The year 2021 was one for the ages. COVID-19 raged on. The metaverse stepped into the limelight. The stock market popped, with the tally of public debuts soaring to new heights. Billionaires—and the rest of the world—looked skyward, imagining a future beyond our Earthly boundaries.
At the same time, some of the most headline-grabbing stories revolved around the evolving landscape of decentralized finance, or DeFi—a monetary system not owned by any company but instead run via a public blockchain network—which is quickly being pioneered by the brave and the bold. From Elon Musk and NFTs to meme coins and cryptocurrency crackdowns, these were some of the biggest moments that defined the blockchain in 2021:
Bitcoin reached record highs—again and again
Bitcoin repeatedly defied the expectation of skeptics in 2021, soaring to dizzying heights with mind-numbing effect. It rose meteorically from $30,000 at the beginning of the year, to $40,000, to $50,000, and then—after an early-summer cratering of the crypto economy, with Bitcoin losing over 30% of its value during the course of a single day—back up to a record high of $68,000 in November.
The roller-coaster ride in price—which, before December 2020, had never hit $20,000—made millionaires out of small-time hobby investors nearly overnight, and also probably gave them whiplash after it then dropped repeatedly in volatile swings. But hey, the thrill is part of the game: Big risk, big rewards.
Shiba Inu surpassed Dogecoin
You could also call it the year of the meme coin. Dogecoin had a heck of a run, surging over 12,000% from the start of the year to early May, meaning—try not to cry—if you invested just $500, you would have earned over $60,000 from doing nothing, really.
But those who bought into the joke token—which is based on a popular meme and bears the face of a Shiba Inu dog—are a lion-hearted bunch, matched only perhaps by the fervent investors of the rival joke token, Shiba Inu coin, which was engineered in August 2020 specifically to become the “Dogecoin killer” (and which bears the face of an animated Shiba Inu—get it?).
Despite the best efforts of Elon Musk—possibly DOGE’s most influential fan—SHIB finally fulfilled its prophecy in November, temporarily overtaking its predecessor in the cryptocurrency rankings by market capitalization. (However, SHIB has since fallen back to the spot just below DOGE—and the internet culture wars continue.)
Elon Musk brought crypto love to SNL
It doesn’t get much more mainstream than Saturday Night Live, the sketch comedy TV show that features the most iconic and beloved celebrities of our time as host. In May, it tapped Elon Musk, of Tesla and SpaceX fame, who’s recognized in the crypto universe as one of its most powerful trend makers. He can send tokens spiking or spiraling, depending on his mood, all with the post of a cryptic tweet.
There was great hype over Musk’s appearance, particularly when he suggested via Twitter that it would include a skit about a “Dogefather”; fans then bought Dogecoin en masse, sending its price to a record high of 73 cents.
Unfortunately, the gold rush didn’t pan out—minutes into the episode, Dogecoin’s value fell off a cliff, tumbling as much as 30%, as guest host Musk quipped that the whole thing was a “hustle.” (He made up for it, perhaps, when he later adopted a pet Shiba Inu puppy named Floki, sparking another jump in Dogecoin’s price.)
NFTs spawned a burgeoning market
NFTs, or digital tokens that let purchasers claim ownership of items that exist solely online, exploded this year much like a supernova: quickly and with far-reaching consequence. These digital collectibles were being minted left and right, by artists in every medium—from the famous to the obscure—and megacompanies in every industry; often they sold for millions of dollars.
Call it a fast-growing market or a bubble about to burst, but a new genre of consumerism has been created, and it’s one that embraces the spectacle. Among the trendiest NFTs of the moment are digital avatars in various species, including “cool cats” and “mutant apes,” which go for roughly $30,000 in Ether. (A CryptoPunk human, meanwhile, once fetched $500 million.) Sometimes you know what you’re getting, and sometimes you don’t; each comes with a mishmash of characteristics, and it’s a gamble whether the one wearing the flat-brim hat will be worth more than the one with brains oozing down its face. But again, that’s just part of the fun.
El Salvador blazed a cryptocurrency trail
In June, the Central American nation of El Salvador said it would become the first country to make Bitcoin legal tender. While exciting for crypto-heads, the move prompted mass protests from the small country’s impoverished population, which feared the volatile cryptocurrency would bring instability and inflation.
Never mind that the policy’s rollout in September was plagued by glitches—that the government-sponsored digital wallet crashed almost immediately, and the system’s failure to check new users’ photos resulted in rampant identity fraud. President Nayib Bukele’s response was instead to double down, taking the stage at a November blockchain conference—clad in a backwards baseball cap—to map out his forthcoming Bitcoin city, which would be shaped like a large coin and use geothermal energy from a surrounding volcano to power Bitcoin mining.
Bukele’s vision also involved $1 billion in bonds tied to the volcano—half of which would be used, naturally, to buy and sell more Bitcoin, a scheme many analysts see as the administration’s desperate ploy to claw its way out of a financial hole.
China got tough on mining
Following China’s militant crackdown this year was like watching a blood sport. Beijing took aim at massive companies like Ant Group and Didi, video games like Fortnite, and fandoms like the BTS Army. And cryptocurrency was among the most vilified of institutions, with officials likening it to the currency of scam artists and money launderers.
In May, the government tightened its grip by outlawing crypto mining—an industry that was booming in China due to the country’s coal-rich energy plants, which can fuel supercomputers that solve complex puzzles to verify the blockchain and unlock new coins. Just like that, the region that supplied roughly three-quarters of the world’s mining power in 2019 was suddenly offline under threat of stiff punishment, contributing to a major crypto-economy meltdown that lasted through the summer as brand-name coins like Binance and Ethereum shed up to 50% or more of their value. That’s some collateral damage.
Staples Center gets a 21st century rebrand
In a glaring sign of the times, the legendary Los Angeles Staples Center—home of the NBA’s Lakers, and an often-namechecked venue where the likes of Bruce Springsteen, U2, Madonna, and Taylor Swift played to sold-out crowds—is becoming the Crypto.com Arena, it was revealed in November. The Singapore-based cryptocurrency exchange, which currently boasts 10 million users, paid a reported $700 million for the rebrand in what’s believed to be the richest naming-rights deal in sports history, taking the the arena’s title away from an increasingly obsolete metal clamp for paper printouts.
The new logo will be unveiled on Christmas Day, when the word “crypto” will start rolling off the tongues of, well, probably a few hundred thousand more people than before. Crypto.com, meanwhile, gets to be the cool new kid in town with lots of cash, flashing sponsorship deals with Formula One, UFC, and Hollywood star Matt Damon.
Crypto investors plot to snatch the Constitution
In November, an internet collective called ConstitutionDAO sought to raise the flag of a DeFi revolution, crowdfunding nearly $47 million in Ether to purchase an original copy of the United States Constitution, which it said would finally be owned by “we the people.” DAO, an acronym for decentralized autonomous organization, refers to a group with no top leadership, that governs itself by voting on rules automatically enforced through blockchain technology; ConstitutionDAO agreed it would turn over the prized document to a charitable organization dedicated to furthering democracy. It would have been a caper for the ages, had the plucky group not ultimately lost their bid to Wall Street giant Citadel’s billionaire executive. But setback aside, the campaign embodied the spirit of DeFi—that power belongs in the hands of the many. Vive la revolution.