The Next Step In Crypto's Evolution: Consolidation

Authored by Jan Bauer via SafeHaven.com,

The crypto market has been running on steroids, and like an adrenaline junkie, it risks seriously burning out or suffering a catastrophic heart attack.

In fact, the industry is evolving at such a breakneck speed that Morgan Stanley recently drew parallels between crypto and the Nasdaq prior to the Dotcom crash, saying the only difference is that the crypto market is evolving 15x faster.

Major Shakeout Looming

It's a well-established fact that early-stage industries tend to be heavily fragmented before embarking on a consolidation phase as they mature. But things have been a lot more dramatic in cryptoland.

From just a few dozen cryptos a few years ago, the crypto industry now has a deluge of digital coins with the tally now approaching 2,000. 

The cryptocurrency industry is so heavily fragmented and littered with scams that a huge consolidation exercise is the only way to clean it up.

The DeadCoins websites lists nearly 800 cryptocurrencies that have been deceased, and the list keeps growing.

Explosive growth by ICOs gives you an idea of what is at stake here.

Through ICOs, startups design tokens which are sold in secondary markets via a crowdfunded model. All token sales are powered by blockchain technology. This novel fundraising mechanism has proven very popular, thanks to its key attractions including zero dilution for the owners, strong network effect and high returns. Indeed, ICOs are frequently oversubscribed and have already overtaken VCs as the preferred method for startups to raise equity.

Startups raised more than $5 billion through ICOs in 2017 by selling hundreds of coins in the digital bazaar, and industry experts see this ending in pain and tears for many investors.  

A worrying trend in the market is that a lot of money has been going into weak and unproven technologies that are likely to fail the test of time.

If you want to know how far investors are willing to go with their crypto investments, look no further than Dogecoin.

From 2013-2014, Dogecoin managed to carve a respectable niche in the crypto world as a currency mainly because rivals such as Bitcoin and Litecoin were considered serious assets. Every day, thousands of Dogecoins would zip around Reddit and Twitter. Dogecoin was able thrive for years despite receiving zero upgrades. That surprised even their founder, Jack Palmer.

With so much money being pumped into unproven cryptos, it might take years before self-regulation is able to weed out weak or worthless players.

Cloud Evolution Provides a Blueprint

The cloud industry gives you a good idea of how the crypto evolution might progress.

The cloud begun as a novel concept of remote server access. Once it achieved mainstream adoption, it sparked off an app-building mania very similar to the token mania we have been witnessing with ERC20 (Ethereum’s Token Standard Interface).

But once the cloud ecosystem became flooded with apps and tools, larger platforms created huge networks of native applications that enabled companies to adopt other successful tools via APIs.

Meanwhile, weaker technologies were gradually eclipsed while others were acquired by the titans.

Ethereum co-founder Vitalik Buterin has predicted that at least 90 percent of cryptocurrencies on built on the Ether blockchain will end up worthless. Another Ethereum co-founder, Charles Hoskinson, says the crypto market will first go through a  massive crash before proper consolidation begins in earnest.

Comments

Buckaroo Banzai Bondosaurus Rex Tue, 05/01/2018 - 13:17 Permalink

Expect to see major consolidation around a few dozen cryptocurrencies over the next few years. The cryptocurrencies that are going to still be around in ten years have mostly all been created already. Maybe one or two of the top ten cryptocurrencies of 2030 have yet to be invented, the rest are here right now, just waiting for you to buy them.

This is analogous to what happened between 1995 and 2001. Most of the biggest modern internet companies were started in that timeframe (Google, Amazon, eBay, Expedia, Salesforce, etc). A couple of major success stories, like YouTube and Facebook, were invented in the mid-2000s. Most of what was invented after 2007, i.e., shit like Twitter or Instagram or Uber, will never make a dollar of profit for anybody.

In reply to by Bondosaurus Rex

King of Ruperts Land Exponere Mendaces Tue, 05/01/2018 - 15:16 Permalink

"Consolidation" what an original thought. (Not!) Big bankers wish. Crypto's don't have to consolidate because a computer can handle virtually unlimited number of them. One for each entity you deal with for instance.

The biggest threat to bankers and civilization for that matter is the abandonment of Christian morality and the replacement with post modernism. Pay back a debt? Fulfill a contract? They are racist so just kill them.

In reply to by Exponere Mendaces

Leakanthrophy King of Ruperts Land Tue, 05/01/2018 - 15:29 Permalink

The yellow wrapped chocolate coins have more value than cryptos.

And no need for Photoshop to make them look like coins.

 

NEWSFLASH for all those butthurt coinistas out there: your globalist currency pet project is doomed now with the trend of nationalism and dialing back globalism.

It was global banksters' wet dream wrapped in a cool, groovy, pirate image to appeal to millennials. Suckers... fooled just like indians fooled with shiny beads.

Nevertheless, a few one will survive: ONLY the 100% anonymous, decentralized, anti-51% attack (banning ASICs miners) like Monero for example.

While globalism will be dialed back, those (less than 5 coins) could become the 21century outlawed dark money. Outlawed, because lets face it, 100% anonymous, decentralized, privacy-oriented cryptos can't be traced,controlled or taxed... therefore they will be outlawed.

In reply to by King of Ruperts Land

Exponere Mendaces Buckaroo Banzai Tue, 05/01/2018 - 14:44 Permalink

Exactly.

The long-tail of dead altcoins and shitforks will grow, while a few top dogs will remain in place. The article used Dogecoin as an example, which is pretty stupid -- it was always advertised as a "training wheels" crypto that nobody really took too seriously. The whole thing is based on a fucking meme anyway.

The rest, like Very Wrong Ver's ego-project BCash, will face a winding down as capital exits and the top movers adapt and improve. If you like alts, sure, scalp 'em - but don't get married to them. They're just a stroke away from being made obsolete by new improvements in the top-movers.

 

In reply to by Buckaroo Banzai

Buckaroo Banzai Ghost of PartysOver Tue, 05/01/2018 - 13:45 Permalink

No intrinsic value? That's hard to fathom. Can you name any asset besides cryptocurrencies that can be transferred electronically, directly and with no intermediary, at low cost, and with delivery of full and unique title and possession to and from anywhere on the planet with an internet connection within minutes (hours at most)?

You'd have to be a retard to think that doesn't represent significant intrinsic value.

In reply to by Ghost of PartysOver

Bondosaurus Rex lester1 Tue, 05/01/2018 - 13:28 Permalink

Lester! Baby! Why would I down vote that picture! This is business!

You are right about the intrinsic value. But it is not the value that matters. It is the block chain system that matters. When we had the tech crash everyone was shocked. But people saw Amazon survived. Back then there was no cloud and people would have laughed at a stock that was almost a penny stock having its own airplanes and drones. The blockchain survivor is a ten bagger.

In reply to by lester1

Son of Captain Nemo Tue, 05/01/2018 - 12:56 Permalink

Oh how I love gold electroplated computer printed tin plated slugs that can be purchased for $9,000 with unlimited quantities of a World Reserve Currency...

Then dumped at appropriate times to raise and lower the price at will without ANYONE ever knowing who the owners of those digital wallet(s) are... that has NO REGULATION(S) and is "DECENTRALIZED" in order to "protect" the investor from the banks...

WHO PROVIDE that "unlimited quantity" of a $World Reserve Currency that PURCHASES IT!!!...

                                                          The circuitous logic gospel of Satoshi Scrotumoto

Consuelo Tue, 05/01/2018 - 13:20 Permalink

(1) Crypto ring to rule them all.   Government sanctioned, IRS approved.   You will be in the system, or you will be labeled a criminal - i.e., money-launderer, terrorist, scofflaw, conspiracy-fanatic, ad-infinitum.

RedBaron616 Tue, 05/01/2018 - 13:25 Permalink

The cloud industry is actually useful, backing up data on servers. Crypto is nothing but fiat, wrapped in a pretty digital package, that is no better than any fiat currency.

you_are_cleared_hot Tue, 05/01/2018 - 13:28 Permalink

From a "miner" perspective, No! the Commercial Cloud is not the future for Cryptos. CSPs like AWS, Azure, etc. will "bill you by the byte", expect a Yuuuggeee monthly bill from your local CSP. Nope, the future will be "pirate" private clouds (locally sourced compute and power).

From the "user" perspective, I really don't want Bezos knowing he has a whole crypto currency on his cloud...what could possibly go wrong?? The future of crypto currencies will be obscurity - not knowing where and on what cloud it rides on - that's why I think the "pirate cloud" is where this will be for the long term.

TheytookERjobs Tue, 05/01/2018 - 13:45 Permalink

I just come here to see all the retards say how bitcoin has no future (mirroring the internet retard naysayers back in the day) bitcoin is like gold in a way. Fukin useless good only for a store of wealth. The cryptos these days which are 8 years more advanced then btc will be bigger then the internet. Radix, iota, bitlattice, pascal, hashgraph are the best bets imo.

By the way I'm confused as to how all these new cryptos can all CIA scam projects. Maybe some of you tin foil spastics can enlighten me

snblitz Tue, 05/01/2018 - 14:00 Permalink

Focusing on bitcoin where is the value?

  • irreversible public ledger - no
  • stable currency - no
  • decentralized - no (and suffers from the 51% problem)
  • cheap - sometimes
  • fast - no (60 minutes for transaction confirmation)
  • scaleable - no (7.5 transaction per second max or 20 with segwit)
  • eliminates third parties - no
  • exchanges - risky and costly (though not entirely bitcoin's fault)

https://www.finitespaces.com/2018/01/01/what-is-bitcoin-and-the-other-crypto-currencies/

What happens to transaction costs when the block reward ends?

For miners to keep going without a block reward means a $21 transaction fee.

So your cup of coffee is $5 + $21 transaction fee and 60 minutes wait for confirmation?

The 20 transactions per second is not going to last long with 2 billion users.  Luckily for bitcoin few use it.

 

Exponere Mendaces snblitz Tue, 05/01/2018 - 15:01 Permalink

What a lie-spewing fuckstick. Looks like the Very Wrong Ver gospel is flowing through you like a spastic cultist.

The blockchain is NOT reversible - (This dude didn't even look it up, that's how dumb his statement was.)

Volatility is declining on a long-term basis - last 30 days is 4.57%, most currencies are a bit lower at 3% - hardly out of the ballpark.

Bitcoin is decentralized - https://bitnodes.earn.com/ - nodes all over the world. As for mining, there hasn't ever been a 51% attack in its going on 9 year history.

Fees - Lightning has ushered in 0.00000001 fees, main-net tx fees are very low as well - Lightning is also instantaneous, no waiting.

Scaleable - Lightning is allowing scale to occur apace, the network itself is over 1,800 nodes with over $140k USD notional used for micropayments (which is huge). Segwit also allows scaling on the main-net as well.

Third Parties - Transitory, as the network grows exchanges become less necessary - everything else lives on a node and is positioned for anyone to participate with a low barrier to entry.

When the block reward ends in 2140, the fee market will take over - it already has to an extent in 2018. This is part of the model, if you had bothered to do any research.

Your cup of coffee will be transacted on the second layer, Lightning, at network speeds with a 0.00000001 fee. I hope you can spare that fraction of a cent. :)

And to the last mouth-breathing bullshit point -- Bitcoin transaction volume is just fine -- http://fork.lol/tx/txs - especially compared to Very Wrong Ver's ego-project.

How you can be so deluded is fascinating - cognitive dissonance on full display.

 

In reply to by snblitz