“We have lost the public’s trust”: the crypto community is forced to admit its wrongs

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

We’ve lost the public’s trust “says Viktor, coffee in hand. We are seated 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, is being held for 3 days, from July 19 to 21, 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 completely exhausted.

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 the Web3, or specialists in crypto-currencies. All the people gathered during these few days within the confines of the Maison de la Mutualité are motivated by a single objective: to make Ethereum, and crypto-currencies in general, the future. But these last few months prove that the game is far from won, and that if professionals continue to believe in the crypto project, this is not the case with the public.

In the corridors of the EthCC, there are crowds. // Source: Numerama

A “purge” beneficial for 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 start of 2022 has been dubbed, due to the prolonged price drop in bitcoin and other cryptocurrencies, has wreaked havoc on investors and businesses alike. To this must be added the collapse of the Terra project, which led to the loss of 50 billion dollars, as well as the bankruptcies of the investment fund 3 Arrows Capital and the crypto lending 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 purge “, recognizes Karina Krooks, who works for Quantstamp, a company specializing in the security control of blockchain projects, “ but it allows to get rid of the less serious projects, and to keep only the best “. She hopes companies with dodgy security, lying about certain specs, 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 markethe explains, laughing. He simply brushes aside the issue of falling prices: “ if you believe in technology, the price of bitcoin and other cryptos absolutely does not matter “. For him, ” it’s a question of culture change: young people no longer want social networks that sell their data. They want to be able to truly own their identity online, and that’s where cryptocurrencies and NFTs are really essential. »

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The EthCC brought together all Ethereum professionals. // Source: Numerama

Same story for Viktor Fischer, who works for the Rochaway Capital investment fund. ” There is always a future in cryptos. The crypto winter of 2017 was much harsher, almost every company that raised funds went bankrupt “, he recalls, “ and the market was able to recover “. The current crisis will eventually pass, he believes. “ But for that, we need to regain the public’s trust “. And the game is far from over.

Cryptos have earned a bad reputation

This is the major difference between this crisis and the previous ones: previously, cryptocurrencies were a niche sector. But since 2020, bitcoin has become a real social subject: a study, 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 the running of the bullswhen prices were skyrocketing, and so they bought their crypto at a premium. Since then, with the fall in prices, many have lost their stake – between that, the repeated crashes and scams, digital assets have acquired a bad reputation.

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Crypto scammers are innovating: 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. Even if the professionals of the sector have also lost money, it is the private individuals who have paid the heaviest price. Both emphasize the importance of crypto education. ” We must explain to people what blockchains really are, and absolutely do prevention », stresses Karina.

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Behind the teepees, Sorare. // Source: Numerama

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

Fortunately, people have short memories he continues, smiling and finishing his coffee. ” Confidence returned in 2020, with DeFi projects (decentralized finance, note), and in 2021, with NFTs. It remains to be seen what events can restore the reputation of cryptos with the general public.