The Rise of Blockchain

They have been 4 long years in this current blockchain tech rise and the public is still in question. Bitcoin will grow, Bitcoin will collapse, all these ICOs are scams, things are happening way too fast…all are common mindsets and conversations among blockchain enthusiasts and investors…well maybe that’s a good thing and here’s why.

BTC & ETH used as a holding and business ledger

Many blockchain corporations are operating through the Bitcoin and Ethereum ledgers. It’s simple, and their decisions can sometimes be affected by ICO deployment.

We notice on several quarters of the year that Bitcoin will grow in value and will shortly be followed by a drop. This is not a phenomenon, it’s simply this:

1. A blockchain company is about to come into existence, they decide on using Bitcoin as a ledger and as a gateway of payment into their own coin.
2. Most ICOs now are capable of deploying several payment gateways into their ICO launch and this makes the variables harder for the human eye to spot….perhaps an algorithmic bot is needed if you wish to trade and make earnings off the fluctuation.
3. As these companies come into existence and enthusiasts or investors participate, the coin gateways’ (BTC, ETH, LTC, and others) marketcap grows. This obviously depends on the nature of and size of the company coming into existence. Variables there are industry type itself, service or product offering, problem/market/solution fit, which finally leads to scalability.
4. The more these ICOs initially collect in capital (dependent on their stated needs), the more the payment gateway is utilized, the more all market caps grow in some form, the more the profitability of that coin. Now as money goes in, money will come out. Investor fiat cashflow goes into btc or other payment gateways. Active day traders will make earnings, sell, and wait for the dip. Coin founders will need to pay developers for pre (if need be) and post development of systems and operations. Salaries of employees also needs to be covered whether in the shape of fiat, btc, or their own coin of the company that shares some value.

The point for these blockchain companies is to grow enough through a crowd fund (ICO) for a reason or another. Either they don’t have enough capital to fund their entire roadmap or their coins are actually used in their service operations and they need transaction traffic. However, here’s the tricky part; what they do with the money is a different story. Remember this saying, theory (research) is essential to the development of progress in whatever you do, but practical work always teaches you more as it’s more hand on and you gain active experience.

This is why whitepaper reading is important in almost all industries, if they have an existing product with a clear roadmap, then you know this company will scale. They know why they are collecting money, where it’s going, and definitely how they should expand operations to gain more money doing their core business whether being global expansion or more consumer reach (For more info on this, read “This ICO is going to Mars“. There are many examples of these companies calibered to have diverse scalable abilities and are of complete different environments; here are a couple:

1. Earn.com

   This is a great example of a scalable project that works in different ventures and has recently been bought out by Coinbase. For the average Joe, it acts like a LinkedIn for the blockchain industry with a minor difference. Earn will pay you for actions or replies on it’s system by other people. For example, if a coin would like to add you to it’s Telegram group (for the purpose of providing more information about its product, or get you to check out it’s whitepaper), they will pay you a dollar to do it (no investment required). So just having to the app and adding yourself to Telegram groups could provide side income for just for having an account. Also there will be some due diligence made by Earn when allowing these coins to advertise on their platform. If you are in the blockchain industry, you will notice many others are on earn as well and you can connect with them, for their price point. They even have a bounce back email service for annoying emails of people or spam you don’t want to deal with. Pick your price, and depending on the market’s need, you could be emailed.

2. Bidooh:

   This concept is a personal favorite. It involves advertising but also bridges the gap of a common global industry problem. Bidooh is essentially an out of home advertising space in the shape of a billboard placed and operating in several countries today like the UK, Czech Republic, and Korea. Here’s the interesting model, you don’t contact an advertising firm or media agency to book the space. Just like how Facebook operates their advertising model and customer journey, Bidooh does just that but displays the ad content on a physical board rather than online on a social network. The ads are based on 10 seconds of impression time and cost a fraction of what you would get charged by agencies. Booking the advertisement is on an app and takes minutes (dependant on where you deploy the ad). Think of it as a Facebook Ad Manager for physical digital billboards, so book your space and see it live along with everybody else by the space. The tech involves a camera to capture some recognition and be able to identify things like age in order to better display the right ad to; the billboard will also collect data about the space to better serve the media buyers.

3. War Field:

   This company is definitely for the gamers out there and especially for the ones extensively niched in First Person Shooter games. War Fields brings the ultimate prize & stake to the test, money. The concept is fairly simple; enter a session (They cost 1 Golder per round), the more you kill, the more Golder coins you get. If you get fragged, then you would need to re-enter a session with a stake of 1 Golder and going. You can start completely free just by following their Telegram or any social accounts; they currently offer 50 Golders per airdrop task. What I really appreciate about this is the ultimate incentive offered; gamers will be gamers, but tell gamers they could make money doing it, and there is no stopping them.

So how can Blockchain penetrate industries and why is market cap so important as a KPI, and more importantly, why does everybody keep saying “we are way too early, so be patient!”

Well for many reasons we currently stand at a market cap of about 215,000,000,000, that’s 250 Billion. Well let’s apply some perspective to this and compare other market caps:

1. Gold:

   With a market cap of about $7.7 Trillion USD, gold in a commodity sense, carries trillions; the entire cryptocurrency market cap would need to be multiplied by 35 to balance. Bitcoin is thought of as a commodity itself, knowing there are 21 million in existence but only 17.2 million have been mined.

2. Global Real Estate:
   

   Holding a total of $217 Trillion USD, 75% being residential, yes people owned. We can now clearly see that the blockchain market is young in terms of financials. If real estate owners with no plans for a lot of land decide to get into concurrency mining, and have the ideal situation to do it (electricity cost), then there is some expansion in the stability of networks as the mining crowds are growing, and so is the cashflow.

3. Business and Stock Trade:
   

   At about 100 Trillion in value, we should start to imagine that if blockchain was to ease business and automate operational functions through a decentralized private and transparent ledger, then it’s safe to say blockchain will get some of this pie.

Here’s the interesting part (Besides blockchain being miles away in numbers), it does cater to industry needs, especially ones of today. There are many use cases that are already live and in operation. We can even break them down by industry and market cap of each:

1. Banking and Fintech (Market cap average: $12.2 Trillion USD):

   MasterCard now operates a blockchain and it’s not the only mega financial corporation that does, several do and are of interest like Visa and Barclays.

2. Tech (Marketcap average: $7.2 Trillion USD:):

   IBM was an early adopter of the tech and along with the IBM blockchain platform, they offer networking services, and of course all are decentralized systems.

3. Transportation & Logistics (Market cap average: 13 Trillion USD):

   Maersk are teaming up with IBM to deploy and offer a jointly developed global trade digitization platform built on open standards and designed for use by the entire global shipping ecosystem. It will address the need to provide more transparency and simplicity in the movement of goods across borders and trading zones.

4. Investment Business and Stock Trade (Market cap average: 100 Trillion USD):

   Goldman Sachs launched a very nice web page dedicated to blockchain (check this out if you have the time). They have been circulating around the matter for years now and definitely are keen on introducing several projects in industry. Blockchain would automate most of their services, creating a system of complete transparency catered for easier success.

Having several industries looking at and already operating blockchains of either their own or through other networks indicates the technology works and having btc last this long indicates that it can sustain as a ledger. The problem is still scalability; each company out there cannot make global decisions on their own, they need the whole industry to move. Here’s the certainty, blockchain being integrated in every industry is only a matter of time, here’s why. If the financial industry and most business industries migrate their cashflow to digital currencies operated on a ledger and eventually flush out cash, then the entire world will use it as it becomes a mean of finance.

The right path to scaling in the financial world is direct and constant consumer use, with rapid frequency and constant growth. Let’s assume a solution is used on a daily basis, where consumers can pay using fiat to get a company’s coins, then use these coins to operate the service or product consistently (every day to three times a week at minimum) then we can predict a market cap scale; if we see many of these companies, then we can predict the market cap getting to a trillion faster. If a Facebook for crypto is created, and the whole world decides to use it for a reason or another, then that’s also a potential market cap growth opportunity.

The .com bubble Vs. The blockchain bubble

We currently are being struck by media emphasizing on the fact that the blockchain bubble is just like the .com bubble. They are not far from the truth, but most certainly the .com bubble never stopped the .com from rising and neither will the blockchain bubble. Let’s take a step back and explore the .com bubble through some little facts which can clearly define the tech’s roadmap at the time. It was a historic economic bubble and period of excessive speculation that occurred roughly from 1995 to 2000 and was a period of extreme growth in the usage and adaptation of the Internet.

The Nasdaq Composite stock market index, which included many Internet-based companies, peaked in value on March 10, 2000 before crashing. The burst of the bubble lasted from March 11, 2000 to October 9, 2002. After the bubble burst, online retail companies, such as Pets.com, Webvan and Boo.com, failed completely and shut down along with communication companies, such as WorldCom, NorthPoint Communications and Global Crossing. Others, such as Cisco, whose stock declined by 86%, and Qualcomm, lost a large portion of their market capitalization but survived, and some companies, such as eBay and Amazon.com, declined in value but recovered quickly.

Let’s add more beef to these points:

1. All the companies that started in order to simply have a .com or be connected in some sort to the internet failed. In other words, they collected capital, and collapsed because they didn’t know what to do with it; their stock fell and so did investor money.
2. Not all companies had the right roadmap but still got funded, boo.com for instance, planned on selling books in the UK but flopped because in short, their cost was more expensive than their billing; 125 million in 6 months to be exact.
3. Companies that competed against ones that were already well established and had the right roadmap in mind either fell or got bought out. A common example of this is Webvan getting folded into Amazon.
4. The companies that actually had a proof of work and an operation model that is functional also crashed (this is due to the entire market cap falling) but recovered because regardless of the others shutting down, they were operational day to day.

If we start to compare this with the blockchain industry we can see common relations. Not all ICOs get their needed funding, not all blockchain companies who get funded know what to do with the money. Competition is tough in the blockchain industry and fall outs occur faster than other industries due to heavy competition and market volatility. We can clearly see dominant blockchain companies and coins that well maintain their rank in market.

It’s safe to say that if the blockchain bubble bursts, we will still have dominant companies that will stick around and eventually grow to the likings of Amazon and Apple. There are many companies riding the bubble’s bandwagon in order to get faster and easier cashflow. As the tech is new and carries a tiny market cap, there is still endless room for growth. It’s only a matter of time before all mega corporations take on blockchain and use it within their operations and business infrastructure. The capabilities and variants of blockchain use are endless making several industry penetration boundless.

Just think about it for a minute, you had factories with jobs for humans to place bottle caps on bottles as the conveyor belt was circulating. Later in time we did not need these humans, instead we limited them to operate a machine that would instead not only replace humans (labour cost) but optimize the efficiency of the task. Later we noticed that we can remove the people operating these machines (more labour cost deduction) and instead replace them with software optimized to not only be errorless, but handle several types of bottles at the same time. At this stage, the world still relies on human labour to operate a ledger, manage and check inventory, and handle roles like contract follow-ups and payment related operations. Blockchain technology, smart contract systems, and autonomous ledgers are here to just take that job on.