After the Blackout, the Larger, More Distant Stars of Blockchain Follow Close Behind

The sky’s gone out. The second nuclear winter of crypto has begun.

So what does that look like?

Pretty much like every early stage tech bubble that has come before. As the news of regulators taking a closer look spread, the scammy company layer that took advantage of unregulated ICOs has largely disappeared. The crappy company layer, lacking well thought through business plans, basic fundamentals, and enough investor cash to pay seasoned professionals to help orchestrate well planned ICOs and investment rounds are right now starving out. Next up? More investor lawsuits and fraud investigations will come to light as the shake out continues. Eventually, all that will remain will be entrepreneurs truly committed to the space trying to build real companies with whatever money is left.

If you look back historically, it is usually during or after these shake-out periods that the most successful companies are born, Google being prime example A number one. There certainly were a lot of interesting ideas being discussed in the last two years of rampant, unbridled ICO enthusiasm. As the many unsustainable ideas and companies collapse, the best engineers and entrepreneurs will aggregate around the few really good ones. And so will the money. So don’t listen to people who say that crypto is dead, and blockchain is bunk. They said that about tech stocks in 2000 too. The people saying this are usually people who never really got involved or learned much about it in the first place. Now is the time to pay closer attention, and see where the real value is.

It’s still early. Blockchain infrastructure remains largely unbuilt. VHS is still battling Betamax, as companies decide whether to build on Ethereum, Stellar, Cardano, EOS, or Hashgraph. We rewind and repeat the bandwidth and disk space wars, as companies grapple with slow mining speeds and massive electric power consumption. The graphical user interfaces blow. Most normal people still don’t know how to open a wallet, transfer money, or trade tokens. Coinbase only gains you access to a very few coins, and you still need to switch to a different app, and use an exchange token like ETH or Bitcoin in order to buy anything else. No one has properly executed on most of the mega ideas and many more great company ideas remain completely undiscovered and unexploited.

So even if crypto values are down, and no one is trading, don’t look away too fast. A whole new form of capital formation has been invented. Lawyers are working through the regulatory hurdles and more solid deal structures and best practices are emerging. There is a whole new layer of companies standardizing and automating unit, share, and token distribution, and basic regulatory disclosure. Smart people are working on the real problems. It is a new industry, and the fun has just begun.