Tech
Has the crypto dawn evolved into a crypto yawn?
Raise your hand if you are no longer interested in articles and opinions on the world of cryptocurrencies. If your eyes glaze over when the topic is brought up, or alternatively, if you want to jump up and slap the next person who mentions the word Bitcoin.
Me too. I have written two books on the subject. I make a living, I invest in it, I scan crypto news feeds all day, I think about it too much. Most of the time it bores me to death.
I wonder this. How has something so fundamentally transformative become worn out to the point of becoming mildly irritating background noise for most people?
I was recently invited to be part of a panel at the Franschhoek Literary Festival. The topic was “The Future”. The speakers had expertise in artificial intelligence, cryptocurrencies and future trend analysis. It was lively and entertaining, but during the Q&A session it was clear that the audience’s main interest was artificial intelligence.
Artificial intelligence is the shiny new button. The shine of cryptocurrencies in the zeitgeist has clearly dimmed.
To which I respond with a hurrah. It marks the beginning of the maturity of this historically maligned and much misunderstood technology. This is not to say that innovation in the sector has slowed down. Instead, fabulous new inventions continue to make their appearance in the broader crypto ecosystem. Some of the smartest brains on the planet are doing wonderful technological things in a gravity-charged realm, expanding the meaning of “trust” and the social mechanisms through which humans claim and protect “ownership” of their assets, whether virtual or physicists.
And so we hear about new cryptocurrency-related arcana in terms suffused with inscrutable jargon, such as zero-knowledge proofs, MEV mitigation, proposer-builder separation, directed acyclic graphs, Byzantine practical fault tolerance, account abstraction, Level 3, Level 4… All really heady stuff. Ingenious. Important. New.
So why the boredom?
More information on the Daily Maverick: The FSCA opens the door to cryptocurrencies in personal investment portfolios
Second Google Trends, searches using the word “cryptocurrency” have decreased by 50% in the last three months. I believe the fundamental reason for this general loss of interest in the field is that the battle between believers and disbelievers has been won, and it has been won by cryptocurrencies. The gladiator show is over, the audience heads towards the exits.
Cryptocurrencies are now firmly institutionalized by the largest (and some of the most conservative) asset managers in the world, such as Blackrock and Fidelity. Bitcoin and stablecoins are found on the balance sheets of major companies and countries, including the US government, which has taken ownership of billions in seized cryptocurrencies (the proceeds of crimes) but has not yet chosen to convert them all into dollars, presumably because they are investment level.
Tokenization
A new blockchain-based creature called real-world asset tokenization has been rapidly adopted by nearly every major global bank. It is now expected to be responsible for 10% of global assets (Boston Consulting Group forecasts) as myriad asset ownership securities, from real estate to debt to stocks, are expected to be deposited on various blockchains by 2030. Gaming has lost the last of its reticence in the cryptocurrency space and is widely incorporating NFTs for ownership of in-game items.
Additionally, people barely mention the energy cost of mining these days, as the technology has become increasingly sustainable, with Bitcoin mining now among the greenest industries in the world.
Of course there are still pockets of resistance. Some regulators in some jurisdictions remain unmoved, apoplectic about the march of cryptocurrencies. None more so than Senator Elizabeth Warren in the United States, who based her entire campaign on eliminating cryptocurrencies and is now increasingly isolating herself even from her Democratic colleagues, some of whom last week voted with Republicans for regulations crypto-friendly.
Dubai, Portugal, the United Arab Emirates, Germany, Estonia, Malaysia and even Hong Kong have opened their arms to crypto investments and projects. Even Donald Trump has sensed the shift in public temperatures and is calling on crypto-loving voters to support him, promising both deregulation and nirvana.
Architecture done and dusted
Cryptocurrencies and their hydraulic system (blockchain) are no longer interesting because they simply work. It has proven to be a legitimate and increasingly non-volatile store of value, a trusted custodian of title to both real and virtual assets, as well as a set of incredibly fast and secure payment channels used by everyone from PayPal to Visa. .
This means that what we are seeing now are simply incremental improvements, including the complicatedly named ones mentioned above. The days of truly amazing people seem to be over. The rush to innovate has given way to making things work a little faster, a little safer, and a little less expensive (as with any other technology). The architecture is pretty much in place now. The rest is detail.
So, fewer and fewer of us are driven to talk about cryptocurrencies, to discuss their merits and demerits. She is silently fading into the background. A public utility. Reliable. Safe.
Boring. Maybe even forgettable. DM
Steven Boykey Sidley is Professor of Practice at JBS, University of Johannesburg. His new book It’s Mine: How the Crypto Industry is Redefining Ownership is published by Maverick451 in SA and Legend Times Group in the UK/EU, available now.