Is blockchain tech the internet—or the Segway? At last year's World Economic Forum in Davos, Switzerland, blockchains were all the rage. This year, with crypto winter in full force, the discussion in Davos has been much more grounded—and focused on the long-term.
"Most meaningful technologies get overestimated in the short-term and underestimated in the long-term," said Brian Behlendorf, executive director of the Hyperledger Project, during a panel discussion in Davos yesterday. "I think in many ways (blockchain technology is) at the cutover point between short-term and long-term." Though it was overhyped and many projects have failed, the ones that have survived have positioned the field to progress along the "slope of enlightenment" phase of Gartner's famous hype cycle, he said. (If you're keeping score at home, that's the phase in between the "trough of disillusionment" and the "plateau of productivity.") "This is a marathon, not a sprint," added fellow panelist and Ripple CEO Brad Garlinghouse.
Adena Friedman, president and CEO of Nasdaq, shared a similar view in a recent LinkedIn post she wrote in preparation for Davos. "The world of 'crypto' has gone through the first phase of the classic invention cycle," she says, and now it faces one of two outcomes: In one scenario, it "finds practical utility followed by years of steady and sustainable commercial progress and integration into the economic fabric (e.g., the internet)." In the other, it "fails to achieve broad adoption and its commercial applications as a medium of exchange are limited (e.g., the Segway)." Friedman says that Nasdaq still believes that cryptocurrencies can be a "global currency of the future."
Meanwhile, big money blockchain projects keep humming along. A flurry of recent headlines suggest the blockchain fever is far from breaking. A startup called Kadena has launched a new "blockchain as a service" product that uses Amazon Web Services, will be free to use for smaller projects, and (the company says) is much faster than competing smart contract platforms. Anchorage, a startup that will securely store crypto-assets for institutional investors, has come out of stealth and revealed that it has raised $17 million from backers including Andreessen Horowitz and Khosla Ventures. And speaking of Nasdaq, its venture arm has joined Citigroup and crypto-focused VC fund Galaxy Digital Holdings in investing $20 million in Symbiont, which has developed a smart contract platform aimed at financial institutions.
"We are entering a much more realistic phase where people look at this technology and think seriously about where it makes sense to apply it and where it doesn't," Symbiont's CEO Mark Smith tells Bloomberg. "We are leaving the peak of the hype cycle and entering the trough of disillusionment, especially for people who inappropriately applied this technology hoping it would become a panacea for solving all their problems." Gartner must be loving all these shoutouts.
(Also see: "In 2019, blockchains will start to become boring")
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