With the recent explosion in ICO’s and mainstream media attention on Cryptocurrency, there is an ongoing debate as to the merits of the ICO market and whether ICO’s are good or bad for Cryptocurrency in general. I would like to suggest that there is an additional viewpoint that is not being widely discussed and perhaps should be.
Recently I found myself trying to explain to a friend what Blockchain technology is and how it can be used. He wanted to hear about practical examples for its application. As I ran through examples of ledgers, health tech, real estate, smart grids and smart contracts, his answer was always the same: “That can be done today without Blockchain”. People want to create these applications today because of Blockchain. And for that I thank Satoshi. But how is this relevant to the ICO debate?
The Year of the ICO
2017 has thus far been the year of the ICO. Last year we saw ICO’s launching every few weeks and struggling to raise their minimum funding levels over the course of weeks or longer. Today we see multiple ICO’s a day with all of the tokens selling out in as little as a matter of minutes. Traditionally three metrics are used as measures in the ICO debate:
- Valuations of these ICO’s
- Use Cases
- Prototype or Minimum Viable Products (MVP’s)
Today it has become commonplace to see an ICO raise tens of millions of dollars in a day for an idea that has no clear existing use case, and is based on the promise of a prototype to be delivered in the future. For traditional investors, this is anathema to everything that they understand about value and as a result many are labelling ICO’s as ponzi schemes or scams.
The Future of the ICO Industry
Whether we will see the hand of government and regulation intervene or thousands of people will lose their money or a new generation of millionaires will be created, I don’t know. But, I suggest that there is an additional benefit to the current climate regardless of outcome and that is that the potential of ICO’s has captured the imagination of a new generation of technical wizards.
The Coming Explosion of Intellectual Capital
Based on this I hypothesize that 2017 and 2018 will see one of the largest migrations of intellectual capital that the modern world has seen. Primarily developers and graduates – but also all types of professionals will give up their day jobs or known career paths for the opportunity to create something in Satoshi’s image. Personally, I don’t believe we are anywhere close to a bubble and in fact not even near full momentum yet. As the ICO space accelerates and money keeps pouring in, I expect to see more ICO’s, more inventive applications of the technology and more disruptive collaborations in all sectors.
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