It was a wild ride. A rollercoaster alternately fuelled by hype, FOMO, and extreme panic selling. Fortunes were made. ICO’s were launched for everything from in-game tokens to shares in woodlots and DNA databases. Blockchain was the buzzword and the public bought in. Big time. Due diligence was thrown to the wind and fools rushed in where angels feared to tread. At the height of the bubble, the crypto market cap topped out around $750 billion. Then a loud POP! The bubble burst and market cap dropped to around $130 billion where it bottomed out. Rekt became a word……
While many early adopters are still up, in some cases by 1000 and more times, many more saw their investments shrink to a few percent of it’s original worth and some even saw it disappear in one of the many scams which abound. Deadcoins.com currently lists almost 1000 coins which are either deceased or have been revealed as a scam.
As a relatively early Skycoin investor, I watched the pandemonium with great interest. Not to make light of anyone’s losses but seriously? What did people expect. Infinite growth is a fallacy (Take note economists — resources DO run out but I digress). Simply put, what accelerates up must correct and this correction is arguably the best thing that could have happened to crypto (I will elucidate, please bear with me). Skycoin’s lead developer, Synth, predicted this crash. I heard him talk about it in Shanghai more than a year ago before the bubble inflated in earnest. During the same presentation Synth made another prediction though. Perhaps prediction is the wrong word as it conjures up images of crystal balls and potions. Synth is an analyst with a profound comprehension of the world’s financial system, the forces which manipulate the world economy and the methods used to do so. Not the kind to dabble in crystal balls. Let us then call it a forecast.
Synth forecasted the bubble followed by a crash or hypercorrection. He forecast that this will result in a massive shitcoin extinction and went on to say that the only blockchain projects to survive this cataclysm would be projects which hold actual value in the form of a real world commodity. I believe we are witnessing this forecast transpiring in the current market and the reason for it being a good thing is that the stage is now set for distributed ledger technologies to rise above the speculative hype and claim it’s place among the revolutionary technologies which changed the world as we know it.
I feel a valid comparison would be the dotcom bubble back in the day when internet first became a thing. Everybody and his dog registered a domain for their company and HTML coders made a killing building web stores decorated with animated clipart gifs. Share prices in dotcom companies soared sky high as speculation fever gripped a public all to keen to throw money at this marvellous new technology. IPO’s for dotcom companies abounded. Then…. Pop! Crash! A massacre of on-line sales as well as communications companies ensued. Once the smoke cleared though, today’s Internet giants started to emerge. Amazon.com and eBay are good examples of survivors of the dotcom crash which went on to dominate the Internet landscape.
Imagine for a moment you were an early investor in Amazon.com who rode the bull market up and then panic sold at a loss on the way down. It would be a safe assumption that you would be experiencing a fair amount of regret at not loading up on Amazon shares again during the dip.
Well, the crypto market is now in that phase where the dotcom market found itself around 2001. The scams and weak hands have been mostly purged through the crash, the public have become more educated about the technology and the technology itself is maturing to the point where it is becoming possible to identify valid applications and make calculated guesses regarding which blockchain companies might emerge as the distributed ledger giants of tomorrow.
Since it’s very inception, Skycoin adopted the philosophy that real world value should drive the coin and cleverly used Skywire to facilitate that value in the form of Bandwidth provided through the new, privacy-centric, incentivised, secure and decentralised, community owned Internet which they are busy deploying (Skywire testnet is fast approaching 10 000 nodes). The first requirement for emergence from the shakedown is most definitely met by Skycoin.
A few other points to look for when picking that winning horse to back before the next bullrun are;
- Does the project have it’s own Blockchain? I my opinion this is a minimum requirement for success in the post-bubble paradigm. Outsourcing your copywriting might be a good idea but as a distributed ledger technology provider, relying on someone else’s ledger puts you at a distinct disadvantage. Skycoin not only has it’s own blockchain but also secures it using it’s own revolutionary new consensus algorithm called Obelisk which makes POS and POW obsolete.
Is the project’s code under active development? It is frightening how many successful coin ICO’s were launched backed by little more than a whitepaper, a web site and a glib PR person. Do your diligence. Five minutes on Github will show you how long the project has been committing code and how active it currently is. The Skycoin Git has 59 active repositories. When I checked their Git for this article, the latest commit was 12 minutes ago and the Skycoin core code had 7915 commits and 58 contributors. Rather active by anyones’ standards.
- How mature is the project? I think it is a reasonable assumption that a project which has been active in the crypto space for a longer period of time and which meets the other conditions above should have a better chance of succeeding not only due to knowledge and experienced gained within the space but also because the team has weathered a few storms and are still standing . Skycoin is one of the oldest projects in the cryptosphere dating back to 2012.
Those who pay attention to such things might have noticed that the Bitcoin hashrate has been increasing steadily (translation: Lots of transactions meaning that people are using Bitcoin). With Lightning Network about to go live and being hyped by celebrities, we might very well be on the verge of another bull run, this time fuelled by real world adoption more than by speculation so get out there and select that winning horse.