The defeat with FTX is an embarrassment that is hard to justify. Even the most staunch advocates of cryptocurrencies find what is happening to the third largest exchange in the world unacceptable. Many analysts have warned of the risks and volatility of the crypto market, but what has happened has an impact on something much more difficult to recover: trust.

Error in associating blockchain only with cryptocurrencies. Blockchains, more popularly known in English terms, are the cornerstone of Bitcoin, but their use goes much further. This technology promised a decentralized economy transformation, but its visibility and success has been attributed to cryptocurrencies themselves.

When Bitcoin rose, blockchain seemed to be implemented in thousands of companies, while when cryptocurrencies fell, the technology was scorned. It’s an erroneous attribution, as the technical advantages of the blockchain are completely independent of the crypto’s value.

The new references are not up to the task. Vitalik Buterin created Ethereum, Gavin Andresen laid the foundations for Bitcoin Core and the Bitcoin Foundation, Gavin Wood created Polkadot, and Charles Hoskinson developed Cardano. These are some of the biggest references in the crypto world in its early days. All of them have technical knowledge and a style closer to the academic world.

But the biggest known names in the crypto ecosystem for several years closer to the financial world. We’ve seen this with Michael Saylor, Changpeng Zhao, Nayib Bukele or Sam Bankman-Fried, who are considered the “Warren Buffett” of cryptocurrencies.

HODL? Over the years, the (relative) success of investors has eclipsed the tech business that garnered a lot of attention before the 2017 boom. Even then, many people’s confidence in blockchain was intact. This was when pride was embodied in the already classic HOLD meme.

“Whether its value has risen or fallen, it doesn’t change that it’s a digital currency, that it can’t be blamed, that it’s key for people in some countries to avoid losing money when leaving their country, or that it’s programmable money. It can be programmed to handle that,” said Raúl Marcos, Xataka’s blockchain expert.

Major exchanges shattered confidence. What’s going on in FTX now is watched with a lot of uncertainty. Exchanges are tools that facilitate the management of cryptocurrencies, but their role is called into question due to immeasurable theft and practices constrained by legality. There is not only FTX here, there are doubts about Binance.

Who’s left to get back to basics? There are analysts like Noah Smith who are already opening the door for the crypto world to disappear completely due to the cascading effect of the problem with FTX. The crypto world has experienced major crises in the past and has managed to get back on its feet. Its strength is that the foundations of blockchain are solid. There are many advocates of decentralization of the economy. It will be necessary to see who takes action to remember these values ​​and convince investors again.

Image | bernard pascal