In the latest discovery in the world of cryptocurrency, Bitcoin which registered an all-time high of $20,000 has seen a fall in value by almost 80% in the last one year.
Satoshi Nakamoto’s Bitcoin revolution which brought the meteoric rise of cryptocurrencies led to the inception of global projects like Ripple and Ethereum and creation of new ideas and cases in distributed ledger technology (DLT).
Ripple is a real-time gross settlement or RTGS system which supports fiat currency, cryptocurrency and commodity exchanges, and remittances. The earliest cryptocurrency on this platform was Ripples, abbreviated as XRP. Ripple was created by the Ripple company but can function without it due to its shared ledger. Used by companies such as UBS, UniCredit, and Santander, Ripple has been increasingly adopted by banks, financial institutions and payment networks due to its settlement infrastructure technology with benefits like payment’s speed within the network, stability of the technology, and the ability of its coin as a bridge currency.
Similarly, Ethereum is a decentralized system and not controlled by any single governing entity. An absolute majority of online services, businesses and enterprises are built on a centralized system of governance. Ethereum, being a decentralized system survives on its own and is fully autonomous. It would never fail as it is being run by thousands of users around the globe, which means it can never go offline. Moreover, users’ personal information stays on their own computers, while content, such as apps, videos stays in full control of its creators without having to obey by the rules imposed by hosting services.
The success of these companies has set the bar high and have encouraged companies to go for project funding through initial coin offerings (ICO) unlike the dot.com cloud of the 1990s which saw the world pump hundreds of millions of dollars.
As per a report published mid-2018, over 1000 ICOs have been confirmed dead while some of the bigger projects have managed to sustain by cutting down their operations to remain profitable and cost-effective. In recent times, established firms have streamed the operations. Earlier this month, one of the start-up firms and incubator named ConsenSys which was raised by Ethereum, disclosed its plans to restructure its business and commitment to have a revenue-driven approach. ConsenSys primarily invests in early seed funding for start-ups, building applications on the Ethereum blockchain. The company made it clear that the company would become more careful with projects under their belt and wouldn’t mind ceasing projects that may have looked promising earlier during their inception. The organization even plans to reduce its man force by thirteen to fifteen percent.
This is not the only story of ConsenSys. A lot of other companies were in the news of late who also have taken far more drastic measures to downscale their operations. Social network giant Steemit stated last month that it would be sending pink slips to its staff as a direct result of the severe market conditions affecting cryptocurrencies across their verticals. The decentralized platform, which runs on the Steemit blockchain, has felt the pinch alongside the rest of the industry. Apart from downsizing man force, the company is planning for a number of technical changes to reduce further their operational costs. The volatile market climate has taken its toll, considering the fact that Steemit once had a market capitalization of over dollar four hundred million in mid last year.
In another report, it was found that Coinfloor which is a London-based bitcoin exchange plans to cut staff as the U.K. Bitcoin exchange restructures its operations amid a sell-off in cryptocurrencies. In an interview, Chief Executive Officer Obi Nwosu said that Coinfloor is currently working on a business restructure to ensure that they focus on competitive advantages in the marketplace. As part of this restructuring, some staff changes would be made. The London-based exchange plans to cut around 40 employees. Nwosu told Financial News that it was a normal business practice to adjust staff numbers according to changes in the market environment and that the exchange has seen a significant change in trading volumes in the market.
Hundreds of crypto exchanges which started in recent years are finding it difficult to sustain due to the volatility in the market. The number of transactions in Bitcoin has declined significantly from last year. Coinfloor which started in 2013 is one of the oldest Bitcoin exchanges in the U.K. The company is backed by Taavet Hinrikus, co-founder of U.K. fintech TransferWise Ltd., and venture capital firm Passion Capital.
Even in this volatile market condition, there seem to be companies doing pretty well. According to a social media report, blockchain developers are in high demand, becoming one of the fastest-growing emerging jobs in the US. In the last three years, jobs relating to the blockchain, Bitcoin, and cryptocurrency have been on the rise in one of the premier global social media platforms. Facebook recently listed openings for blockchain-related jobs on its career portal earlier this month. These jobs seem to be extremely lucrative, the fact being the rise in interest in the world of cryptocurrency over the past two years. Blockchain engineers are believed to be earning more than $150,000 a year.
According a research from Challenger, Gray & Christmas which is an an outplacement agency, last month saw an upward surge in job cuts in different industries in the U.S. Challenger stated that GM plans to cut 15 percent of its workforce which is equivalent to around 14,000 jobs, a step taken that would certainly save about $6 billion for the organization. In comparison to job cuts around the world in other industries and verticals, the current slump in the cryptocurrency markets and job cuts in associated companies seems relatively less. With all these data in hand, one can easily draw a conclusion between the rise of internet companies in the last decade and the rise of cryptocurrency- and blockchain-focused companies from 2010 onward. As per a report from the Guardian in late 2000, the dot-com bubble burst saw around 100 plus internet companies close their shop leading to around 7,500 job cuts from internet companies. However, few of those that managed to survive laid the foundation for the cryptocurrency and blockchain industry which we have today.