How important will patience be in the world of crypto? Benedict Evans, a general partner at Andreessen Horowitz (which happens to be one of the most successful venture capital firms in the world) has said that the cryptocurrency and blockchain sector has reached a point in its journey that is similar to where the internet was in the 1990s.
As with any other emerging technology or market, the cryptocurrency space has seen a large number of failed projects over the past several years, some of which have put the interests of its founders first and foremost without due care for other participants.
However, according to Evans, if prospective crypto enthusiasts focus too much on the negatives – the failed projects and fraudulent operations – it would be like dismissing the internet in 1999 based on the lack of progress made by early domains like Usenet, Cuecat, and Boo.com.
The internet produced a hype-driven bubble which peaked in 1999 and caused tech stocks to crash over the course of the next few years. But we all know that the last 12 years or so has produced some phenomenal digital success stories.
Evans said: “Crypto today has a lot in common with both the internet in 1993 and the internet in 1999. Huge potential with few of the use cases invented yet, combined with froth, scams and delusion. This makes it easier to dismiss. But dismissing crypto as a useless scam is much like looking at Usenet, Cuecat and Boo.com and dismissing the internet. It mistakes applications for the enabling layer.”
Emerging Technology or Inferior Technology?
Previously, Ben Horowitz, a legendary venture capital investor and the co-founder of A16Z, emphasized that one deceptive aspect about emerging technologies like crypto and mobile phones is that in the beginning emerging technologies seem significantly inferior to existing technologies.
Hence, due to the discrepancy in efficiency and practicality between emerging technologies and existing solutions, it is easier to dismiss the new technologies.
In a new market, people seeking a stake in crypto often try to rush in to invest in every new project to catch the bubble. Several cryptocurrency projects reached multi-billion dollar valuations in late 2017 as the valuation of the cryptocurrency market reached $800 billion.
But, Evans explained that as the market matures, more mainstream use cases will emerge, and technologies employed by projects in the sector will drastically improve.
“Looking at crypto and only seeing the scams is like looking at the internet in 1999 and only seeing the bubble. Looking at crypto and seeing no use cases is like looking at the internet in 1993, when the web was 3% of traffic,” said Evans.
The difference between crypto in 2018 and the internet in 1993 is that cryptocurrencies already have several use cases that surpass the efficiency of legacy systems.
Crypto remains in its infancy so now is the time to exercise patience. This is why the NetLeaders vision, in common with the whole Das ecosystem, is about slow and steady growth, and giving utility to the coin – a theme which is set to dominate the end of this year and the early part of 2019. AlliancePay, Smart Tools (our digital management hub), DasMarketPlace and much more are either being rolled out already or awaiting launch.
For individuals curious about crypto, as well as venture capital firms and hedge funds, it is easier to dismiss the innovations than to understand and recognize its potential in the long-term to operate as a consensus currency and a global supercomputer.
On the other hand, if crypto does achieve mainstream adoption, investors that did not consider the potential of the technology will be left out, as we saw with the internet in 1999. Patience really is key.