Beyond the boring blockchain bubble

The silly season continues. Speculators are piling into the cryptocurrency space in the hopes ofsometimes very literallymaking money fast. As I write this Ethereums value has halved since June but is still 20x since January. Litecoin is up 12x since then. Even Bitcoin has tripled, again. It seems like everyone now has an opinion on, and a position in, cryptocurrencies.

And hey, if you want to speculate, and casinos seem too sedate and controlled to you, then more power to you, jump right in. But for those of us who are interested in the technology, not the money who think that blockchains are primarily interesting because, unlike most modern technology, they decentralize power so far this has actually been a mostly disheartening year.

This has been the year of the ICO, in which an astonishing amount of money has been raised by the issuance of new cryptocurrencies in exchange for existing ones, the value of which is then inevitably measured in US dollars, which says something. Tezos, which is basically a more flexible Ethereum (just as Ethereum was, to vastly oversimplify, a more flexible Bitcoin) raised ~$230 million. Bancor, which enables anyone to create a new type of cryptocurrency, raised ~$150 million. Status, an open source messaging platform and mobile browser to interact with decentralized applications that run on the Ethereum Network, raised $95 million. TenX, Making Cryptocurrencies Spendable Anytime Anywhere, raised ~$80 million.

Do you notice anything that these massive fundraises have in common? Thats right; theyre projects which benefit cryptocurrencies which manipulate and/or hope to supersede other cryptocurrencies. Much, if not most, of the big-money high-profile ICOs this year have been self-referential Crypto Inception. Theyre built on the (often unquestioned) assumption that decentralized blockchain apps will be widespread and enormously valuable, and therefore, blockchain tooling and infrastructure will be as well.

That implicit assumption sounds nice; it even sounds plausible, if you squint the right way and accept a few uncomfortable assumptions; but uh tooling and infrastructure for what, exactly? Bitcoin has fought its way into a valuable and important niche as a widely recognized, fairly widely used, decentralized currency and alternative to gold, which is remarkable although as pointed out by Adam Back, CEO of Blockstream, crypto OG, and generally extremely perspicacious guy, the rise of other cryptocurrencies is arguably a threat to the whole notion of blockchains-as-currency:

When you get beyond Bitcoin, though, and more specialized currencies such as ZCash and Monero, what exactly are blockchains being used for? Where is the colossal value implied by these eye-popping valuations for ICOs for blockchain tools and infrastructure?

Well. Uh. About that.

As we will see, most of these projects are unlikely to be useful. And of those that have a chance of being useful, most dont seem to clearly need the tokens that were sold and dont have a clear path to provide value to the token holders, or are likely to be quickly forked into less rent-seeking forms.

Thats from a pessimistic but trenchant analysis by Lyle Cantor a whopping six weeks ago. It does not seem any less accurate today. Consider the forthcoming Filecoin ICO; then consider the analysis Filecoin doesnt want you to read. Does this still seem like a healthy market to you? Does it really?

(Aside from this parenthetical Im not even going to talk about the millions of dollars worth of currency that has been stolen or outright lost because of bugs and/or insecure code. Im actually not too concerned about that in the long run. Every new technology is ridden with security flaws early in its lifespan. Think of cryptocurrencies as a technology with massive built-in bug bounties.)

Most blockchain apps weve seen to date which arent focused on the cryptocurrency space itself address the same few areas: namespaces, identity management, decentralized storage, decentralized cloud computing, and prediction markets. What concerns me is that it remains at best highly unclear whether a decentralized solution is better in any of these areas than a centralized one, for anything more than a small minority of users. As Ive said before: when it comes to consumer apps, blockchains are the new Linux, not the new Internet.

The calls for a glorious fully-tokenized fat-protocol future are stirring. I want to believe. But when the rubber hits the road, and they consider concrete examples, these glorious futures tend to come to a screeching halt. They talk of value being shared among all users of the network, instead of accruing to a single company but they tend to elide the fact that such a network would be slower, more complex, and harder to use, in exchange for very little end-user value.

Consider Facebook. Imagine that Facebook was a decentralized social network that returned fully half of its revenue (not profits, revenue) to its users. That means the average Facebook user would receive a whole US$1 a month. That is not enough to make people want to use a clumsier, slower Facebook that innovates far less rapidly. It isnt enough for decentralized networks to be more equitable. They have to be better. Or they have to do something that centralized networks cannot.

Note that thus far Ive been talking about public, permissionless, fully decentralized blockchains. Private blockchains are a different story. Their obvious application there is to replace the multiple systems involved in any given type of financial transaction with a single shared blockchain. For instance: any given credit card transaction requires systematic coordination between five different parties, as entertainingly related in this recent video from noted cryptocurrency champions Andreessen Horowitz. It would be simpler, more efficient, and presumably cheaper for all concerned, to use a common shared datastore such asyou guessed ita blockchain.

But as for new applications of the technology

well, thankfully, largely orthogonal to the crypto/ICO bubble, a few have in fact arisen. There is Braves Basic Attention Token, which is nothing less than an entirely new business model for online advertising. There is Grid+, which leverages the Ethereum blockchain to give consumers direct access to wholesale energy markets; its early days yet, but the interesting thing here is that the energy market is, when you consider the growth of home solar, also permissionless and decentralized; it seems like a natural fit.

Most interesting of all, there are multiple initiatives trying to give Ethereums smart contracts code which runs to conditionally perform transactions, or not, depending on certain criteria the actual force of law. OpenLaw from Consensys. The Accord Project. And Mattereum, from Ethereum release coordinator Vinay Gupta and crypto-accountant-philosopher Ian Grigg among others, which:

is the first Internet of Agreements infrastructure project, bringing legally-enforceable smart contracts, and enabling the sale, lease, and transfer of physical property and legal rights achieved by using natural language contracts which specifically delegate legal authority to two external systems: the smart contract on the blockchain, and an arbitration association which handles disputes.

The kind of blockchain true believers who cause my eyes to roll violently are fond of saying things like code is law, which, um, good luck convincing a judge of that. But explicitly incorporating code as law is a far more interesting and productive approach, and opens a road to a whole new panoply of applications and possibilities. Which is supposed to be the whole ultimate point of new technology.

So speculate if you like, but dont pay too much attention to valuation bubbles or cryptocurrency prices or even ICOs. Conversely, dont be dissuaded by the recent surreality there into thinking that the whole blockchain sector is nothing but snake-oil Dunning-Krugerrands. Once you get past the current wave of sheer ignorant greed, I promise you, youll find a lot of interesting things going on.

More From this publisher : HERE

 


RELATED PRODUCTS
  • Time To Make Bank... Again: Surviving The Final Bubble.
  • 30 Days to the Bubble Butt of Your Dreams.
  • Destroy workout plateaus and trash boring and outdated interval workout with 51 news
  • Speak Spanish In Minutes - Interactive Course - Join Over 1,200 Students.
  • 33 Gluten-free, Dairy-free And Paleo Sauce Recipes To Make Your Meals Insanely Delicious
  • Packed full of the info you need for profitable horse racing
  • Renegade fitness model fights back against the powerful supplement and fitness.
  • Learn How To Make Over 200 Juicy, Mouth-Watering Paleo Recipes You've Never Seen or Tasted Before
  • Clickbank Ads
     

    If you like our content help us with a share… or two …  

    Also -  I have some free stuff for you .......

    Nr 1. In This FREE Report you can Discover:

    Secrets to acquiring the freshest, hottest leads via YouTube In-Stream ads quickly and easily! Best secret tips for the most effective targeting for your ads! Totally legal, but little-known method for literally stealing traffic from your competitors! Get more traffic to your videos and landing pages without spending a fortune! And much more - all within this special FREE report!

     

    Nr 2. Did you know you can Absolutely EXPLODE YOUR EMAIL LIST FOR FREE with UNTOUCHED offline sources?

     

    Nr 3. The #1 secret to becoming an affiliate superstar - Earn your first $100 online – without a dime to invest.

    If you’re still looking to “make it online – I have just the thing for you. It’s a video series that shows how to make your first $100 online – even if you don’t have a dime to invest. Yes – nothing.  Free.  Nada. Is this possible? You bet. It’s the most powerful system used by those “in the know”. Good things don’t have to be difficult. And they don’t only come to those who wait. Have A Look

     

    Nr 4. Top 10 Email Marketing Mistakes. Which of these mistakes do you make?

     

    Nr 5.  You can learn about : The hottest social networking site that will send an unlimited stampede of traffic to your site - for FREE! How to quickly locate a swarm of hungry buyers using "information portals"! The fast and easy way to use simple images to siphon targeted traffic, on command! Learn how to get the most possible traffic from Instagram, and make sure that traffic converts! And much more ...

     

    Nr 6. It’s no secret… Facebook is an incredible place to get tons of free, viral traffic. But… most people are going about it all wrong.  How many of these mistakes are you making? Download the free report to find out.

       

    Nr 7.  Special free report .  It's called "Operation Midas Touch" and you can download it here...

    The report features a surefire method for generating at least $1000 per week online,without a website or product of your own!

    Nr 8.  Instagram is still one of the hottest ways to get a LOT of traffic fast. All by sharing images. Sounds easy enough, yeah? Well, yes and no. If you want to really start driving a lot of  traffic and making sales using Instagram then you should download this report.

    Nr 9.  When it comes to creating a product online there are so many ways to approach it. Wouldn’t it be great to just get the meat of it all so you can get started faster? Well, the good news is, today you can download a guide called the Product Creation Formula Quickstart Guide. It’s as the title suggests - a Quickstart guide. You’ll get a list of action steps to take right away. Download your copy today !

    Nr 10. Would you like to finally USE all of that dusty PLR you have sitting around on your harddrive? Or maybe find the resources for the best PLR available - at the best prices? What about how to use that PLR to make you money with just a few minutes of work. Well, you’re not going to want to miss this!

      Nr 11. Buzzfeed’s top post has more than 21 million views. Think about that for a sec… ONE of their articles has had over 21 million people who have read it! And they have thousands of articles... what would you do with that kind of traffic? A friend of mine hacked their method and was able to use it to get 11,592 targeted new subscribers in 2 weeks on their very first attempt!

    Nr 12. Push notifications are one of today's hottest trends in website traffic and conversions, and for good reason. Studies have shown that as many as 40% of people will opt-in for push notifications, which is about TEN TIMES the rate of people who opt-in for emails! That’s huge! Not only that, but they're also highly effective at pulling clicks, as well. Some studies have shown CTR at an average of around 40%, with highs of as much as 80%! Again, that’s huge!

    Nr 13. Would you like to know how to get more money from the exact same number of website visitors you’re currently getting? Even if you’re website is getting as few as 1-2 visitors a day, this report will show you how to increase your profits using these few handy hacks.

    Nr 14. People have now realised that it's not the size of the list which matters, it's the quality. ... and the only way to create a quality list is by launching your own products. Let it be $7 ebooks, $17 info products, $27 video training product or software's... all of these work. My good friend Kevin Fahey has is revealing how he's launched over 20 products in the past 4 years, many of them top sellers. Needless to say he's banked a handsome amount in this time.

    Nr 15. Do you ever feel that the man you like or even love, just doesn't see you or desire you in way you want him to? Or... maybe you're able to get a man's attention though not the right kind of attention? Or... maybe you're still single because you wait and wait for men to approach you first? What you may not know is that the way we flirt will either attract the "wrong" man for us or the "right" man.

    Nr 16. When it comes to getting sales and leads online, there is ONE thing that 95% of marketers use... it's called a LIST. My friend Jimmy just released a free book that explains WHY a list is important and how YOU can build your own list. It's available right here (and it won't cost you a penny)

    Nr 17. If you have tried everything, and still aren't able to get your Ex back, then you need to pay attention.

    Nr 18. What if I told you that you could make ANY woman WANT to do ANYTHING for you? Would you think I'm crazy? Well... what If I told you that you could also make her LOVE every minute of it and come back for more?

       

    Nr 19. I have a special free plugin for you today. It's called "Covert Hover Mini"

    This plugin will triple your blog traffic by compelling your visitors to share your images on social media. This is some really clever stuff and it works like a charm. After you grab your free plugin, don't  forget to read the free bonus report as it will show exactly how and why this strategy works like crazy.

    Nr 20. The days of being able to get away with a basic WP theme and a pic or two are gone, your site needs to look good. Even Google are looking for you to have engaging graphics on your site. But getting good quality graphics made for your site is a pain, AND it will cost you both time and money (if you outsource it). But I have a special free download for you today. A virtual treasure chest of over 21K profit pulling graphics you can start sing today to generate more traffic & sales!

    Nr 21. 20 professional full HD background videos. These background videos are perfect for giving your videos that extra kick they need to stand out from the crowd Oh yeah they are in full 1080p HD too, I hope you'll enjoy them.

    Nr 22. If you've ever failed to create a WordPress site of your own or typically waste hours & even weeks trying to figure it all out on your own....

    Nr 23. No doubt, you've seen all of the video launches lately! There is a reason for it... Video marketing is a GREAT way to make money, and with the recent creation tools making it super accessable for anyone to get started... It's no surprise that more people are making videos. However... there is a missing element to most video marketing products...

    Nr 24. For the first time ever... You can get the straight scoop on how someone is selling over $1,000,000/year of t-shirts on Facebook!

    Use them  .... and have fun !