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After attention-grabbing growth in 2017, cryptocurrency markets spent most of this year in turmoil as values alternated between slumping and plummeting. Around this time last year, Bitcoin hit a record value of $19,783.21 after several whirlwind months on the market. It is now worth about $3,700. Other cryptocurrencies had similar trajectories: Litecoin fell from $366 last December to $30 now. Ethereum fell from $1,400 to $130.
This was also the year that regulators like the Securities and Exchange Commission moved in to stymie the overwhelming number of cryptocurrency scams. Research indicates that up to 85 percent of initial coin offerings are scams, and the SEC in 2018 began more aggressively fining companies for failing to register their ICOs. There have also been reports that the Justice Department is investigating Bitfinex and Tether Ltd., major crypto players, for a wash-trading scheme that may have inflated Bitcoin values in 2017. Even boxer Floyd Mayweather and music producer DJ Khaled have had to pay penalties for improperly advertising cryptocurrencies.
Critics have pointed to cryptocurrencies’ paltry market performance and the preponderance of scams as proof that the technology is doomed. But how would you look at 2018 if you were someone who preaches the power of cryptocurrency? In order to find out, Slate spoke with prominent Bitcoin evangelist Andreas M. Antonopoulos. A teaching fellow for the University of Nicosia’s digital currency program and a host of the Let’s Talk Bitcoin podcast, Antonopoulos began immersing himself in the Bitcoin community in 2012. He’s since then become one of cryptocurrency’s most vocal advocates, encouraging laypeople to participate in the space through numerous books and speeches. Prior to the interview, Antonopoulos emphasized that his expertise is in computer science rather than investment.
Below is a transcript of Slate’s conversation with Antonopoulos, which has been condensed and lightly edited for clarity.
Slate: Looking at 2018, do you think we saw the crypto bubble burst?
Antonopoulos: We did see a bubble burst. This was the sixth or seventh bubble, depending on how you count it, in the cryptocurrency space, which is actually closely related to how the cryptocurrency markets work: causing cryptocurrency to grow in this kind of explosive way that results in sudden bursts followed by sudden contractions.
“Cryptocurrency is neutral politically. It doesn’t do geopolitics. It doesn’t do embargoes and sanctions and currency controls of the traditional currencies.”
— Andreas M. Antonopoulos
How would you characterize the state of cryptocurrency this year, beyond the crash?
It was a year of consolidation. We saw a lot of very interesting developments in a couple of different areas. 2018 was the year of rapid growth of a system called the Lightning Network, which is a micropayments network that’s built on top of Bitcoin.
We also saw a bunch of consolidation around the crowdfunding activities that happened in 2017, when there was a lot of exuberance over crowdfunding, and a lot of that died down. We’ve got a more rational market for that.
So you see developments toward making cryptocurrency into more usable currency, rather than an asset for speculative trading?
Yeah, the technology continues to mature, and the amount of work that’s happening in terms of technical developments has continued to grow at a very, very rapid pace across the whole space of cryptocurrencies.
One of the other important things we saw in…