Let’s recall the post-2000 tech stocks (opinion)

Last year saw the collapse of the Terra-Luna, BlockFi, Celsius, Voyager Digital, 3AC and Alameda-FTX ecosystems. But that is not the end of cryptocurrency. Like the internet after the Dot Com crash, cryptocurrencies are just getting started.

Of course, it is true that several crypto companies have failed in 2022. But it seems that it is worse in the headlines than in reality. Critics of cryptocurrency in newspaper journalism and the traditional financial industry treat failure stories as representative of the entire industry.

The cryptocurrency community likes to use the term “FUD” to describe the proliferation of negative cryptocurrency news. In a way, this is natural and understandable in terms of vigilance, transparency and threat detection.

Fud is an acronym to describe crypto news articles or social media posts that increase the perception and feelings of fear, uncertainty and doubt. While FUD can start discussions on Twitter or YouTube and drive engagement, it rarely informs recent threats and vulnerabilities.

Instead, it usually over-discusses them and creates biases in the participants in these discussions to overwhelm them in their view of the industry and markets. Plus, all the FUD doesn’t tell anyone about the great products the crypto industry is building.

Crypto critics continue to fuel doubt

At this point, the inevitability of cryptocurrency is hard to doubt for anyone familiar with cryptocurrency facts and the latest techniques and products of the global financial market.

Take, for example, this recent story in The Politico about the attitude toward crypto at Davos. He says:

Scaramucci is one of a crowd of crypto junkies — executives and staff from high-profile exchanges, brokers and tech companies — who are here in this Swiss ski town to try to convince investors and potential backers that, despite the industry’s near-total collapse this fall, everything is in order. okay.”

There’s just no sense of this word, “almost total collapse”, correct. The crypto industry was nowhere near a complete collapse last fall. Another company in the cryptocurrency industry, a new venture startup company in the innovative technology space, has failed.

The Internet never stopped growing after the Dot Com crash

More crypto businesses and altcoins will fail in the crypto industry in the future. This does not make blockchain any different from any other sector of the economy. In addition, the price of Bitcoin and altcoins were in a deep correction in 2022. But the context is that this was after an equally steep rise until November 2021.

But the production of crypto networks during the crypto winter of 2022 did not come close to a complete collapse. They didn’t schedule. They didn’t even give in. Bitcoin hashrate and difficulty continued to rise during the crypto winter. Network miners continue to find a new block on average every ten minutes and fill transaction orders for addresses.

Activity on the Bitcoin network has remained strong. The daily new active BTC addresses were a picture of the healthy use of the digital platform on a global scale. The most popular altcoin, Ethereum (ETH), has seen the same strong growth in stakes and network usage.

Therefore, it is simply wrong to say that the cryptocurrency industry has almost completely collapsed in 2022. It is possible that many people who only have a superficial understanding of cryptocurrency think that this really happened.

But cryptocurrencies didn’t all but disappear last year, and they aren’t a “pet rock,” as JP Morgan’s Jamie Dimon recently quipped.

Drawing a comparison

Future Crypto fortunes today look like Internet 2000. Even after several dot com stocks crashed and burned in a widely discussed media spectacle. The parallels are almost uncanny.

Back in 1999, the Internet had the same kind of criticism in the media that crypto has today. They said it was a passing fad. They complained that it was too clunky and difficult to use. At first, the public saw the Internet as a convenient toy for computer geeks.

But they didn’t see its potential to connect the whole world. Even today, they do not see the expected future value of organizing this global connection to make it fairer and safer.

Most people didn’t invest in “tech stocks” even after everyone and every company started keeping the Internet at their fingertips 24/7 roughly a decade after the dotcom crash.

Back in the year 2000, crap was circulating on the internet. They said it’s a place for scams, phone scams and over hyped companies that don’t actually produce anything. Not that what they were talking about was completely untrue.

They reported the facts, but not to effectively sort them out and put them in a wider context to better inform their audience.

From failure to shaping the world

The newspapers raised a small public panic about the Y2K bug as if it would be the end of the Internet.

Today, they use the Internet for their traffic. But the same organizations scoffed at the Internet on giant, folded pieces of paper that were trucked into homes.

Many investments made in the economy of the late 90s, awash with capital and low-interest financing, at the height of dot com mania, were ill-advised. They burned when the stock market corrected.

But it wasn’t hard to spot some of the Internet companies that will be winning over the next few decades. Some dot coms had customers and revenue. Others had a dot com website, with some pictures and their email address on it, but no customers or sales.

Amazon, for example, was a well-publicized Internet success story when the Internet was new. It has a sharp business model and founder. This dot com has made more books available to its customers than any other bookstore in the world ever. They then ship your order straight to your door and take great care of their customers.

AMZN worth just $1,000, bought for $18 a share in its 1997 IPO, had a market value of over $2 million in 2021. That was just over two decades later.

Many cryptocurrencies have already risen that much in a much shorter time than Amazon’s stock did.

Tons of developer interest in the 2020s is in crypto

All young developers in 1999 wanted to build dot com websites and video games. By the late 2000s, everyone wanted to make mobile apps and video games.

By the late 2010s, everyone wanted to build cryptocurrencies and DeFi apps (and video games).

Really talented computer science students, creative entrepreneurs, and savvy venture capitalists are as excited about cryptocurrency today as those same types of business people were about the Internet twenty years ago.

The very emergence of the digital network has created a global revolution in connectivity. It was characterized by the ability to make digital copies of so many things. What’s more, digital computer copies were super instant, super fast to send around the world, and all super affordable.

There has been a flood of digital abundance.

Cryptocurrency is the next step in that connectivity revolution. Blockchain is an industry that supports the global computer network by reliably producing digital scarcity and securing it to its owners.