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Is Crypto Following the Footsteps of the Early Internet?

Does crypto and the internet share the same path to mass adoption?

A new report by Architect Partners draws a compelling parallel between the nascent journey of cryptocurrency and the evolutionary saga of the internet. The report, penned by Eric Risley and Arjun Mehra, delves into how both groundbreaking technologies, despite initial skepticism and perceived limited practical value, have paved the way for revolutionary applications. 

Highlighting a shared digital lineage, the authors argue that cryptocurrency, much like the internet in its infancy, holds the potential to transform the digital fabric of our world. This analysis arrives at a critical juncture, as cryptocurrency vies for a stable position within the financial landscape, attracting attention from traditional finance institutions and venture capitalists. 

As we explore this digital confluence, the question remains: Will cryptocurrency mirror the internet’s trajectory towards ubiquity, or carve out a distinct path of its own?

The formative years: skepticism and early challenges

The infancy of the internet and cryptocurrency was marked by a cloud of skepticism, a phase where both were regarded more as novelties than the bedrocks of future innovation they were destined to become. In their report, Risley and Mehra shed light on this parallel, noting:

 "These networks alone offer little practical value," 

likening them to blank canvases awaiting the brushstrokes of innovation. This sentiment is echoed in the early criticism of the internet, which, despite its foundational launch in the 1960s, struggled for decades to find its footing and practical application. The comparison is starkly similar to the current state of cryptocurrency and Web3, which, despite their potential, are often dismissed for their perceived lack of intrinsic value.

The authors draw a significant comparison to the year 1998, a pivotal moment for the internet with the birth of Windows 98, the integration of the web browser into the operating system, and the emergence of giants like Google and Tencent. This moment in history is paralleled with Crypto/Web3 in 2022, suggesting a similar cusp of technological breakthrough and mainstream acceptance. The tweet by Yunus:

 "Based on user trends, Crypto/Web3 in 2022 is probably the same as the Internet in 1998.

That year Win98 was born, the browser web page into the computer operating system, portal site began to be born.

It was also the year that Google and Tencent emerged."

encapsulates this sentiment, hinting at the imminent explosion of applications and platforms that will harness the full potential of blockchain technology.

From bubble to bedrock: the internet's rise and crypto's potential

As the internet transitioned from its speculative bubble at the turn of the millennium to become the foundation of modern digital life, cryptocurrency stands at a similar crossroads. The late '90s dot-com bubble saw astronomical investments in internet companies, with the tech sector's valuation soaring to $5.6 trillion by 1999. This period of frenzied investment, however, was followed by a dramatic burst, leading to a significant reevaluation of the internet's commercial viability. 

The report notes, highlighting the resilience and innovation that emerged from the tumult.

"Some of today’s most notable leaders were founded during this era, including Amazon, Google, Salesforce, Equinix, Expedia, and Netflix,"

This historical context offers a lens through which to view the current state of cryptocurrency. Like the internet's early days, crypto has experienced its own cycles of hype and skepticism, notably demonstrated by the volatile market dynamics and speculative trading that characterize much of its history. Yet, as the internet proved, such periods of uncertainty can precede substantial growth and integration into the fabric of everyday life.

Alex Starling (@AlexStarling77):

“The Y2K bug (not THE Y2K computer bug, but respiratory disease in late 1999 and early Jan 2000) was nasty. Per capita mortality in 2020 was ‘only’ 93% that of the millenium epidemic.

Thankfully it wasn't made worse in 2000 by shutting down society, was was implemented in 2020.”

The narrative of the internet's recovery and expansion post-bubble burst provides a hopeful precedent for cryptocurrency enthusiasts. It suggests that, despite the challenges and volatility, there is a path forward for crypto to become as ingrained and indispensable as the internet.

Looking ahead: the future of cryptocurrency in a digital world

The ultimate question posed by the comparison between cryptocurrency and the internet's historical growth is whether crypto will follow a similar path to become a universally accepted technology or remain on the fringes of digital innovation. Reflecting on the internet's journey from a skeptical beginning to an indispensable tool, the report by Architect Partners suggests a promising future for cryptocurrency, underpinned by continuous innovation and growing acceptance within the financial ecosystem.

Venture capitalist Chris Dixon, in his publication "Read Write Own: Constructing the Next Era of the Internet," explores this potential future, where cryptocurrency and blockchain technology play central roles in constructing a new digital era. This vision aligns with the optimistic view that, despite current challenges, cryptocurrency's integration into the global economy is not only possible but inevitable.

The report concludes with a thought-provoking inquiry: 

"What felt like breakneck innovation actually took 34 years – almost half a lifetime." 

This reflection on the internet's evolution serves as a reminder of the patience required to witness the full maturation of groundbreaking technologies like cryptocurrency. As we stand on the brink of this new digital epoch, the parallels drawn between the two technologies suggest a horizon rich with potential, awaiting the collective creativity and ingenuity of the global community to unlock its full promise.