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Sam Masten, a 21-year-old engineering student, is sticking to his guns when it comes to cryptocurrency, even if last year presented him with a few doubts.
Masten is the co-founder of the first blockchain club at North Carolina State University, and is currently interning at Blockchain Center Raleigh, a local hub for those involved in digital technology.
Despite the recent bad news – the price crashes of Bitcoin and Ethereum, the disappearance of dozens of smaller coins, and the November bankruptcies of cryptocurrency exchange FTX and the BlockFi loan firm – Masten still has faith in the potential of blockchain and the virtual ledgers supporting cryptocurrencies.
“The underlying technology is what’s truly revolutionary here,” He said. “It is not the price of Ethereum that represents everything that is happening. They are the actual blockchains themselves and what they allow people to do. It could be used in the supply chain. It could be used in science.”
Masten and other Triangle crypto entrepreneurs, engineers and artists are aware that enthusiasm for the technology has declined alongside the value of coins. Since reaching all-time highs last year, the prices of Bitcoin and Ethereum, by far the two largest cryptocurrencies, have fallen more than 70%.
Several of the companies Masten has been applying to for spring and summer internships have put a hold on hiring.
“We are probably going to see a bit of a pause to be honest, because we are in a deep bear market in the crypto space right now,” he said. “But for those who have followed the crypto space for a long time, it is very cyclical and has huge boom and bust periods.”
Similar to how regular stock market crashes led to more government oversight, many economic leaders, including US Treasury Secretary Janet Yellen, are calling this week for regulation of crypto markets. . Since Bitcoin was founded in 2008 and Ethereum in 2015, there has been little to no regulation of these or any other coins.
Bethencourt noted that the decimation of the Terra LUNA coin (currently trading at $0.000163 after topping $110 in April) has especially impacted people in the area who had been working with that coin. South Korean prosecutors are currently investigating the coin’s co-founder for possible fraud.
HODLing On
The high-profile scandal surrounding Sam Bankman-Fried’s FTX exchange, which reportedly lost at least $1 billion in customer money, has shaken the entire industry. However, Bethencourt asserted that Bankman-Fried’s allegedly questionable (if not potentially criminal) actions should not tarnish the work that people are doing locally.
He said that Layer One has raised $3 million this year, which is given to a dozen companies that work with cryptocurrency, NFTs, or Web3, a broad term that describes the decentralized blockchain ecosystem.
Compared to other markets that view cryptocurrencies as a commodity, the Triangle has a particular focus on cryptocurrency applications, according to Bethencourt. Local startups include Lolli, Kaleido, and even Epic Games from Cary, the creator of Fortnite, which launched its first Web3 game on its Epic Games Store earlier this year.
“Time and time again I am amazed at the quality of builders here in the Triangle,” Bethencourt said. “It’s like the nerds who work on the weekends, playing with things. The nerds are here. The nerds are in the Triangle.”
There is a feeling among crypto followers that the crisis has wiped out those looking to make a quick buck.
“A lot of people went looking for waterfalls,” said Stephen Clausnitzer, a Chapel Hill resident and CEO of non-crypto biomedical company Forever Labs. Clausnitzer was an early investor in Ethereum and used some of his earnings from the coin to invest in the OpenSea NFT marketplace.
In crypto jargon, people use the acronyms FUD (Fear, Uncertainty, and Doubt) and HODL, a typo for “wait” which now means “wait for your life,” to describe the volatile nature of their industry. There is always some degree of FUD surrounding various currencies, but true believers preach the virtues of HODL.
Clausnitzer is one of these believers, even as the Ethereum price has plummeted to around $1,300 per ether, from a high of $4,700.
“I have held, and I will not sell,” he said. “I believe so strongly.”
This story was produced with the financial support of a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains complete editorial control of the work.
