Despite the fact that Bitcoin has been around for over 10 years, it didn’t really creep into the public’s awareness until the end of 2017. Due to the mania surrounding the cryptocurrency craze of 2017, the price of Bitcoin shot from $969 USD at the beginning of the year, to over $20,000 by mid-December. Shortly after, the price came crashing back down, bringing with it the hype that surrounds blockchain.
So, what does this all mean for blockchain technology? Apparently, even with a current lull in the media hype, venture capital funding for blockchain technology is at an all-time high, with over $1.3 billion invested into blockchain startups so far in 2018. This is a clear sign that the big players of the tech world are still very hungry for what blockchain has to offer, even if the media has focused its attention elsewhere.
In 2014, cryptocurrency saw a similar, albeit smaller, wave of attention. This initial wave led to a large price spike followed by a crash. After this first wave, many investors left. However, those who saw the potential of blockchain technology stayed, and many became the people who helped usher in the 2017 wave of innovation and adoption.
If one lesson can be learned from the first wave of adoption and investment seen in 2014, it is that when the market is at a low, it’s time for those serious about the industry to dig in their heels and start to create products that will shape the future of our society. Those who do so stand to reap the biggest gains from the next big wave.
“Innovative pioneers catch the largest worms, but most pioneers must experience mockery, cold-shoulders, and even dark moments. If every venture could be accomplished in a month or a year, then everyone would be a pioneer,” declared Jimmy Zhong, Co-Founder and CEO of Internet of Services Token (IOST).
So, what are the new wave of blockchain companies like IOST working on? They are creating what is known as blockchain 3.0, essentially taking the torch from Ethereum, aka blockchain 2.0, and attempting to overcome some issues Ethereum faced in terms of scalability. The trick here is that they must also maintain a high level of security.
Ethereum represents a huge leap forward in decentralized technology. However, immediately following the massive wave of innovation and development built on top of Ethereum, the network started to show signs of its limitations. The best, and cutest, example of this is CryptoKitties, a cute game that allowed users to purchase, breed, and trade collectible kittens on the blockchain. The game was so popular that it clogged the Ethereum network with transactions, bringing it almost to a grinding halt.
One victim of the CryptoKitties craze, SophiaTX, had to delay the launch of their initial coin offering (ICO), a type of blockchain-based startup funding. Imagine your company has plans to raise tens of millions of dollars using the Ethereum network, only to have them spoiled by a bunch of digital kittens. Obviously, this led many to wonder – is Ethereum ready for real-world applications?
Although Ethereum has a massive team of developers working to solve its issues, fixing a blockchain once it’s been launched has been compared to changing the wheels on a moving car. Is it possible? Yes, with enough ingenuity almost anything is possible, but it’s easier to just create a new car with wheels that work. Blockchain 3.0 is the new car with the new wheels that work.
Blockchain 3.0 promises to bring in a new wave of development, with real-world applications that can truly scale. For example, the blockchain-based content distribution will revolutionize the dynamic between user and service provider by creating an ecosystem where the economic value of the content produced by individuals is funnelled back to the users. Or virtual product exchanges can provide a platform for the online trading of goods, such as game cards, rewards, copyrights, etc. Trading on a virtual product exchange eliminates intermediaries and enables simple, fast, and secure peer-to-peer transactions.
So, is the blockchain craze over? Not even close – it’s just getting started.