Joe Pindar is the director of strategy in the office of the chief technology officer at security firm Gemalto.
In this opinion piece, Pindar argues that the recent token craze is a blip, and that blockchain technology remains more important in the long term than any currency.
If you attend investment conferences or talk to long-time industry analysts, it's clear that that the general cryptocurrency market bubble is unsustainable.
There were 30 initial coin offerings (ICOs) in July, each launching new cryptocurrencies. Then, in August, there were more than 50, with marketing and investors ranging from Floyd Mayweather to Paris Hilton.
Now, part of this mania is based on speculation. But it's also clear that we’re departing from the fundamental assumption of what a cryptocurrency originally is – a scarce digital commodity where the value derives from that scarcity.
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Simply put, if more than 100 new sources of this digital commodity have been launched since the summer, then the entire concept of scarcity, and therefore value, begins to erode. In fact, many of these new cryptocurrencies will need to fail in order to maintain the viability of the best-known currencies, bitcoin and ether.
Ether, the second-largest cryptocurrency by market cap, has been around for two years, so it's a relatively known quantity. Most of the recent ICOs are based on the ERC-20 ethereum token, and the primary purchasing mechanism for new cryptocurrencies has been ether, the currency of the ethereum network.