A lot of new people to the crypto space really haven’t experienced a rug pull yet. In almost every single project investors are eventually left bag holders whether it is a pure money grab or because tokenomics puts the vast majority of the supply in the hands founders and insiders.
The Bitcoin is outdated and we have a better technology narrative has been used to lure investors, and in the vast majority of cases, investors have been losing their money since 2013 when better than Bitcoin projects came to the scene.
There are some really interesting projects with technical merits, but looking at how the supply was distributed with the founders, developers, insiders, now VCs and/or “the foundation” keeping the majority of the supply to themselves while the price pumps with limited supply released to the public, I don’t see how things are now going to be any different from 2013 and 2017.
- First coin that was 100% Proof of Stake
- 1.5 minutes block times
- Assets in the blockchain
- Programmable APIs
- Decentralized DNS
- One of the first to have support for NFTs
- Vitalik referred to PrimeCon developer Sunny King as the “the single most original altcoin developer” and if PrimeCoin and Bitcoin were released in 2008, PrimeCoin would have won.
- First Proof of Stake coin
Some of the narratives that were sold in 2017 included:
- XRP is the Standard. Banks are about to adopt XRP as the settlement and interoperability layer for the internet of value.
- Stratis (this was once the #8 on marketcap) is the future of Blockchain tech, smart contracts written in C#. Devs are going to flock to the platform.
- IOTA (was once #4 on marketcap) is going to be the backbone for the “machine to machine (M2M) economy, the underlying protocol for the internet of things.
- NEO (once staple top 10) is going to bring the smart economy to China by by smart contracts and digital assets. The potential is just huge in China.
- SIA and Golem are going to revolutionize tech creating a paradigm shift in storage and computing.
- ICON is the Korean Ethereum because they partnered with a ton of Korean banks, hospitals, universities. This will be huge in Korea because Koreans support their own projects and this will hyperconnect the world.
- REQuest Network is the most important financial project to crypto. This is the Paypal of crypto.
Highly scalable blockchains, like EOS and
- Raiblocks (Nano) is fast and feeless and will kill every inefficient blockchains.
2021 and 2022
- DEFI (Decentralized Finance) is the next big thing!
- NFTs (Non Fungible Tokens) in the form of crypto art are the next big thing!
- Metaverse is the next big thing!
- AI (Artificial Intelligence) focused blockchains (??!!)
Bitcoin also has its own narratives and they changed, learn more here.
For Ethereum narratives learn more here.
What can we note is that these narratives develop mainly during crypto bull markets. I am not saying that these will not be one day big thing, but not now (at the time when hype is developing).
As we can see on the Gartner’s picture above, some buzzwordy techs are indeed emerging, but there are YEARS until they hit peak of inflated expectations of the technology, and decade plus for them to develop and reach plateau of productivity.
Why is this happening?
The answer is one word: psychology. Now longer answer.
These all are so-called shiny “silver bullets” – aka seemingly magical solution to a complicated problem. Btw origin of the term is because silver bullet is supposedly the only weapon that could kill a werewolf.
So this is nothing new, there is even expression for this, it’s called Fad. By definition, a fad is any form of collective behavior that develops within a culture, a generation or social group in which a group of people enthusiastically follow an impulse for a short period of time.
Many cryptocurrency projects are suffering from this, because they are starting on “the next big thing” which turns them into a fad product. Fad products are brands that live as long as Mayfly.
They initially cause a huge buzz (story) among the so-called “early adopters,” because they are interesting, new and intriguing. Later, when the feeling of the new wears off, most of these brands don’t survive, because their creators didn’t think a few steps ahead. In particular, a product never spills over from early adopters to the masses because it has little real value beyond being new and different.
From the point of view of psychology, fad products attract initial attention primarily because they are talked about a lot by people who like everything new and generally anti-mainstream. Does crypto community ring a bell?
But do not mistaken a fad as a trend, a trend is something that persists for a significantly longer period of time.
Let’s say that a black woman appears in a small town where only white people live. The girl would initially attract a lot of attention and the whole town would talk about her. However, if it is a person who is generally boring and has nothing specific about him, after a few months no one would pay attention anymore.
With the advent of the Internet, this fad-syndrome has become stronger than ever and there have never been more cases like this, because it is relatively easy to cause a “buzz” with something new and different. It is difficult to preserve it.
For example, I compared Google Trends for Bitcoin and NFT, fad and anti-fad.
Btw all this and much more is taught in Economics and is called Product Life Cycle Theory. Admittedly, little attention is paid to fads there, because until the advent of the Internet, there were not so many of them.
How to not fall for the “Fad effect?”
The most important thing is to be aware that this effect exists and not to believe the initial enthusiasm of the crowd, no matter how much it is. You should always think at least two steps ahead and not rely on instant fame.
You should be looking at crypto projects that are experiencing this “fad effect” because if they and you don’t have any long-term value, if they are using the current attention to create that value and thus keep the project alive even after it becomes “old.”
So, be careful, and without false illusions.
Generally speaking, as we saw dozens of times, people do not know what they are doing in the cryptocurrency space, so they are storytelling these futuristic ideas that sound right in order to pump their bags. Some ideas succeed to stick (for a while), and turn into a narrative that is, you guessed it, developing hype and luring noobs into buying.
Be careful whenever you see “common wisdom” in the crypto space, because it is usually fairytale.