Author: ahmed

In November 2022, the crypto world experienced its most shocking implosion yet. FTX, the second-largest crypto exchange in the world, collapsed in a matter of days. Its founder, Sam Bankman-Fried (SBF), who had been celebrated as a visionary and philanthropist, was revealed to be running what prosecutors would later call one of the biggest financial frauds in American history. Billions of dollars in customer funds vanished. SBF went from a paper billionaire to inmate #80111 in federal prison.

Sam Bankman-Fried had seemed like crypto’s golden boy. He was a 30-year-old MIT graduate with messy hair and cargo shorts, who talked eloquently about effective altruism — the philosophy of earning money to give it away to maximize human welfare. He had built FTX into a top exchange in just three years, with valuations reaching $32 billion. He was a major Democratic Party donor. He appeared at Congressional hearings urging thoughtful regulation. He was featured on magazine covers as “the next Warren Buffett.”

The unraveling began on November 2, 2022, when CoinDesk published an article revealing that Alameda Research, SBF’s trading firm, had a suspicious amount of its balance sheet in FTT — FTX’s own exchange token. This suggested that Alameda was dependent on FTX for its solvency, raising concerns about circular ownership. On November 6, CZ, the CEO of Binance, announced he was liquidating Binance’s FTT holdings. The tweet sparked a bank run on FTX. Within days, customers were withdrawing funds frantically, and FTX couldn’t meet the demand.

What emerged was shocking. Investigators discovered that FTX had been using customer deposits to fund Alameda Research’s risky trades. When Alameda lost money, FTX customers lost money. SBF had been running what appeared to be a Ponzi scheme, telling customers their funds were safe while secretly moving them to his trading firm. Billions of dollars were unaccounted for. On November 11, FTX filed for bankruptcy. SBF was arrested in the Bahamas on December 12 and extradited to the United States.

The FTX trial was a spectacle. Top executives, including SBF’s girlfriend Caroline Ellison and co-founders Gary Wang and Nishad Singh, pled guilty and testified against him. SBF’s defense was that he was “just bad at management.” The jury was unconvinced. On November 2, 2023, exactly one year after the first CoinDesk article, SBF was convicted on all seven counts of fraud. He was sentenced to 25 years in federal prison. The FTX collapse was more than just a bankruptcy — it was a generational scandal that reshaped crypto regulation, destroyed trust in centralized exchanges, and ended the careers of many in the industry.

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In May 2022, the crypto world witnessed one of the most spectacular collapses in financial history. Terra, a cryptocurrency ecosystem built around the algorithmic stablecoin UST and its sister token LUNA, imploded in just seven days. At its peak, Terra had been worth over $60 billion. By the end of the collapse, it was worth essentially zero. Billions of dollars of wealth — much of it held by ordinary retail investors — simply vanished.

Terra was founded by a South Korean entrepreneur named Do Kwon in 2018. Its signature innovation was UST, a stablecoin that maintained its $1 peg not through cash reserves (like USDC) but through an algorithmic relationship with LUNA. If UST fell below $1, users could burn UST to mint LUNA at a profit, reducing UST supply and pushing the price back up. If UST rose above $1, they could burn LUNA to mint UST, increasing supply and pushing the price back down. The system was elegant on paper but relied on a critical assumption: that LUNA would always have market value.

Terra grew rapidly by offering 20% annual yields on UST deposits through a protocol called Anchor. This was completely unsustainable — no investment could consistently generate 20% returns to pay depositors. But it attracted billions of dollars from people who didn’t understand the risks. By early 2022, UST had become one of the largest stablecoins in crypto, with over $18 billion in circulation. Critics warned that Terra was a Ponzi scheme waiting to collapse. Supporters called them FUDders and pointed to Do Kwon’s brilliance.

The collapse began on May 8, 2022, when a large UST holder dumped hundreds of millions of UST on the market. The price briefly broke from its $1 peg. Panic ensued. Holders began mass-selling UST and LUNA. The algorithmic mechanism started minting massive amounts of LUNA to absorb the UST sell pressure. LUNA’s supply exploded from 340 million tokens to over 6 trillion in days. Its price crashed from $80 to fractions of a cent. Anchor’s 20% yield disappeared. UST dropped to 10 cents. The entire ecosystem was wiped out.

The human cost was enormous. Many Terra investors had put their life savings into the system, trusting the supposedly “stable” UST and the high yields. Some lost everything. The subreddit r/TerraLuna filled with heartbreaking stories. South Korean investors organized protests demanding justice. Do Kwon was eventually arrested in Montenegro in 2023 and faces criminal charges. The Terra collapse was a watershed moment. It destroyed trust in algorithmic stablecoins, triggered a cascade of other crypto failures (including FTX six months later), and reminded everyone of crypto’s most dangerous lesson: if something seems too good to be true, it is.

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On November 10, 2021, Bitcoin reached its all-time high of $68,990 per coin. It was the culmination of a 17-month rally that had taken Bitcoin from under $5,000 in March 2020 to nearly $70,000. The total market cap of all cryptocurrencies exceeded $3 trillion — a number that dwarfed many of the world’s largest companies and most national economies. For Bitcoin believers, it was a moment of vindication. For skeptics, it was the latest speculative frenzy in a series they had been predicting would end badly.

The 2021 bull run was driven by several factors that came together simultaneously. Institutional adoption continued accelerating. Tesla announced it had bought $1.5 billion of Bitcoin in February. Coinbase went public in April at a valuation of $86 billion. Bitcoin futures ETFs launched in October. El Salvador made Bitcoin legal tender in September. Each of these events added legitimacy and fuel to the rally.

Retail interest was at an all-time high. Crypto apps like Coinbase and Robinhood topped the iOS download charts. Reddit’s r/WallStreetBets forum, having made GameStop stock famous earlier in the year, turned its attention to crypto. Dogecoin, boosted by Elon Musk’s tweets, briefly reached $0.73, giving it a market cap near $100 billion. Shiba Inu, an even more absurd meme coin, became one of the top 10 cryptocurrencies. It felt like everything crypto-related was going up.

Beyond Bitcoin, the NFT market was experiencing its own speculative frenzy. Bored Apes, CryptoPunks, and hundreds of other collections traded for millions of dollars. Axie Infinity, a play-to-earn game, had 2 million daily users, many in the Philippines earning their livelihood from it. Gaming token prices exploded. Even abstract ideas like “the metaverse” were enough to drive project valuations to billions.

Then it all began to unravel. Inflation concerns mounted throughout late 2021. The Federal Reserve signaled that it would raise interest rates in 2022. Risk assets — including crypto — started declining. By January 2022, Bitcoin was at $35,000. By June 2022, after the Terra/Luna collapse, it was at $20,000. By November 2022, after the FTX implosion, it was below $16,000. The 2021 peak had marked the top of the cycle. Another crypto winter had arrived, harsher than any before.

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On June 5, 2021, Nayib Bukele, the young populist president of El Salvador, made a stunning announcement via a pre-recorded video played at the Bitcoin 2021 conference in Miami. “Next week, I will send to congress a bill that will make Bitcoin a legal tender in El Salvador,” he said. Three days later, the Salvadoran Congress passed the law with 62 votes in favor. On September 7, 2021, El Salvador became the first country in history to adopt Bitcoin as legal tender alongside the U.S. dollar.

The decision was controversial. Critics argued that Bitcoin was too volatile to serve as legal tender, that adopting it would expose the country to financial risk, and that Bukele was using the move as a publicity stunt. The International Monetary Fund urged El Salvador to reverse course. Credit rating agencies downgraded the country’s debt. Many Salvadorans expressed skepticism, with polls showing most did not want the change.

But Bukele had a plan. El Salvador launched a government-backed Bitcoin wallet called Chivo, which came preloaded with $30 worth of Bitcoin for every adult citizen who registered. The country installed 200 Bitcoin ATMs and built Lightning Network infrastructure to enable fast, cheap transactions. Bukele began buying Bitcoin with government funds, tweeting each purchase. He announced plans to build a “Bitcoin City” powered by geothermal energy from a volcano, funded by “volcano bonds.”

The early rollout was rocky. The Chivo wallet had technical problems. Many Salvadorans stopped using it after spending their free $30. Merchants reported that customers rarely paid with Bitcoin. The volatility proved to be a real problem — El Salvador’s Bitcoin treasury losses during the 2022 bear market reached hundreds of millions of dollars. Critics called it a disaster. Supporters said it was just early days.

Regardless of implementation challenges, El Salvador’s move was historically significant. It broke a taboo. For the first time, a sovereign nation had elevated a cryptocurrency to legal tender status. Other countries took notice. The Central African Republic briefly followed suit in 2022 (then reversed course). Bitcoin advocacy organizations began pushing other nations to consider similar moves. El Salvador’s experiment would take years to judge fairly, but its impact on the crypto world was immediate: Bitcoin had become a geopolitical asset, not just a technological one.

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In April 2021, four anonymous friends launched a new NFT project called Bored Ape Yacht Club (BAYC). It consisted of 10,000 unique cartoon ape illustrations, each with different traits — outfits, expressions, accessories, backgrounds. The project’s theme was that the apes were all members of an exclusive club, a “yacht club” for crypto millionaires who had gotten so rich they were bored.

Initial sales were modest. Apes sold for 0.08 ether each (about $200 at the time). But unlike CryptoPunks, BAYC came with perks. Holding a Bored Ape gave you commercial rights to use the image as you wished. You could make merchandise, sell prints, use it as a brand. Holders also received airdrops of other NFT collections — mutants, dogs, serums. Yuga Labs, the company behind BAYC, treated holders as an exclusive club and rewarded them generously.

By mid-2021, Bored Apes were the hottest thing in NFTs. Celebrities started buying them as profile pictures — Jimmy Fallon, Stephen Curry, Paris Hilton, Eminem, Snoop Dogg. Each celebrity purchase drove prices higher. A floor price of 0.08 ETH at launch became 100 ETH by 2022 — a 1,250x return in less than a year. Rare Apes sold for millions of dollars.

Yuga Labs capitalized brilliantly on BAYC’s success. They launched ApeCoin, a token for the Bored Ape ecosystem. They bought CryptoPunks from Larva Labs. They created “Otherside,” a metaverse built around Bored Apes. They signed major partnerships with music labels and brands. By 2022, Yuga Labs was valued at over $4 billion, making it one of the most valuable crypto startups in the world.

But BAYC also revealed the vulnerabilities of NFT culture. When the 2022 bear market hit, floor prices crashed from 100 ETH to 15 ETH. The celebrity endorsers quietly removed their Ape profile pictures. Critics argued BAYC had been a bubble, that $300,000 pictures of cartoon apes made no sense. Supporters countered that BAYC had proven NFTs could build genuine communities and have real cultural impact. Regardless of where you stand, BAYC is impossible to ignore. It defined the “profile picture NFT” era and pushed NFTs into popular culture in ways nothing else had.

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On March 11, 2021, the world was introduced to NFTs through a single extraordinary event. A digital artist named Mike Winkelmann, known professionally as Beeple, sold an NFT at Christie’s auction house for $69 million. The piece was called “Everydays: The First 5000 Days” — a collage of 5,000 individual digital artworks that Beeple had created, one per day, over nearly 14 years.

Beeple was already known in the digital art world. He had been creating and posting daily artworks since May 1, 2007, without missing a day. His work had gotten increasingly surreal and political over the years, featuring grotesque satirical imagery of tech billionaires, political figures, and cultural moments. He had millions of followers on Instagram but had never sold physical art — his work was meant to be viewed for free online.

Then came the NFT boom of early 2021. Suddenly, digital artists could sell their work as NFTs, with each piece represented by a unique token on the Ethereum blockchain. Beeple embraced the medium enthusiastically. In December 2020, he sold his first NFTs on the platform Nifty Gateway. By February 2021, individual Beeple NFTs were selling for six figures. Christie’s — the oldest and most prestigious auction house in the world — took notice and approached Beeple about auctioning a piece.

The “Everydays” auction was a 14-day online event. Bidding started at just $100. It quickly escalated. Within minutes, bids were in the thousands. Within hours, hundreds of thousands. By the final day, millions. The final bid of $69,346,250 came in the last seconds of the auction. It made Beeple the third most valuable living artist, behind only Jeff Koons and David Hockney. It also made him, in dollar terms, one of the most successful digital artists in history.

The sale was a cultural earthquake. Mainstream media covered it extensively. People who had never heard of NFTs, Bitcoin, or Ethereum suddenly asked “What is an NFT?” Traditional art collectors were outraged and intrigued. Art critics debated whether digital art could really be worth $69 million. The crypto community celebrated — this was the validation they had been waiting for. For better or worse, the Beeple auction made NFTs a mainstream phenomenon and kicked off the wildest NFT speculation ever seen.

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In June 2017, two developers at Larva Labs — John Watkinson and Matt Hall — released a project called CryptoPunks. It consisted of 10,000 unique 24×24 pixel art images of “punks” — stylized humanoid faces with different attributes like hairstyles, accessories, and expressions. Each Punk was stored as a non-fungible token (NFT) on the Ethereum blockchain. At launch, CryptoPunks were free — anyone with an Ethereum wallet could claim one.

The initial reaction was modest. A few hundred people claimed Punks out of curiosity. Most of the 10,000 sat unclaimed for months. Then, slowly, they started trading. Early collectors realized that each Punk was truly unique, permanently recorded on Ethereum, and scarce by design. They were digital collectibles in the purest sense. Prices crept up. By 2018, rare Punks were selling for a few ether. By 2020, for tens of ether.

Then came 2021, and CryptoPunks went parabolic. The NFT craze, which had been building for months, exploded in March when digital artist Beeple sold an NFT for $69 million at Christie’s. Suddenly, NFTs were international news. CryptoPunks — as the first major NFT project and arguably the most iconic — became the most coveted digital collectibles in the world. Rare Punks sold for millions of dollars each. Visa bought one. Christie’s auctioned a batch for $17 million. Jay-Z used one as his Twitter profile picture.

The most valuable Punks are those with rare attributes — alien, ape, and zombie heads are the rarest. Punk #7523, one of only nine alien Punks, sold at Sotheby’s for $11.8 million in 2021. Punk #5822 sold for $23.7 million, making it the most expensive Punk ever sold. In total, CryptoPunks’ market cap briefly exceeded $3 billion — not bad for pixel art that was given away for free.

CryptoPunks’ cultural impact has been immense. They demonstrated that NFTs could have value not just as art, but as identity and status symbols. Owning a Punk became a way to signal early adoption and wealth in the crypto community. Larva Labs was eventually acquired by Yuga Labs (the makers of Bored Ape Yacht Club) in 2022. CryptoPunks remains the most historically significant NFT project, the blueprint that every generative profile picture project has tried to copy.

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On May 11, 2020, Bitcoin experienced its third “halving” — a programmed event that cuts the reward miners receive for each new block in half. The previous halvings had occurred in 2012 and 2016, and both had preceded major bull runs. Historically, halvings have been bullish for Bitcoin’s price because they reduce the rate at which new bitcoins enter the market, effectively creating scarcity.

The 2020 halving came at an extraordinary moment in history. The world was in the middle of the COVID-19 pandemic. Central banks around the world were printing trillions of dollars in stimulus. Governments were running massive deficits. For Bitcoin’s “digital gold” narrative, this was the perfect storm: a hard-capped asset entering supply shortage just as the world was flooded with fiat currency.

Institutional investors began paying attention in a way they never had before. In August 2020, MicroStrategy, a public company run by CEO Michael Saylor, announced it had purchased $250 million worth of Bitcoin for its treasury. Saylor said the company had concluded that holding cash was financially irresponsible given inflation, and Bitcoin was the best alternative store of value. This was unprecedented — a public company putting Bitcoin on its balance sheet.

Other institutions followed. Square, Jack Dorsey’s payments company, bought $50 million of Bitcoin. Tesla, led by Elon Musk, bought $1.5 billion. PayPal announced users could buy and sell Bitcoin through its platform. Fidelity launched Bitcoin services for institutional clients. Massachusetts Mutual Life Insurance bought $100 million of Bitcoin. The floodgates had opened. Each institutional purchase was celebrated by crypto media and drove the price higher.

By the end of 2020, Bitcoin had reached a new all-time high of around $29,000 — surpassing its 2017 peak. The rally continued through 2021, with Bitcoin eventually reaching $69,000 in November. But more important than the price was the shift in perception. Bitcoin was no longer a speculative toy or a criminal tool. It was becoming a legitimate treasury asset, held by public companies, mentioned in earnings calls, and discussed by Wall Street analysts. The 2020 halving marked the moment when Bitcoin crossed from fringe to mainstream for institutional investors.

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In April 2020, a former Qualcomm engineer named Anatoly Yakovenko launched a new blockchain called Solana. Its pitch was simple and audacious: Ethereum was too slow and too expensive, and Solana would be the alternative that scaled to millions of users with fast, cheap transactions. Where Ethereum processed about 15 transactions per second at high cost, Solana claimed to process 50,000 transactions per second at almost no cost.

The key innovation was called “Proof of History,” a novel technique that let the network agree on the order of transactions without needing to communicate about it. This removed a major bottleneck in traditional blockchains. Combined with other optimizations — parallel transaction processing, fast gossip protocols, and innovative consensus algorithms — Solana achieved unprecedented performance for a decentralized network.

Solana’s launch was well-timed. DeFi was exploding on Ethereum in 2020, and gas fees were making small transactions impossible. Users were desperate for a cheaper alternative. Solana offered it, and developers flocked to build on the new platform. Within months, Solana had its own DeFi ecosystem, NFT marketplaces, and games — all with transaction costs measured in fractions of a cent.

Solana’s SOL token exploded in value during the 2021 bull market. From launch price of about $1, SOL reached over $250 at its peak, giving Solana a market cap of over $75 billion. Early investors who had bought SOL during its 2020 IEO saw returns of 100x or more. Solana became the most credible “Ethereum killer” — a title many projects had claimed but few had delivered on.

But Solana had its problems. The network experienced several major outages during 2021-2022, sometimes going offline for hours. Critics argued that Solana had sacrificed decentralization for speed — the network had relatively few validators and required expensive hardware to run. The FTX collapse in late 2022 hit Solana especially hard because FTX had been a major SOL holder. Yet Solana survived. By 2024, it had become one of the most actively used blockchains in the world, home to a thriving NFT and DeFi ecosystem, and a serious rival to Ethereum.

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After leaving Ethereum in 2014 due to disagreements with Vitalik Buterin, Charles Hoskinson founded a new project called Cardano. His vision was dramatically different from most crypto projects: instead of moving fast and breaking things, Cardano would be developed using rigorous academic methods. Every major design decision would be peer-reviewed, formally verified, and published as academic papers in top computer science journals.

Cardano’s founding team included several Ethereum veterans and academic researchers. The blockchain was developed by IOHK (Input Output Hong Kong), a research-driven company, in partnership with Emurgo and the Cardano Foundation. The project took years to develop because of its methodical approach. Where Ethereum had launched in 2015 and iterated quickly, Cardano’s mainnet didn’t launch until September 2017 — and many key features took years more to arrive.

The academic approach had both advantages and disadvantages. On the positive side, Cardano’s consensus mechanism, Ouroboros, is one of the first proof-of-stake protocols to have mathematical proofs of security. Its formal verification techniques help prevent bugs in smart contracts. The team has published over 150 peer-reviewed papers, making it one of the most academically prolific projects in crypto. On the negative side, Cardano was slow to ship features. Smart contracts didn’t arrive until September 2021, nearly four years after mainnet launch.

Despite the slow development, Cardano attracted a passionate community. Its ADA token became one of the top ten cryptocurrencies by market cap. During the 2021 bull market, Cardano briefly reached a market cap of over $90 billion. The community valued Cardano’s methodical approach and saw it as a “serious” alternative to Ethereum. Critics called it “vaporware” and pointed to the lack of working applications on the network.

Cardano’s legacy is complicated. It’s an example of what happens when you prioritize rigor over speed — you get a mathematically sound system, but you fall behind in the market. Ethereum’s DeFi ecosystem grew while Cardano was still finalizing its smart contract platform. By the time Cardano was ready, the competitive landscape had changed dramatically. Still, Cardano has made real contributions to blockchain research and continues to have devoted users. Its story reminds us that there’s more than one way to build crypto infrastructure — and different tradeoffs suit different philosophies.

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