Move over, crypto – there’s a new hottie in town

If it seems to you that the much-hyped world of cryptocurrencies and non-fungible tokens has slipped out of zeitgeist, you wouldn’t be far wrong. For a while it felt almost daily that we were being told that “Web3” was going to change how we lived, but for the moment it seems that the crypto hucksters have gone silent.

There are a few reasons for this, the first and most obvious being the catastrophic collapse of the crypto exchange FTX towards the end of last year. Its unexpected demise exposed the cracks in the crypto facade and set off a chain reaction of bankruptcies and other failures that continues today.

Then there was the sharp decline in the prices of almost all major cryptocurrencies that coincided with FTX’s dissolution, which not only weakened investor confidence, but discouraged any potential crypto buyers. And finally, a global crackdown by regulators after a series of frauds and collapses that have cost investors nearly $US12 billion ($17.3 billion).

However, confront any crypto-focused company about this downturn and you will be met with the same response: everything is fine, crypto is still healthy, we are just using this lull in the market as an opportunity to “build”.

But build what actually? A list of laid-off employees to present to their HR department, perhaps? Or possibly a limping pile of dubious investments in half-baked crypto startups? In the seven years I’ve been reporting on the crypto industry, I struggle to think of a single thing “built” that could be considered useful in the real world.

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A quick snapshot of the most popular cryptocurrencies shows projects that are just investment opportunities (bitcoin, BNB), blockchain-centric development tools (ethereum, cardano), memes (dogecoin) or stablecoins used to facilitate crypto trading and investment (tether, USDC).

It is a harsh truth that after more than a decade of development and billions of dollars poured in from investors, the so-called Web3 industry has so far failed to cement a single “killer app”.

This isn’t for lack of trying – at first people thought the programmable nature of ethereum would transform the software world, which it didn’t. Then decentralized finance (DeFi) took off in an attempt to tear up financial markers, which it hasn’t and probably never will (especially not the ASX). And finally, there was 2021’s collective delusion that NFTs could replace art, collectibles, and one day represent all of our digital assets in the definitely-real-and-not-fictional metaverse.