Bubbles don't form from nothing. They don't appear from nowhere.
Take bubbles on the beach for example.
Sometimes powerful waves break on the ocean shore, turning into a mess of short-lived foamy bubbles scrambling up the sand - only to pop, disappear into the sand, or be pulled back into the heave and sway of the mighty ocean from which they emerged.
If you live near the beach, or have studied even a smattering of physics or geography, you will recognise how waves maintain the wind and storm energy that formed them as they travel through the ocean. Some waves, like tsunamis, can travel thousands of kilometres and leave devastation in their wake.
But, with the exception of tsunamis, large waves begin as small waves and the larger the wave, the more wind-energy has been invested in it.
In the field of human ideas, blockchains (and the cryptocurrencies they enable), display the potential to become very significant developments. But at the moment, they are still small waves in an ocean of contested innovations. More telling, their creative disruption has created barely a ripple in the stagnant swamp of received wisdom that is the canon of the world's economic thinking.
But I believe the wave has a long way to travel. And will become a lot more powerful.
Here's the thing. The altcoin market cap as calculated by https://coinmarketcap.com/ stands at just under USD $112B at the time of writing. A lot of money, to be sure. Enough to demonstrate the strong commitment and belief in crypto technology of the people who have invested so far.
But check this. At the time of writing, according to http://money.visualcapitalist.com/all-of-the-worlds-stock-exchanges-by-size/ there is serious money tied up in stock markets around the world. For example:
- NASDAQ has a market cap of $7,449 Trillion at the time of writing; and
- NYSE has a total market cap of $18,486 Trillion
In fact, as the site says, there are 60 stock exchanges around the world that have a total market cap of USD$69 Trillion today. The $112B invested in cryptocurrencies is quite literally a drop in the bucket compared to this.
What does this suggest? That the potential of blockchain/cryptocurrency/altcoin innovations and creative disruption across a swathe of economic activity (and therefore investment opportunities) is not yet on the awareness radar of investors in China, India and Russia, or even in western countries.
And don't forget, too, that the cryptocurrency market is worldwide. All the stockmarkets making up that $69T in investments are geographically based - unless you have multiple bank accounts and presence in different countries - you are generally limited to only investing in the stocks available through your own local exchange. For me, in Australia, that's the ASX (Australian Stock Exchange).
Not so the cryptocurrency market. Investors and innovators from around the world are buying and selling these technologies from each other. Directly.
And slowly but surely, the success of bitcoin and its millionaire investors is starting to make waves in the mainstream consciousness. Not very big, not yet. But most big waves start small.
The point is that no-one knows where this will land. This technology has tremendous potential. For example, imagine the long term implications and innovations enabled by the promise of these altcoins (a term essentially meaning alternatives to Bitcoin):
*Ethereum promises a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.
*Siacom revolutionises cloud storage. It splits apart, encrypts, and distributes your files across a decentralized network. Since you hold the keys, you own your data. Unlike traditional cloud storage providers, no outside company can access or control your files.
*Golem is a global, open sourced, decentralized supercomputer that anyone can access. It's made up of the combined power of user's machines, from personal laptops to entire datacenters. Anyone will be able to use Golem to compute (almost) any program you can think of, from rendering to research to running websites, in a completely decentralized & inexpensive way.
*Steem is a blockchain-based social media platform where anyone can earn rewards - and is ideally suited to discussing cryptotech. It's happening now. It's working.
*Augur combines the magic of prediction markets with the power of a decentralized network to create a stunningly accurate forecasting tool.
*Ripple works with banks to transform how they send money around the world — a necessary step to compete in today’s growing economy.
*Stratis offer simple and affordable end-to-end solutions for development, testing and deployment of native C# blockchain applications on the .Net framework.
*Dash is Digital Cash You Can Spend Anywhere. Use Dash to make instant, private payments online or in-store using a secure open-source platform hosted by thousands of users around the world.
*Factom creates products that transform the way organisations secure and share their data. Their products safeguard the most critical government, commercial, and non-profit systems.
(All information copied from the cryptotech websites.)
Check out this great piece (https://steemit.com/bitcoin/@gamerveda/bitcoin-price-breaking-down-the-importance-of-zooming-out) by @gamerveda
And even when waves do eventually break, the water they are made of washes back into the ocean to form yet another wave and eventually make its way back to the beach.
This is not investment advice, just my personal opinion.
Feel free to upvote and follow me if you like my blog. I will do the same for you if I like yours!
Cryptotech is quickly becoming a bit of an obsession for me, inspiring me creatively in a way I seriously didn't see coming. I really want to engage in the big ideas playing in the creativetech background, and I'd love to engage with your ideas. To see where I'm coming from, check out my first steemit piece, 'What if the future arrived and we didn't notice' on https://steemit.com/@drwom. It's kind of my 'who am I'/introduction piece.
More to come!