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Money has turned many faces ever since its inception. From gold to paper to plastic even. One thing is for sure, though. It’s never about the material per se. No, the real essence of money lies in its insubstantial value — one that’s recently taken a liking to a virtual form of currency.
Virtual, because it is internet-based.
Internet, which is the lifeblood of today’s world.
Quite fitting, right?
You might have already come across digital money before, if you’ve played any of the open-world fantasy games, or MMORPGs (World of Warcraft, Second Life or Entropia, and others) over a fast network, like me.
No, virtual money is definitely not a new concept. But, it sure was a limited one, restricted to a certain group of users only. That is until 2013 when it soared into the public limelight with the boom of Bitcoin.
Understanding B & B (Not bed and breakfast)
Bitcoin, the revolutionary digital asset, was titled as a top-performing virtual currency in the last four out of six years. Why? Because it solved more than one financial problems of the people, like giving them:
- Online transference security, privacy, and counterfeit prevention
- Transaction transparency (open for public viewing)
- Freedom from centralized control
- Easy divisibility, irreversibility (not being able to spend a coin twice), and portability (virtually-maintained)
- Global inclusion and cross-border sharing without any remittance fee
The powerhouse technology behind Bitcoin was blockchain — an online ledger system that’s publicly visible and keeps a chained record of each monetary transaction ever made, in anonymous terms. It is maintained by a cluster of miners, linked in a peer-to-peer network, who’re responsible for computational calculations necessary for validating each Bitcoin transaction, for a minted incentive, of course.
That’s the loophole-free brilliancy of the whole Bitcoin-blockchain system, which appealed to the crowds far and wide, who eventually formed communities around it.
Bitcoin’s hype and the creation of a cryptocurrency community
The peak of the crypto mania came in late 2017 when the price of Bitcoin went up from $900 to almost $20,000 in a swing! This feverish rise defined the mass-level surge in people to purchase more and more Bitcoins over their credit cards and build a billion-dollar hedge fund out of it. Ventures like the Long Island Iced Tea, and charity organizations like the Pineapple Fund, saw an immediate swelling in their stocks with an investment in Bitcoin and blockchain.
This hype brought together cyberpunks, new-age developers, tech-libertines and even Redditors into a tightknit community centered on cryptocurrency. Group chats, crypto conferences, online message boards, and late-night meetups became the norm. Talks on changing the world order and decentralizing power through cryptocurrency soared through the air. Bitcoin created a new shared consciousness, best represented by the residents of the Crypto Castle.
Introduction to the San Francisco Crypto Castle
Just like the 1990s dot-com explosion brought everyone to the Silicon Valley, 2017s Bitcoin boom made a castle out of a three-story house.
Erected on a steep side of the Potrero Hill neighborhood, this landing pad drew millennials from all backgrounds into a single cryptocurrency space. Most of them being young Bitcoin investors. Though, some others were entrepreneurs with a dream project in the pipeline.
The Crypto Castle was born out of a $20,000 rental deposit placed by Jeremy Gardner, the king of the castle and the de facto leader of the crypto newcomers in 2015. Back then, he needed the place to work on Augur, a market-forecasting start-up, which eventually saw its value going into millions with Gardner’s ICOs.
Not only that, the self-driving car start-up Comma.ai, also founded in 2015, grew out of the Castle’s space with its CEO George Hotz residing in a closet, off the main room. In addition, Crypto Castle witnessed collaborations of the next level and heated discussions about the future of money among prodigies, like BitTorrent’s founder Bram Cohen and Etherium’s creator Vitalik Buterin.
All this and so much more happened at this fraternity of crypto-enthusiasts, who worked, partied and plotted like it’s the end of the world.
Bitcoin’s tragic fall and the closing of crypto fever
Speaking of the end, the bubble of Bitcoin burst right after its unbelievable expansion at the dawn of 2018, as many had feared and predicted. From the height of $19,783.06 in December 2017, its price fell to the lowest $3,242 in December 2018.
The Great Crypto Crash engineered a sell-out of all the major cryptocurrencies. Coin exchanges got shut down. Coincheck market was hacked. Allegations of fraudulence were imposed. Almost four billion Bitcoins got lost and the fever finally cooled down.
All castles turn to dust eventually
Don’t bite off more than you can chew. That’s what my grandmother used to tell me. And, it’s something which might’ve lurked in the mind of Jeremy Gardner when he said that it’s too much, too soon. Bitcoin’s flight didn’t feel real to him, more on the level of insane, and he would’ve felt better if the value of the asset was to go down a full 90 percent.
Well, he got his wish.
But, what happened to his castle, though? Did it succumb to the long night (GoT reference)?
Jeff Wilser, a digital nomad and an author, recently went to the Crypto loft and found the signs of abandonment. In his account, he notes an over-cluttered garage, a dust-eating backyard, a sealed hot-tub, Honest Kids juice boxes with tiny straws instead of the lavish Rosé of old times, an air of discomfort around crypto-wealth discussions, sad lighting remnants from the previous Wolf of Wall Street-style parties, and its king moved away from the San Francisco Castle to Miami.
However, this is not the end.
From the ashes, the Phoenix will rise yet again, as Bitcoin’s value picks up pace this April. We seem to be in for another roller coaster ride.
From time to time, we invite industry thought leaders, academic experts and partners, to share their opinions and insights on current trends in blockchain to the Blockchain Pulse blog. While the opinions in these blog posts are their own, and do not necessarily reflect the views of IBM, this blog strives to welcome all points of view to the conversation.