Crypto has had fraud and scam problems from its beginning. We covered these in-depth earlier this year.
Also, crypto markets crashed last spring, with Bitcoin prices falling to their lowest levels since 2020. Other crypto coins and token prices fell even more.
But the FTX cryptocurrency exchange's implosion and bankruptcy is an even more significant blow to crypto than prior acts of fraud and price volatility.
This is because FTX was seen as a source of stability in the uncertain world of cryptocurrencies.
Key quote from the New York Times article Here's the Latest on the FTX Collapse:
FTX's implosion sent shock waves through the crypto and financial communities. Numerous funds and crypto start-ups were entangled with FTX, which extended lifelines to other firms after the crypto market crashed in the spring.
So what does the crypto winter (some are calling it a crypto ice age) mean for Web3?
Axios' Web3 is in FTX's Blast Radius points out that:
Web3, at its heart, is all about using blockchains and crypto tokens as tools for organizing decision-making, governance, and financial incentives in every realm of human endeavor — from virtual world-building to social networking and from accounting to art-making.
But to accomplish any of this, Web3 and crypto firms will have to show that they can add value while at the same time significantly reducing the industry's fraud and scam problems.
We first covered Bitcoin in 2013 and blockchain in 2015.
We also covered a wide range of potential blockchain applications in 2017. But it's five years later, and none have come to fruition.
We're not ready to give up on Web3. We continue to think Web3 technologies will eventually produce useful applications.
And just as many other technologies went through "winters" and successfully emerged - the Internet, A.I., etc. - we think Web3 will, eventually, work through the problems.
But the promises will be less grandiose, and the applications grounded in reality.
