Shades of the dot.com bubble burst..
The Fork in the Road is here for all those ICOs which raked in the big bucks.
No "@ scale" Value delivered 2 years later? I would be worried, very worried 'cuz you're rapidly running out of time and, cash (as well as user patience).
Cashflow is precious in these troubled times, where customers and, users are even more precious as it's very competitive out there in crypto land.
'Me2' value delivery solutions "trying to one up" an existing incumbent play in the crypto space IMO, better be improving value in their market niche by 25-50% to leap frog the incumbent (asap) or else...
BTC or ETH Centric?
Whether you are 'Maximalist' Bitcoin proponent or Ethereum Flippening 'Advocate', matters not. Crypto startups need to be "laser' focused on business best practices to maximize investor and founder, early team returns which means no time for coding 'science experiments' (aka research). Unless you have an unlimited amount of Cash (funded by Big Brother private or public) managing your burn rate (how fast you eat up cash paying for developers, services and equipment to deliver a viable product/service @ scale) is paramount.
Resource limits, balanced with market opportunity and technical difficulty, that 'three legged stool' if you like, on which your differentiated value layer is balanced, is the 'plate-spinning' act all startup leadership teams must address daily, in real time. Try to spin up too many plates at once and, some are bound to fall over as, each requires a specific amount of time, energy and cash to keep the one specific effort(plate) going in concert with the other plates, in order to create the 'ensemble of effort' and 'new symphony of differentiated value' to vault yourself ahead of the competition so as to grab more users and market share.
The Dot.com Bubble Burst, Smaller than Today's Big Bubble Burst, but still a lesson learned, Now Useful in 2020
Way back in the late 90s, startups, after the dot.com bubble burst, were struggling big time with finances AND, were either summarily shutdown (due to lack of performance/realized value delivery) for good (ie-get rid of the competition to others and/or the status quo) OR, did not get additional funding as the clients stopped buying/refused to buy into the new differentiated value these dot.com startups were just starting to deliver, sometimes leading to a distress sale of the startup or its IP "Intellectual Property (or even raiding of its team by the better funded competition), where the Startup and/or it's IP (and key team members) were 'snapped up" at a big 90% discount (M&A "Merger & Acquisition" activity was way up then as it is now) in many startup distress cases (Cashflow shortages, out of runway, due to too high a burn-rate not being cranked back quick (non-essential staff get cut first.. sometimes)).
I lived that dot.com "Alptraum", big time. (go to archive.org 'waybackmachine' and search on www.platespin.com) . So much for the TK Creds. ;)
"Fast forward" to today and it's easy for anyone to see the same "dot.com bust like'" M&A activity is well underway in the Crypto space, albeit largely "under the covers" and 'out of sight' for now. So what's really going on? Let's have a look..
M&A Activity via crypto VCs, Financiers, Exchanges: M&A Opportunity Number#1 in Crypto? -The Inter-Chain Opportunity
As the bigger central banks plan to role out Digital Cash instruments (centrally controlled using PoS type consensus most likley) which will roll through the existing International Inter-Central Bank exchange the BIS, they are busily working with the companies working on fiat-centric gateway services to see how they can leverage "what is already out there and working" in the Inter-chain space.
The China "X" Factor- Chainlink Nodes?- Enabling "Crypto" Silkroad Settlements, driving new Crypto M&A ?
Chainlink, which as far as I can tell is a 100% Chinese government funded concern whose price is manipulated by same is likely the crypto "gateway" aand conversion candidate to be used for their Silk Road initiative settlement layer, where China is now well under way (last 5+ years) building the "One Belt, One Road" new economy, worldwide.
This new China "Silk road" which traverses Asia to tie in India, Africa, Russia and the edge of Europe (Turkey and now Italy) as well span the oceans into Canada, the USA and Brazil, is largely connected via 'transport hubs' on land at the ocean's edge (new harbor shipping infrastructure development). These same hubs will need to "settle' large scale transactions, which today have used a combination of US $ and Chinese Yuan/RMBY as currencies, sometimes together with some gold, where the currency is changing hands for commodities (Oil, Natural Gas, ore, wood, etc..).
BTC Enters the MainStream Settlement Scheme- Worldwide. - Bumps Gold a bit out out of the way?
It's only a matter of time before BTC will be used for settlement, given the runaway deflation of other currencies versus the USA $, while gold price upward growth "suppression strategies" are crumbling in the face of the fact there is more Comex paper than there is physical gold, where the latter physical exchange to support settlement is slow and suffers a shortage of 'smaller' 100 ounce bars, now being substituted by 400 ounce bars (very cumbersome to move between different geographic vault locations).
The use of BTC makes a lot of sense given the physical exchange problems with gold, where such use of BTC will be good for those Crypto Startups building Inter-chain Gateway capabilities with full support of BTC.
But where in the Heck is BTC "Interchain" Functionality?- In SideChains, Sharding or something else?
It's a decent question many investors are likely to ask as they think more an more about "How on Earth is Bitcoin going to Scale to 100,000 TPS" like what EOS has infamously claimed (If you believe EOS in their current state, I have land for sale in Florida (complete with water critters) I want you to look at. The EOS Ecosystem of all chains might get there one day (to 100K TPS) in practical terms, but only with Sharding and SideChains and many Inter-chain Gateways and, EOS need to make it easier for Developers, QA Engineers and DevOps Experts to actually employ their tech in their own solutions.
Seriously, as the Asia and Eastern Economies shift away from US $ fiat being used for settlement of large transactions in the first instance, expect Chainlink gateways to be deployed at least in duplicate, in Data Centres operating on either side of the borders traversed by "Silkroad". Also look for 'oracles', 3rd party external application gateway software to be used to connect existing IBAN 'settlement' gateways to CHAINLINK for used by those European partners (Germany et al) looking to join the Silk road.
The Inter-chain functionality is today offered as its own world by Chainlink as it is by Cosmos and a few others. Is that how such inter-chain differentiated value/functionality will be consumed in the worlds of BTC and Ethereum? Maybe. There is a case that those two primary Crypto worlds BTC and ETH will simply add such value as a "built-in option or sponsor the development and integration of third party "same/similar function" Inter-chain capabilities, modifying sidechains and/or work with each of Chainlink and Cosmos et al, to provide this Inter-chain capability in the context of sharding and sidechain efforts currently underway in both camps.
I say the more "Inter-chain solutions" the merrier (healthier for the crypto market), which is not a BTC maximalist pitch, I know.
My rationale is simple, while BTC is only 10+ years old, actual effective use of BTC @ scale with large $ volume daily is only at best, 2 years old, which means in terms of maturity, years 4 to 6 (2022 to 2024) are likely when we will see who the real leaders and challengers will be when it comes to Inter-chain differentiated value working @ scale, with really decent daily transaction volumes by MANY users across MANY use cases and markets (retail, services, financial, manufacturing, utilities etc.)
Cosmos- The Ethereum Centric Early Inter-Chain Challenger for Settlement @ Scale- "Knobs for Nerds" Everywhere
"The Internet of Blockchains"- (Whatever that means...)
Qualifier, I am still trying to better understand Cosmos and am getting there. That said the COSMOS SDK platform is rich with features, has REALLY big vision, is extremely developer centric (yest another Taxonomy of terms I must learn first before I understand what they are really up to) AND, "out of the gate" Cosmos as we know it today really only works with Ethereum and more easily 'adopted' by the Solidity centric techies, a type of ETH Luddite floating out there is crypto developer land dreaming of (and trying to make happen asap) the "Flippening "
I will save more detailed analysis for a later post on Cosmos, which is more western world centric in its development efforts.
The Purge or Merge- What's it going to be, Crypto Startup?
More importantly there is a 'Fork in the Road' emerging for all crypto startups running and emerging, big time, after a 2 year Whale (big investor) 'pass-card' (love in). As the big fiat cash surges into the crypto space (as a safe harbor against rampant Big Gov/Central Banks fiat money printing eating your buying power) and is re-allocated by the "Wizards of Finance's" VC front men to many ICOs, many crypto startups will be strategically shoved into the "Shitcoin" category for lack of delivery and differentiation these past 2 years and, be left to struggle on their own, where the smart ones with some form of value differentiation surviving only when the realize (quickly) they need to be merged or end up purged, with many departing as as early as now in Q2 2020 and into summer, with, imo, the rest of the purge more or less complete by end of 2021.
2022- The Foundation for rapid Crypto Growth, The entry of Central Bank driven Digital Cash- The Big Show Down
Provided the Inter-chain value adds appear @ scale this year and next , the crypto market stands to see massive Market Cap growth heading upwards starting in Mid 2021, making good on the Keiser and McAfee "wild' BTC price predictions often quoted to be over US $100K per coin and beyond. The only technical hurdles getting in BTC's way will be "inter-chain" between BTC sidechain and sharding instances and the oracles tying themselves into the BTC main chain. The first to "Inter-chain- are likely to be those crypto communities with PoW Byzantine blockchain hard forks of BTC , simply because they really understand how BTC works. Will they write their own? What's the risk? (you could get users migrating away from these hard fork look-a-like coins, or it could go the other way in their favour if they offer more differentiated value).
The Flippening, if it ever happens, an ETH community hope/plan when the entire world of ETH and ERC20 surpasses BTC Market Cap dominance (currently 64%), we will see that surge take place only after the "Inter-chain" gateways prove their ERC20 worth @ scale, likely again starting in mid 2021. Why do I say that? Being an old developer, architect type, and looking at the progress in both camps ( each of which is making good progress) neither have figured out how to scale their own tech, so what do they think they can simply "network" together what's out there with Inter-chain tech any faster. Both have at least 2 major releases and 4 to five minor releases they will need to cycle through (using bi-weekly sprints governed by Agile programming methods and Scrum masters) to get there by mid 2021, again @ scale (for example 100K TPS is a good 'software architecture' benchmark for the entire network of BTC using Inter-chain gateways to aim for, good to 2025, running at 10% capacity "out of the gate" in mid 2021. Same goes for the ETH camp.
The Big Gov/Central Bank Digital Cash Threat- coming soon to an ATM near you, via your Debit Card..
One thing is for sure, both camps better get going, because its alot easier to fashion a centralized private permissioned chain and add private Inter-chain gateway capability and connect them all together as the Central banks roll out their Digital cash equivalent (with unlimited money printing machines attached).
Making your existing Debit Card a "Digital Cash" Wallet has already happened for your local currency. Making that same debit card work so it supports a global Digital Cash currency, or multiple country Digital Cash currencies is technical not that hard, as the terminal you 'tap' or insert into will prompt you with the right display, just like what we see at grocery stores today..
I thought so (cuz my audience is indeed brainy (and polyglot). ;) )
Moving Forward- Toward Mid 2021 and the Big Crypto Market Cap 'Surge': Watch out for the Big "Shitcoin" Purge now, until then..
My small investor advice? Invest in sound BTC, BTC hard forks, and ETH and quality ERC20 altcoins both PoW and PoS and, keep an eye on the rate of feature delivery @ scale of the key "Inter-chain" developments in both camps and the "solo plays".
Does EOS actually count in all this? Maybe but they have a lot of work to do to attract developers and the like.
Cosmos and Chainlink are two solo plays with which you can start, but also pay attention to sidechain and sharding progress in both the ETH and BTC camps, especially when either mention terms such as "Inter-chain like" settlement functionality or similar.
The Economy is about to wake up (checkout #newday2020 on twitter where May 1st, seems to be the day), until then be safe...
Just be sure to filter all your choices through a simple small investor test: Have they (the investment target) really delivered any significant value since two years ago (Jan. 2018) AND, is the value truly differentiated (Me2 versus Unique) AND, actually wanted/useful by the many (and not just the few).
TK over an' out.