Scams, scaling, and dapps: working on the right things at the right time
An excerpt of recent news:
- 0x, a protocol for building decentralized exchanges, raised $775 000 last year (The news that they raised money last year appeared recently)
- Vitalik Buterin doesn’t fear ASIC mining and Monero forked to circumvent ASIC miners
- Coinbase acquired decentralized app browser/wallet Cipher Browser
- The team behind Modern Tech, a Vietnamese-based crypto company, disappeared after collecting $660 Million through an ICO in an „exit scam”
In other words:
- The industry is interested in Blockchain’s core technological issues; 0x who raised money, working one of the essential features – decentralized exchanges – is one example of that. Besides that, ongoing scalability issues are the general concern in the industry.
- The industry is interested in end-user applications: Coinbase’s acquisition of Cipher Browser is one recent example for that. Semi-useful dapps and tokenized apps are a general representation of that interest (see Appcoins – product rewards matter more than financial rewards and Decentralized applications – “experimenting with blockchain” is more than tech)
- The industry is still uncertain about foundational aspects; “ASIC wars“ (the fight between mining equipment companies like Bitmain and developers like Buterin whether ASIC mining is the future) is one of many examples
- The industry is still wild west: Modern Tech’s exist scam is one of the countless examples. Ongoing changes in regulations across countries is another one. The consequence is loss of trust and consumer uncertainty.
- The industry is still highly experimental: in “Decentralized applications – “experimenting with blockchain” is more than tech“ I argued that, among other things, it is still unsure whether people want self-governance, that the industry’s experiments with new business models (tokens instead of ads) is yet to be proven, and that economic models (how will token value, spending, and saving correlate? – e.g. if people expect a token to rise in value will they spend it?) still require long-term testing.
In yet another words: different industry participants are working on different things. The issues with that, however, is that those things depend on each other. Unless technical core issues (e.g. scalability, decentralized exchanges or ASIC) and market issues (e.g. loss of trust or proof of concepts) are solved, building mass marked ready applications is impossible.