How the Cryptocurrency Boom is Similar to (But Not the Same As) the Early Internet Boom

Some of the public FUD (Fear, Uncertainty, and Doubt) against Cryptocurrencies has been with attempts to connect the new blockchain economy to the early internet boom and bust days, as mentioned in the preface to this writing. This article discusses how they are both correct and incorrect.
The Dot-Com Boom

I enjoy looking back in time to see how people, events, and ideas have spread and changed over time. Let's start with the dot-com bubble and subsequent crash.

Around 1997 and 2000, there was an information technology boom or bubble, as it was known at the time. And then there was the crash of 2000–2002. There was a lot of speculation in tech companies in the beginning, and there was a lot of growth. In the previous years, from 1990 to 1997, the number of households with computers in the United States increased from 15% to 35% [1], which seems unreal today, given that everybody has a strong machine in their possession.

This was a period of unparalleled personal investment. People were leaving their jobs to devote their full time to day trading. Investors are pouring money into everything that has to do with the Internet. This should be sounding very familiar to some by now, since the same thing is happening in Crypto right now.

Pop's Pinnacle

On January 10, 2000, America Online, a darling of dot-com investors and the founder of dial-up Internet access, announced plans to merge with Time Warner, the world's largest media corporation at the time (the new company was worth $350 billion). [two] This was known as the pinnacle. [three]

The NASDAQ reached a high of 5,132.52 in March 2000, but dropped by 78 percent over the next 30 months. All of the new Internet companies grew too quickly and overspent. It was unsustainable to lose $10–30 million dollars per quarter.

The Telecom crash occurred in 2001 as a result of high debt, unused network equipment devices, and a general lack of stock market trust.

But the next question is: what are the parallels we're seeing now as the modern Internet of Money gets underway?

When Bitcoin was founded in 2009, it was the first time on the Internet that anything could be truly scarce and have all of the characteristics of currency. We saw the first alt-coins being created in 2011, and now there are thousands of coins and tokens, with new ones being created every day in 2017.

Many people have become Bitcoin millionaires and have gone on to found new businesses in the rapidly expanding space, while others are now attempting to replicate that success with new coins or a portfolio of assets. People I know have dropped out of school or lost their jobs because they were early miners. People are now mining Ethereum full-time, or forging Lisk, as the case may be.

New investors are dabbling in day trading and, as in the early days of the Internet, are losing a lot of money. Due to the existence of ICOs, more than a few have simply opened a website, received cryptocurrency donations, and then shut down. Investing in Crypto and keeping your funds secure is still difficult, and investors have lost over $150 million this year alone due to website hacking and email/slack chat phishing [4].

Despite this, the current asset class demonstrates a high degree of durability.

This Is How The Dot-Com Crash Appeared

Cryptocurrencies are volatile and volatile. However, there are still bubbles and crashes, as well as consolidations and recoveries. They're beasts that don't want to die. According to the Bitcoin Obituaries, a satirical site with saved references of Bitcoin's death in the media, Bitcoin has been reported dead over 160 times.

Then there's the notorious Mt Gox heist and subsequent price collapse. However, the biggest crash in Bitcoin history occurred in 2011, when it peaked at $32 and then plunged to $2, a 68 percent loss, due to investors taking profits in a market with low liquidity.

5 big Bitcoin crashes are discussed in a Fortune article.

Here is a Bitcoin map with data dating back to 2009, showing all of the cryptocurrency's crashes.

Bitstamp is a cryptographic hashing algorithm.

Not just Bitcoin, but all Cryptocurrencies are booming, bursting, collapsing, and then recovering to all-time peaks. Since both of these markets are still in their infancy and have yet to see widespread early acceptance, the volatility is powered by a small number of investors compared to the capital markets and Forex.

This graph depicts the overall market dominance of Cryptocurrencies.

Every year, Bitcoin will lose market share. However, the value of each Bitcoin seems unlikely to be contested by any other coin at this time. Bitcoin's value has doubled every year since its inception, putting it on track to reach $10,000 in 2018.

Insanity of the Initial Coin Offering (ICO)

Ethereum launched smart contracts and served as a forum for emerging blockchain ventures. Orthodox VC (venture capitalists) and angel investing have been utterly disrupted as a result of this. Anyone can now invest in a token startup and gain ownership of the underlying asset.

This has resulted in new wealth being generated in the cryptocurrency space, but the popularity of Ethereum and other cryptocurrencies has sparked yet more frenzy. Thousands of new investors enter every day, all looking for the next Bitcoin or Ethereum, pumping and dumping, and losing money to outright frauds or phishing.

When hackers took over their website servers and replaced the donation address, they stole over $150 million from users and $7 million in Ethereum from the Coindash ICO alone. Investing and creativity, however, continue despite this.

Unlike during the Internet boom, when sites like Pets.com suffered due to overvaluation and a lack of results. These new tech companies are creating web 3.0, also known as the Internet of Money, which is the next iteration and infrastructure of the Internet. In the future, all companies dealing with banking, data recording, healthcare, voting, and other topics will be run on the blockchain in some way.

Cryptocurrencies are not a fad, and while bubbles erupt from time to time, these new assets recover because they are all, in essence, money and future stores of value.

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