Bear markets are a completely natural feature that can be observed in all commercial environments. They help weed out projects that have inefficiencies and don’t contribute to the wider ecosystem. They also help dispel the hype and false assumptions that contribute to, and rise during, the preceding bull market.
The current crypto bear market has been going on for quite some time. It is an ideal time to look at which projects and industries will survive in the long term, when capital is not so easy to come by. For reasons outlined below, four market segments that will survive the crypto bear market and have long-term viability are cyber security, infrastructure, data storage and games.
Segment Survivor #1 – Cyber Security
With everything going on in the world, few are aware that we are in the midst of a cybercrime epidemic. While fingers are often pointed at Web3 security concerns, it’s worth remembering that government departments, mega-corporations, manufacturing facilities. universities, schools, healthcare providers, postal services and more have all been breached. Even “secure” password managers have been compromised.
These all operate on an outdated Web2 infrastructure, leaving themselves open to attack. Web3 projects that deliver successful security protocols are bound to survive in the long term. Existing solutions do not exist to adequately protect users from phishing attacks, social manipulation, malware, keyloggers and many other threats.
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Decentralized servers are much more secure because there is no central repository for hackers to steal from. Zero knowledge architecture ensures that providers do not keep customer information at hand. Customers retain access to their private keys across services. Much innovation remains, but we may see a renaissance in cybersecurity after this epidemic is over.
Segment Survivor #2 – Infrastructure
Providers of decentralized infrastructure (“infra”) will also certainly survive as a market segment. In relation to the cybersecurity concerns of centralized server architectures, we have seen many alternative vendors emerge that do not hold customer data. The service is anonymous access, which is at the core of Web3.
Aside from the fact that no personally identifiable information means nothing to target for hackers, Web3 infrastructure providers are more efficient than traditional server architectures. In a world of rapidly increasing energy prices and decreasing resources, increasing server efficiency is strongly required.
Existing server models do not accommodate the many blockchain-as-a-service businesses that are redefining how we interact. A decentralized infrastructure is needed to support and connect the many DAOs, dApps, NFTs, Layer-1s, Layer-2s, bridges, exchanges, decentralized exchanges, games, metaverses and more.
Infra vendors that offer RPC connections to the various aspects of Web3 will thrive. New projects must choose an infrastructure provider to build with, on a ready-made architecture that connects to many different blockchains, at a low cost. Ankr is one example of a prominent infra supplier within Web3.
Segment Survivor #3 – Data Storage
Anonymous, decentralized data storage is also going to be sorely needed as Web3 evolves. This is a security. Information must always be stored, but the problems with existing data storage are obvious. Companies such as Facebook and Twitter store customer information in centralized databases. They are then hacked or (in the case of Facebook) sell this information to other companies.
An alternative means of data storage is a requirement, because neither governments nor companies have proven to be reliable in protecting user information, either through negligence or inefficiency. Web3 projects can ensure that information is stored on a number of decentralized servers, and the architecture itself ensures both efficiency and data security.
An example of this could be Web3.storage. Web3.storage is a suite of APIs and services that make it easy for developers and other users to interact with data in a way that is not tied to where the data is physically located. It uses identity protocols such as IPFS, Filecoin and UCAN.
Segment Survivor #4 – Gaming
Gaming is still one of the most invested sectors in Web3. We have seen the gamification of various industries. Gaming is not a side industry, but is a viable means of income for younger generations, either from investing in a plot of land in the metaverse or playing Axie Infinity to flip an NFT. There are many monetization models offered by Web3 games, including play to earn, share to earn, learn to earn, play and earn, etc.
But games can take on new meanings when it comes to Web3. Our game, for example, combines education with gaming by offering an interactive Roman-themed metaverse to satisfy both. It’s a reality metaverse that university students and classical enthusiasts can engage with, and also provides a fun platform for generic Web3 players.
Plus, virtual reality products aren’t too far off, which will provide an immersive experience in every sense of the world. The combination of a virtual environment with real rewards is a combination that ensures that Web3 games will survive regardless of crypto market prices. It connects too closely with fundamental elements of human nature.
Makes sense of the crypto market
It is impossible to say with certainty which specific businesses within an industry will survive. But it is certainly plausible to identify which broad sectors will win by looking at the existing market.
We are in a cybercrime epidemic and the centralized server model has failed, it is expensive, slow and insecure. We need rapid changes in data storage, cyber security and infrastructure. Web3 offers this.
When it comes to Web3 games, the numbers speak for themselves, and interest in games is as high as ever. It even has the capacity to reach people who don’t currently consider themselves gamers, especially when VR and AR elements are integrated into an ecosystem that offers impressive rewards.
