It’s no secret that 2022 was a tough year for cryptocurrency. Markets have fallen over 50 percent from their peak in 2021. Projects like Terra imploded. CeFi companies including Celsius Network and Voyager Digital filed for bankruptcy. And crypto exchange FTX collapsed.
None of this has been good for crypto, and many are questioning where the market goes from here. But while things appear bleak on the surface, if you dig a bit deeper, you’ll find that cryptocurrency is providing us with valuable insight.
In fact, in 2023 and beyond, Minecheck CEO Kyle Sidles believes cryptocurrency will continue to bring to light some of the fundamental issues of our current financial system.
“The initial reaction from the general public around the SBF and FTX predicament was that this is centered around crypto and it’s crypto’s fault,” said Sidles. “When in reality, all of it comes down to corruption based on legacy systems that have operated that way for as long as I can remember.”
Crypto Will Continue to Provide Increased Transparency
While it’s easy to point our fingers at cryptocurrency, many of the issues arising in this space have less to do with cryptocurrency and more to do with poor actors, or individuals and institutions making mistakes and taking on too much risk.
FTX is a prime example. “FTX showed a coordinated effort between governments and between politicians,” said Sidles. “People that were connected in the government that should not have been doing what they were doing.”
While this narrative hasn’t been pushed in the mainstream media, there are many individuals who have researched and documented what transpired, and are working to get the information out there – all of which can be fact-checked and cross-referenced (for example, see here).
“So at first glance it looks like this is kind of bad for crypto,” said Sidles. “But I think that those that are capable of reading between the lines will see that this is why crypto is important, because of the transparency it provides.”
In fact, nothing that’s transpired in the crypto market in 2022 undermines the inherent value of the blockchain – the distributed, peer-to-peer network that processes bitcoin transactions.
“In reality, the transactions that are conducted on a ledger are much more transparent than transactions that are done behind the scenes through traditional banking organizations,” said Sidles.
“I can’t look at the balance sheet of any of the banks, I can’t look at the flow of money of any of the banks. I have to take their word for it. But with bitcoin, you have a record, you have a ledger of all the transactions that occur and it’s maintained by a distributed system of multiple people. So everybody is looking at the same ledger, everybody is dealing with the same information. And that is something that I don’t think we as a civilization have ever seen.”
Transparency is one of the major reasons Sidles got behind cryptocurrency in the first place, and is something he believes we desperately need more of.
“There are a lot of shady dealings that go on that impact people all over the world,” he said. “There’s not a whole lot that the average person can do to get around that. So where it might on the surface look like crypto is inherently at fault, I think longer term, crypto will continue to bring to light some of these things that have been happening for many, many years.”
Still, some have argued that cryptocurrency will only amplify the problems that already exist, but Sidles disagrees. “I think as time goes on, it will actually decrease those dealings because of the transparency provided by the blockchain,” he said.
“In reality, from a government perspective and a finance perspective, transparency is what we’re lacking. A lot of government officials have their private dealings and there are discussions that go on behind closed doors, which typically lead to one thing and one thing only: corruption and abuse of power.”
People Will Continue to Wake Up
From the collapse of FTX to the Twitter Files, more and more deceitful practices are being exposed. Regardless of the politicization of issues, Sidles encourages people to face the real elephant in the room: that deception, dishonesty and fraud is occurring all over the place at some of the highest levels.
“I think people are waking up, that’s my hope,” he said. “It’s almost impossible not to see, everywhere you look, you see it. It’s up to the individual at this point to start having some discernment and not just believing what our leaders are telling them.”
He added: “I hope that this actually turns into a very positive thing for humanity as a whole because I don’t know that there’s ever been a time in history where there’s this much communication happening between individuals and groups and this amount of open flow of information.”
Sidles is hopeful that more and more people will start seeing through the facade and realize that there’s more going on behind the scenes than what appears to be happening.
As for the cryptocurrency market as a whole, Sidles remains confident that it will correct itself over time. Having entered the cryptocurrency market in 2013, he’s witnessed the market’s continued volatility and crashes throughout the years. In particular, he recalled the collapse of Tokyo-based bitcoin exchange Mt. Gox in 2014. “So many people lost money, and it was just as big of, if not bigger, catastrophe than FTX,” he said. “The difference is, it was less of a coordinated effort. FTX was highly coordinated between all sorts of bad actors.”