Why the Media Loves the Worst of Crypto

If you’re pondering, “How on earth did we end up back here?” or questioning why television news declared Bitcoin dead, know that you’re not the only one. The rise of viral social media movements such as Elizabeth Warren’s “Anti-Crypto Army” has given cryptocurrency a reputation akin to that of investment banking in the wake of the 2008 financial crisis. Today, those who claim that crypto is a scam might have seemed insightful when FTX collapsed in 2022, but a more charitable description for these critics now would be “lackadaisical.

In various aspects of the cryptocurrency industry, solutions are being developed to tackle real-world issues on a large scale. For example, stablecoins – digital assets linked to traditional currencies such as the US dollar – are experiencing rapid adoption, especially in developing countries where people grapple with unstable local money.

In simpler terms, Decentralized Finance (DeFi) is a system where people can lend, borrow, and exchange assets without needing traditional financial institutions. This is particularly beneficial in countries with limited banking access, as it promotes financial inclusion. Moreover, in an era where trade and dollar usage are being re-evaluated, DeFi provides a neutral platform for transactions, while also contributing to the widespread use of the US dollar.

While many cryptocurrency initiatives have a defined purpose or value, there are exceptions like meme-based coins whose worth is primarily influenced by internet hype instead of practical applications. Even within the crypto community, these tokens generate controversy, such as dogecoin, which has a market capitalization surpassing 94% of S&P 500 companies despite having no product or business model. Recently, Chris Dixon from Andreessen Horowitz voiced criticism towards meme-coins, claiming they undermine the sector’s overall utility. If you were seeking evidence to argue that cryptocurrency is a scam, you might find it in certain meme-coin communities.

Following Sam Bankman Fried’s public downfall in 2022, a fresh player has emerged, leveraging crypto systems to reshape the physical world: Decentralized Physical Infrastructure Networks (DePIN). These networks empower individuals to contribute resources like data or connectivity, earning them rewards. By pooling resources in this manner, DePIN initiatives can challenge established giants, providing affordable and easily accessible services that are often cheaper than those offered by large incumbents.

The Atlantic has already called the term DePIN (which was coined by an analyst at Messari) “boring.” But these networks are already changing the market structure of legacy industries. Today, there are over 1,400 DePIN projects building, having raised more than $1 billion in venture funding. But if you relied solely on the Atlantic and Warren’s Twitter feed, you’d still think the industry was fraudulent.

One notable instance is the Helium network, which encourages grassroots installation of mini-towers and hotspots to establish a decentralized mobile coverage system. Currently serving more than 120,000 active mobile plans, Helium delivers affordable connectivity by shifting operational expenses towards the periphery of the network. However, some may label Helium as a scam or deem it unsuccessful following a 90% drop in its token value in 2022.

The fact that many people don’t realize how Helium has shifted from an IoT network to a cellular provider demonstrates the way token prices can sometimes overshadow genuine business transformations. This misconception highlights how unstable crypto market prices can create confusion about the actual progress being made by networks like Helium, which are capable of adapting and becoming stronger amidst volatility – even when dramatic price fluctuations spawn misleading stories.

As a crypto investor, I can’t help but see parallels between my own experience in this space and Donald Trump’s political journey. Just like him, the crypto world is frequently misrepresented or stripped of its context, with certain actors being lumped together as representatives of the entire industry. This makes it all too easy for those seeking someone to blame to find a convenient scapegoat.

Indeed, a significant group of cryptocurrency users advocate for anarchy, while some have exploited this unsupervised market for their own profit. Following the collapses in the previous cycle, mainstream skepticism has been understandable. It’s not surprising that many people think the darkest days of crypto are still ahead. However, as numerous practical applications in stablecoins, DeFi, and decentralized identity (DePIN) continue to emerge, it’s evident that the brightest future of cryptocurrency is also on the horizon.

Important Note: The opinions expressed within this article belong solely to the writer and may not align with the perspectives of CoinDesk, Inc., its proprietors, or its associates.