I saw a funny comment on twitter the other day. Here’s what it said.

Crypto people don’t live in the future. We live in the present. Just seems we’re in the future cuz y’all living in the past.


Pretty accurate.

Crypto Cycles

For those involved within crypto and hardened vets, this probably won’t be anything new to you. But, those who are not this might be useful for you.

Crypto is a very nascent space, with just shy of over a decade under its short history.

With that short history comes a relatively small market capitalization as comparative to commodities, precious metals, etc. After 10 or so years the entire market capitalization of crypto isn’t even over 3 trillion USD.

Given that market capitalization, it rises fast and can swing just as fast downwards. Hence the volatility, which comes in waves every 2-4 years.

These waves are usually created following a Bitcoin halving event where Bitcoin miners block rewards for mining get cut, making Bitcoin more scarce. Eventually there will come a time where no more Bitcoin could be mined, but that’s a conversation for another time.

What’s become more than apparent to me is these crypto cycles are not as random as we might think. They extend beyond these halving events. Now, what do I mean by that?

Let me explain.

What was Bitcoin created for?

I think it’s safe to say that any logical observer watching today’s events unfold can see how its importance has truly lived up to its motivation at onset. It’s something that cannot be controlled or artificially inflated by central authorities, governments, etc.

Definitely not a coincidence it was introduced following the 2008 financial crisis, to enumerate the above.

See all the massive money printing today? Bitcoin provides a decentralized and p2p (peer to peer) way to exchange value globally. For most people, it’s seen as a global reserve asset. Because, something that appreciates that much over time does not indulge a lot of people into wanting to sell/exchange it for use in day to day activities.

Hence the fierce #HODL mindset.

Even though there has been some really interesting advancements with lightning payments on Twitter recently.

The key point here for Bitcoin is it redefined an existing problem and has been fairly successful in doing so. It changed the way we viewed money and value, for that matter.

Fast forward to 2017, the previous bull run. Initial coin offerings (ICO’s) were raising $20-50M every other day for some solution to whatever. This resulted in moving beyond Bitcoin and exploring vastly the capabilities of platforms like Ethereum and smart contracts. It also redefined traditional funding models (i.e. investment groups, VC funds, etc).

Fast forward even more to late 2019 and present. Decentralized Finance (DeFi) was introduced and provided the same legacy financial world instruments – lending, borrowing, etc. But, decentralized and amongst pseudo anonymous people on the internet.

I didn’t think something that would surely repeat the previous pattern of redefining of an existing centralized problem, but it did. There’s over $200B in total value locked (TVL) across all DeFi platforms as of today.

Now, let’s enter the “metaverse” and JPEG land.

Enter Web3

Web3, metaverse, NFT’s… you hear these phrases several times a day at this point. What does it all mean though?

There’s no granular or “perfect” definition for this. To be quite candid, it’s mainly a lot of internet dwellers over exposed to JPEG’s trying to pitch you a grandeur vision of why you should buy their bags. Have to offload them somehow, right?

Jokes aside (mostly), behind the NFT speculation craze we’re seeing today is actually the groundwork for something much bigger.

I’ll give you an example.

Say you’re one of the many who decided to buy an NFT at some point, a lizard for examples purpose. Maybe this lizard is now pretty valuable and your social media channels are now full of people with lizard pictures as their profile pic. They also keep screaming the floor is too low.

A few things happened here.

Firstly, instead of glamorizing your newly acquired lizard NFT, you’ve became intertwined into a newly formed community of people who also have these lizards. We can draw parallels to sporting teams. What once was no reason for someone to approach or converse with you, due to the shared common interest (your lizard NFT), you’ve now opened up doors that previously would have been closed socially.

Arthur Hayes does an amazing job at detailing this concept further here.

Now, these NFT’s are tokens, by their very name (Non-Fungible Tokens). Web3 itself is the internet owned by the builders and users, orchestrated by tokens.

This orchestration can lie in the underlying management of the platforms in which these NFT’s are based on, such as Ethereum, Tezos, etc. What we’re essentially seeing is tapping further away from big tech and revitalizing the very origin of what the internet was supposed to be.

The internet was most certainly not meant to be used to track, profile you, and collect data from you as we’ve witnessed from the likes of Facebook, Instagram, and others. Their entire business model relies on this.

Imagine a future where your cryptographic wallet address represents your identity. That wallet address reveals some details about you, through a profile you may have created for it or what have you. Take it a step further and imagine its your personnel number or identification for your job.

It’s not going to be a so-distant future where we begin to see these things come to life. I see DAO’s playing a critical role here as well in aligning incentives as we begin to push away from typical corporate structures. Just look at the rapid trend of remote based work in the past year or two, it’s not going away.

How everything binds together might require some more time to see, and thought for that matter.