7 Things You Need To Know Before Entering Crypto Market (1)
Moritz Neto is the Head of Growth at bitfwd, he is a blockchain entrepreneur, crypto growth specialist with an obsession for UX Design optimization for blockchain products, community leader in the crypto landscape, mentor at Blockchain Centre Vilnius.
A framework to make the most from what is yet to come in the Blockchain world.
As the usual disclaimer goes, all the information in this article consist of my own opinions, insights and observations. They are not, by any means, financial advice. Use all information as new inputs, be big boys and girls , do your own due diligence and take responsibility for your own decisions.
— Is it too late to get into Crypto? Is it a good idea at all?
Being 100% straight forward:
In the long term, I don’t really think you have an option. When did you last hear someone ask: is it too late to start using the internet? Is it a good idea at all? As human beings, I believe we tend to shut down opportunities when we feel like “Daaaamn, I’m late to the party”. Well my friend, I would actually argue that in terms of Blockchain, you just missed a couple of songs…
Blockchain gave a small taste of the “ding” that it will make on society as we know it in the year of 2017.
Billions raised in funds through ICOs.
10x market cap in less than 12 months.
Thousands of non-sophisticated investors making fortunes in a market driven by FOMO and FUD.
Blockchain being sold as a silver bullet in Every. Single. Industry.
I’m pretty sure that if you landed here, you have already been exposed to all the noise that has been surrounding cryptocurrencies and it’s not my objective to add more noise to your brain.
You don’t need more noise.
What I want to give you is my red pill. My insights about what’s next. The best. The worst. And how to make the most out of the opportunities that are yet to come in the year of 2018.
“You take the blue pill, the story ends. You wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in Wonderland, and I’ll show you how deep the rabbit hole goes.”
1# What Are The Killer Projects?
Yep, we are starting bold here. Well, Crypto-land is a place with really diverse animals. Before giving you my insights, let’s touch some points on the main species that we’ve found in this ecosystem:
Classic Dapps. Crypto Dapps. Networks & Protocols.
Let me briefly describe each one.
Basically we have a whole layer of projects proposing new networks and protocols similar to Ethereum or NEO or NEM. There are many different value propositions out there at this point, going from niched applications, to major architecture improvements. These are the biggest animals in Crypto-land. Biggest visionaries, biggest projects, biggest successes, biggest danger.
Classic Dapps are decentralised applications that propose to transform the middle man in some industry into a smart contract. It’s like Uber, AirBnB, Alibaba and similar models except it’s on the Blockchain. These animals sound and look pretty much like a classic Silicon Valley startup. I don’t like this kind of animal.
Crypto Dapps are decentralised applications that are building solutions to the web 3.0. They are making a big bet that the decentralised networks will moon big time, and they will be ahead building basic infrastructure tools to allow users to interface with the network. These animals are rarer because to build something meaningful here, you have to break the amends that you have with the whole startup culture with classic business models and do what the CEO of ChronoBank, Sergei Sergienko says:
“You have to have some imagination bro.”
My insights about the ecosystem:
In terms of networks, there is not yet a winner. Ethereum has incredible products, interfaces and backing. But so has NEM and NEO. The main problem that all these networks face right now is scalability. There is huge demand for the innovation at this point, but if one single application like the cryptokitties can completely overload the network, it makes it clear that there is a shit ton of things to be improved.
The projects that heavily focus on solving transactions scalability issues will grow big time. Like internet-size big time. And that’s also why the biggest scams lie in this category. People know that scalability is an incredibly sexy buzzword for a blockchain network proposal.
So, how to recognise opportunities in terms of decentralised networks?
Look at the team. The team that will solve this has to be AVENGERS level. Right now, this is the hardest challenge in the blockchain world. You have to believe that the person selling you this dream has the skills to really deliver, or at least to give a good fight. Look at their backgrounds, past work, participation in the community. I’ve invested in Polkadot for example because although Gavin Wood has screw up a few times already in terms of funds security, he has been there since the beginning. If there is someone that can solve what he is proposing to solve, it’s him.
In terms of Classic Dapps. I really don’t like these to be honest. I have two reasons for that:
1. The infrastructure is not there yet. Let’s assume that one of this projects manages to build something as clean and usable as the Uber or AirBnB apps. At this point, they would still fail to support 1/100th of the number of transactions of a centralised application due the network limitations. There are so many basic things that have to be in place in the land before a tree like this can prosper, that I just think people could dedicate their efforts and funds to more meaningful things.
2. None of them have met my threshold of subversiveness. What do you mean Moritz? I will explain more what subversiveness means later, but as I mentioned before, what crypto-land ask from its visitors and inhabitants, is to think different. To break the things you assume and allow yourself to have Imagination. There is just so much that can be created in completely new ways, that in my humble opinion, it’s boring to force Blockchain into something just to pretend that you are doing something meaningful and raise funds.
What about the Crypto Dapps? These are my favourite ones because they are making Blockchain really usable and tangible. They are solving the problems from the network (and there are a shit ton of problems to be solved) like key management, indexing, forecasting, etc.
If the networks and protocols will prepare the land, these are the tools you will be using to interface with the network.
What should you look for here?
Not only in terms of pretty and neat stuff. But in terms of usability and relevance. Is this Dapp solving a burning pain in the Crypto-community? Is it making something that makes it 10x easier to interface with the Blockchain in whichever network? That’s a clear winner.
2# ICOs Taking Off?
In sum, yes. There will be heaps of explosive growth and the moon is the limit. In that regards, I feel there are two things to have in mind.
1. 2017 was an “observation experiment” for the big guys. Now they will act. Telegram has confirmed what will potentially be the biggest ICO so far, proposing to build a smart contracts network that interfaces with their app that has already more than 100.000.000 users. This could completely change the game in terms of mass adoption and become the one network to rule them all.
Having in mind that Telegram is the main competitor for Whatsapp - owned by Facebook, uncle Mark has already publicly mentioned that he is looking to better understand the crypto world to see how Facebook can potentially adopt and implement some of these technologies.
We also have interesting players like Kodak, that got its shares up 130% after stating that they will issue their own Cryptocurrency (sometimes you move fast, sometimes you move slow).
2. The market is a little bit more educated. Don’t get me wrong, even a little is quite good in comparison to the kind of things we saw during 2017. But what does it mean in tangible aspects?
It means that to thrive, projects will have to show more evidence of potential success.
You can be sure that absurd things will keep happening, but I truly believe that the explosive ICOs will be the ones that have the one core element that I mentioned before. Design. They will be building things that can actually be used by everyone, putting real thought on user experience, marketing, product, applications, and growth strategies.