Episode # 41
Episode 41: A Year in Crypto
It pains me to say it, but, yes – this is the LAST EPISODE of School of Block. It’s been quite the rollercoaster this last year – and you know, because you’ve been on it with me. Perhaps because PLANET BLOCKCHAIN is near the MAXIMALISTS’ BLACK HOLE I’ve aged 36 years compared to the one that’s passed on earth. [INTERSTELLAR clip] And maybe you have too. A lot happens down here on Planet Blockchain, running at 36 times Earth speed.
Together we survived the EMERGENCE of NFTs. A mid cycle MARKET CRASH. A sensationally fast EVOLUTION OF CULTURE, the arrival of PLAY TO EARN and the FERVOUR around the METAVERSE. Not to mention DEFI, DAOs, PFPs… And everyone’s favourite space cadet Elon Musk. How did you feel when he announced Tesla bought a GALAXY of Bitcoin? And then when he said he wouldn’t buy any more, because… polar bears? How did you feel when China banned crypto? AGAIN?
These TIDAL WAVES on Planet Blockchain are your EMOTIONS. Did you hold tight for a year in the space? Or did you get washed away? I hope we went some small way to helping you HOLD TIGHT. Because this is a journey we’ve been on TOGETHER. The seas do get rough sometimes, and it feels damn good to have someone by your side. So how about the next 12 months? Is the promise of financial freedom really getting closer? Or are we stuck out way beyond the event horizon?
Well, stay with me and let’s hit the thrusters. And work out what the next year has in store for us.
Welcome to School of Block. And if you’ve enjoyed what we’ve been doing here, please do like and subscribe – it really does help us help you find your financial freedom.
When we started this wild ride with School of Block, back in those prehistoric times of March 2021, not only was I still the picture of youth, but the messaging around the space was completely different. The narrative was that BITCOIN was going to go up, and predominantly because of the INSTITUTIONS which finally had the PLATFORMS to take part.
What was our purpose? We wanted to make crypto LESS INTIMIDATING, MORE ACCESSIBLE and to CRYSTALISE the PURPOSE of the industry – which for many new to the space was still slightly opaque. What exactly does Bitcoin do? How does it work? Why is it important?
And once we’d answered some of those big questions, we wanted to provide people with the KNOWLEDGE and TOOLS to SAFELY NAVIGATE the space. Because, whilst regulation is coming, many territories on Planet Blockchain are still the WILD WEST. And it certainly helps to know what the risks are when you go there. And of course there was one other MASSIVE factor driving behaviour worldwide. The PANDEMIC.
THE GLOBAL PANDEMIC
The impact of COVID-19 has been felt at just about every level – obviously in HEALTHCARE, but also SOCIALLY, STRUCTURALLY, POLITICALLY and of course ECONOMICALLY. On a personal level it’s changed the way we work, travel, socialise and play. And on a societal level we’ve seen governments reeling and central banks printing money like their lives depended on it.
And when it comes to BEHAVIOUR, whether it’s how you spend your day or how the markets react to a stimulus, it’s largely driven by EMOTION. Because, no doubt, these are emotional times. We’ve all been riding the rollercoaster together – FEAR, RELIEF, WORRY, HAPPINESS, SADNESS, PAIN, GREED – it’s all there, and largely on repeat as the pandemic surges and relents. And then surges again.
So that’s the context – and when you consider the role that CRYPTO can play in terms of restructuring society, providing equitable treatment for the ‘little guy’ and solving the issue of inflation – well, no wonder the pandemic has acted as a CATALYST for everything we’ve seen in the last year. It really is the PERFECT STORM.
So, let’s pick up with the NARRATIVE – Bitcoin and institutions. By and large the INSTITUTIONS came. First PAYPAL, and then TESLA, who bought 1.5 BILLION DOLLARS of it And remarkably, it wasn’t the BUYING of that sum that moved the market, but the ANNOUNCEMENT.
Suddenly those cynics out there who’d dismissed it were thinking – maybe this CRYPTO thing really IS legit? Because, of course, it is. And if you were here with me on Planet Blockchain for that, it felt like PARTY TIME. [https://youtu.be/8yTntOoDlAA?t=196]. Finally everyone else was seeing what we could see. This train had left the station and we were hanging out of the windows BLOWING TRUMPETS and WAVING FLAGS.
But as happy as we might have been with those PF ATHs, the big market moves for BITCOIN weren’t really what 2021 was all about. It was the acronyms that really took us to NIRVANA.
First was DEFI – or decentralized finance, first discussed in Episode 13. [CLIP] Projects that had been in development for years were finally launching and the DEFI space exploded. At the start of 2021 DEFI had $15 billion in assets. Now at the end of 2021 it’s up to $100 billion.
DEFI tokens on the exchanges went bonkers and the Ethereum network got clogged up as more and more protocols launched. Were you in on YFI or UNISWAP? If so and you weren’t EUPHORIC you might have been doing it wrong. And if like me you weren’t, then you were pretty damn gutted. But as is always the way in crypto… You miss one bus, and another is right round the corner. And this particular bus had three letters on the destination board. NFT.
NFTs were one Pandora’s Box we kept opening, because – well, they’re awesome. We talked about why in episodes 11, 12 and 33 [What is an NFT – CLIP]. Absolutely fundamental to the success of the NFT space was the CULTURAL IMPACT they made. Communities were brought together, and by tapping into their shared goals and incentives, they flourished.
To be fair, if you were one of the early ones into the NFT space you weren’t on a bus or even a train. You were on a space rocket – that blasted straight THROUGH the MOON and kept going. Adoption went crazy and so did the values. We can see the scale of adoption by the growth in ACTIVE WALLETS. At the end of 2020 there were 64,000 active wallets, 19,000 buyers and $22 million worth of NFTs traded. By the end of Q3 2021, the number of active wallets had OCTUPLED to 412,000 and the number of buyers THIRTEENPLED to 260,000. And that’s only on Ethereum.
What about the VALUE of NFTs traded? That had multiplied TWO HUNDRED and SIXTY EIGHT TIMES to 5.9 BILLION DOLLARS. As I said. MOON doesn’t do it justice.
And it wasn’t just the values that were rocking the world, it was this explosion of innovation. Of culture, of artwork, of ideas. People were brought together, driven by collaboration and shared goals. It was thrilling, invigorating, life affirming. To say spirits were high is an understatement.
And then Elon dissed Bitcoin. China banned it for the 46th time. And the market crashed. And then kept crashing. We’d never seen a 55% correction in the middle of a bull run before. Was it all over? Was the adoption, the interest, the development – all a mirage?
Hands were wrung, stacks were capitulated and even the memedog stopped saying it was fine. [https://www.theverge.com/2016/5/5/11592622/this-is-fine-meme-comic] But despite the tears, of course it wasn’t all over. Crypto isn’t just about what the Bitcoin price is doing. This community is hard to rattle .The devs keep developing, the community keeps innovating. And amidst the swarm of newly minted NFTs, one particular type stood out. The PFP.
First there were the PUNKS. Then the APES. Then, well, just about everything else. From MEEBITS to COOL CATS, there was seemingly no ANIMAL that couldn’t be APED in on in the search for representing an eager INDIVIDUAL’S IDENTITY.
The most successful projects went beyond just exclusivity and cool artwork, and created community, owner benefits and a life progression for the asset itself – whether it’s the spawning of new NFTs – see the DOGs that came free with ownership of an APE, or the metaverse futureproofing that comes with a MEEBIT. And it was this NFT explosion that drew many newcomers to the space. More and more of you saw that they weren’t ‘JUST A JPEG’ and then quickly found yourself tumbling down the rabbithole like Alice in Wonderland.
And that rabbithole is quite something isn’t it? Tell me you didn’t feel SHOCK, AWE, WONDER, BAFFLEMENT and AMAZEMENT as you bounced off the sides on the way down. The potential these little jpegs have is shaking the establishment at its core. I mean, Adidas have just quite literally APED in on it, changing their twitter profile pic to this…
Crypto Culture is no longer a facet of a niche tech sector. It IS culture. The rest of the world is looking at Planet Blockchain and desperately trying to get in on it. But they’ll have a hard job keeping up. Because the newcomers of 2020 and 2021 have completely changed the CULTURE of the whole space. Where it was once warring tribes of Bitcoin MAXIMALISTS vs Vitalik disciples, suddenly now the inclusive world of NFTs has dictated interactions, grown friendships and birthed incredibly innovative projects.
Just look at LOOT, a seemingly simple ‘retro gaming’ NFT – but the key to instigating a community to come together to create the very game it hints at. Being at the forefront of an entirely new way of building projects is inspiring and rewarding in a way few other endeavours are.
And perhaps that’s what’s encouraged an influx of celebs into the space. Here’s the surprising thing though, unlike Floyd Mayweather in 2017 and Akon’s disastrous Crypto city – they came and took part in a way that people didn’t hate. Who’d have thought? Jimmy Fallon wanted to buy APES. Timberland, Steph Curry rocked up too. This was one party to which everyone was welcome.
Perhaps the difference is that these celebs stepped in in a respectful way, and this community didn’t reject them because they themselves were new. New participants. New attitude. Invigorated by the joy they find in the space and wanting to share it. Those BTC maxis are no longer the belligerent feudal lords governing the space, they’re the TROLLS under the BRIDGE.
Even the new language itself – GM, frens. WAGMI. Might seem like cliquish slang at first but at its very core it says ‘we’re in this together’. It’s this TOGETHERNESS, INCLUSIVENESS and POSITIVITY that drives Planet Blockchain in 2021, and that makes all of us pretty DAMN JOLLY .
SOCIAL TOKENS AND 3rd GEN CHAINS
In all the buzz around NFTs, let’s not forget SOCIAL TOKENS. Way back in episode 22 we covered them in depth [CLIP], as they offer a profound opportunity to REALIGN the INTERESTS and INCENTIVES of creators and their communities. Going forwards ALIGNING INCENTIVES is something that crypto does FAR, FAR BETTER than the traditional social and economic model. When it works it has the power to dramatically change the world around us.
As do 3rd GENERATION BLOCKCHAINS, more in Episode 36 [CLIP]. The combination of POWER and COMPATIBILITY means that when these take off, the sky won’t even be close to the limit. Both of these have found their footing in the last year, and you’ll be seeing plenty more of both in the time to come.
So, 2021. It’s drawn INNOVATIONS in ART, GAMING, COLLECTIBLES, FAN ENGAGEMENT and COMMUNITY. And no grand leaders on pedestals here – these communities are governed from the BOTTOM UP, in DAOs. And before you throw your hot mug of tea at me – yes, we’ve dived deep into DAOs too – back in episode 23 [What is a DAO – CLIP]. The implications of this revolutionary governance model are HUGE. Do you want to go and live in Zark Muckerbergs Metaverse, being HARVESTED SENSELESS for data and having your every interaction MILKED as if you were a giant profit udder? [Clip from that AWFUL META PROMO]
I don’t. That’s why we were talking about it before he launched that monstrosity onto the world. And the brilliance of Planet Blockchain is that YOU don’t have to – DECENTRALIZED METAVERSES, governed by the bottom up will enable EVERYONE to have a stake and ownership in their identity, wearables and interactions – let alone the ability to earn a living there.
2021 then. One hell of a ride. We’ve been UP – dare I say it, even EUPHORIC – and we’ve been DOWN. But you know what those wise men CHUMBAWUMBA once said: [https://youtu.be/1njIckENbRA?t=9] Spending time here on Planet Blockchain does require some resilience. Are you able to handle your own emotions? Stop that FEAR and PANIC rising through your body, and ride out the dips to feel the EXCITEMENT, AWE and WONDER on the other side? If so, stick around – and you will be rewarded.
So what’s next for the crypto space as a whole? More ADOPTION for sure – whilst the number of individual wallets increased from 60 to 80 million in 2021, Coinbase users DOUBLED in the same time. And let’s face it, one minute you’re tentatively buying your first crypto on Coinbase, the next you’re APING in on NFTs and GMing your frens.
What’s also likely – more REGULATION. Which is a good thing if it helps more people access all things decentralized. It does of course depend on the regulation, though.
And that regulation is coming in large part because of the perceived CONSUMER RISK. Scams are a part of crypto, as they are in any financial environment, and they will continue to evolve as regulation tries to chase them out. Price may not continue going up, it may even correct – but the evolution of the space will continue apace because crypto is HERE TO STAY. Not that it won’t be without competition…
Because if there’s one thing experience has taught us, it’s that all of the BIG TRENDS happening on Planet Blockchain will be HIJACKED by the big WEB 2 PLATFORMS or by the INCUMBENTS. We’re seeing it already. But there is hope. Because it’s up to ALL OF US to drive the future of the space through our actions. We can shape the future of society. It’s up to us which projects succeed and which fail.
Our choice – YOURS, and MINE, about WHERE we go and WHICH projects we support will determine the future for all of us. Do we want to live in a society where the RICHEST and most POWERFUL run the show, making us make money for them? Or one where we – TOGETHER – make the decisions that empower us all? Because there’s only one choice that gives YOU your FINANCIAL FREEDOM. And it’s DECENTRALIZED.
This might be the end of this series of School of Block but we’re going to stay on PLANET BLOCKCHAIN a little longer. Because Ledger and The Defiant are developing another concept to share with you next year. So maybe the next time you see me I’ll be a little older. Maybe my face will have COMPLETELY FALLEN OFF. But I’m staying here. Because I like it. And I don’t want to go back.
How about you? You’ve been watching School of Block, presented by Ledger and the Defiant, demystifying decentralisation, one block at a time. Don’t forget to subscribe, drop us a like if that’s what you’re into, and as always – here’s to your financial freedom.