The past year has been challenging for the crypto community. Investors and idealists alike have had to question their commitments through a grueling bear market. Sadly, many people have come up against hard truths. We have been reminded that power corrupts all of us, that greed can always compromise the individual, and that castles built in the sky can come crashing down. As painful as it has been, this purge was, and will continue to be, necessary. So long as people see crypto primarily as a vehicle for getting rich rather than as a tool for achieving freedom, we will continue to experience painful moments of disillusion.
The fact is that as crypto has grown in both popularity and complexity, the amount of money lost to scams, hacks, and outright failures has grown right alongside it. All you need is a brief glance at the Rekt.News Leaderboard to get the picture: there is blood in the streets. Tens and hundreds of millions at a time, crypto investors have been decimated. Not to mention the institutions that were thought to be untouchable: Terra Luna, Celsius, FTX, and the like, each responsible for billions in losses.
The crypto community has suffered immensely, both in terms of dollars lost and reputational damage. While the fakes and scammers flee into anonymity with our funds, many individuals will never recover their life savings. Many crypto projects have been - and will continue to be - eaten by this bear market. Those who do recover may take years to do so. While it is easy to blame greedy or wreckless founders, or to point a finger at hackers stealing funds, we have to recognize that the fault is also our own.
The broader crypto community has strayed from the ethos that created it, and now we are paying the price. We’ve got to get back to our roots. Bitcoin was created to protect people from the greedy and dangerous actions of centralized or adversarial actors. If we had only kept this in mind, perhaps SBF (Sam Bankman-Fried) would not have had $16 billion to lose. If we had only thought for a second about the importance of a sound protocol design, perhaps Luna’s death spiral would have been smaller than $60 billion.
However, every challenge also presents an opportunity. As the new year begins, we have time and space to lick our wounds and consider the first principles that gave birth to the crypto movement - guidelines that can help the industry prevent the recent catastrophes from unnecessarily repeating themselves. These principles are simple, really. Committing to them is not always sexy or popular, but over the long term, they will ensure that cryptocurrency is better positioned to achieve its goals. If you choose to remain in the crypto space as a developer, user, or investor, consider the following points below to guide your decision making. Finally, click the links included in each section to discover how Ergo is accomplishing each one specifically:
Decentralization: The distributed nature of a cryptocurrency or blockchain system is its defining feature. Decentralized protocols ensure that no single entity or group holds a dominant position of control. Decentralization is meant to prevent any single point of failure and to ensure that the system remains resistant to censorship or manipulation.
Trustlessness: This principle refers to the idea that a cryptocurrency or blockchain system should not require users to trust any particular party or entity in order to use it securely. Instead, all intermediaries get automated away, requiring users to trust code alone.
Self Custody: The common phrase, “not your keys, not your crypto,” emphasizes the importance of individuals being in control of their own assets, rather than relying on third parties to hold and manage them. Self custody allows users to retain full control over their assets and to take responsibility for their own security.
Security: The robustness and resilience of a blockchain or dApp against attacks defines its usefulness as a financial tool. Ensuring the security of a system is crucial for protecting user funds and maintaining the integrity of the ecosystem. Secure systems have not only been audited, but have withstood the test of time. Developers and users must take care to prioritize security when using a new technology, and not abandon proven strategies before proper testing has been completed.
Transparency: This principle refers to the idea that the workings of a cryptocurrency or blockchain system should be open sourced and transparent, allowing anyone to verify and audit the system. This transparency helps to build trust and confidence in the system, and aids new development by allowing others to use strategies that have been proven.
Privacy: Protecting the personal and financial information of users is a matter of safety and autonomy. Strong privacy protections can help to ensure that users are able to transact and interact with one another without fear of their information being misused or exposed.
Interoperability: This principle refers to the ability of different blockchain systems to work together and exchange information and assets without compromising security. Interoperability helps to create a more connected and inclusive ecosystem and can facilitate greater adoption and use of the technology.
Inclusion: Cryptocurrency and blockchain technology were designed to level the playing field and provide secure financial tools to the average people of the world. It is critical that this technology remains accessible to a diverse range of individuals and groups in order to fulfill its purpose.
Common wisdom tells us that Bitcoin has lived up to these principles more than other crypto projects thus far. As volatile as the space can be, Bitcoin is actually a conservative choice among the 10,000+ high risk digital assets. However, as valuable as this conservatism has been for the protection of user funds, developers and users alike recognize the value of pushing the limit of what is possible through decentralized finance. After all, the development of crypto technology did not stop in 2009.
The money lost through crypto scams, hacks, and failures cannot continue to define the space. The principles above serve as guidelines for moving forward responsibly. Users, investors, and developers must prioritize adhering to them, and support projects that demonstrate a willingness to promote said principles. Documents such as The Ergo Manifesto serve as a benchmark for what it means to define a project’s mission and values, and provide the crypto community with standards by which all projects can be judged. The introduction makes its purpose clear:
“We hope to build society through horizontal cooperation, through production under the division of labor, trade and exchange, and solidarity and mutual aid. We believe this is achievable while maintaining basic principles that benefit the well-being of all humans. Core principles that have been central to human rights and values must be maintained as our technological capacities evolve. The built tools must enrich human value rather than subjugate humans in surveillance and control systems.”
Alexander ‘Kushti’ Chepurnoy, the creator of Ergo, has underscored here that Ergo exists to uplift and empower the average people of the world. By adhering to the first principles defined above, the Ergo blockchain is able to work as a force for good in the world, fighting against systems of control and the weaponization of money that has contributed to the inequality of the world. Ergo stands up as an open, fair, permissionless, and resilient platform for contractual money. While this mission may not sound as sexy as the marketing of many VC (venture capital) chains in the cryptocurrency sector, it is precisely this mission that keeps Ergo fundamentally sound. Perhaps users living in developed nations will not immediately recognize the immense value of such principles. However, in the words of Kushti...
“Because the tools we are building may not benefit you today, make no mistake, they may be the lifeboat of tomorrow... Often those at the bottom suffer in separation from those at the top who initiate the suffering. This cycle of economic abuse needs to be broken... That is the intent and purpose of my life's work in cryptocurrency.”
To learn more, continue reading The Ergo Manifesto and discover how projects like Ergo are working to change the world for the better. By adhering to these first principles, Ergo is able to offer truly innovative, secure, trustless, and decentralized financial tools to users from around the globe.