Crypto’s crash does little to shake the faith of some blockchain believers

Crypto is in the middle of its worst career. Block chain advocates are not necessarily sweating.

The price of Bitcoin remains around $ 20,000, a 70% drop in prices since its all-time high in November. Cryptographic exchange platform Coinbase has laid off 18% of its workforce or 1,110 workers. Celsius Network, one of the largest cryptocurrency lenders, stopped withdrawals and transfers last week.

Many industry experts have warned that these developments are signs of a “cryptographic winter,” but some proponents of blockchain, distributed computing technology that underpins cryptocurrencies, NFTs, smart contracts, and more, think there is a side positive in the declines.

“I’m more optimistic about cryptography than ever,” said Jason Yanowitz, co-founder of Blockworks, a financial media company.

Yanowitz compared the current cryptographic crash to the technology bubble of the early 2000s.

“That’s the period we’re in now; we are erasing the greed and exuberance of the market, ”he wrote in an email.

Once the realm of a relatively limited and awkward corner of the tech world, blockchain-based technologies have become a global focus of attention thanks to the seemingly nocturnal riches enjoyed by early investors in some cryptocurrencies and, more recently, connected digital art. to NFT. or non-fungible tokens, which also use blockchain technology. That boom coincided with a growing group of financial analysts and technologists who warned that these markets seemed increasingly unsustainable.

And even some members of the blockchain community have argued that the boom and fall of cryptography was a false signal, diverting the public from the underlying technological benefit of decentralized computing.

Brain Brooks, the CEO of The Bitfury Group, a bitcoin mining company that has existed since 2011, told CNN which sees the recent cryptographic crash as a necessary part of pushing blockchain technology forward.

“Forest management is the analogy I think of,” said Brooks, who served as the currency’s auditor during the Trump administration. “At some point the undergrowth has to burn so the tall trees have room to grow.”

Many proponents of the blockchain point to a bit of a paradox when it comes to the broader cryptographic boom: what is supposed to be a decentralized technology is becoming quite centralized.

Blockchains work by involving a network of computers so that each can compete in a way that makes it almost impossible for a single entity to control the system. But for people who use major cryptographic exchanges, there is not so much difference with a centralized bank that owns a person’s assets.

Cleve Mesidor, executive director of The Blockchain Foundation, an educational platform, said the Celsius cryptocurrency exchange is not decentralized although it handles decentralized cryptocurrencies.

An assistant, who appears to be dressed as Doc Brown from the movie franchise “Back to the Future,” cheers NFT.NYC.Julius Constantine Motal / NBC News

“What happened to Celsius will not affect the future of bitcoin,” he said.

Mesidor added that it is a concern when a company like Celsius draws attention and struggles, but is not representative of the blockchain community.

“As you innovate you’re going to have problems,” he said. “There are models that don’t work and that’s what we’re dealing with with these companies.”

More important than current prices is confidence that the decentralization of markets creates opportunities for financial inclusion and the solution of economic inequality, Mesidor said. Blockchains are accessible to anyone and are a game changer for minorities, he added.

But the blockchain may not be as decentralized as one might think, said Mark Nadal, founder of ERA, an innovation lab focused on building open source Internet applications.

Blockchains still require the approval of other members of the chain and are just “slow public counting machines,” Nadal said. There are person-to-person technologies that allow data sharing without the need for consensus from others, such as on a blockchain, Nadal said.

Still, many proponents of the blockchain chain seem to lean toward the crash, letting the market take its course and claiming that blockchain technology has a bright future.

Even on the eve of a cryptographic winter, it has a silver lining, said Marta Belcher, president and president of the Filecoin Foundation, an organization that funds development projects that seek to improve the decentralized website.

Belcher said he believes cryptocurrencies are here to stay and are the foundation for a better Internet: “an alternative to Big Tech that puts people in control of their own data, protects users’ privacy and security, and permanently preserves more information. important part of humanity. “

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