Bitcoin's rapid price swings from highs near $20,000 in December to under $8,000 just a few weeks later cut deep.

Investors were forced to face head-on the unprecedented potential for cryptocurrencies to shift wildly in price. But according to Nolan Bauerle, the director of research for digital currency analysis and media site Coindesk, the price pendulum and the difficulty exchanges have had keeping up with the huge increases in trading activity also illustrate just how different the crypto space is from most other industries.

"I think that the attention it received in December laid bare a few of the infrastructure shortcomings and I don't mean necessarily the blockchains, I mean the typical on- and off-ramps for the cryptocurrencies," Bauerle told TheStreet. "So the large exchanges -- they had to face scaling that was unprecedented in the history of these sophisticated tools."

And as that sudden call to create scale where there previously was none grew louder and more demanding, cryptocurrency exchanges and platforms were put through the wringer. While that might work in Silicon Valley, it doesn't work for crypto, Bauerle explained.

"You've got what we're used to in Silicon Valley, which is fail fast, make mistakes, break things. That's fine for video games and culture information consumption," he said. "When it comes to secure, legal relationships using cryptography, cryptography doesn't behave like normal software."

Cryptography is a complicated form of creating codes for communication in the presence of third parties, often referred to as adversaries. The point of cryptography is to establish constructs and analytical protocols that prevent those third parties from reading private communications. Today's cryptography is based heavily on math theory and complex computer science. 

"If cryptographic protocols have one error in them, one little mistake -- they're useless," Bauerle said.

That's not the case for much of the everyday tech in Silicon Valley. When there's a problem in traditional computer code, for example, many times a patch can be sent out to all affected computers, tablets, games, etc., that will address an issue in question.

Because of that, investors and traders must recognize that the ability of crypto to quickly scale is different from that in other industries. The "unprecedented influx of attention," Bauerle said, pushed crypto developers up against a wall.

Those looking to trade crypto as it gained steam so quickly were "frustrated" with exchanges' inability to execute their trades right away. With such an exponential increase in trading activity for many of the top coins on the market, developers struggled to get cryptographic codes right on the first try. When they didn't, their work was useless and their anxious investors were stymied. 

"[Cryptography] can't be like the Silicon Valley type software. There is no patch you can send out for cryptographic protocols. They either work or they don't and if they don't, they're worth nothing."

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