The popularity of electricity took 46 years, the popularity of the phone took 35 years, the TV took 14 years, and the Web took 7 years to penetrate the market of a quarter of the world. Therefore, we expect that for cryptocurrencies, it may take another 15 years to reach the level of Internet penetration today.
The history of the Internet revolution is based on Brian McCullough's book How The Internet Works. Mark Twain once said: "History will not repeat itself, but it will rhyme." We tried to outline some similarities between the Internet and the blockchain revolution to help entrepreneurs and investors better understand the technology cycle. .
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Yahoo was originally created by a hobby. Two students Jerry Yang and David Filo, who were studying at Stanford University at the time (1994), collected and traded new web links in earlier networks. After discovering the first web browser, Mosaic, the two became very obsessed with the World Wide Web.
At the time, people could access existing URLs in a matter of hours and generate very few new URLs every day. The goal of Jerry and David is to find the best URLs, sort by category, and edit them into a list. After word of mouth, their public website directory quickly spread among the earliest users. In a way, the first version of Yahoo is more like a "glorified list" than a technology company, but by providing a collection of URLs scattered across the network, they provide powerful value, which makes They became the first promoters to have an advantage during this period.
Vitalic co-founded Bitcoin magazine in 2012
Similarly, Ethereum co-founder and chief scientist Vitalik Buterin originally wrote a forum article for a bitcoin blog, which is also a hobby, and each manuscript can earn 5 bitcoins (about 4 dollars at that time).
The rest of the story is what you know. The cryptocurrency quickly became something he was obsessed with, and he kept feeding the bitcoin blog until it ended up being closed due to the lack of mainstream attention in Bitcoin. Soon after, Vitalik Buterin co-founded Bitcoin Magazine and wrote as the first editor. In the process, he proposed the idea of creating a cryptocurrency that transcends bitcoin and supports financial applications, and in 2013 published a systematic white paper called Ethereum.
Larry Page and Cher Gabrin, the founder of Google
Compared to other existing technologies, university research projects often produce groundbreaking solutions. In 1995, Google's founder Larry Page and Sheer Gabriel met at Stanford University and looked for topics for monographs. They realized that the web consisted of links that link one web page to another. The paper can cite other reputable articles to construct arguments, and the academic community inspires them to sort the importance of the number by the number of citations. Conversely, when there are more papers citing it, this paper can have a higher visibility.
Larry and Sergey created the strongest search system, sorting the pages by their importance in the world, surpassing any search engines that existed at the time, such as Yahoo, Excite, Lycos, AltaVista, and so on. They tried to solve some interesting problems and gave some compelling ideas.
In the blockchain sector, some projects from academia include Algorand (MIT- Silvio Micali), Oasis Team (University of California – Dawn Song), Thunder Core (Cornell – Elaine Shi and Rafael Pass) and more.
Photo of w00w00 team 2002
It turns out that many groundbreaking ideas come from technology communities that trade hackers and share new ideas. At some point between 1997 and 1998, the first Internet service to share music files (later inspired by BitTorrent) Napster founder Shawn Fanning was invited to join the private IRC channel called w00w00, a hacker group online conference place. The members of w00w00 were made up of anonymously hacked children, who later formed a number of technology companies, from WhatsApp to Arbor Networks.
The emergence of the blockchain is similar to this. In 2008, a person used the name Nakamoto to send an academic paper to the cryptography mailing list, in which he proposed a number called Bitcoin. cash. Another example is the anonymous creator of Tom Elvis Jedusor (the name of Voldemort from Harry Potter) who signed a bitcoin research IRC channel in 2016 and published a document called Mimblewimble that provides a succinct Different blockchain methods, which later led to the creation of the Grin and Beam projects.
Former employee of a successful company
The famous "Paypal Mafia" and "Coinbase Mafia"
During the Internet revolution, Paypal's original staff continued to create some of the most successful companies and investment companies. Some examples include: Tesla's Elon Musk, Yelp's Jeremy Stoppelman, Slide's Max Levchin and other PayPal staff members who have participated in the creation, financing or contribution of many well-known companies such as LinkedIn, YouTube, Yammer, Palantir and Square. Therefore, the technicians usually refer to the "PayPal Mafia" that operates today's Silicon Valley.
Also in the cryptocurrency and blockchain industries, former Coinbase employees continue to create key projects and investment companies such as Litecoin, dYdX, Dharma, Polychain Capital, Scalar Capital and more. A similar example is the co-founder of Ethereum, who has continued to create popular projects in the blockchain, such as ConsenSys (Joseph Lubin), Cardano (Charles Hoskinson), Parity & Polkadot (Gav Would / Gavin). Wood).
Successful technology companies, their early employees can expand their business in practice. They have significant advantages in starting a business because they have a strong existing industry network and new potential business models in emerging industries, and they already have hands-on experience.
Scalability and cost
Although today's Internet is very fast, it faces scalability and cost issues in the early stages. On August 7, 1996, AOL's Internet service failed because it faced a large number of users within 19 hours but could not support it. At that time, more and more Americans lived their daily online lives.
AOL was once the largest Internet service provider in the United States, along with Prodigy, CompuServe and MSN. At the time, AOL Internet itself did not crash, but access to it became more and more difficult due to increased demand. This is a big problem for many people who are getting used to surfing the Internet in their daily lives.
This is similar to what happened in December 2017. At that time, the encrypted cat game set off a wave of transactions in the Ethereum chain, which made the Ethereum network fall into awkwardness. Unless you pay a high amount of miners, most users can't transfer money successfully, which makes the Ethereum community full of incomprehensible and lost emotions. The congestion of the Ethereum network has made us realize that the current blockchain network is not scalable enough to support more complex application scenarios.
The two examples of the lack of scalability of the Internet and Ethereum show us how these technologies have become important for early adopters in just a few years, and the market is in desperate need of better expansion plans to support the growing user base.
US Internet and wireless mobile network speed
In the early days of the Internet industry, opening a startup was costly and costly, similar to the early days of the blockchain industry. At that time, the Internet needed a modem (so-called "cat") and a telephone line to dial up, and all online services were connected to the local "cat" in this way, and thus used by people. At that time, the most popular online service was AOL, where users paid $9.95 a month for five hours of unlimited use of the Internet, and those that exceeded the package were charged $2.95 per hour, which is based on today’s standards. The service is quite tasteless.
Over time, broadband with DSL technology finally emerged, expanding the speed of the Internet. By 2014, the speed of the Internet was 200 times faster than in 1999, and the cost was 90% cheaper. Similarly, we have seen the growth of wireless mobile devices over the past few years, from less than 1 Mbps for 2G to 25 Mbps for 4G, enabling new services such as music and video to run on mobile devices. Over time, scalability and cost issues have gradually resolved, making more complex and bandwidth-intensive applications feasible.
Transaction speed of multiple blockchain projects
In the blockchain world, we are still in the early stages of development of this technology. At this point, the challenge of scalability and cost remains a flaw in complex applications and larger users. Low scalability means that developers or users need to compete to increase transaction costs to reduce waiting time.
In February 2019, the average transaction cost of Ethereum was approximately $0.13. If you want to use a complex DApp like the chain game on the Ethereum, you have to pay a high transaction fee. Although not every action has to be done on the chain, there is still an urgent need to expand the blockchain to support the growing number of dapps and daily transfers. Numerous projects aim to increase the speed of blockchain transactions in different ways, balancing the scalability, security and decentralization.
With the launch of EOS and the main wave network (their TPS are 4,000 and 750 respectively), we have seen more complex DApp releases in the past few months, and we expect this trend to continue because A highly scalable blockchain is under development. In summary, different expansion options are being explored, such as novel data structures (sharding, tangling, DAG, Coda, etc.), solutions for Layer 2 networks (sidechain, chain, hash time lock, etc.), and more Efficient consensus algorithms (POS, DPOS, Casper, Avalanche, Hashgraph, etc.) will gradually increase the bandwidth of the blockchain and reduce its transaction costs, resulting in new application scenarios and services.
From 1999-2010, the decline in the cost of starting a startup
In addition, we expect that the cost of opening blockchain start-ups will decrease over time. During the Internet revolution, the average cost of opening an Internet business also dropped significantly, from $5 million in 1999 to $500,000 in 2005 to $50,000 in 2010.
The first wave of cost reductions was due to the emergence of open source software (ie UNIX, web servers and Oracle databases without licenses/certificates) and the rise of Horizontal computing (which meant eliminating the need to purchase expensive Sun servers and EMC storage). Then, the second wave of cost reduction is due to the number of cloud computing, which is promoted by Amazon to provide users with Web storage (S3), processing power (EC2) and the ability to adjust traffic in the cloud.
According to Gartner data, the initial cost of deploying an enterprise blockchain is $275,000 and may rise to millions of dollars. It depends on the blockchain platform (Ethereum, NEO, EOS, etc.), where the simple DApp transfer fee will cost you $30,000 to $50,000, and the current blockchain talent is in short supply and high wages (average $150,000 in annual salary).
Similar to the evolution of the Internet, we also expect that the scalability of blockchain transactions will continue to increase and it will be cheaper to use. As a result, the cost of publishing blockchain projects will decrease. Currently, more enterprise-wide full-stack products (blockchain-as-a-service hosting platforms – Kaleido, AWS, Azure, Oracle, etc), development platforms (NoOps – Esprezzo), middleware (Omnitude), and developer tools ( Mist, Geth, Truffle, Remix, etc) are being released, and more development talent is pouring into the blockchain space.
Education is a fundamental driving force for the spread of new technologies, which reduces the corresponding barriers to entry and promotes a “gap crossing”. In the face of the divide, technology is often treated as a foreign object, and once people truly cross it, it will be seen as something that can be safely enjoyed.
In the early days of the Internet era, Jan Brandt was hired as the vice president of the AOL marketing department, and her task was to increase the number of AOL users. In the process of studying the market, she realized that people didn't know how to use the computer because "some people hold the mouse, just like pointing a computer with a TV remote control, just like the mouse is used to remotely control the computer."
So starting from the most basic place to increase the number of users is very important. Selling a product to a user is no more important than educating the user about what is online. AOL's marketing strategy is to give people a chance to listen to some discs and CDs, and if people are satisfied with them, they will pay for them. AOL has invested heavily in this marketing strategy. CDs are everywhere, in people's mailboxes, on new computers, in magazines, etc., so that half of the world's CDs have AOL logos.
At one time, 50% of the world's CDs had an AOL logo.
The program helped AOL surpass its competitors and increased its users from 200,000 to 25 million in a few years. In short, AOL's activities are a good example of helping younger users who don't know the technology to use the technology by actively lowering the barriers to entry.
In order to draw a world parallel to the world of encryption, we have seen many activities that educate the next generation of cryptocurrency and blockchain users, such as large conferences like Consensus, corporate education by Deloitte or IBM, and image zones. University education such as the Blockchain Education Network (BEN).
Many companies are also trying to distribute tokens and promote cold wallets for free through events. Recently, Coinbase hosted a project to learn about and earn cryptocurrencies, offering cryptocurrency rewards to participants who complete their educational programs. At present, compared with traditional payment methods like Venmo or Paypal, there is still a lot of friction between the blockchain project and the user, and the user is required to have a certain basic knowledge, not to mention the improper key management and the accompanying transaction. The risk is gone.
Learn about 0x projects from Coinbase and earn 0x tokens
We are still accepting a global industry with less than 1% of the industry. Educating the public about cryptocurrency, blockchain, and key management will be an important factor driving industry growth. Just as AOL earns users by giving away CDs, big companies such as Coinbase are also rewarding users with gifts and cryptocurrencies as incentives to help the industry reduce barriers to entry and further promote the industry.
It is undeniable that in recent years, the blockchain industry has made significant progress in addressing scalability, cost and education challenges. Although we are still in the early stages of this technology cycle, we are confident that the blockchain will mature with an Internet-like paradigm, and the scalability will become higher, and will eventually be more economical and conducive to large-scale use.
Emerging technologies give new possibilities and business models that were once impossible to realize. These new concepts and business models often take some time to be validated and require new valuation methods. As the Internet shows us, timing is critical to their success in emerging markets for these new concepts and business models.
The rise of new concepts
New concepts emerge with the development of the Internet and blockchain
New technologies have the potential to create new concepts and business models that have spawned new markets. For example, the Internet has spawned new concepts such as "unlimited selection" (book sellers selling global books – Amazon), or the concept of "timely music" (Netflix for renting global videos). The Internet has made these models possible, and companies such as Amazon or Netfilx understand that customer expectations are always changing, they focus on it and adjust their models to meet customer needs, followed by "search ads." Concepts such as "real-time information", "instant messaging", "social media", "digital advertising" and "streaming".
Although we now take most of the above concepts for granted, many concepts start with an idea and take time to verify. For example, in the early days of the Internet, Jeff Bezos had the idea of "store everything", but felt that it was too grand at first, so he chose to focus on selling books to verify "e-commerce". Business model. Bezos chose books because they are similar to goods, and buyers know what they will receive and have a higher profit margin. Once Bezos verified that "e-commerce" was a reliable business model by selling books, Amazon quickly expanded into other areas.
With the advent of new technologies, the evolution of the entertainment industry
In the blockchain field, as crypto cats became popular in late 2017, “digital scarcity” began to attract attention as an emerging concept. It allows you to have digital cats on the blockchain. It is not a viable idea to have full ownership of a digital asset before the blockchain exists, which is what prompted the entertainment industry to migrate their business models over the past three decades.
In the pre-Internet era, the business model of the entertainment industry relied heavily on sales of physical products such as CDs, tapes, vinyles, and DVDs. With the advent of the Internet, new types of files such as MP3 and MP4, and peer-to-peer protocols that emerged in 1999, piracy began to become obscure, and these files became freely available. The lack of digital copyright protection and the ambiguity of file ownership have forced the traditional entertainment industry to migrate to the experience-oriented model we are familiar with today, based on its services Blockbuster, Netflix, and Spotify. If blockchain technology emerges 10 years earlier, perhaps the digital content we consume today will be different.
Along with the blockchain, new concepts have emerged, such as: “not to be modified”, “final”, “cryptocurrency”, “universal token”, “decentralized financial system” (DeFi), and “decentralized autonomy”. Organization" (DAO). These concepts are now being explored by existing projects in the blockchain field, and time will test their true value.
New valuation method
Fat protocol vs thin protocol
The feasibility of the new business model is not always clear at the outset.
In the early stages of the Internet's development, many companies began to adopt the "paywall" business model, and then gradually turned into an advertising model, as it turned out to be working. The digital advertising business model was discovered and promoted by Wired. In 1994, Wired copied its traditional advertising model from their magazine to their new online magazine (Hotwired), an online magazine that has never been tried before.
Interestingly, in the early days of the Internet, people even liked to click on advertising banners, just because there were very few websites that could explore other pages. Once this new business model is proven to generate significant revenue, many companies will follow this path, especially for emerging search engines like Yahoo, which have been trying to find ways to monetize. In the past 25 years, the market size of digital advertising has grown from 2018 to $27 billion (Statista).
Connectwire's Hotwired.com is the first website to present ads
In the field of cryptocurrency, we have witnessed an interesting new model linked to the token economy. For example, developers of agreements and general-purpose tokens can create value for themselves by acquiring tokens from the first mining. Its profit depends on the token price, while the latter is based on token acceptance, demand size, and market speculation.
This model makes sense from the perspective of decentralization. In this case, the opportunity for the broker to obtain value should be removed or minimized from the system. However, the risks borne by these projects are considerable because their success will depend entirely on the one-time excavation of the tokens, and there is no opportunity to make major business model changes after deployment.
There are also other interesting businesses that we deserve to mention again. For example, the exchange Fcoin has practiced the “transaction-mining” model, which attempts to address the liquidity of the platform by rewarding tokens for user transactions rather than charging fees like most exchanges. The model of the social media platform Steemit is also very interesting. Steemit will reward the user for the content they produce. If the user mortgages their token, Steemit will give them exposure on the platform. All in all, we are excited to see new tokens and business models in this area.
UTXO analysis and market cycle (Source: Delphi Digital)
To predict the price of cryptocurrencies, we have seen new valuation methods, such as the Network Transaction Value (NVT) ratio, which measures the dollar value of crypto asset trading activity relative to the value of the network (promoted by Willy Woo and Chris Burniske). Or UTXO analysis (from the concept of Unchained Capital), which correlates the unspent output of bitcoin transactions with price over time.
Both provide an interesting path to explain bitcoin prices during the Bear Bull Market cycle. However, the issue of how to correctly assess the value of the agreement token remains to be resolved. Should the value of a blockchain be based on the number of DApps built on it, or is it the user base? Or should they be based on the computing resources they provide (for example, the gas charge in Ethereum is considered a computing resource provided by the miner and the storage resource in FileCoin)? Overall, because we are still in the early stages of the blockchain revolution, there is no standard framework for assessing the value of blockchain, DAPP, and cryptocurrency.
Back in the way of the main applications of the Internet era, the pioneers of new technologies rarely survive for a long time, and occupy the products of their main categories. Usually, the products that follow up are living today: Google is winning instead of AltaVista or Yahoo! In the social networking field, Facebook, not Friendster or Myspace, has won.
In the world of technology, the ultimate success of a new idea depends heavily on timing. Making the first Internet browser, Mosaic, a success is the time to be a pioneer in the field. In the 1980s, only four universities received sufficient federal funding to efficiently build and develop the National Science Foundation Network (NSFNET), which is basically equivalent to the Internet. NCSA's fast computer and network connections allow Mark Anderson and other children to conduct good research and have the opportunity to seize this opportunity before the Web era takes off.
Since the underlying technology or infrastructure is not yet mature enough to support its application and reliability, the great ideas that may be grandiose cannot show a matching front-end. For example, in the early days of the Internet when Brodcast.com was successful (the company was founded by Mark Cuban in 1995), streaming media was a very popular concept, but other companies trying to provide similar services failed. For Youtube, which was founded in 2004, its take-off requires the development of network broadband, as well as the combination of C-side video and lens, and draws lessons from Naseter about copyright (the first peer-to-peer file sharing service, but because of copyright The problem was shut down), and eventually its take-off took place almost ten years after its creation. Founded in 2004, Facebook is also a beat to the popularity of smartphones, which provides a more personal, instant Internet experience. If it weren’t for the iPhone to turn on the smartphone revolution, where would Instagram, Snapchat, Twitter, and Uberbe be? Some people think that social media is ultimately mainstream because smartphones are mainstreaming at the same time—the two are at the right time to complement each other.
In the blockchain domain, the mainstreaming of DApp will rely heavily on the maturity of blockchain technology and infrastructure, which provides stability and scalability for some application scenarios. Some ideas may not be feasible until a few years later, and some may take 5-10 years.
In summary, emerging technologies have spawned new concepts, business models, and it is important to evaluate their value from a new perspective, as the previous approach may not be applicable. Many of these new concepts take time to validate, and their adoption is closely linked at the same time.
Internet revolution: the evolution of markets, infrastructure and companies
Are we in 1994?
Interestingly, when Mark Anderson founded Netscape in Silicon Valley in 1994, because of the decline in the technology industry in 1990-1991, he felt that his Internet industry was too late to miss the entire opportunity of the Internet. The current development phase of blockchain and cryptocurrency is most similar to the Internet revolution of 1994, when we invented TCP/IP, HTML, and FTP, which led to Netscape (1994) and Facebook (2004) after comparison. And Airbnb (2008).
In the blockchain space, we are still inventing modules that build the industry and the tools that allow us to allocate computing resources, protect privacy, manage identities, and increase scalability—the breakthrough DApp has not yet appeared, and it will appear in the next few years. .
Perez technology wave cycle (from technological revolution and financial capital)
Although the downside of the encryption market has put pressure on the blockchain, we are still in the early stages of the industry, and the bubble comes prematurely because: (1) despite the fact that most products and technologies are not released, the early liquidity of the token Still quite attractive; (2) The Internet and social media have brought the world closer together, an unprecedented way to accelerate the spread of news in the encryption market and contribute to the global bubble.
However, from a technical point of view, we are still in the “pregnancy” phase of the Perez technology wave cycle, and the “installation” phase has not yet arrived. Because the crazy market did not produce the turning point, the latter includes “significant technical facility improvements and a replicable business model that can serve the project roadmap during the deployment phase”.
The growth of global Internet users vs. the growth of their mapped cryptocurrency users
At present, the acceptance of cryptocurrency is closest to that of the Internet in 1994. In the following 24 years, more than half of the population on the planet has access to the Internet. We can expect the same track to appear in the cryptocurrency world, which may be faster at a faster rate because the world is now more connected, and new technologies have become more popular in the past few centuries. For example, the popularity of electricity took 46 years, the popularity of the phone took 35 years, the TV took 14 years, and the Web took 7 years to penetrate the market of a quarter of the world. Therefore, we expect that for cryptocurrencies, it may take another 15 years to reach the level of Internet penetration today.
From a capital perspective, the amount of money invested during the Internet and blockchain revolutions is also very different. According to CNN Financial Channel, in 1999, $35.6 billion of venture capital flooded into US Internet start-ups. According to CB Insights, $1 billion in venture capital and $500 million in ICO funds flowed into the block in 2017. Chain company.
At the culmination of the Internet bubble in 2000, Nasdaq had a market capitalization of $6.5 trillion, compared to a market value of $800 billion in early 2018. Although the Internet bubble only occurs in the United States, and the bubble of cryptocurrency is global, the former has a larger influx of capital. This is because: (1) it superimposes the bull market of the stock market, Wall Street and retail investors have long been keen to invest money in the IPO of Internet companies and profit from it; (2) a large amount of wealth from the baby boomers of the 1940s or so People, they have accumulated a lot of wealth, managed their retirement savings, and are not familiar with the economic crisis surrounding their lives. In contrast, investors in cryptocurrencies are mainly made up of millennials with less capital. In addition, funds from institutional investors that invest in cryptocurrencies are relatively small, and large populous countries such as India and China lack participation.
Blockchain Revolution: Evolution of Markets, Technologies and Companies
From the above perspective, we should expect one bubble after another in the next few years, because the “successful and reproducible business model” in decentralized applications will be discovered, with a larger institutional capital flowing into the industry. Similar to what happened during the 1999-2000 Internet Revolution.
We can expect the overall market size to eventually exceed 10 trillion. It will be the agreement token (which captures the value from the DApp), the equity token, the generic token (if the model proves to be reliable in the future), and the cryptocurrency (value store – if the bitcoin can become a number The equivalent of gold, its market value can reach 7.8 trillion US dollars) and other components. In general, we believe that we are still in the early stages of the blockchain technology wave, similar to the 1994 Internet Revolution, and we should expect more market cycles to emerge in the next few years.
What do you expect next?
Consensus2018 Conference: Debate between the founder of ConSensys Joseph Rubin and Blockchain Capital partner Jimmy Song on the adoption of decentralized applications
Because the current cryptocurrency market is down, the cryptocurrency and blockchain industries need some explosive applications to reinvigorate the industry. After the dot-com bubble burst, as new wave of Internet startups found their way, people gradually regained their confidence in the Internet, and the success of Netflix and Paypal began to reduce people's uncertainty and bad impressions of the Internet. In the world of blockchain and cryptocurrency, we are still looking for successful applications that demonstrate the value of blockchain and decentralized applications that help the industry regain confidence.
At the Consensus 2018 conference, Joseph Rubin, one of the leading leaders in the development of Dapp, and the founder of ConsenSys, debated with Jimmy Song. Joseph Rubin is a strong supporter of decentralization, while others such as Jimmy Song from Block Capital are suspicious of the popularity of decentralized applications in the next few years. As of now, the unicorns in this field are centralized companies of the traditional business model (Coinbase, Coin, Circle and Bitland). We have not seen a popular decentralized application to replace the traditional company.
Blockchain revolution before and in the future
We will now transition to the fifth phase of the blockchain revolution, where blockchain applications enter different industries and blockchain expansion plans are being developed.
In the first phase, during the period 2009-2012, Bitcoin was released as a new digital currency and proof of concept, and the first users were composed of hardcore technicians, cryptographers, and cyberpunk, who were different. Mailing lists and forums (bitcointalk.org, Reddit, etc.) promote bitcoin.
During the second phase of 2013-2014, as the media increased its exposure to Bitcoin (although many were negative reports), such as exchanges, managed services, and trading solutions began to increase.
The third phase is 2015-2017. The industry is more focused on real-world applications such as remittances, small micropayments, and cross-border payments.
With the advent of Ethereum, we entered the fourth phase, and the new financing tool ICO became the killer application at this stage.
In the fifth phase, we look forward to the emergence of successful DApps, as well as improvements in blockchain scalability, privacy, data storage, interactivity, hosting and user experience.
In the sixth phase, we expect DApp to break the monopoly of centralized giants such as Dropbox, Facebook, Youtube, Airbnb, etc., allowing customers to participate in the digital economy and gain more power.
On the other hand, a successful DApp may take some time to launch because the decentralized application ecosystem receives far less money than the agreement. During the Internet bubble, most of the financing went into applications (Yahoo, Netscape, eBay, Amazon, etc.). Protocol developers (TCP / IP, HTML, FTP) are researchers who receive little or no compensation, and subsequent iterations of the technology are often handled by non-profit organizations. However, in the blockchain field, we have witnessed the opposite. Most of the money has flowed into the private companies that started the agreement development (Ethereum, NEO, ICON, ontology/ontology team, etc.), and many blockchain tools. No ICO has been carried out. A disproportionate amount of funds may slow down the overall development and release of decentralized applications.
“Crossing the Divide”: A vocabulary created by Geolffrey Moore
Overall, in terms of global applications, recipients of cryptocurrency and blockchain are still within 2.5% of the “innovators”. And the world already has about 4 billion Internet users, entering the "late majority" stage.
The next blockchain bubble may bring "early receivers" of cryptocurrencies. With the help of large C-oriented companies (Starbucks, Facebook, Wal-Mart, etc.), the gap may be crossed. Large financial institutions (Fidelity, NASDAQ, Goldman Sachs, etc.), which have long begun to explore blockchain industry opportunities and have a large user base and influence, are also helping this process. For example, Facebook is currently working on a solution that allows stable currency payments on its messaging app WhatsApp. The company is very likely to enter the financial sector, with more than 2 billion users and a huge user base in India (the country's cross-border remittances are huge – according to World Bank data this year, Indians in 2017 Remittances to the home country of $69 billion). We also saw recent announcements by Samsung and HTC to enter the blockchain mobile phone, which prepares for the next round of applications by embedding a cryptocurrency wallet in the Galaxy S10 and Exodus phones.
In addition, we have seen a shift in the mindset of large organizations, especially the endowment funds of universities such as Harvard University, Massachusetts Institute of Technology, Yale University, and Dartmouth University, and they have begun to join the field of cryptocurrency investment. Recently, some of the leading pension and endowment fund consultants have begun to advise clients to invest in the field of crypto assets for a long time. In addition, the Intercontinental Exchange (ICE), which includes operators of several global exchanges within the New York Stock Exchange, recently launched a project called Bakkt, which has just raised $182.5 million in funding to make consumption And institutions can buy, sell, store and consume digital assets. These initiatives will further promote the global adoption of cryptocurrencies at the institutional level and help bridge the adoption gap.
All in all, we are still in the early stages of the blockchain technology cycle, similar to the 1994 Internet Revolution, and we expect more bubbles and greater capital flows to the DApp ecosystem. In addition, we expect to release more DApps in the next few years, some of which will be groundbreaking projects, gradually reshaping confidence in the field.
Large companies and financial institutions are increasingly participating in this area and are likely to bring in a large number of consumers and investors to help bridge the gap and open the door to large-scale adoption. We are still optimistic about the development of the industry and are happy to see what will happen in the next few years.
Author: Remi Gai
Translation: Wang Zelong Mulan
Editor: Jiang Xiaoyu