infinity games Yes, Crypto Is Crashing Again. Blockchain Will Survive.

This week, the crypto market plummeted for the second time in a month, in tandem with a sharp drop in global stock markets. The collapse, not the first of its kind, showed again how the violent swings of a largely unregulated market warp the development of a transformative technology. But crypto is just one aspect of the larger blockchain universe. Its skeptics and fans alike must learn to see it as a technological experiment, instead of just a blatant scam or a speculative path to riches.

Why has the market fallen apart in such spectacular fashion?

The first recent crash, when the cryptocurrency market plunged 36 percent in a week in May, offers a clue. The collapse was largely set off by the death spiral of a cryptocurrency system called Terra Luna, made up of the coin Luna and its associated stablecoin, TerraUSD. At its dizzying heights in the spring, it represented roughly 3 percent of the total crypto market. Fear spread throughout the exchanges, and with it came panic selling.

After the second crash this week, the cryptocurrency market is still worth in total nearly $1 trillion (about one-third of last November’s peak). Only a few of the 19,000 cryptocurrencies that have been created since 2009 are now worth billions. Most have failed. The crypto market is wildly volatile not because of cryptocurrency’s underlying technology, but because of the uneasy and often dangerously unstable junction between emerging technologies and regular money. Viewed from the long perspective of market history, this instability isn’t remotely new.

In the late 1990s and early 2000s, internet stocks were a white-knuckle ride, just as crypto is now. Back then, too, hucksterism was rampant, the atmosphere was like a casino, and almost any idea with an “e” in front of it — no matter how reckless or silly — attracted attention from investors and the news media. Seemingly every day, fortunes were spectacularly made and lost.

But even as Napster, Webvan and eToys flamed out, a revolution was taking place. Despite all the shenanigans going on in the casino, real and lasting companies, publications and communities were built and thrived online. The internet survived, more or less.

Terraform Labs, the company behind TerraUSD and Luna, was founded in 2018 by Do Kwon, a computer scientist and entrepreneur in South Korea. Mr. Kwon, now 30, is a notoriously brazen hustler who has made waves for calling his critics “poor” and “cockroaches.” But despite his lack of polish, and the early warnings from developers and analysts about the technical weaknesses of his plans, he succeeded in raising $200 million in venture capital from 2018 to 2021. His company boasted of reaching an elusive goal in crypto, namely, the establishment of a truly “decentralized” stablecoin.

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