Are we in a bubble or are we not? The answer does not matter for the sake of this article. We will pass on focusing upon market conditions, instead delving into the undercurrent that is taking place.
Here is where we see the lessons that can be applied to what we are embarking upon today. At the foundation, much of this does not change. While technology is racing ahead, there are some clues for us to follow.
Many are likely to get caught in the same trap as 20+ years ago. A lot of people dove into the hype of Yahoo at $475 per share. Of course, in hindsight, that was tremendously overvalued.
So while the numbers might change, a lot of the same premise holds true.
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Throwing Money At Everything
For those too young to remember, the DotCom Era was something very interesting. It was rather unique in the sense that we never saw anything like that take place. Things were so new that even the "experts" were tossing money around without a clue.
It was the first, wide spread technological age. Never before had so much technologically become public. Instead of being some research piece at an upper level institution, we saw the unfolding of a new technological paradigm being discussed on national television. Everywhere we turned, there was talk about the "Information Superhighway".
Money was plentiful. Anyone with an idea that was presented as "being on the Internet" was funded. College dropouts were handed millions of dollars simply by claiming they were building an application. We can see now how insane that was. Nevertheless, people knew no better.
Of course, there were some highly successful ventures from that time. Names like Priceline, Google, and Amazon were all part of the wave that set off during that period. Money invested in them turned out to be life changing.
Even Yahoo was a successful company. It did maintain leads for a number of years in email, search, and instant messenger. Nevertheless, it was eventually sold for a smidgeon of the price as compared to its peak.
The challenge was to separate from the fact from fiction. Many of the projects were established with no intention of being completed (sound familiar?). Then we had others, like WebVan, which were legitimate in their intentions yet failed to have proper path to success. Perhaps that idea was simply ahead of its time. Today, 20 years later, grocery chains are looking to implement delivery services.
Nevertheless, it failed along with many others. Here is where the lessons of that era need to be applied.
Cryptocurrency Repeating History
Basically we can put the projects of the DotCom Era into 4 categories:
- Big Time Success (Google, Amazon)
- No Intention of Doing What Presented
- Genuine But Lacking (Timing, Expertise, Money)
- Will Survive Yet Over Inflated (Yahoo)
Naturally, everyone is looking for the first category. What is the cryptocurrency version of Amazon and Google? Where is a project that we can get into for a minimal money and watch it 100x over the course of a couple decades? Actually, in cryptocurrency we want the 100x by next Friday.
The second category is obviously one to avoid at all costs. This was most of the ICO craze. White Papers were tossed out there with no intention of completing what was set forth. It was an early version of a rug pull without the name.
When we look at the third category, we find many genuine projects. However, this is where investigation is required. The idea is sound yet it will not be pulled off. It is difficult to create a successful business from scratch, no matter what the field. Even in the digital world, a lot is required to keep things moving forward. Is the expertise along with resources there to fulfill what is expect?
Finally, the last category is the toughest to determine since it can truly only be concluded years into the future. Many thought Yahoo would keep developing and advancing. To a degree, they did yet were overwhelmed by Google. At every turn, that company was able to usurp them. So while Yahoo was a success, it was a fraction of the company Google became.
If we run through our mental checklist of projects, we can see where a few quickly fall into a particular category. As mentioned, the ICO craze gave us a lot of people who got money yet never intended on building anything. At the same time, we see many projects that sputter along because the team lacks the ability/resources to get much done.
With the rest, we have to decide which of the remaining categories will they fall into.
Development One Of The Major Keys
One of the reasons why development is consistently presented as being vital is because it is a lesson from the DotCom Era. Those entities that kept rolling out new applications and updating their existing system were the major winners. Those that ended up in the fourth category were a step or two behind in this area.
We can point to a lot of cryptocurrency projects that are "successes". Since we are dealing with blockchain, it is likely many of these keep going for years. There is no reason to stop the block production. As long as there is someone running a node, the chain will keep going.
That does not mean it will grow. In fact, many of the projects we see might have peaked already in terms of their utility. Without the continued development, it is not likely that attention will be drawn. Things get stale very quickly in the digital world. Users need to continually be engaged with new features and applications. If not, they will find it elsewhere.
The best example we see is MySpace. Here was the dominant player in the Social Media world at the turn of the century. Nothing was even close to this. It had first mover advantage along with a growing user base. It also had very little competition.
Fast forward to the present and MySpace still exists. The site is in operation and does have millions of users. Yet it is a fraction of the 100 million it reached at the peak. In other words, this is similar to Yahoo.
All of this is what we need to keep in mind when looking at cryptocurrency projects. The lessons from the DotCom Era are sound. We need to ensure that we are participating in the proper projects and not going all in on those that are going to fail.
Perhaps this might help some to frame DOGE and Shibu in a different manner.
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