Altcoin News: Bye Shitcoins, Hello Ecosystem: That’s Why the Situation Is Better Than Expected
The more complex a topic, the greater the danger that general places arise, which reflect only conditionally the real situation. This also applies to blockchain projects and their financing via ICO. A central problem here is the lack of distinction between blockchain ecosystem platforms (set on the protocol layer) and the token service platforms (set on the application layer). Why shitcoins used on service platforms now play a minor role and ecosystems such as Ethereum, EOS or Lisk are more important than ever.
Typical generalizations regarding cryptocurrencies and ICOs are as follows:
- ICOs have failed all the way
- Tokens do not make sense
- There is a lack of business cases
These statements may also be true in parts. The only problem is that they refer to specific parts, areas or companies in the crypto-economy. Specifically, these statements are based primarily on ICOs or token projects that have sprung up on the basis of Ethereum, Services’ ERC20 token, without a substantial token concept. The Mindset: “Tokens at all costs. Business case and community added value will come by itself “, has led to this image damage that has shaped the image outside the crypto scene.
What weight do shitcoins really have?
As much as we like to pull across the many ERC20 token platforms, it should not be forgotten that they make up only a very small part of the crypto market capitalization. If one looks at the top 30 coins according to market capitalization, it is noticeable that the share of “independent” ecosystem platforms is enormously high. The further you scroll down in the ranking table by market capitalization, the fewer ecosystems and native blockchain tokens you find at the other end of the crypto-food chain. The classic ERC20 token born in the ICO hype accounts for only a small fraction of the current $120 billion market capitalization. It is estimated that we are in a much lower percentage range than a year ago.
The same is true for scam ICOs. So many scrap or even fraud ICOs have existed in the past: Few, with a few exceptions, have actually raised a lot of capital at the beginning of the ICO hype (eg Bitconnect). The typical scam ICO is virtually dead or the sums that are collected here are now negligible.
Ecosystem first, application second
However, it would be wrong to condemn applications or services that are based on an ecosystem platform such as Ethereum, EOS or Lisk. Finally, they provide for the final use cases, for the emergence of a crypto-economy. The only problem is that these crypto services build on a previously too weak foundation. After all, a house should not be built in a swamp area, but on a solid foundation.
However, this foundation is not sufficiently available. Among other things, it lacks usability, scaling, and interfaces. The result is service tokens, which, in addition to the often inadequate business case, make no sense. The result we have been experiencing for over a year in the form of the bear market and slow bleeding of these many hopeless projects.
But that also means: It is all the more important that Ethereum develop further. The Ethereum Constantinople Hard Fork will be held with the block 7.280.000, presumably on the 27th of February. Together with Casper and Sharding she initiates exactly the right steps. This groundwork increases the likelihood that in the future applications will be seen whose commercial use is not limited to gambling dApps. Even if the current technological advances, for example in the area of second-layer solutions, blockchain identity or reputation systems, are positive, this development is only partially accepted by the crypto market. Here, decentralized ecosystems can not emerge overnight. The expectations of the blockchain technology are not too high.
Author: Marko Vidrih
@cryptomarks (@VidrihMarko) | Twitter
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