What does the change of mood mean for the industry?

Last month, cultural critic Alison P. Davis published in The cut an article titled “A Vibe Shift is on its way. Will any of us survive it?”. In German, this title means something along the lines of “We are facing a change of mood. Will we survive this?”. This “mood shift” Davis is talking about has nothing to do with cryptocurrencies. She referred to a shift in pop culture and societal trends, especially given that the so-called Generation Z (GenZ) is becoming trendsetters and culturally relevant. Nevertheless, her article caught my eye because it summed up something crucial that I also feel, especially when it comes to cryptocurrencies. The paradigm shift towards the next cultural moment, whatever it may be, is tangible, if not tangible. We can not say exactly what it is, but we know it is there. The specifics have not changed yet, but the mood has determined.

Shortly after its release, the term “vibe shift” got a lot of attention on Twitter, and in some cases mockery. Where silly the expression sounds, it describes something real and similar that is happening in the crypto space. It may sound ridiculous, but there is a change of mood in the crypto world.

I like the term “vibe shift” because that’s exactly what it describes: a feeling, a shadow, a mood, an atmosphere, a mood. In the relatively short history of cryptocurrencies, vibe changes have followed changes in technology. The initial “wild west” and “everything goes” optimism about cryptocurrencies arose when Bitcoin (BTC) switched from a peer-to-peer (P2P) payment solution to a value store. This craze was even exacerbated with the launch of Ethereum, which demonstrated the potential of smart contracts. This semi-manic optimism became more serious and businesslike as decentralized finance (DeFi) developed on the Layer Two networks. The development of non-fungible tokens (NFT) has brought artists and musicians into play and not the other way around.

In this context: How should Non-Fungible Tokens (NFTs) be taxed in Germany?

It’s neither good nor bad, it’s just a fact. Technology determines the discourse within DeFi and crypto. It also means that it dictates the culture. One can only say “this is no longer the case” when the actual technology has reached a certain level of sophistication and public recognition. This is now the case with crypto and DeFi. A “vibe shift” in crypto is a new concept that is needed. And how it develops is very interesting.

The way we talk about cryptocurrencies is changing, but not in response to the technology itself. People talk as if they are part of the crypto space, and not just because they have invested money. People attach a greater role to cryptocurrencies in the world. Not just for self-interest, to take advantage of common acceptance.

From profit to politics

May I say we have become political? I first noticed this during the Canadian hauliers’ protests against compulsory vaccination. This topic has shaken the cryptocurrency space and it was not a matter of agreeing with the hauliers or not. With their traditional assets frozen by the government and hauliers banned from well-known funding platforms like GoFundMe, hauliers switched to Bitcoin and were able to raise $ 900,000 in a matter of days. The Canadian government subsequently attempted to freeze cryptocurrencies attached to the convoy, but was only partially successful. So, when an Ontario judge issued an injunction to freeze multimillion-dollar cryptocurrencies, the crypto community responded with a mixture of protest and scorn. The multi-signature wallet Nunchuck has in public responded and states that regardless of the policy, it could not provide the information sued, even if it wanted to: “We are a software provider and not a financial intermediary”. As such, the company has no option to confiscate the assets of its users.

In any case, these measures have shown some unpleasant things. The notion (now a reality) that a government could confiscate cryptocurrencies with a court order and, for at least partly ideological reasons, goes against everything this society is based on. The Russian attack on Ukraine only reinforced this feeling.

In this context: No Bitcoin for Trucker protests – Canada strikes at cryptocurrency exchanges

The cryptonomy of war

Some interesting things happened in the first days of the Russian invasion. The Ukrainian government asked early for donations in Bitcoin (which inevitably led to scammers trying to profit from it). She then urged crypto exchanges to freeze Russian accounts. Using cryptocurrencies as a safe, financial haven and reliable store of value for a country at war was a game changer whose influence we will feel in the years to come. Many of these exchanges denied and claimed that it would unfairly punish ordinary Russian citizens for the actions of their government. Some of the biggest names in this space have wanted to remain more or less neutral. Vitalik Buterin tweeted then on this subject that Ethereum was neutral, but he was not.

Also, the war in Europe has caused many of us to lose interest in the latest crooked NFT drops, at least so far. There are more serious issues to talk about right now. And in the crypto space, it is also talked about. It’s the change of mood, and it does not come as a reaction to technology. This is a result of developments in the real world, which in turn also change the contours of the crypto world. This leads to a deep moral bill that raises the question of what the real purpose of cryptocurrencies is and who they are intended for. It’s about the price of neutrality and what neutrality exactly means.

In this context: How crypto supports Ukraine in crisis

If cryptocurrencies invaded the real world, the real world is now invading the cryptocurrency. The short-sighted and unrealistic view that our opponents like to accuse us of is gradually fading away. This mood change makes it very difficult to predict what will come next. This is especially true now that we are suddenly becoming massively geopolitically involved. The discourse has gone in a different direction because the rules of engagement have changed. Crypto is about fun and games and monkeys until the war breaks out. Or to a convoy.

The end of the history or the future of cryptocurrencies?

I remain confident about the future of crypto and DeFi. But this future is getting complicated. The Canadian convoy and the war in Ukraine are unexpected events to which there are no easy and in many cases very ugly answers. Like most active in this area, I still believe that much of the hard and soft power of cryptocurrency is related to its unbanked, decentralized status, which takes place outside the traditional mechanisms of global finance. But such things are never so simple.

The point of a change of mood is that no one knows what will come next. We are only just beginning to understand the strength of cryptocurrencies and the enormous implications of a legitimate, censorship-resistant financial infrastructure. What that means for the future and how it will continue is uncertain. There is more at stake for us than for the cultural regulars of New York City as the term was originally intended. Self-governing money uncontrolled by traditional finance is untested in the context of geopolitical conflicts and cultural wars. Whatever happens next will change everything.

This article does not constitute investment advice or recommendation. Every investment and every trade involves risk. One should research well before making a decision.

The views, thoughts and opinions expressed herein are solely those of the author and do not necessarily reflect the views and opinions of the Cointelegraph.

Dominik Schiener is a co-founder of the Iota Foundation, a non-profit foundation from Berlin. He oversees partnerships and the implementation of the project’s vision. IOTA is a distributed ledger technology for the Internet of Things and a cryptocurrency. He also won the biggest blockchain hackathon in Shanghai. For the past two years, he has focused on promoting the machine economy with IOTA.

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