Total cryptocurrency market cap hits $820 billion as Bitcoin's dominance dropped to 33% from 85% in 2017 2021 – Bitcoin hits $67,566 as the total market cap of crypto smashes $2.9 trillion. Coinmarketcap now tracks over 17 thousand crypto projects and over 450 exchanges.

From here, we can either see the crypto world go to zero and NFT projects become entirely worthless, or we can start to see the future take shape. Web 3.0 is still in its infancy, but there are RPC tooling companies, NFT builders, smart contract generators and tonnes of other unique and exceptional projects that are only just getting started. 2017 might have been the peak of the Ponzi scheme, 2021 could be the peak of the euphoria. Next comes the boring bit that is the precursor to the real revolution; the base. We need proper tooling for developers standardisation of code and development protocols. We have to focus on the technology instead of the marketing hype or 'meme status' of a token. Crypto seems to have followed the gaming industry with its 'pseudo-agile' development without learning from its mistakes. Projects are often delayed and working to impossible deadlines without communicating correctly. The 'Crypto-Bro' development mentality has to go just like the advertising-only-mentality of the dot-com era internet startups.

In the 90s, we had an internet boom followed by a crash that sorted the weak from the strong. The same is coming in crypto. At present, there are too many get-rich-quick and Ponzi schemes. This has been true since 2017… OneCoin anyone? Yet it is not the technology that is broken. In fact, I would say it is an extremely bullish sign for the technology. Everyone wants in, but not everyone understands why it will change the world. They see the obvious; they see how to make money today. Just like the vapid dot-com companies spent up to 90% of their budgets on advertising, some crypto projects simply fork a successful chain and add new branding to it. This is not innovation. This opportunism. 

However, this is not what crypto and blockchain are about. Some of us, we see how we can change tomorrow and move towards a world where everyone has a voice. It is a long way away yet but, for me, the only path is through blockchain. But, first, we need to clear the way. There are far too many vapid projects that add no value. We are clearly in a bubble. Even today, with Bitcoin teetering around $35,000, we have a total market cap of over double what it was just 4 years ago. The coming crash will not cripple every project, just those that don't have the technological fundamentals. It will pave the way for the project that will make up the true building blocks of Web 3.0 So should we sell? Well, I can't offer that advice but I'm personally picking the projects I think will have a place after the reset and dollar-cost averaging into them.

If we don't see a purge of baseless projects then we may well be in for a future that proves Idiocracy was simply a documentary set before its time...

I do not know the exact route to the decentralised world that opens opportunities to everyone, but the direction is obvious; crypto alone has the foundations we need.