Why This Was a Successful Year For Crypto
The year 2021 is quickly coming to an end and this year has been unlike any other. While it looks like we will probably fall short of those incredible end-of-year price predictions that we were all hoping to see, but that doesn't mean this year was a failure. In fact, I would argue that this year was perhaps one of the most successful years for crypto. Let's talk about why.
Sure, if you only look at price and had your hopes set on those numbers that potentially could make you rich; you then might be feeling disappointed with the year. But even if you only measure in price, I would still argue it was a great year. Bitcoin did over a 3x, ethereum did even better than that, and then you had the emergence of alt Layer 1 chains such as Solana, Luna, Avalanche and more. Don't forget about the meme coins as well. Dogecoin and Shiba Inu were the talk of the market during the first half of the year. Everyone was expecting a 10x for bitcoin and more for ETH, but we have to understand that a 3x is still fantastic.
Even more importantly, I would point to 2021 being the year of blockchains improving adoption and advancing. For example, look at bitcoin's layer 2, Lightning. A year ago, next to nothing was happening and many people had given up on it. But, now it is being used to service an entire country in El Salvador, something that none of us could have imagined. Don't forget that the bitcoin blockchain saw its biggest upgrade in years with Taproot, something that we will begin to see results from years down the line. Most people still don't understand how bullish this is. And then we saw a whole country adopt bitcoin as their legal tender, a move that took everyone by surprise.
While Ethereum did become unusable at many points because of insane gas fees. We still did the introduction of layer 2, Arbitrum, and the great adoption of the ETH side chain Polygon. Ethereum is very similar to bitcoin, in that most people in the future probably will not be performing transactions on the layer 1 chain, but will instead be living on the layer 2 chain. This is a great step towards the future. Also, we finally saw the emergence of rivals for ethereum. Solana, Avalanche and Luna all emerged and saw great adoption. The fact is that competition is important to have in the industry. It forces progress to be made or get lost behind. The comparison between Ethereum and Solana also brought up some important questions. How much importance should we place on decentralization, and do people even care about it? People who do should choose Ethereum. People who don't might be more inclined to choose Solana.
This year we also began to see the emergence of crypto gaming with the incredible popularity of Axie Infinity. The game was so popular that it even became some peoples' jobs. In the future we will look back at this game and know that it was the game to start this movement. People love games and making money. It seems only natural that these two will be merged together. The game that everyone is looking at to be the "it" game, is Star Atlas, which is being built on Solana. It will be interesting to see how this continues to evolve over the next few years.
And then there were NFT's. Everyone thought that DeFi would be the thing that brought regular people into crypto and ignite the bull run. But instead, it was NFTs. While I will admit I still am not a fan of most of what has been released up until now. But I still understand how this market will continue to grow and grow. Then add in the fact that the Metaverse is becoming a real thing, and that will make NFTs even more popular.
These are only just a few of the great things that happened this year, and I'm sure there are a ton that I left out. That's the incredible thing about crypto, it is nearly impossible for one person to keep up to date on everything. Looking ahead to next year, I see the Layer 2's being the talk of the market. Especially on Ethereum. With the gas fees being less on L2, I think we will see a return of the popularity of DeFi and those coins will go up greatly in value. No matter what happens, one thing is for sure, next year will be an exciting year in crypto too.
How about you? What did you think were the most important things that happened in crypto this year?
As always, thank you for reading!
What I like about an article like this is that it offers a bit of perspective. You know, anything good will have growing pains along the way, and certainly crypto is one of them. But at the same time seeing the positive within the muck is something that helps one to form a better perspective on what's possible down the road despite what the road looks like today.
I guess the bottom line here is that there IS a silver lining if you look for it.