Patience is said to be a virtue. But markets, or at least some of the markets and participants we hear about on a daily basis, like to make quick profits. Long-term investors may sleep better at night, but they don’t get much attention.
But patience pays off when it comes to cryptocurrency development. The network, which launched in beta with big promises of rapid growth, has languished due to rushed design.
Some have criticized the crypto ecosystem for its apparent lack of practicality (despite global evidence to the contrary). They criticize the crypto industry for hiding behind the “still in its infancy” excuse.
They are usually steeped in the spirit of the traditional marketplace, seeking tangible, visible results after only a few years of evolution, and if such results are not realized, they will never be. I think it’s proof of that. Recently, I heard someone say that the Internet didn’t take long to get going.
Contrast with the Internet
that’s not right. In 1969, the ARPANET, which preceded the present vast Internet network, sent its “first message”. html and the first globally accessible website came 22 years later. Seven years later, a prominent economist argued that the Internet was unlikely to matter.
Crypto assets, on the other hand, are only 14 years old in a development process that started in 2009 by processing the first Bitcoin (BTC) transaction. Imagine what the industry will look like in 2031, 22 years after the first deal, the Internet’s “first message,” and what criticism it will receive another seven years later. Blockchain is just getting started.
For further evidence, take a quick look at crypto-related news headlines. No matter which day you choose, you are sure to find multiple evolutions of existing blockchains, new blockchain designs, and use case discussions.
Even the oldest blockchain, Bitcoin, is still evolving. There is currently a heated debate in the community about whether the Bitcoin blockchain should be used for NFTs. On the one hand, there are those who believe in the power of evolution, experimentation, and the absence of administrators. There is
Additionally, there are minorities who insist that bitcoin will never be used for payments. But the reality is that many people in emerging markets, and even less-new markets, are already using them to make payments.
In other words, even Bitcoin continues to be tested and expanded on its technical potential, and its practicality is still being debated.
Other large networks, such as the Ethereum blockchain, are in even more flux. Upgrades that change its functionality include drastic changes to basic functions such as address management, rapid growth of Layer 2, increased experimentation in security and privacy technologies, new applications emerging, modifications to existing applications, ambitious Such as the emergence of such an “Ethereum killer”.
Thinking in cycles of technological innovation
How could it be early days when we’re discussing technical standards, let alone applications? Historian and economist Carlota Perez categorizes the cycle of technology diffusion as follows:
The first stage is the introduction stage when the infrastructure is developed. Then comes the deployment phase, in which the technology is widely deployed.
Clearly we are far from widespread diffusion. We can’t even agree on what that means. Not only is it in the early stages of adoption, but it is also establishing a new technology platform with fragmented efforts pursuing emerging use cases on a fragmented global stage.
Related article: Turning point of the crypto asset revolution[Opinion]
Moreover, it has faced strong resistance from regulators. This is frustrating, but also understandable. Blockchain technology does not improve any product or make people move faster.
Its main purpose is to transform the way we transact business, which is why blockchain technology is seen as a threat by incumbent (financial) administrators. There is no doubt that finance should change slowly. Because the risks are too great. But resistance to change also poses a real threat to social cohesion.
Anyone with any understanding of history knows that our civilization operates in a cycle driven by radical new technological innovations. It remains to be seen whether blockchain technology will mark the beginning of a new cycle or continue building on the cycle started by the internet. I personally think it’s the former, but either way, it’s only been 14 years since it started, so it’s still early days.
The critics are correct that they use the “early stage” excuse to excuse bad behavior and lax code verification. Just because an ecosystem is immature doesn’t mean it can’t be better.
But conversely, we can criticize those who criticize us from the outside for not trying hard enough and not succeeding. Vested interests that prioritize static over dynamic, and vested interests that prioritize convenience over meaningful things can be criticized.
Opportunity to invest in early-stage technology
In 2014, venture capitalist Marc Andreesse likened the state of Bitcoin back then to the state of the internet in 1994. I disagree with his analysis. At the time of his remarks, Bitcoin was still figuring out what it wanted to be and how it could become useful.
And many failed to invest in early Internet companies. Such opportunities were limited to venture capitalists and qualified investors.
But with the blockchain ecosystem, investing in nascent opportunities is now open to anyone with internet access in the world. And unlike the 1990s, instead of investing in the containers and wrapping paper that represent technology, we can now invest in technology itself.
When will it stop being early stage? When mainstream coverage becomes as much about adoption and new applications as asset price movements. When technology no longer intimidates those interested in cryptocurrencies. When regulators see new financial applications as an opportunity rather than a threat….
At this point, those days may seem far away. But that is not the case. Five, ten, twenty years from now, the crypto ecosystem will not give up or slow down.
Anyone who has developed something durable knows that perseverance at scale wins. And change feels like it’s still ahead, but suddenly you realize it’s happening quickly.
Mr. Noelle Achesonis the former Head of Research at CoinDesk and Genesis Trading.
｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
| Image: Federico Respini/CoinDesk
｜Original: Yes, Crypto Is Still Early