Ethereum Network completed the long-awaited transition from energy consuming Proof-of-Work to an energy-efficient Proof-of-Stake consensus mechanism on September 15. The upgrade was implemented successfully, as the transition had been expected for many years. And it has drastically reduced the amount of energy consumed by the network to 99%.
In an exclusive video interview last week, Joe Lubin, the CEO of crypto software giant ConsenSys and co-founder of Ethereum, told Decrypt in an exclusive video interview last week that the upgrade, “I’ve asked around in a bunch of different contexts for any awareness of anything that broke, and I haven’t heard one thing.”
Lubin says the price movement after the upgrade was “possibly inevitable ‘sell the news’ kind of activity,” along with some Ethereum miners “unloading their Ether inventory as they shut down their mining rigs.” Why have the prices of ETH, Bitcoin, and the cryptocurrency market in general continued to fall?
Lubin added that “The economy is broken, and it’s likely to remain broken for a while,” “So we remain the tail that is being wagged by a very sick dog: the global macro situation. But our ecosystem and our company are doing quite well, even with reduced volumes and reduced intensity. I think we’re all enjoying just building.’’
Practically, this is what most founders in the crypto market believe as crypto markets continue to get beaten up by the same global economic crisis experienced by other markets occasioned by the effect of US inflation and higher Federal interest rates, the war in Ukraine, and the COVID-19 pandemic aftermath.
People like Anatoly Yakovenko, the founder of Solana, believe that the bear market will last for another year, as the road to global recovery is slippery.
On the most recent edition of Decrypt’s gm podcast, Yakovenko said, “Looking at macro stuff, my guess is there’s probably 12 to 18 months more of this brutal, Fed rates going up,” “But there is an end to it. And just like the last bear market, a lot of teams that built and focused on product-market fit and really tried to build amazing products—a lot of those succeeded, I think, in a surprising way.”
At Anthony Scaramucci’s SALT conference in New York last month, FTX CEO Sam Bankman-Fried said something similar, perhaps succinctly: “Everything’s down this year because dollars are up this year.”
Cryptocurrency markets are predicted to stay stagnant until the cost of capital decreases. However, Lubin and other funders are as upbeat as ever about the crypto market’s essential areas, such as DeFi, web3, and NFTs.
He predicted that NFTs would see a ton of innovation, telling Decrypt, “I think NFTs still have a ton of legs; NFTs are going to undergo so much innovation,” he said Decrypt. “I imagine we’re post our irrational exuberance moments with respect to DeFi. I think it’ll continue to innovate and mature quite significantly, but I think the real building will be in the development of the Web3 economy.”