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Why is Blockchain so Popular?

Lincoln Murr

Summary: Blockchain, cryptocurrencies, and Web3 have been among the most popular and well-known technological innovations since the internet. In some ways it is unlike anything ever seen, with passionate and dedicated fans of the technology cheering on their favorite cryptocurrency like it is a sports team. Dozens of other technologies and protocols, while certainly still incredibly ...

Blockchain, cryptocurrencies, and Web3 have been among the most popular and well-known technological innovations since the internet. In some ways it is unlike anything ever seen, with passionate and dedicated fans of the technology cheering on their favorite cryptocurrency like it is a sports team. Dozens of other technologies and protocols, while certainly still incredibly valuable, have not even come close to capturing the attention that blockchain has. Understanding the reasoning behind the personification of blockchain is critical to comprehending why the industry acts the way it does and assists in creating more accurate and informed investors.

For the past several centuries, trust has been centralized, with institutions like banks, governments, and corporations serving as the primary guardians and facilitators of financial and information exchanges. However, the 21st century witnessed a series of events, from the 2008 financial crisis to various breaches of data privacy, which shook public confidence in these centralized entities. Blockchain offered a decentralized solution where trust is established not by intermediaries but by cryptographic algorithms and a consensus mechanism. This technology did not merely create a new form of currency or a more efficient transaction system; it proposed a radical shift from institutional trust to distributed trust. This cultural and psychological transformation, where people began placing faith in decentralized networks over traditional entities, added another dimension to blockchain's allure. This underlying narrative – a move from centralized to decentralized trust – captures the zeitgeist of a generation seeking more autonomy, transparency, and democratization in every facet of their lives.

The first time blockchain was publicly released was with the announcement of Bitcoin in 2008. There were digital currencies before Bitcoin, but none had been able to solve the problem of creating truly decentralized digital ownership. Blockchain, a technology that on its own is only slightly more interesting than the current protocols and standards that make up the internet, became immediately tethered to a financial asset. This made blockchain intrinsically different: it was financialized from its inception.

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Unlike technologies like TCP/IP, which underpin the structure of the internet, blockchain is inherently tied to money. TCP/IP, or Transmission Control Protocol/Internet Protocol, is a silent and invisible backbone, ensuring smooth digital communication but rarely making headlines. Though fundamentally essential, it never captured the public's imagination like blockchain has.

Cryptocurrencies, built on the blockchain, are not just technological marvels; they represent assets that can be bought, sold, and speculated upon. This has inevitably led to the personification of these assets. It's not just a blockchain or a technology; it's Bitcoin, Ethereum, and Dogecoin – each with its narrative, persona, and fanbase.

Cryptocurrencies, unlike traditional stocks or financial products, began in a largely unregulated space. Without clear boundaries or oversight, the possibilities were boundless. Innovators and early adopters saw this as a new frontier, with no gatekeepers to stifle their creativity. This libertarian spirit, combined with the potential for significant financial gains, drew in a diverse group of supporters. The ease in which it became possible to create a cryptocurrency token on Ethereum meant anyone could do it, and the process of creating a speculative token centered around the community built, not the technology required. The cryptocurrency landscape was truly a Wild West for the first several years of its existence, and its only just beginning to become a regulated industry.

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Moreover, the lack of regulations around advertising meant that cryptocurrencies could be marketed in ways that traditional assets couldn't. Highly energetic and emotive campaigns, grassroots movements, social media blitzes, and celebrity endorsements became the norm. This passionate marketing, combined with genuine technological advancements, created a fervor reminiscent of sporting events. Fans became advocates, evangelists, and even tribal in their support. And without prohibitive regulations and procedures, buying tokens felt relatively simple yet productive, even if the “investment” was closer to a gamble. The NFT craze of 2021 only furthered this frenzy in a repetitive cycle of breaking sale records causing more interest and speculation.

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Another factor at play is the democratizing aspect of blockchain and cryptocurrency. It allowed people worldwide, regardless of their socioeconomic status, to participate in a global financial system. It promised a future where banks weren't necessary, where transactions were transparent, and where governments couldn't control an individual's wealth. This utopian vision resonated deeply with many, creating an even stronger emotional attachment to the technology and its possibilities.

The meteoric rise and popularity of blockchain cannot solely be credited to its technological prowess. It is its intrinsic financial nature, its unregulated beginnings, the impassioned fan bases, and the promises of a decentralized future that have propelled it to heights that few technologies ever achieve.

By Lincoln Murr

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