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Sometime around the year 300 BC, a wealthy merchant set sail hauling a load of precious cargo across the shimmering expanse of the Mediterranean.
His shipment was varied, including rare furs, an array of the fine gems his people the Phoenicians were known for, as well as exquisite carpets and linens prized by wealthy collectors. But despite these magnificent wares, they paled in value compared to his primary freight: Tyrian purple dye, one of the rarest commodities on Earth.
At the time, certain colours were almost impossible for humans to create. Our species could easily produce paints and dyes of most shades using materials easily found in nature—leaves, sap, berries, bugs, charcoal, and even urine—but the deepest blue and purple hues were significantly more challenging.
The labour involved in the creation of Tyrian purple dye was immense. Large numbers of a specific type of sea snail had to be collected, the blood of which was then extracted by slaves with meticulous care. Once the blood had been left to bake in the sun for a significant time, the dried remnants of this process were ground into a fine pigment.
The resulting powder’s rarity and the rich colour it produced made it sought after by royals and well-to-dos of the time. Its value was so significant when traded, that it was described as being as valuable as silver by weight.
The merchant and ship owner who carried this cargo was named Zeno. And fate had decided his extraordinary goods would never reach their final destination.
History doesn’t record how Zeno’s shipment was lost—whether by piracy, storm, shipwreck, or other machinations—all we know is that it was mislaid in its entirety. For some, this would have meant a life-destroying event. For Zeno however, it was exactly what would lead to the fulfilment of his destiny.
After the catastrophe, Zeno sought a new life and fresh opportunity in Athens. It was here he relinquished the merchant trade, instead taking up a career of the mind. Eventually, Zeno would become known as one of the most famous scholars of his time, as well as the creator of the school of thought known as Stoicism: a philosophy that has survived almost two and a half thousand years, that today boasts untold millions of followers around the world.
Zeno’s misfortune was a necessary one. It was required for something better to be created on the other side.
I’d like all of us to remember this sentiment today.
By now, I’m sure you’ve heard about the recent crash in cryptocurrency. It’s an event that’s resulted in the total downfall of FTX—the second largest crypto exchange on the planet—as well as the possible bankruptcy of BlockFi, something that many (including me) expect to be announced in the coming few days.
What caused this crypto calamity? The finer details are not quite clear. Though on a macro level it was most likely spurred on by crypto markets taking a heavy dive, resulting in over-leveraged exchanges running out of capital, and being unable to pay back loans. FTX was simply the first domino to fall, and will now likely take other exchanges down with it as it implodes.
The millions of individuals who had money stored on FTX (myself included) and the myriad of institutional investors who bet billions on the platform will likely never see their money again. Its former CEO Sam Bankman-Fried once boasted that FTX held over $5.5 billion on the exchange, yet its recent bankruptcy filing lists its total crypto assets at a pitiful value of just $659,000.
Like droplets of rain meeting a glowing lava flow, billions of dollars have now transformed into nothing more than ephemeral financial vapour.
Due to this precarious situation, other exchanges including BlockFi and AAX have since halted customer withdrawals, and Binance has ceased offering certain trading pairs. These are just a handful of examples of new bad news that’s hitting almost on a daily basis now.
Many now believe these are all signals that vultures are circling above the bloated corpse of the crypto industry as a whole, ready to pick its carcass clean. That after years of hype causing an overinflation of this digital asset class, the end is finally nigh.
So, is crypto finally dead?
I very highly doubt it.
For a long time, I’ve believed the industry has needed an event like this to thin out the herd, so to speak—it required something of a reset. Simply because of how over the years, the proverbial belly of crypto had become distended as it was ever-increasingly filled with disgusting digital trash.
Untold billions of dollars have been pumped into useless shitcoins like Shiba Inu and Dink Doink, as well as over-hyped NFTs. Digital items that have absolutely no value, no utility, and provide absolutely no benefit to society, beyond being volatile speculative items for their creators to sell, inflate, and then leave others holding the bag when their prices inevitably come crashing down.
In my opinion, NFT art has been the worst offender in all this lunacy. Virtually no NFT artworks have escaped having most of their value completely wiped from existence, for example like in the case of Justin Bieber who spent $1.3 million on a Bored Ape NFT; a piece of “art” that today is worth less than seventy grand—a total loss of almost 95%. There are now literally millions of stories of similar percentage losses.
In short, there was a lot about the industry that needed to go away. The gangrenous fat it had accumulated over the years had to be removed, and we needed to be reminded of what crypto was intended for in the first place: a safe and decentralised way to store and trade value.
My ideal outcome would be that we’ll eventually only be left with what I consider to be the digital equivalents of gold and silver—Bitcoin and Ethereum respectively—and everything else would fade into oblivion. I don’t think that will happen, but I know that going forward, people will be more careful about the kinds of crypto assets they put their money into.
And all it took was a little catastrophe. Which sometimes, is exactly what we need to start anew.
So in my opinion: no, crypto isn’t dead. However, the vultures are circling.
Conveniently only days after FTX’s collapse, the US Federal Reserve announced a 12-week pilot of its new digital dollar, otherwise known as a central bank digital currency (CBDC). And although the trial’s timeline sounds rather short, the players involved in it definitely aren’t. Mastercard, US Bank, Wells Fargo, Citi, and HSBC are all taking part in it, just to name a few.
We already know that our governments don’t like the idea of “we the people” owning a decentralised means of trade they can’t control. So if there was ever a moment for them to apply the killing stroke to our decentralised money, it would be now when a large part of the industry is on life support, with many standing at the bedside ready to pull the plug. Their timing, as always, is impeccable.
But this is why now more than ever, we can’t lose our faith in crypto.
Sure, it can be hard not to feel pessimistic at times like this. And it’s easy to listen to the doomsayers who are now prophesying that this is the end. But to give up now will almost certainly pave the way for the absolute dominance of government-controlled CBDCs, and the weakening of the only independent alternative that’s still owned by us.
This is why I’m still personally betting on crypto.
Remember, crypto didn’t fail us. Exchanges did. And we don’t need exchanges to hold or use these assets.
And we sure as hell don’t need (nor want) the government’s alternative to them either.
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