By Staff Writer.
Just a week before the news of FTX collapse, many had gathered at the Singapore FinTech Festival 2022 (SFF) to share their views on the 2022 “crypto winter”, which was triggered by several high profile events, such as hacks amounting to USD 2.5 billion in losses, the collapse of the USD 40 billion Terra network, bankruptcy of crypto funds worth more than tens of billions, macroeconomic paradigm shifts (inflation and rising interest rates) and the on-going Russia-Ukraine conflict.
All in all, before the FTX collapse, investors had already pulled more than 50% from the USD 2.5 trillion crypto market, valued as of 2021 year-end. 
Such “contagion” is theoretically less possible in the crypto world, especially after Bitcoin and blockchain were hailed as the “holy grail” after the Global Financial Crisis 2008. With blockchain, we can “decentralize” and reduce the “single point of failure”, putting an end to “too big to fail”.
But so far, 2022 seems to imply that the crypto world failed to live up to its promises. So, was it all a hype?
These are some of the insights we gathered from sessions such as “Building Resilient Web3 Companies and Communities in APAC” and “The Next 10 Years: Building the Crypto Economy, Scaling Web3 Innovation, and Weathering Storms” at the SFF 2022.
First, what does crypto aspire to deliver?
Crypto – the all-encompassing term for everything blockchain – with its decentralization premise aspire to revolutionize how we interact and transact with each other.
With everyone (each network participant) having access to the tamper-proof database of transactions, the role of a central authority is “disintermediated”, replaced by direct peer-to-peer exchange.
This peer-to-peer interaction will power the next generation of internet, the “Internet of value”, or, recently referred to as “Web3.0”.
What we will see with this “Internet of Value” is “what we’ve seen with the internet of information,” said Jeremy Allaire (Co-founder, Chairman, CEO, Circle). It delivers a “layer of capability for society and the economy which is really profound that that’s never existed before in an open way,” he added.
It is the next internet evolution where “you could read, write and own,” Dante Disparte (Chief Strategy Officer & Head of Global Policy, Circle) explained.
One “use case” attracting much attention besides cryptocurrencies, has been “NFTs” (non-fungible tokens). The potential to “write” and “store” digital creations on a blockchain presents content creators ways to interact and transact directly with customers and fans.
According to Jonathan Levin (Co-founder & Chief Strategy Officer, Chainalysis), he said that crypto is “touching a lot more markets today – the art world, music, gaming – in ways where people are reimagining existing business models.”
The transformation from a centralized to a peer-to-peer model, is so powerful that users are said to be synonymous with the technology. Eric Anziani (COO, Crypto.com) and Elroy Cheo (Co-founder, ARC) viewed that “users are the product in Web3”, and “our community is our product” respectively.
So, what will these transformations mean for us?
“This unique innovation and invention” will “allow economic freedom to be created in all these different countries around the world,” said Brian Armstrong (Co-founder & CEO, Coinbase).
One reason, Dante said, is because it can “change people’s life in a positive way by giving back empowerment and better control” and “basic rights over your money, your data and identity.”
Or as Brian noted, it enables anybody to “store their own wealth in a way that it can’t be taken from them or manipulated.”
And users also “get the return for their labor contribution whether they engage with the brand or with a fan or a collector” Eric said.
Sounds like we are nowhere close to fulfilling these ambitions?
Some suggest that many of the failed ventures have significant centralized components, and they are in fact operations cloaked in decentralised narratives.
For instance, could the Ronin Network have been hacked, if instead of nine validator nodes, there were more?
Would Voyager have collapsed, if instead of a USD 670 million unsecured loan to 3AC, the credit was diversified over more borrowers?
Would the Terra network or the FX debacles arise, if management decisions over for examples, collateral or investments, were made by a larger group of people instead of being limited to a few key personnel?
And crypto will emerge stronger from the winter blues?
Dante pointed out, “what you could count on for the long run” is more focus on “utility value” and “what goes is obviously the speculation phase.”
Gartner’s Hype Cycle for Emerging Technologies 2022  suggests that we are near the “Peak of inflated expectations”, and that today’s crypto winter represents the “Trough of Disillusionment” from which the “Slope of Enlightenment” will emerge.
Well, as with any exciting innovations, “FOMO” (fear of missing out) has been ruthlessly exploited in Ponzi schemes and pump-and-dump, exacerbating the boom-and-bust.
Vitalik Buterin (Co-founder of Ethereum & Researcher, Ethereum Foundation) he noted the cyclical nature of cryptocurrencies, that they “rise and fall” (in contrast to the local fiat that “falls and falls” – but warning that “it is important to always be mindful of different contexts of different regions”).
But are the aspirations hopeless idealism?
There is certainly a clear trend of increased adoption according to surveys, such as the “2022 Fidelity Digital Assets Institutional Investor Digital Assets Study” .
Or the Chainalysis Global Crypto Adoption Index  which Jonathan noted “is indicative of real macro drivers behind adoption” in seven fastest countries adopting cryptocurrency “that are different to pure forms of speculation.
Some also observed that despite the gloom, sign-ups of the crypto bell-weather Bitcoin hit new highs.
This trend is further bolstered by “traditional” incumbents such as Nasdaq, Fidelity itself, and Singapore’s largest bank, DBS establishing digital assets businesses to meet the anticipated rise in demand.
Other indicators include on-going developments, such as the Ethereum’s “merge” (to mitigate the high energy usage, for which Bitcoin is criticised), or the recent U.S. crypto regulation framework, or the new inspiring proposal by Vitalik and his co-authors “to unlock exponential growth” in a “Decentralized Society (DeSoc)”
So, keep calm and carry on?
Reshaping social and economic realities is necessarily complex, and the timespan from theoretical inception to mass adoption is not one of overnight.
Stuart Huber and Scott Stornetta wrote about what become known as blockchain in their 1991 paper “How to Time Stamp a Digital Document.” It was not until the 2008 Bitcoin white paper that it reached the wider public.
Similarly, it took more than a decade for Nick Szabo 1996 paper “Smart Contracts: Building Blocks for Digital Markets” to become more widespread after it was referenced in Ethereum’s 2014 white paper.
In fact, in building this “Internet of Value” and “Web3.0”, as Gavin Wood pointed out, “as with the development of the internet before it, the timeline could be measured in decades rather than months”.
In short, “Rome is not built in a day”, and the proponents are sending out a message of “sober restraint” – learn from the crypto blues, keep calm and carry on.
 The Merge is the merger of two blockchain systems: the current Ethereum Mainnet and the Beacon Chain proof-of-stake system
 E. Wely, P. Ohlhaver, V. Buterin, May 2022, “Decentralized Society: Finding Web3’s Soul”, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4105763
 S. Haber, W.S. Stornetta, “How to time-stamp a digital document,” In Journal of Cryptology, vol 3, no 2, pages 99-111, 1991.
 N Szabo 1996 “Smart Contracts: Building Blocks for Digital Markets,” https://www.fon.hum.uva.nl/rob/Courses/InformationInSpeech/CDROM/Literature/LOTwinterschool2006/szabo.best.vwh.net/smart_contracts_2.html
 Gavin Wood, Sept 2018, “Why We Need Web3.0.0”, https://gavofyork.medium.com/why-we-need-web-3-0-5da4f2bf95ab