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OpenAI launched ChatGPT in November 2022 while the cryptocurrency and blockchain industry was neck-deep in scandals, defaults, hacks and price collapses – an industry in crisis, to put it mildly. You can think of this period as a high-tech version of “A Tale of Two Cities,” with one industry in turmoil and another in an era of unprecedented prosperity.
As we all know, ChatGPT will represent rapid advances in generative artificial intelligence and natural language processing, shocking the world with its ability to quickly produce data and help users with a wide range of tasks. Amassing a record 57 million active users in its first month, ChatGPT has disrupted entire industries and kicked off a Big Tech AI arms race.
Amid the highest levels of intrigue and hype around AI developments, blockchain and cryptocurrencies have been caught up in a debilitating bear market and overshadowed by another hot new technology.
Bitcoin has reached a new all-time high, surpassing $70,000. At the same time, above all, other cryptocurrencies are trending upwards; confidence in an impending bull market has never been higher. With the industry poised for another bull market, many on the outside question whether it has matured enough to become more mainstream or whether projects have failed to learn lessons from the previous market downturn.
Related: Infographic: Bitcoin Soars Higher, M-cap Surpasses $1 Trillion
The enhanced support role of DeFi
Developments over the past year point to a renewed crypto and blockchain space focused on real products, services and infrastructure – and less on gimmicky, hype-soaked projects that provide little to no value.
Decentralized finance (DeFi), which leverages blockchain technology to provide intermediary-free financial services, demonstrates this new maturation and has since become a backbone of the industry’s recovery.
DeFi’s evolution from a niche space for lending and borrowing or simply addressing Ethereum’s operational issues is reflected in its improved solutions, increased scalability, expanded interoperability, and greater sustainability. With more mature exchanges, sustainable liquidity mining and yield options, and stronger smart contract controls and regulatory compliance, retail investors and institutions are increasingly intrigued by DeFi’s capabilities.
As DeFi builds a more stable and sustainable foundation for the industry, an increased focus on infrastructure projects like Kima, which provides tools and interfaces to connect DeFi to traditional bank accounts and credit cards, has supported these advances. Privacy and security features like Chainlink’s decentralized node network minimize smart contract vulnerabilities by verifying on-chain data, enabling seamless cross-chain communications, and collaborating with SWIFT.
Even large institutions are taking stock of these improvements, as demonstrated by a recent pilot program of the Cantonal Network. In it, a few dozen institutions, including Goldman Sachs, BNY Mellon and Cboe, simulated numerous transactions across 22 blockchains.
Related: Bitcoin Is Halving Soon: Will It Cause New Bull Run?
The outskirts of Crypto
In addition to increasing credibility, advances in DeFi infrastructure have enabled greater liquidity and easier access for a wider range of users, allowing funds to spread across the Web3 space. This goodwill has revitalized segments of the industry that emerged and thrived during previous bull runs, but have become witnesses to what went wrong with cryptocurrencies when they crashed: Blockchain games, NFTs (non-fungible tokens), and meme coins.
Blockchain gaming was a big deal for a short time. But word quickly spread that these were not real games, but rather a convoluted and time-consuming way to stake tokens and NFTs, leading to widespread criticism from players and even industry players.
Now, we have seen a shift in blockchain gaming, letting the game itself take the lead rather than the economies within the game. It has also led to the emergence of new types of games, including first-person shooters like “Exverse,” whose stunning graphics and story-rich gameplay are a far cry from point-and-click collectible card games like “Axie Infinity.” or “CryptoKitties”. .”
Related: Are NFTs Back? Why NFTs will make a comeback in 2024
NFTs are similarly transforming as blockchain games evolve emphasizing quality gameplay over cryptographic elements. We are seeing a transition from overhyped, celebrity-backed “members clubs” to more accessible, utility-oriented NFTs. New trends in this industry include using advanced generative AI technology to design unique collections, major brands like Starbucks designing loyalty programs based on NFTs, using NFTs to verify the authenticity of luxury goods, and other uses innovative in the real world.
While NFTs are often misunderstood outside of the broader Web3 world, non-crypto enthusiasts are aware of them. Memecoins, however, are a little more unique, as even some within the cryptocurrency industry never understood their purpose or appeal.
Although highly speculative, meme coins have been on the rise recently. Boom-or-bust assets owe their renewed success in part to the rise of Bitcoin, but they also owe it largely to the dedicated communities they’ve built over the years, even if they started as a joke. With meme coins, their success depends on marketing and finding the right narrative at the perfect time.
For example, a Joe Biden-themed meme coin skyrocketed 830% in early March as the US incumbent entered the election campaign. Likewise, Dogelon Mars, with a namesake inspired by memecoin enthusiast Elon Musk, has built a large and loyal community while forging partnerships and developing new financial products. This unlikely resurgence of memecoins highlights how cryptocurrencies’ innate shareability and connections to internet culture can galvanize true community building.
It may certainly seem that when Bitcoin goes up in flames, it takes the entire crypto ecosystem with it. While this is certainly the case, the industry has also helped elevate Bitcoin during previous bull runs – it’s not necessarily a one-way street. Now, with the industry on the brink of another bull run, it has weathered its coldest crypto winter and is positioning itself to continue expanding.