Ever since the sharp rise of cryptocurrencies, most notably with Bitcoin exceeding $10,000 dollars in value, there has been a spike in attention on blockchain technology, perhaps to the point some might consider to be past the point of reason. Jack Dorsey, CEO of Twitter, has made a speculation that bitcoin could replace other currencies within ten years as the world’s single currency.
Companies have been capitalizing on the hype, such as Long Island Ice Tea changing its name to Long Blockchain and On-line changing its name to On-line Blockchain. Even Kodak, a photography company that has been struggling since photography has gone digital, launched a blockchain-powered image rights management platform, named KodakOne, along with a photo-centric cryptocurrency, KodakCoin.
The hopes being put on blockchain, Dante Disparte argues, has gotten to the point of absurdity. Dogecoin, a cryptocurrency based off of the “doge” meme which features the face of a shiba inu dotted with broken English text, saw $5.25 million of the currency traded between March 26th and March 27th. Bitconnect, presented as an investment lending platform for cryptocurrencies, collapsed in January, 2018, leaving some people who invested in the scheme penniless. Disparte even joked, as an example, that at some point someone might make the case for blockchain’s double counting to be able to make sure both sides of a piece of toast are evenly browned.
More than just a Buzzword
Nevertheless, while the astronomical hype has lead to interesting developments in the blockchain industry, Disparte has made a comparison between the hype surrounding blockchain and the hype surrounding the internet during the latter’s earlier days. One might have trouble remembering that companies such as Amazon, Google, and eBay were but the few survivors remaining in a competitive field where thousands of competitors are no longer to be seen. The key feature of the companies that survived and flourished beyond the dot-com was that they managed to use the technology as a background instrument rather than a leading instrument.
Like most start-ups, there are countless blockchain enthusiasts who are looking for problems for their ready-made solutions, rather than leading with problems for which blockchain can be part of the solution.
Enduring business models that emerge are based on simplicity, unmet market needs, perseverance, and plenty of experimentation. Blockchain, Disparte argues, is as much about a culture shift and a state of mind, as it is about technology, cybersecurity, and new ways of transferring value and trust. This is made clear by Bitcoin’s meteoric rise in 2017, based by CME and CBOE’s futures trading platforms.
A new, bleeding edge technology, in of itself, cannot solve all the world’s problems and fill in all the market’s inefficiencies. The more blockchain-based solutions meaningfully tie in with the real world without being touted as a loud, neon-lit buzzword, the better for blockchain, and the better for the world.
There are already thought leaders who are taking a more cautionary approach with the long run in mind. Vitaly Buterin, the 24-year-old programmer who developed the Ethereum blockchain, has issued a cautionary statement about investing in cryptocurrencies, citing that the concept is still new, and therefore, prone to volatility. He has also mulled over the idea of introducing a “rental fee” to slow down Ethereum’s runaway growth. With more blockchain platforms relying on the Ethereum blockchain, there are fears that, if things continue without a rental fee, the increased amount of data might be too much for the network to handle.
The speculation and the hype surrounding blockchain has risen to the point of absurdity, at least according to Disparte. Blockchain has been utilized as a buzzword by some companies to raise stock prices and has been speculated to be the world’s proverbial cancer cure. Such hysteria has existed during the early days of the dotcom boom, and while the tech companies that survived went on to flourish and change lives, they used the technology in the background as a way to solve existing issues, rather than generating one out of air.
Perhaps, with the sustained drop in cryptocurrency prices in March, 2018, the hype surrounding blockchain might be curbed. People like Disparte might consider that a good thing, as focus could perhaps shift to those who are serious about blockchain. When people no longer have to specifically mention blockchain to successfully deploy it, that may be the moment when fundamental change will come.