The cryptocurrency and blockchain industry experienced explosive growth in 2021, particularly in its decentralized finance (DeFi) and nonfungible t
The cryptocurrency and blockchain industry experienced explosive growth in 2021, particularly in its decentralized finance (DeFi) and nonfungible token (NFT) sectors.
The year was also marked by continued price volatility, baffling behavior from China, a grand experiment in Central America, escalating institutional interest, and the rise of some faster smart-contract networks — all of which is reflected in this year’s list of industry “winners and losers.”
Winners in 2021
Kazakhstan
When China effectively banned Bitcoin (BTC) mining operations in May 2021, Kazakhstan rushed in to fill the vacuum, pitching displaced miners and others on its cheap and plentiful coal supply. Many set up operations in the Central Asian country, including a top-five crypto mining pool operated by BIT Mining.
By July 2021, Kazakhstan’s average monthly hash rate share stood at 18.1% — that is, it accounted for nearly a fifth of the world’s Bitcoin mining output, second only to the United States (42.7%), and a stunning increase from only 1.4% in September 2019, according to the Cambridge Centre for Alternative Finance.
Whether Kazakhstan will maintain its global share of BTC mining in 2022, given reports of widespread power shortages in the country as winter approaches remains to be seen.
Coinbase
Coinbase Global, the largest cryptocurrency exchange in the U.S., became the first crypto company to list on a U.S. stock exchange when it debuted on April 14 on Nasdaq. It closed that day at $328.28 with a market capitalization of $86 billion, a stunning launch that invited comparisons with Facebook’s and Airbnb’s initial public offerings. Its share price came back to earth by year’s end, however, standing at $243.35 on Dec. 18, with a still-strong market cap of $52.37 billion.
Coinbase’s listing was widely viewed as another sign that crypto had gone mainstream, with more public offerings to come. “Coinbase will be the torchbearer for the whole blockchain community in the public market,” Kavita Gupta, founding managing partner at Delta Growth Fund, told Cointelegraph.
Solana
A tide of new smart contract-enabled networks emerged on the scene in 2021. The largest and fastest-growing among them was Solana, a super quick proof-of-stake network that claims to have clocked 50,000 transactions per second (TPS). By comparison, Ethereum does about 30 TPS.
“No project — maybe in crypto’s history — has gotten hotter, faster than Solana in 2021,” wrote Messari’s Ryan Selkis. The open-source blockchain hosts a growing number of NFT and DeFi projects, although it was subject to several distributed denial-of-service attacks through 2021. Solona’s (SOL) native cryptocurrency comfortably ranks fifth among all coins as of Dec. 20, according to Cointelegraph Markets Pro, trailing only BTC, Ether (ETH), Binance Coin (BNB) and Tether (USDT).
Nayib Bukele/El Salvador
El Salvador made history in 2021 — becoming the first country to declare Bitcoin (BTC) legal tender. The country’s dynamic president, Nayib Bukele, captivated the crypto world with his doings: harnessing energy from a volcano to power his country’s BTC mining operations, air-dropping $30 of BTC to every adult in the country, and, in late November, announcing the launch of Bitcoin City, a fully functional city built around Bitcoin, funded initially by $1 billion Bitcoin bonds.
Only time will tell whether all this amounts to a clear economic “win” for El Salvador’s people, but Bukele arguably, through buying the dips, brought some 21st-century innovation and luster to a poor Central American land whose economy is heavily dependent on remittances — i.e., money sent home by foreign workers.
Mike Winkelmann, aka Beeple
When art house Christie’s put up for auction in February a digital collage — the first major auction house to offer a purely digital work with a unique NFT — it didn’t even attach a price. No one knew how to value it. The work “Everydays: The First 5000 Days” by Mike Winkelmann (aka Beeple) sold for $69.3 million, and the art industry may never be the same.
Related: NFT ‘art revolution’: Beeple on his 5,040-day labor of love, Cointelegraph Magazine
To put this into context: The work fetched more at auction than pieces by Georges Seurat, Paul Gaugain or Salvador Dalí, and catapulted the relatively obscure Beeple into the company of the world’s highest-earning contemporary artists, such as David Hockney and Jeff Koons. It also sent notice to those outside the cryptoverse that nonfungible tokens would be a force with which to be reckoned. Sales of NFTs skyrocketed through 2021, and in late November, “NFT” was declared “word of the year” by dictionary publisher Collins.
Avalanche
Avalanche was another speedy smart contract network that shot into the top 10 in 2021. “Solana and Avalanche are the new stars” among DeFi multichains, declared CoinGecko, with 6% and 2% total value locked (TVL), respectively, in the third…
cointelegraph.com