Lorraine shares her perspective on the crypto space, summarizes the current state of the market, highlights key sectors in the space, and emphasizes the need for crypto education.
The crypto space is imperfect and ever-evolving, with tremendous potential There is more to crypto than Bitcoin, Ethereum, and Dogecoin. Approximately 97% of the cryptocurrencies listed on Coinmarketcap are vaporware DeFi, Web3.0, the Metaverse, and crypto infrastructure are the crypto sectors seeing the most development
Episode Links
Coinmarketcap: https://coinmarketcap.com
Satoshi Nakamoto ‘s Bitcoin whitepaper: https://www.google.com/search?client=safari&rls=en&q=bitcoin+whitepaper&ie=UTF-8&oe=UTF-8
Further Reading
DeFi: https://www.coindesk.com/learn/what-is-defi/
Web3.0: https://coinmarketcap.com/alexandria/article/what-is-web-3-0
I love this space. I love the ingenuity in the space, the innovations in the space, and the crazy ideas that people come up with and then execute. It just blows my mind. I am a believer, and I am a convert. But I am not an evangelist. This space is not for everyone. It is imperfect and ever-evolving. Some of the criticism that has been leveled against it is also not entirely unfounded. It is true that verification of transactions on the Bitcoin blockchain consumes an inordinate amount of energy presently, but that doesn't mean this is how it's always going to be. So if you're new to this space, if you know nothing about this space, if you're still on the fence about crypto, I hope the information I share will allow you to form your own opinions about cryptocurrencies and the crypto space and maybe you will see its value as well.
I first came across crypto in 2013. I was reading an article about the Winklevoss twins of Facebook fame, and how they had invested upwards of $10 million in a digital currency called Bitcoin. I remember thinking to myself, what is a digital currency? What is Bitcoin? These poor guys, they're going to lose all their money. But at that point, Bitcoin was already four years old. The fact that it had survived for four years meant that there were people out there who saw value in it, who had kept it alive.
The first Bitcoin made its grand entrance onto the world stage in January 2009. But the concept of Bitcoin had been presented in a technical paper in 2008 by a person or persons going by the name of Satoshi Nakamoto. They envisioned a currency that was resistant to the shortcomings of central bank, government-backed currencies. One such shortcoming is hyperinflation, which we're all grappling with right now. Transactions made with this currency would be peer-to-peer or from one person to another person, with no need for an intermediary to ensure the validity of the transactions. This innovation appealed to me. And the more I read about it, the more fascinated I became by cryptocurrencies. Nine years later, I still love this space, and I hope it's not stifled. I hope it's allowed to thrive, because I do believe it has the power potential to change the way we interact, the way we transact, and the way that we live.
I like statistics, I love numbers. So I'm going to throw a few out there so that you have an idea of where we were, and where we are. 230. That was the price of one bitcoin in April 2013. 68,700 and thereabouts. That was the price of Bitcoin in early November 2021. 22,000. That is the average price of Bitcoin at the time of this recording. Since November, Bitcoin has lost about 68, more than 68% of its value. And it's not the only cryptocurrency that has lost value. Most of them have. We are in what we like to call a crypto winter or a bear market. And we'll touch on some of the factors that have brought us here in in future episodes for anyone who's interested. So back to the numbers. One four. The number of cryptocurrencies on coinmarketcap in 2013. Coinmarketcap is a lovely website that allows you to track cryptocurrency prices and has lots of information about cryptocurrencies, as well as a lot of really lovely resources. For anyone who is new to this space. I encourage you to check it out. 19,702. That's the total number of crypto currencies on coinmarketcap at the time of this recording. That's a lot of cryptocurrencies, a lot of crypto assets. But not all of these 19,700 plus cryptocurrencies are worth giving a second look, I would say only about 97%. Actually, I would say only five 3% of the cryptocurrencies on that list are worth delving deeper into. The remaining 97% are composed of projects that failed, projects that were abandoned by their communities, projects that were outright scams. A friend of mine said the other day crypto has a PR problem. Because there are so many scams and so many bad things happen in this space. But a lot of good things happen as well. And not every project is a scam. But all those 97% besides the scams and the ones that failed, and the ones that have been forgotten, are some really good projects that for one reason or another just failed to take off. And then you have those projects that were disruptive and efficient and needed four years ago that have been left behind by the advancements in technology, by newer protocols. They have been usurped. And it's very likely that in a few years, the usurpers will have to give way to another breed of protocols and projects. So most crypto currencies do not exist in isolation. They are associated with particular projects, protocols, and blockchains or they are native to those protocols, blockchains, or projects. And so for the remaining 3% What do we have? We have different sectors in this space. And I'm not going to touch on all of them. I'm just going to focus on the ones that have captured our imagination and where the most development is.
So, the first sector is crypto infrastructure. These are blockchains, like the Bitcoin Blockchain to which the bitcoin is native, you have the Ethereum blockchain, you have other blockchains that have been developed to achieve different functions and with different goals in mind. And then you have others that have been developed to address the inefficiencies in the blockchains that already exist. Each of these blockchains has a cryptocurrency related or native to it. And then we have Web3.0. So Web 3.0 is supposed to be the next iteration of the internet, it's supposed to be more efficient, have better functionality, give people back that data. And it will not be controlled, at least that is the hope by just a few companies or a few people. And so there are projects in that sector as well. There are protocols that would like to be the next Google the next Facebook, or Meta. And there is lots of developments in that space as well. And then you have decentralized finance, which is hands down my favorite sector in all of crypto. The projects in this space are trying to replicate the services that we find in traditional finance. So whether that's borrowing or lending. There are some that offer insurance. And they're doing this in very innovative, disruptive ways. And then you have others that are developing services that you will not find anywhere in traditional finance. The goal is to democratize access to these services, because not everyone is banked, and so they do not have access to those services, decentralized finance gives them that access. And then we have the metaverse, which is a very out-there idea. But it's not even an idea anymore. It is a reality. It's a virtual world that's very immersive that allows you to do everything and more, everything you can do in the real world and more. And however out-there the concept and idea is, the fact is there companies that have moved their headquarters to the metaverse, there are companies buying up plots of land in the metaverse. The Metaverse might very well be the future of work. Who knows, but there's development in that sector as well. And there are projects in there. And they are crypto currencies, and crypto assets that are associated with those projects. So those will be the main project, the main sectors that I will focus on again, because there's a lot of development there. And they seem to be pushing the envelope of what is possible, and what can be achieved. So over the next episodes and future episodes, I will delve a lot deeper into these different sectors as well as the various protocols in them. I believe the best way of navigating this space especially if you want to invest in it, is to understand the lay of the land to understand why certain sectors exist and where they're going. It's also important to understand why the market, for example, is down as much as it is. While bitcoin is down 68%, there are several protocols that are down in excess of that, 80% 90%. So why why are we here? All those questions I will try to answer in subsequent future episodes. I hope you'll listen in. This is all I had for you this week. Thank you for listening in. Until next time. Take care of yourself