ICO: ridiculous frenzy or market new discovery? (Maybe both)


nnnIt may be said that the encrypted money market bubble has been there, for emerging markets, this is not an accident. But with the evolution of the ICO project, the challenge of technology and the industry itself has begun to diminish. Therefore, from the perspective of market development, any innovation will experience such ups and downs, so the ups and downs of ICO project is also a new area of ​​learning progress must be the process.n
nnTranslation: Annie_Xun
nAriel Deschapell is a javascript full-stack developer who teaches at the Miami Ironhack Crack Training Camp and has recently worked with Henry Hazlitt at Digital Development at the FEE, Foundation for Economic Education.n
nDeschapell examines the emerging block-chain tokens ecosystem in this paper, which can be seen as a new continuation of the market for innovative markets.n
nnAfter the encrypted currency rises, a question is always pending, is there a bigger reversal?n
nIn order to study this issue, we must first look at the driving force of the market capitalization of $ 100 billion in encrypted money, and the factors that make up such a driving force, including countless ICOs, soaring the price of the currency, so much more likely (perhaps is coming) On the Segregated Witness.n
nFirst of all, it is best to reiterate that many commentators have seen the size and quantity of such ICOs, promoting speculative greed for their development, and issuing warnings.n
nPerhaps the best sign of the bubble in this area is the Tezos project, which recently broke the record for $ 232 million, and only white papers and websites.n
nThe defender will point out the bull market that had previously been warned.n
nHere, I would like to point out an important neglected difference: in previous bubbles, the new capital investment is always accompanied by the inherent doubts of technology and the industry itself.n
nBut no doubt the status quo has changed.n
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nNew optimismn
nNow, little or no mention is made of the inherent instability of encrypted money growth, or the expectations of critics for long-term bear markets.n
nOn the contrary, we see simple and reasonable conclusions, perhaps the recent capital inflows too fast. Block chains and their tokens are increasingly recognized as the eternal components of our world.n
nDespite the subtle changes in people’s conversations, we do experience significant changes in the mainstream of encrypted money.n
nThe value of the public chain network is recognized for the first time in the financial sector and it seems that the overall acceptance of the encrypted currency is a new asset class.n
n2014 Goldman Sachs (Goldman Sachs) and other large industry participants attitudes and actions and now form a strong contrast. Now we are no longer just a matter of technical research, we see that the encrypted currency becomes the next target of hedge funds and other investment instruments.n
nThe question of 2014 is whether the public chain and distributed encryption currency will survive, and now the answer is already there.n
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nWhere are we going?n
nHowever, there are still countless questions that need to be answered.n
nWhich block chain architecture is the most secure and useful? How will their security be? How many kinds of encrypted money is necessary for practical use? How to implement the land, which agreement can withstand the test of time?n
nThere are many different answers to these questions.n
nSo ICO investors bet on every possible technical configuration is not surprising, because the outcome of how high-end experts are puzzles, let alone ordinary people.n
nEncrypted money industry is in the molding stage, the increasing pain points will include each price reversal and more individual failure cases and short-term fluctuations.n
nBut the ecosystem has been building an important infrastructure, and more importantly, what kind of unrelated knowledge base and market confidence.n
nThis is not the ICO short-term valuation has nothing to do, on the contrary it is most of the reason.n
nn
nexpected outcome n
nYes, many ICOs may fail.n
nThe characteristics of the encrypted currency have never been seen before, and the dynamic characteristics of the ecosystem are novel, and the expected failure rate will be higher than that of the typical technology startups. But rational and professional economists do not think the failure rate of a new start-up company is a failure of the problem market, so the possibility of ICO project failure is not an issue of the ecosystem.n
nOn the contrary, this is the necessary positive step in building the basics and market confidence, which is a necessary condition for the persistence and stability of the money industry. Miners to maximize their own interests, need to protect the bitco currency block chain, traders are trying to optimize the return, so as to increase the long-term value of the ecosystem.n
nAlthough their approach is not immediately understood. No test and error, there is no collective knowledge, and ultimately there is no economic growth.n
nICO is not careless and naive mediocrity, the recent ICO can be seen as the public chain long-term bullish investment and large-scale insurance. How the future, the views of many, so the funds naturally put into different competitive point of view.n
nBut this does not mean that the market has a fundamental long-term problem, but that does not depend on a single successful project, creativity and the future market of the team is strong.n
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nThe highest programn
nThe most likely to laugh at this point of view is self-proclaimed “Bitcoin supreme programmers” who are extremely confident in the long-term superiority of a single block-chain solution (natural versus coin-like attitude, despite the side chain and the new agreement Layer can increase functionality and usage).n
nEven if the assumptions and long-term predictions of the supreme programmers are correct, the market can not and will not go forward with these conclusions, unless many different actions have been tried.n
nThe market is an extension of the creature, so the market is like the creatures that run and learn only through the form of feedback. Only through competitive attempts and mistakes, market hypotheses and theories can be established or overturned. This mechanism is the most accurate way of thinking in the world, after verification and sharing become common sense, economist Friedrich Hayek wisdom of the words have proved this point.n
nICO provides the most important function is to verify what is useful, what is useless, and thus guide the development of the ecosystem.n
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nSowingn
nIn other words, let ICO spread over the earth.n
nDiversity and the benefits of increased competition is the high frequency of the test and learning, but with the market debate, doubts, fluctuations. These costs are the product of early ecology, and the encrypted currency is still in the early stages.n
nWe will continue to see every fluctuation, profit and loss. But at the same time the necessary knowledge and technology base in the slow and stable, in order to have a greater impact on the global economy.n
nThere are many possibilities for the future.n
nA new block-chain agreement that attempts to resolve defects such as bitcores may fail, leaving only a more powerful version of the bitcover than ever before. Or some may be successful, to provide long-term value; even if you can solve some major problems, may compete with Bitcoin.n
nThe question of the new ICO project is allowed, and it is almost impossible to participate in the obstacles needed. But you can not eliminate the real possibility of innovation and the possibility of the same place, like Bitcoin.n
nRegardless of the current frenzy, and how the winner and the loser are presented, the only surety is that the encrypted money ecosystem will be more confident and stable.n

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