
In the late 1990s, Internet technology, emerging at the time, sparked doubts and skepticism about its potential for adoption. Yet here we are almost 3 decades later, with the Internet having become omnipresent in everyday life. Will cryptos, whose issuance is impossible without blockchain technology, follow the same path? Or, on the contrary, suffer a different fate and run out of steam over time? In a recent report, leading investment bank Architect Partners attempts to answer these crucial questions given the dynamics of the crypto industry in recent months. Here, in this article, is the quintessence of what we should remember.
A look back at the evolution of Internet technology
Conceived in the 1960s, the Internet underwent a phase of transformation towards the end of the 1990s. This technology has indeed evolved from its uncertain beginnings. To achieve this, the Internet has strived to establish effective inter-computer communication. This key milestone was reached in March 1992 with the introduction of TCP/IP. A monumental breakthrough that laid the foundations for the future development of the Internet.
We arrive in the mid-1990s. The Internet began to take shape with the appearance of rudimentary Web pages. This paved the way for the rise of influential firms such as AOL, Yahoo and Netscape, collectively recognized today as Web 1.0 platforms. These platforms allowed early users to glimpse the potential of the Internet. This, by offering services ranging from email to search to web browsing.
However, it was at the end of the 1990s that the Internet underwent an absolute metamorphosis. Indeed, this period saw investments in the Internet sector explode. A dynamic fueled in particular by the growing popularity of personal computers and advances in software technology. This influx of capital played a significant role in the development of the Internet. Especially since it spurred technological innovation and paved the way for the creation of revolutionary software tools that shaped the Internet as we know it today. It is in this context that firms such as Amazon, Google, Salesforce, Equinix, Expedia and Netflix will be born, which will eventually dominate the Internet landscape. Thanks to these Internet giants, this technology has become a ubiquitous part of daily life, opening the way to new possibilities. Will crypto experience a similar evolution?
Will crypto take the same path as the Internet?
Between 1995 and 2000, the world witnessed an unprecedented increase in investment in Internet companies. This allowed the technology sector to skyrocket to a staggering $5.6 trillion in 1999. This boom period was marked by exuberant optimism and a speculative frenzy, with investors pouring their money into every company linked to the Internet. However, the euphoria was short-lived, as the bubble burst in 2000, leading to a rapid decline in stock prices and market valuations. By 2002, 74% of the Internet’s perceived value had evaporated, leaving many investors with considerable losses.
Following the Internet crash, the technology industry has been profoundly transformed. The once abundant flow of venture capital has dried up, leading to a period of revaluation. Skeptics, who had warned of the unsustainable nature of the frenzy, felt comforted by the sharp market correction. It seemed that the lofty promises of the Internet were nothing more than hype and speculation.
Despite this setback, the spirit of innovation was maintained. From the ashes of the Internet collapse, a new breed of business has emerged, demonstrating resilience and adaptability. Platforms such as Facebook, YouTube and Skype have been pioneers in their respective fields. This is by harnessing the transformational power of the Internet to revolutionize communication, collaboration and business processes.
Reflecting on the Internet’s trajectory, observers note that what seemed like a meteoric innovation was actually nearly 34 years in the making. That’s almost half a lifetime for some. In this context, a question arises: will cryptos also follow a trajectory similar to that of the Internet? to end up being widely integrated into the functioning of society?
In its report, Architect Partners does not settle the question definitively. What she points out, however, is that, like the Internet before it, crypto has aroused, and still arouses today, as much enthusiasm as skepticism.
Its supporters tout its potential to democratize finance, facilitate borderless transactions and open up new possibilities for innovation. Its critics, on the other hand, warn of its volatility, regulatory uncertainty and association with illicit activities.
As the debate continues, it becomes increasingly clear that the trajectory of cryptos will depend on a myriad of factors. The most determining factors being technological progress, regulatory developments, market dynamics and societal acceptance. Like the Internet before them, cryptos can experience periods of enthusiasm and disillusionment.
However, their underlying promise to be a transformative force in finance and beyond seems within reach. It remains to be seen whether crypto will achieve internet-like ubiquity or remain on the sidelines. One thing is certain: its journey will likely be as tumultuous and transformative as the one the Internet undertook decades earlier.
Conclusion
The evolution of the crypto industry seems to be following in the footsteps of the Internet. As with the latter, cryptos arouse both enthusiasm and skepticism. While some see them as a potential revolution for finance and innovation, others fear their volatility and their association with illicit activities. However, like the journey of the Internet before it, the trajectory of cryptos will be a function of technological advances, regulation, among other things. If they can overcome these challenges, cryptos could see widespread adoption. In the same way that the Internet has become omnipresent in our daily lives.
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