“We have lost public confidence”: The crypto community is forced to admit its mistakes

At EthCC, the annual meeting of developers of the Ethereum ecosystem, the atmosphere is not depressed despite the declining market and repeated bankruptcies. But society is not fooled: there are many problems to be solved.

We have lost public confidence Says Viktor with coffee in his hand. We sit on the terrace of a café not far from the Maison de la Mutualité in Paris, where the EthCC, a major conference for Ethereum developers, will be held for 3 days, from 19 to 21 July 2021. The cryptocurrency, the second most popular in the world behind bitcoin, attracts: there is a queue in front of the Parisian building and the banknotes are quite out of stock.

However, the conference is not open to the general public: all visitors are professionals in the sector, whether they are people working on NFTs, on Web3 or specialists in cryptocurrencies. All the people gathered during these few days within the framework of the Maison de la Mutualité are motivated by a single goal: to make Ethereum and cryptocurrencies in general the future. But the last few months prove that the game is far from won and that if professionals continue to believe in the crypto project, that is not the case with the public.

In EthCC’s corridors, there are crowds. // Source: Numerama

A “cleansing” for the benefit of the sector, but not for the public

It must be recognized that everyone is aware that the period is difficult. ” The crypto winter as the beginning of 2022 has been dubbed, due to the prolonged fall in prices of bitcoin and other cryptocurrencies has created chaos on both investors and companies. To this must be added the collapse of the Terra project, which led to the loss of $ 50 billion, as well as the bankruptcies of the investment fund 3 Arrows Capital and the crypto-loan platform Celsisus, two companies that are heavily indebted.

At EthCC, as elsewhere, professionals in the sector try to put the losses into perspective. ” It’s a cleansing “, Acknowledges Karina Krooks, who works for Quantstamp, a company specializing in security control of blockchain projects,” but it allows to get rid of the less serious projects and keep only the best She hopes that companies with risky security, lying about certain specifications or just trying to get as much money as possible with no real plans behind them, are gone for a while because of this.

Josh, who oversees the development of Lens, a decentralized, blockchain-based social networking project, is not new to this bear market, he explains and laughs. He simply ignores the issue of falling prices: “ if you believe in technology, the price of bitcoin and other cryptocurrencies is absolutely indifferent “. For him, ” it’s a matter of culture change: young people no longer want social networks selling their data. They want to be able to truly own their identity online, and this is where cryptocurrencies and NFTs really are essential. »

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EthCC gathered all Ethereum professionals. // Source: Numerama

Same story for Viktor Fischer, who works for the investment fund Rochaway Capital. ” There is always a future in cryptocurrencies. The crypto winter of 2017 was much tougher, with almost all companies raising funds going bankrupt “, he remembers,” and the market was able to recover “The current crisis will eventually pass, he believes.” But before that, we must regain public confidence “And the battle is far from won.

Cryptos have gained a bad reputation

This is the biggest difference between this crisis and the previous ones: In the past, cryptocurrencies were a niche sector. But since 2020, bitcoin has become a real social topic: a survey, published in July 2021, shows that 89% of Americans have already heard of cryptocurrency.

This growing popularity, which is an advantage in normal times, is now playing against cryptocurrencies. Most new investors arrived during bull run, as prices skyrocketed and so they bought their crypto high. Since then, with the fall in prices, many have lost their share – between it, the repeated crashes and fraud, digital assets have gained a bad reputation.

Further

Crypto-scammers innovate: there are now fake apps // Source: Vasilis Chatzopoulos / Unsplash

For Karina and Josh, the conclusion is the same: newcomers to the crypto world have suffered. Although the professionals in the sector have also lost money, it is the private ones who have paid the heaviest price. Both emphasize the importance of cryptocurrency education. ” We need to explain to people what blockchains really are, and definitely do prevention », Emphasizes Karina.

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Behind the tips, Sorare. // Source: Numerama

“We lost confidence investors Viktor admits. Nevertheless, he does not despair. “ Also in 2018, people no longer believed in cryptocurrencies because the companies that had raised millions of dollars all went bankrupt.. Viktor especially remembers the stablecoin project Basis, which died a few months after raising $ 133 million.

Fortunately, people have short memories he continues smiling and drinking the coffee. ” Confidence returned in 2020 with DeFi projects (decentralized financing, note), and in 2021 with NFTs. It remains to be seen what events can restore the cryptocurrencies’ reputation with the public.

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