Crypto winter was a difficult time for crypto enthusiasts and, especially, crypto investors. Something good happened due to the huge losses that many incurred. Folks who were only interested in a quick buck have largely gone away. Those who remain are more likely to be interested in blockchain tech in the wake of crypto winter. They are more likely to want to make the original crypto dream come true. That is why many folks are excited about the bringing on of someone to help Optimism juice up their layer two services.
Venture Capital That Is Staying With the Blockchain and Crypto
Bloomberg writes about a new blockchain startup. It is backed by Silicon Valley venture capital firm, Andreessen-Horowitz. These folks are one of the investment groups that has stayed in the crypto and blockchain game despite the huge losses of crypto winter. They are focusing on the tech the underlies the blockchain. The company in which they are investing, Optimism, works with layer two crypto technologies. Layer two tech takes data from transaction off the top of the Ethereum blockchain. The data is compressed and posted back to where it came from. This results in savings in time and cost.
What Is Layer Two?
Layer two is blockchain programming that works to solve three conflicting issues in the blockchain. The blockchain has three jobs. These are processing transactions, storing data, and maintaining consensus and security. As a rule efforts to optimize one of these functions generally results in hurting the others. Layer two is technology that works with a blockchain, “sitting on top of it.” It relies on the original blockchain for security but it speeds up data processing.
Hiring Folks With Expertise in the Blockchain
Something that is refreshing in the Optimism story is their choice of a recent hire. They have taken a guy who used to be head of gaming at YouTube. The rationale seems to be to hire someone with blockchain competence for the job of growing their business which relies largely on level two technology. It is noteworthy that the Coinbase blockchain uses Optimism level two technology.
Being Where the Crypto Users Are At
Ryan Wyatt is the new Optimism employee. He notes that the majority of blockchain users are within the Ethereum system. This, he says, is where developers need to focus. The idea is to optimize crypto, DeFi, NFTs, and basic crypto trading with an eye on the future and not the crypto-gambling losses of crypto winter. We have previously written that we believe Ethereum with its smart contracts will eclipse Bitcoin in market capitalization and importance in the crypto world. Thus working on ways to optimize Ethereum such as with layer two tech is an excellent place for a business to be for the long run.
Investing in Crypto After the Fall
A lot of folks jumped back into Bitcoin at the start of 2022. The rationale was that inflation was going to be licked and crypto would recover. We think that a smarter investment move is to invest in crypto and blockchain tech. Such companies prosper no matter if crypto is going up or down. It is more like the folks who made fortunes selling picks and shovels to miners in the 19th century California gold fields. The folks who build and control the tech will be ones who determine the future of crypto and the blockchain.
SlideShare Version – Blockchain Tech in the Wake of Crypto Winter