The Blockchain Wave – Separating Fads from Paradigm Shifts
- Published 23rd Feb 2019
Last edited 23rd Feb 2019
For the greater part of 2018, blockchain has held the top spot in social media posts and keyword searches. However, as the year came to a close, Google trends revealed a significant decline in interest. This raises questions over which part of the blockchain wave was just a passing fad and which one entails an actual paradigm shift.
Cryptocurrencies, Initial Coin Offerings (ICOs) and Decentralised Applications (DApps) are among the flourishing economies that the technology spawned at its peak. Let us consider the current state of these three industries and get an inkling of what the future holds for the sector as a whole.
The State of ICOs
The ICOs rose to popularity as a novel form of fundraising for new projects based on blockchain technology. Given its innovative approach which bypasses the highly regulated traditional funding channels, it was a massive success, at least for a time. In 2017 alone, startups raised more than $5.6 billion in funding and over $13 billion in 2018.
As a result of the massive influx of funds into the ecosystem, it quickly rose to fever pitch with over enthusiastic stakeholders who did not want to miss out. But when they failed to realise their lofty ambitions, the hysteria started cooling off.
However, the ICO was not merely a passing fad and still holds great potential. Due to growing regulatory concerns though, it might find ways to adapt to change, probably through security token offerings and other compliant measures.
Following the launch of smart contracts in 2014 with the birth of Ethereum, a new economy sprang to life by virtue of decentralised applications (DApps). Developers could now create and execute new apps without having to build from scratch.
Just like in the case of the ICO, the initial excitement associated with DApps has cooled down. That is not to say however that they are dead. Far from it, there are interesting changes taking place in the arena.
For instance, the rise of bApps (centralised apps run by companies) and cApps (crypto apps) reveals that the best is probably yet to come.
The Cryptocurrency Market
The year 2017 will always be fondly remembered as the year of cryptocurrencies. During this monumental period in the sector’s history, digital currencies soared to unprecedented heights. Out of nowhere, 2018 came with a vendetta, sending the market down with over 80% declines for bitcoin and more than 90% for a majority of altcoins.
While some have proclaimed this downtrend to be the end of the crypto bubble, others have brushed it off citing growing pains for the nascent industry. Admittedly, hype and speculation have made a noteworthy contribution to the market’s growth.
But all that seems set to come to an end in the foreseeable future. A good number of useless coins might fail to survive this endless apocalypse. However, the ones that do will likely go on to make history.
Blockchain is Here to Stay
Though not every aspect of the blockchain wave will live to tell the tale, blockchain as a whole is an inescapable paradigm shift that is here to stay.
It might not take the course analysts lay out or live up to the world’s wild expectations but its disruptive potential is undeniable. The fundamental building blocks of the technology and the force behind the vast economies highlighted above are its strongest points. Separating real opportunities in the emerging industry from all the background noise is a major challenge. But it is the key to riding the blockchain wave with success.