Gartner’s research methodologies were introduced in the last century and yet they describe how new technologies develop up to this day. It seems like that the story of Crypto is another example of how cycles dominate our world.
2018 has been very tough on the crypto market, especially the end of it. Well, tech experts turned crypto investors have predicted this bearish trend a long time ago. Among them was an early Bitcoin investor Dan Morehead, CEO of Pantera Capital, a hedge fund focused on digital currencies who predicted at least 50% drop last year. Some argue that it was all just a bubble that crashed but we believe that crypto journey has another path, which is backed up by Gartner’s Hype Cycle, a graph that illustrates the maturity, adoption, and social application of tech.
The Gartner Hype Cycle for Emerging Tech was introduced in 1995 and is considered to be the main path for new technologies. It proposed an adoption model and process for new tech on their path to maturity. As seen in the graph, there are 5 stages in Gartner’s Hype Cycle. Let’s see the correlations between each stage and crypto journey so far and try to see what is ahead.
A potential technology breakthrough is on the horizon. Early media interest triggers publicity. Sometimes no products exist and commercial viability is not yet proven.
For cryptocurrencies and blockchain technology, innovation trigger occurred back in 2008 when Satoshi wrote his white paper called Bitcoin: A Peer-to-Peer Electronic Cash System. Satoshi shared his work on a new digital currency system that didn't need governments or banks to facilitate transactions. Bitcoin payment systems seemed exciting and promising but it was the mechanics of how it worked that was indeed revolutionary. Blockchain, the tech that was behind bitcoin, was the main innovation and not digital currency itself.
The following few years were impressive for Crypto. Tech experts and businesses alike were discussing its potential on numerous conferences and the first altcoins, mainly Litecoin, Monero, Dash, Ripple, and others were born.
Early publicity produces some success stories but a number of failures occur too. Many companies start to pay attention to the product.
The peak of inflated expectations began in 2014 with the rise of Ethereum and reached crazy levels last year, unfortunately, a lot of speculation occurred as well. Token and coin prices were going up, the Bitcoin price hit 20,000$ while the Ethereium gained staggering 13,000%.
The rise of Ethereium gave birth to new projects and coins. Developers now had a platform to build and deploy decentralized apps and new fundraising mechanisms - ICOs (Initial Coin Offering) were introduced in the crypto market.
A period from 2014-2017 will be remembered with the birth of numerous amount of startups and tokens appearing almost overnight, and billions of dollars invested in crypto projects, some of them with very little chance to succeed. Many of these startups failed and some of them were even exposed as scams with the sole purpose of taking advantage from investors.
Plenty of success stories emerged during this period too. Many multinational companies from industries as diverse as insurance, education, banking, healthcare, and oil&gas made steps towards developing solutions based on blockchain tech. Enterprises even produced working prototypes and conducted tests.
As experiments and startups fail to show results, overall interest and the amount of investments decreases.
This is where we are right now. 2018 is very difficult for crypto and blockchain, a lot of caution and skepticism exists now too. There is no stability in the market, prices of all the major coins are falling and projects are failing at the same rate as they were appearing on a previous stage - overnight. According to Gartner, Crypto is now in the stage of the trough of disillusionment and there are plenty of reasons why.
In addition to huge price drops and failed projects, funding and ICOs no longer bring profit. In 2018, more than half of ICOs failed and failed quickly. Now its way harder to deliver because of skepticism around scams and the potential for return on investments. The overall view is now one of distrust. There is also a far greater acknowledgment of risky and dangerous nature of these types of ventures.
Enterprises start to realize how the tech works and understand the ways to implement it. 2nd and 3rd gen products come to life from technology providers. At the same time, conservative companies retain the skeptic approach.
As mentioned above, crypto is on the 3rd stage (trough of disillusionment) and it’s hard to say how long this period will last, however, the average length of the trough for emerging technologies is from 2 to 4 years. Every rule has an exception, some innovations mature way faster and only suffer anywhere from a couple of months up to 1 year.
There are good chances that blockchain will mature faster than expected. Crypto, in general, is showing signs that are normally associated with an emerging tech in the Slope of Enlightenment stage.
2nd and 3rd gen products already appear and companies start to show some signs of progress. Additionally, more instances of how the technology can benefit enterprises start to crystallize and become more widely used and understood. The reputation of crypto slowly started to improve.
Other factors for crypto enthusiasts to stay optimistic are following:
Banks are warming up
Signs show that banks might soon become more open to partnering with crypto projects. Examples from Switzerland (The Swiss Bankers Association has issued guidelines to banks that wish to do business with startups) and Singapore (The Monetary Authority has said it is willing to help cryptocurrency companies secure banking services) prove it.
The regulatory landscape is advancing. A lot of countries are taking steps to crack down on scams, and are also introducing new crypto regulations and standards.
Blockchain in Universities
Demand for crypto and blockchain technology-related jobs increases, and so is demand for education and courses in these areas. As a result, universities are starting to offer specializations in blockchain and crypto. According to new research conducted by Coinbase and research firm Qriously, 42% of the world’s top 50 universities now offer at least one course on crypto or blockchain.
Mainstream adoption starts to take off. Criteria for assessing provider viability is clearly defined. The technology’s broad market applicability and relevance are paying off.
Crypto is way too far away from reaching this stage yet, nobody knows when blockchain and cryptocurrencies will mature and reach mainstream adoption. Experts have said this will happen in 2020, others experts point to 2025, another experts say 2030, some people say never. Well, the point is that nobody knows.
What is becoming clearer, however, is that blockchain technology is on track to become a transformative force. Yes, market conditions and sentiment are bad, there are way too many average projects out there. But there are good projects and initiatives too, projects that are building great products and services and are actively solving all the issues in the crypto world right now.
It is safe to say that blockchain is on the right track. Even though market conditions right now are far from being good, many projects show signs of technological advancement. There are plenty of great crypto projects that aim for introducing quality products and services. Among such projects is Crypterium, a company that wants to provide crypto services same way banks provide their financial services and create the worlds first cryptobank. Users already can send and receive crypto in a matter of seconds, make crypto bank transfers (receiver will get fiat money) and top up their mobile phones.
Overall, Crypto industry right now is on a journey to maturity and mainstream adoption. Projects that will adapt to the current times and make improvements to their products will be the successful ones and will gain most from the coming hype cycle stages of enlightenment and productivity.
Crypterium is building a mobile app that will turn cryptocurrencies into money that you can spend with the same ease as cash. Shop around the world and pay with your coins and tokens at any NFC terminal, or via scanning the QR codes. Make purchases in online stores, pay your bills, or just send money across borders in seconds, reliably and for a fraction of a penny.
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