Over the last year we have seen the cryptocurrency market plummet from its all time high, to a fraction of it. Most critics have used this opportunity to say “I told you so…”. However I would say something different.
Blockchain (the underlying technology of cryptocurrency) has been waiting for a chance to spread its wings and differentiate itself from strictly a payment protocol. Supply chain, digital identity, P2P health records, decentralized energy and housing markets have been discussed pretty heavily, however we haven’t seen much progress in bringing a product to market. I would hazard to say that this is because the majority of the development that has taken place has been split between which project will succeed. The front runners, Ethereum, Hyperledger, Aion, EOS, Neo and others that I have missed, are all battling to secure their spot as the “blockchain of the future.” This divided attention has split the time it would take for a project’s mass adoption.
Last year, 2017, was a wild time for everything blockchain. As a founder of a blockchain start up I can speak first hand to the money and opportunities I had in front of me. My company decided against an ICO and to go the traditional venture route. In the short term that was a challenging decision as we were forgoing potentially millions of “no strings attached” capital for the much harder equity raise path. In the long term I think we made the right call as most of the ICO’s were very bullish on the market and are now struggling to build a product.
There are a few clear winners that I would like to discuss, these crypto’s hyper focused on a specific use case that was small enough for them to execute on to start earning revenue. Stellar & Ripple, have built payment rails for international payments with hyper fast transactions and very little fees. Nexo, is a crypto bank that makes small loans based on crypto holdings in your online wallet. Basic Attention Token, is a means to incentivize users to give feed back on marketing material.
What is next?
As these tokens develop a user base and developer community, I think, the next step is for platforms to be built allowing these tokens to do what they do best. I have been focused on decentralized markets for the better part of the last year. My passion project is exploring decentralized micro power grids. Incentivizing the purchase and use of renewable energy sources by powering neighbors’ homes with the excess energy in exchange for a payment token.
One house as the generator, generating electrons which are quantified with a token, supplying neighbors’ homes with energy in exchange for a token with low fees and fast transaction time. These tokens would then be sold on an exchange for the local fiat currency and deposited into the generators mobile wallet (via sms or an app). In developing economies with lots of sun this could be a way for them to be self sustaining as well as lower the cost of the renewable devices.
I expect to see more projects like that one start to appear as the dust settles and companies focus on real use cases for the technology as opposed to having a big ICO.
I hope you enjoyed my thoughts on the future of cryptocurrencies/tokens, please leave a clap/comment if you did!
Crypto isn’t dead it’s evolving was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.