The Great Crypto Depression: How the industry lost its way and whether it can rediscover its idealism to get its mojo back

For crypto fans who came of age during earlier eras — back when Bitcoin was going to bank the unbanked and stop all wars, or even during the ICO boom when tokenizing carbon credits and disrupting dentistry were touted as the future of finance — the last couple of years have been incredibly depressing.

For crypto fans who came of age during earlier eras – back when Bitcoin was going to bank the unbanked and stop all war, or even during the ICO boom when tokenizing carbon credits and disrupting dentistry were touted as the future of finance – the last couple of years have been incredibly depressing.

On the one side, some Bitcoiners who used to want to smash the unfair financial and banking system now cheer the world’s biggest banks and governments for gobbling up an increasing percentage of the supply.

And on the other side, there’s the financial nihilism of memecoin trading, where nothing of value is built or created – just a production line designed to extract as much cash as possible from retail. The vast majority of Pump.fun users, 99.6%, haven’t even made $10,000 on the site.

Ethereum creator Vitalik Buterin has always believed crypto can make the world a better place but seemed to have a crisis of faith back in February about where the industry was headed.

“Do I feel good when I hear people from crypto twitter and VC firms telling me that PvP KOL degen casino that’s money-losing for >99% of its own users is the best product market fit that crypto is going to get, and it’s ‘condescending and elitist’ to wish for something better?” he asked.

So how did crypto lose its way, and does the industry need to rediscover idealism and big dreams to get its mojo back?

Peace, love and crypto’s anarcho-capitalists

The early days of crypto were infused with a much greater sense of purpose than today, says Scott Melker, better known as the Wolf of All Streets.

“Early cypherpunks were true libertarians who deeply believed that money and the government were broken and that Bitcoin and blockchain technology could fix them,” Melker tells Magazine.

Those who clocked up many hours in IRC channels in the early days will recall the passionate arguments that raged between the crypto-anarchists and the leftists, not to mention the endless flames wars on forums like Bitcointalk.

According to Melker, the crypto-anarchists, such as the founders of Bitcoin and early miners, were driven by a vision of a decentralized society free from government control. They saw Bitcoin as a way to create a parallel financial system that would give individuals the power to opt out of the existing system.

“On the other hand, the leftists were interested in using blockchain technology to solve social and economic problems such as inequality, poverty and environmental degradation,” he says. “They saw crypto as a way to create a more just and sustainable world.”

Both groups were united in their belief that crypto had the potential to fundamentally change the world for the better.

Among the early crowd were also a small number of socialists, who saw crypto as a way to create a more equitable society. They were particularly interested in the potential of decentralized autonomous organizations (DAOs) to give workers control over the means of production.

“It is a testament to the technological prowess and promise of this nascent asset class that all of these philosophies saw elements of what they cared about in the decentralized protocol technology, because it was flexible enough and powerful enough to build anything on top of it despite the fact that the protocols started very simply with a blockchain, a smart contract and a token,” adds Bitfinex chief technology officer Paolo Ardoino.

“It is also interesting to note that, despite the fact that there were more pressing issues at hand, such as the global financial crisis and climate change, these early adopters chose to dedicate their time and energy to developing this new technology that they believed in wholeheartedly.”

However, Ardoino says that while there are still plenty of true believers building in crypto today, their idealism has been “overshadowed by speculation.”

“From the beginning, blockchain was about financial inclusion, self-sovereignty and breaking free from the limitations of the traditional financial system,” he explains. “But as the market grew, speculation took center stage, and for many, crypto became just another casino rather than a tool for empowerment.

“We’ve seen this shift in the types of coins and projects that are being developed and funded. Where once the focus was on innovation and solving real-world problems, now the emphasis seems to be on quick profits and exploiting market trends.”

The ICO era was 99% memes, but 1% pure gold

Yet, both idealism and mercenary financial speculation have existed side by side throughout crypto’s history. In many ways, the initial coin offering boom in 2018 foreshadowed the memecoin frenzy, given many projects were little more than a half-baked idea (or meme) spun into a white paper and presentation that earned millions.

It was often cynical and exploitative, with many ICO founders frittering the money away before they’d even built a minimal viable product. ICO mills sprung up to