The rapid rise of cryptocurrencies and the technologies that surround it have caused an enormous buzz in the tech world, but like a kid with a new toy the novelty has almost worn off and we’re left wondering what to play with next.

Althoigh Bitcoin has been around since 2009, it was the enormous spike at the end of 2017 that put it on the map for the rest of the world. During the month of November crypto prices soared from $1,000 to $7,500. This massive increase brought the speculators pouring in, which caused Bitcoin to jump to $10,000 over the course of a single weekend. In just a matter of days, crypto broker Coinbase had opened thousands of accounts, and investors continued to bid up the price for the flood of wannabe speculators determined to secure their slice of the pie. A month later, in December, Bitcoin finally cracked $20,000.

Much like our own monetary system, the value of crypto is only as high as the perceived value assigned it to by its users based on it’s real word usefulness. While Bitcoin represents an incredible technology with the ability to transform our financial system, its rapid price increase was purely speculative, and not based on any kind of sustainable demand. All the big players recognised this, and Saxo bank even predicted that Bitcoin would collapse to $1,000 in 2018. After peaking at around $17,000 in January, Bitcoin has continued it’s decline and a year later it value currently rests at under $4,000.

The flood of new speculators is what caused Bitcoin’s price to rise so rapidly, and more and more people wanting to buy it created a tonne of demand which could not be met because Bitcoin is very costly and time consuming to mine and those who already owned it were reluctant to sell. This mix of extreme demand and reduced supply caused the price to jump, and eventually skyrocket. Of course, these spikes are never sustainable, and the smarter investors began selling en-mass, and with less people buying the price continued to drop. Right now even the most die-hard Bitcoin fanatics are jumping ship and cutting their losses.

The fact is cryptocurrency is a great thing; the world needs a ubiquitous currency that’s free from the meddling of governments and central bankers, and our current financial system is completely unprepared for the new era of international business. It still takes many days to transfer money across the globe, and you’d better be prepared to loose a sizable chunk of your money every time you want to use a bank to send the money and convert between currencies. The plus side of the threat that crypto’s disruptive technologies offers to banks, is that it has spurred renewed innovation in the banking sector in order to compete. Companies like TransferWise are now making this easier, but they are essentially a bandaid; a more user friendly layer of abstraction over an inherently broken system.

Speaking of inherently broken, the same can be said of Bitcoin itself. Written testimony presented to the U.S. Senate Committee on Energy and Natural Resources in August 2018 claims that Bitcoin mining accounts for about 1 percent of the world’s energy consumption. If you run an Antminer 24/7 for a year it will produce about 0.85 bitcoins, at a cost of about 15,000 kilowatt hours. Depending on your power prices it will cost anywhere from $600 (at 3 cents per Kwh) to $1,800 (at 9 cents per Kwh) to mine one coin. This insane energy requirement makes the coin extremely inefficient, not to mention very bad for the environment with it’s massive carbon footprint.

These scalability issues associated with Bitcoin have left the doors open for new better designed offerings to enter the market. There are already some very good ones, such as Ethereum and Litecoin, that already have solid traction and may well overtake Bitcoin at some point in the future.

The rapid rise of Bitcoin in recent years has spurred a rush of innovation based on it’s underlying “blockchain” protocol. Blockchain is the digital, distributed, and decentralized ledger responsible for recording transactions in a transparent and unchanging manner. This technology has any number of real world uses, such as in finance (cryptocurrencies), storing secure data, and in commerce. Forward thinking financial institutions and progressive governments are also looking into crypro and exploring ways to integrate it, which is a cause for concern among the crypto community as widespread adoption of these technologies at a public level would most likely see the value of coin decrease and also cause issues regarding decentralisation and regulation.

Despite the fact that the buzz around crypto’s underlying blockchain protocol has undoubtedly been overhyped, and Bitcoin itself is most likely on the way out, it’s still early days for crypto and there are countless ways which its underlying Distributed Ledger Technology (DLT) can be applied to improve the we conduct business and transact online.