Famed 19th century newspaper editor Horace Greeley once exhorted young Americans to “Go west” in search of wealth and happiness. Elon Musk tweets the word “Doge” with the same implied meaning, if not the same literary flair.

Dogecoin’s 12,000-plus percent run since the beginning of the year is an improbability among improbabilities, which is to say it’s just another crypto story. In the past few years the cryptocurrency world has featured sharp rises, dramatic falls, bubbles forming and bursting and reforming, scams, personalities and most of all, sudden wealth. In parallel, crypto has grown into a new industry, attitudes about its long-term prospects have changed dramatically, and a new role has emerged for both businesses and governments to play. Since Bitcoin first became a phenomenon in the early 2010s, it has been easy to get swept up in the near-constant headlines, growth market of crypto media and influencers and the irresistible allure of making millions overnight.

But the speculation is just one part of the story and in this case not the most interesting. Cryptocurrency is greater than the sum of its trades – it is a new world, backed by an underlying technology called blockchain, an immutable system of record that is shared across a network of computer systems and has applications both in finance and beyond. Interest in cryptocurrency has expanded so rapidly that numerous governments are considering launching crypto-backed digital currencies of their own as an answer to critiques of existing monetary systems, while any number of businesses have made headlines by announcing they will accept cryptocurrency as a form of payment. Legendary financier Carl Icahn, once a skeptic, has recently stated he may invest a substantial amount in cryptocurrency, representative of a larger shift in thinking in the financial world.

To understand the real action in crypto, it might be better to stop following the money. The social media spectacle and the latest price action generates attention, but crypto’s biggest fans believe in the movement because of a distrust in both governments and their fiscal policy, as well as a desire for alternative investments in a marketplace where many assets are perceived as inflated. Crypto is entering a new stage, one that demands a more serious look at its innovations, challenges and future.

The negatives are real, but so is the upside

The critics of cryptocurrency, specifically of Bitcoin, are many as are their criticisms. From the beginning, Bitcoin has been challenged for being a doomed-to-failure fixed currency, for having no real value or use, for its slow and costly transactions and links to criminal activity and scams. There have been a revolving door of dubious initial coin offerings (ICOs) involving internet celebrities, as well as stories of currency exchanges collapsing and other scandals. Separate from the nefarious activities are the more modern criticisms focused on the massive environmental cost of crypto mining and its role in the semiconductor shortage.

A recent article in Harvard Business Review cited a Cambridge Center for Alternative Finance (CCAF) study that found Bitcoin currently consumes around 0.55 percent of global energy production, which they state is roughly equivalent of a country the size of Sweden. The article adds that views on just how much energy Bitcoin should use are skewed by what one thinks of it, and arguments can be made about the energy cost of any number of activities, but there’s no doubt the impact is noteworthy. Bill Gates highlighted the negative impact in a New York Times interview, before adding that he could see a future in which crypto mining was powered by renewables.

In March, C.W Chung, a researcher from financial securities firm Nomura, was widely quoted by media stating that the semiconductor shortage had been exacerbated by the mining of cryptocurrency. Chung noted that during a previous Bitcoin rally, one-tenth of sales made by chip giant TSMC were made to coin miners. The industry itself has validated this problem, with NVIDIA adding anti-cryptomining technology into its latest GeForce RTX 3060. The chip will throttle its own capabilities by 50 percent if it detects it is being used to mine popular cryptocurrency Ethereum.

These challenges exist alongside both great potential and rampant speculation that has been amplified by social media, influencers and the isolation of the pandemic. Short-term thinkers may see great upside in massive returns on a coin founded as a bit of internet humor, but the more serious players in the market are looking at smart contracts, new modes of banking and lending, and even the formation of digital currencies.

Some industry watchers have noted that the Coinbase initial public offering in April is a sign that crypto is taking a leap forward. Following the IPO, financial analyst Peter Atwater told Bloomberg: “When picks and shovels are being touted as your best bet—rather than the gold mine itself—the rush is past.” Coinbase’s CEO, Brian Armstrong, viewed the IPO as a legitimizing event for the industry, one that would make cryptocurrency a part of the financial world. By gaining more formal acceptance, crypto has the opportunity to evolve from its infancy and focus on achieving the financial and social goals that have made it so attractive.

Moving from Speculation to Application

Many companies have worked to develop offerings involving blockchain technology separate from cryptocurrency. Everyone from IBM and Oracle to Google and Amazon Web Services have developed blockchain applications and solutions ranging from supply chain to healthcare to authenticating transactions. But for crypto specifically, the world is a little different.

Coinbase, billed as the largest cryptocurrency exchange, is an obvious standout and starting point. The public needs a place to buy and sell this new currency, and Coinbase is one of many that have stepped in to fill that gap. Exchanges are the beginning by providing a marketplace to exchange traditional currencies for crypto, but the next wave—all based on blockchain technology—will involve payments, lending and even full-service banking. The concept of DeFi, short for decentralized finance, involves a variety of financial services applications, most frequently Ethereum which has an increasingly popular platform. DeFi has the potential to change the way we think of traditional lending, creating peer-to-peer lending networks on blockchain that can disburse funds in an instant, rather than working through the established banking system.

And those are just the financial applications based on blockchain. Decentralized ledger technology can serve purposes that go beyond money, including proof of ownership. This has come to light most recently in another highly speculative, media-driven craze – non-fungible tokens (NFT). While spending $500,000 for “ownership” of the Disaster Girl meme feels more like a sort of mania not unlike Beanie Babies in the 1990s than the path to something resembling real value, the underlying goal of empowering artists is meritorious. There are companies building blogging, gaming, security and other applications all using the same technology underlying crypto as a platform.

Predicting the future for crypto as a practical technology might not be as rewarding as predicting the next short-term bubble. But the applications and concepts being developed on blockchain are showing promise for disrupting the entrenched financial services sector, along with the potential for negative real-world consequences if security and environmental issues are not addressed. If the impact of its applications on commerce is anything like its impact on culture, what comes next will keep us watching.

Adam Riglian is vice president.