I share the opinion of many that are involved in the space when I say Blockchain can almost be considered the Internet 2.0. Everyone saw the potential of the Internet revolution. Unfortunately, all of the upside expectations got a bit chilled because the then infrastructure couldn’t transmit and process the information fast enough to deliver great utility. Likewise, the cryptocurrency infrastructure is currently not able to deliver great utility, adopters are not able to easily use Bitcoin to buy their groceries, or even pay their mortgage. This is going to change in the future and much faster than anticipated. What is unique about this space as compared to the internet/dot-com revolution is that you have four very powerful elements converging on each other at the same time: Moore’s Law, Metcalfe’s Law, Open Source technology/culture and lastly, the worldwide dissemination of information via the internet. With these four elements, you are going to start to see a logarithmic adoption curve, which in turn leads to overall growth.
As a fund administrator, I get the opportunity to sit down and have conversations with the minds behind many of these new projects that are hitting the scene. One concept that I constantly seek out during every single meeting is the adoption of the project. Candidly, it doesn’t matter how good of an idea that you are trying to develop, what is important is if your idea is realistically adoptable. It is the same concept as having a desktop computer on your back, if the customer doesn’t find it easily adaptable, it won’t gain adoption.
While the cryptocurrency market is currently in a major correction and a complete bearish trend, infrastructure and framework in the industry have been constantly growing. You are starting to see projects stretch out into everyday households. You are seeing new ideas hit the space every day, each revolutionizing the last. Projects such as IOTW are making it possible for cryptocurrencies to be available to the everyday consumer with the current infrastructure that is in their house. They do this by using the proof of assignment through the internet of things that already exist in most modern-day households. No extra hardware, no new gadgets being brought into the home, just simply a software update. Projects like these are bringing the Blockchain technology into the home, and most citizens don’t even realize it is happening. They just see it as an ease of operations for their everyday lives. This is what is needed for the next growth stage to hit the space. A mass adoption of the technology will bring the capital to the space naturally.
A project has three simple steps to have a successful implementation:
- Diagnose a contemporary issue
- Point out how Blockchain technology eliminates one or more layers of the said issue
- Implement a course of action on how to implement the technology to ease the transaction
For example, let’s take real estate titles. Traditionally, buyers and sellers of real estate have to go through a title company to transfer ownership of a home from party A to party B. If a blockchain were implemented here, there would be a digital record of all previous ownership of the property as well as its current owner, who could seamlessly transfer this over person to person, without having to use an intermediary. Modern-day title companies run into issues of incorrect titles and charge expensive fees to do so. Title insurance is also an expensive part of this process that blockchain could entirely cut out. Eliminating this step would save money on both ends of the transaction, making this an easily adoptable technology.
The biggest thing that this bearish trend has given us is time. It has allowed many of these projects to catch up to their massive overvaluation. You are starting to see more realistic figures surround projects and the ones that truly do have revolutionary ideas, tech… etc are rising to the top. The winners and losers have yet to come to the surfaces. The ideas are revolutionary but the infrastructure is lacking to incubate these ideas into a reality. The only thing that is going to bridge that gap is the adoption of this new technology.
Over the next couple of years, we will continually get more regulatory clarity. The talent exodus from Wall Street into crypto is going to continue and I think we are going to see the overall quality of the ICO market continue to increase with an influx of experienced developers. When you think about combining Moore’s law, Metcalfe’s law, open source software development, and instant worldwide information dissemination via the internet, you see the potential growth, evolution and adoption rates unlike anything seen before EVER. In technology investing or just technology development, there is a tendency to overestimate the next two years and underestimate the next ten, and I think that without a doubt the case for crypto assets.
The market will continue to grow through a circularity amongst the ecosystem participants. This starts with speculation. Speculation then drives more development. Developers bring more miners. With more miners, the ecosystem moves faster which brings more users. Users bring more consumers and merchants. This then brings more speculation and there is a circularity to the equation. Network effects are the primary force of crypto economics, which enables both value creation and capture at that protocol layer. This is completely revolutionary.