Underrated Players in the Blockchain Ecosystem
The cryptocurrency industry generally conjures up the thought of complex protocols and volatile coins, but the actual ecosystem is so much more complicated than that.
Think about it like this: for every protocol or coin, there is a corresponding team who has such a strong belief in the “mission” of that coin that they were willing to forsake other more stable employment options in order to help develop the organization. It is rare you see this sort of a commitment, but many of the tokens being released have that sort of evangelical feel to them, and attract supporters accordingly.
Much of the industry is made up of these types of contrarians and strong believers. Not only do you have cryptocurrencies, but many tokens and dApps that are in development.
Takers Vs. Builders
One of the most well-known companies in the blockchain sector is Coinbase. As the largest cryptocurrency trading exchange, it has been known to shift entire markets based on announcements of future listings or considerations for listings. Coinbase has made it much more simple for investors to buy cryptocurrencies, and many first-time purchasers start off using Coinbase.
At the same time, they aren’t so much “building” something as they are collecting rents based on being the simplest entry method to cryptocurrencies. Just as big banks dominate in the financial world, Coinbase is dominating in the crypto world. The danger here is the oligopolistic-like trading industry that can result. But more importantly, we need less companies making massive amounts of money collect trading fees and more companies building out protocols.
This is why firms like Consensys are so important. The team is composed of a large group of developers and businessmen (among many other professions) who are trying to expand the blockchain infrastructure. With 47 projects currently in development, as well as consulting and turn-key blockchain-based projects for sale, they are the exact opposite of Coinbase in many sense.
There is nothing wrong with what Coinbase is doing, as there is certainly a need to fill there, but ideally we would see many more developers choosing to go create something rather than incrementally improve an already massive company.
The Effect of the Crash on the Flow of Talent
Many people on the outside believe a crash in cryptocurrency means bad things for the development of the industry, but it is actually precisely the opposite. First of all, a collapse in prices means that there is more potential upside for investments within the industry. No one wants to invest at the peak and this creates better buying opportunities. Also, the lower prices tend to weed out the “non-believers” if you will. Building a company filled with opportunists who are drawn to a quick buck rather than looking to build something over the long-term is a recipe for disaster. Finally, low prices tend to remove the distractions of trading, doing large amounts of press, and all the other things that pull teams away from their core mission. It basically creates an incubation period for the blockchain sector.
Over the long-term, it is hard to deny that more infrastructure is being built out and more major investors are expressing an interest in cryptocurrency. So whether the prices are low or high today, it doesn’t quite matter. What does matter are the players within the industry and their ability to continually build upon the frameworks currently in place so there is eventually a strong decentralized ecosystem.
Featured image courtesy of Shutterstock.