Cryptocurrencies won't become widely adopted unless people envisage specific uses for the technology and work hard to connect it with the "real" world
In this article I share general observations about the three types of current cryptocurrency projects I have observed. I am focusing only on projects which are late comers to a stage where the top 50 hold 92% of the market capitalisation due to sheer network effect.
I'd love to share a structured solution for the problems of one type if there is any interest in the topic. Only for one because in my opinion one of the types has it right and the other does not matter in the long term.
State of the Cryptoverse
Right now we are at a stage of over-saturation with cryptocurrency projects. Worldwide, there are only 170 currencies (list of currencies of the world), but over 1600 cryptocurrencies are listed on CoinMarketCap.
More troubling, hundreds of attempts are being made every month to create new cryptocurrencies.
Cryptocurrency Project Types
Among all of the existing cryptocurrencies, we can observe three general types:
- Projects which have the technology and real world drive. These projects break through the noise by offering new value, actively building and engaging a community, and finding ways to connect with the real world.
- Projects which have excellent technology but no real world drive. They create great platforms, they have solid fundamentals, they have all the right general thoughts about their market. However, they expect proactivity from the market. They broadcast a message and wait for the users to jump in. They basically attempt to mirror the approach of past cryptocurrencies to grow to prominence.
- Projects which find new ways to attract interest and grow but have no technology or real world value to speak of. These projects are most dangerous to the Cryptoverse for a myriad of reasons I won't get into here. It's very troubling that such projects have managed to enter the top 50 and are getting shilled to unwarranted success.
In follow-up articles I'd like to focus on Type 2 cryptocurrency projects.
I won't be focusing on Type 1 or Type 3 projects because I have nothing to offer the former and sincerely hope the latter will die out in the long term.
Conclusion
From here on, price growth will only follow adoption. Network effects got us here but won't get us to real world adoption. Cryptocurrencies will either remain an insignificant fringe investment with boom-and-bust cycles or people will find ways to create real value for the economy.
I'd love to read examples of Type 1 projects as well as warnings about Type 3 projects you know about.
I sincerely hope that there will be sufficient interest in the topic to warrant additional articles.