PALO ALTO, California – Last year during this period, a toy called a cryptokitty was sold for $ 170,000. A real estate agent has made up like CoinDaddy, producing cryptanalous themed music videos. The man behind a company called Ripple became for a moment richer than Mark Zuckerberg. The children just out of high school were buying Lamborghini because of a crypto meme. The experts went to CNBC to say that Bitcoin would have reached $ 100,000 per currency.
For a few sweet months of 2018, the whole Silicon Valley was shrouded in frantic easy money and a fantasy of remaking the world order with cryptocurrencies and a related technology called blockchain. A wave of joy hits the bay area. The New York Times worked with the trend in an article titled "Everyone is getting incredibly rich and you're not." It was temporarily true.
And just as the American public had received all the possible explanations about the blockchain that could be written, the whole thing collapsed. The bubble has exploded.
Today the price of Bitcoin – $ 19,783 last December – is $ 3,810. Litecoin cost $ 366 per coin; now it's $ 30. Ethereum was $ 1,400 in January; today is $ 130.
This December ends the most exciting year of the cryptocurrency, ending in a terrible, sober headache of a winter.
At the remaining meetups and work spaces, those who remain call this "the winter of the crypt". Believers say this is just "the trough of disillusionment", indicating a paper that assumes that all new technologies pass through a similar trough before exploding into inevitable glory.
Those who continue to affect cryptic dreams insist that all of this is positive, because only the most serious, the true crypto-believers, remain.
"It is painful to lose money, but it is a necessary step," said Robert Neivert, investor of the venture capital company 500 Startups. "2018 concerned the transition from the hype to the product".
This year, the blockchain industry – a subgroup of the cryptocurrency industry that would like to live on its own – has gone through a Cambrian explosion. But first, an explanation of the blockchain: A blockchain is a relatively new type of database initially introduced with Bitcoin. It is not the digital currency. It is the underlying technology that helps manage the currency. The most important thing is that it is decentralized, so no person, government or company controls it.
Blockchain has become a solution for everything: blockchain for journalism, for the pot, for dentists. At the base of all this there has been real technological progress and a growing understanding of the fact that this decentralized technology could transform financial systems. But excitement escaped control.
Also adding the word "blockchain" makes stocks go up. When Long Island Iced Tea Company changed its name to the Long Blockchain Company, its stocks rose by 500% in one day. The scammers invaded the space, launching new doubts about investment schemes called "initial offers of coins".
The computational power needed to "extract" a Bitcoin or another cryptocurrency now costs sometimes more than that currency. The mines – in fact, the data centers in need of electricity – are turning off. Electronic images piled up at street corners become viral. As the demand for Bitcoin has declined, the Bitcoin algorithm has been adjusted and the currency has become easier to extract.
But this is really good, cryptography experts claim.
"The fact that the miners are going out and the difficulty is decreasing is a feature, not a bug, of bitcoin design", venture capitalist Arianna Simpson he wrote on Twitter.
Some in the cryptocurrency business just want the world to know that there are still people working there. Julian Spediacci, a cryptocurrency investor in San Francisco with his twin brother, James, said he would like people to know he is still alive and identifies himself as a HODLer, or someone who does not sell despite market fluctuations.
"A lot of people are trying to figure out what happened to us and if we are still alive, it would be nice to make it clear that there are many OG HODLers," Spediacci said. , using a common language in the cryptography industry to indicate that it would remain an investor.
"I think we are getting closer to the bottom," his brother said.
Some of the friends who did leave the city. Meetups are quieter. The most recent video of the community's main musical voice, CoinDaddy, or Arya Bahmanyar, is set to the Beatles' successes "Yesterday."
But the Spediacci brothers continue. They say they are starting a new hedge fund. And that weekend there would be a party in a new blockchain incubator, Starfish, run by Alicia Ferratusco. An incubator is a space in which a start-up group works together, in this case working on blockchain technology.
"It's called Starfish because when you cut the starfish's leg, it can grow back," said Julian Spediacci.
Not everyone is fighting for the crisis. For lawyers, it's a new race for gold.
"Now that the market has collapsed, everyone is reported," said Chante Eliaszadeh, a law student and president of a blockchain club called Blockchain of Berkeley Law.
He said the legal scene is pretty exciting right now. While the Securities and Exchange Commission crashes, some scammers are trying to escape to Bali or Malta, where regulations are more relaxed.
At a Palo Alto party this year, the theme was "real".
The organizers had pasted the motto "Real People, Real Money, Real Deals" – on walls, on posters, slide projections and handouts.
A jury was moderated by Radhika Iyengar-Emens, one of the founding members of a venture capital company specializing in cryptocurrency and block-trading start-up called StarChain Ventures.
"I think we will see many real-world cases," said Ms. Iyengar-Emens. "And these guys will be here for those very real use cases."
A use case would be a normal consumer who is able to use a cryptocurrency to do something other than a speculative investment.
The audience sat folding white chairs. The snacks were Ritz Bits.
"What's the QuarkChain?" He asked the public the founder and CEO of QuarkChain, Qi Zhou. "Next generation blockchain."
Kerry Washington, a member of the Litecoin Foundation, which promotes Litecoin, presented the year when the currency lost more than 90% of its value.
He talked about a great litecoin summit this year, which in a slide he specified cost a quarter of a million dollars. There, guests could buy candy with Litecoins. This showed everyone how useful Litecoin could be, he said.
The problem has always been that we already have something that allows us to buy candy.
An announcement reproduced for something called Bitrue, a wallet. It was only half a dozen people staring straight at the camera saying, "I trust Bitrue."
And then Curtis Wang, CEO of Bitrue, stood up to announce a truly special offer. It could promise investors an annual percentage yield of 10 percent. There were cheers scattered in the crowd.
Someone in the audience raised a hand and asked if it was legal to offer it.