flexibeast.space - gemlog - 2022-08-01

Is (cryptocurrency) winter coming?

No[a]. Most probably not. Unfortunately.

As the current cryptocurrency[b] crash[c] continues apace:

“Crypto collapse: Terra Luna, 3AC’s Singapore liquidation, Celsius, Voyager”

i can't help but wonder whether a ‘cryptocurrency winter’, analogous to the famous ‘AI winter’ of the 1980s, is coming.

Wikipedia: ‘AI winter’

Unfortunately, however, i think it's more likely to be another short ‘trough of disillusionment’.

Image: chart of the Gartner Hype Cycle

i write “unfortunately”, not because i'm fundamentally anti-cryptocurrency in principle, but because i'm not fundamentally anti-cryptocurrency in principle. i think that the concept of cryptocurrency is an interesting one, with lots of potential for providing part of the infrastructure for sociopolitical decentralisation. However, the current state of the cryptocurrency world involves:

“Cambridge Bitcoin Electricity Consumption Index”

“Side-Channel Attack Shows Vulnerabilities Of Cryptocurrency Wallets”

“Bitcoin : Vulnerability Statistics”

“Nirvana Finance drained of $3.5 million”

“The trading team was not using risk controls, and their unhedged position led to forced liquidations that made Babel's lending and trading departments unable to meet its margin calls from counterparties”

“Regulators order Voyager to stop saying they're FDIC insured”