Blockchain is as overplayed and overexposed as Beyonce.
Everyone knows her, everyone’s heard her, everyone loves her, but nobody really knows why she’s so popular. It’s the cult of personality that’s made ‘Bey’ larger than life, a psychological phenomenon.
Now before you go all Kanye on me (I’m obviously on #TeamRiRi), there’s an analogy here. Crashes in markets are always foreshadowed by similar exuberance. You saw it happen in bitcoin and cryptocurrency, where after spiking, the bubble deflated. My question is: because there was a bubble does that make the shift or the technology any less monumental? This article isn’t to spout the genius or importance of blockchain (which, for those who aren’t in the know, is symbiotically linked to cryptocurrency), but I would encourage those laughing right now to look a bit further than the end of their nose.
My brief history lesson goes back to the financial boom in England in the eighteenth century making it one of the most prosperous countries in the world. Everyone wanted a piece of companies such as the British East India Company and South Seas Company — life was smooth sailing!! Multi-generational wealth was created, no matter that it was sometimes tough to discern a legitimate company from a not-so-legitimate one.
‘Entrepreneurs’ went around promising huge returns on various companies after realizing that all they had to do was make vague promises and people would jump at the chance to take the risk.
According to Investopedia, these promoters were promising the moon:
“Some of these were as ludicrous as reclaiming the sunshine from vegetables or, better yet, a company promising investors shares in an undertaking of such vast importance that they couldn’t be revealed.”
Aaannnndddd…the bubble burst.
People were ruined, hurt and jaded. The English government responded by banning the issuing of stock.
Enter the ‘official’ formation of the London Stock Exchange sixty years later. Initially, it was restricted in its offerings and the exchange didn’t really pick up until 1825 when the ban was lifted.
Here’s the point: market crashes are unavoidable when public expectations get out of control, and we are living this out in real time with blockchain. Does this mean it is not viable technology? Or that cryptocurrency was just a fad? I would argue not at all, the point being crypto needs time to develop it’s structures — just like those first stock markets.
The sentiment that ‘crypto is a long game’ was reiterated to me a couple weeks ago by Maddie Callander of Boost VC at a Startup Calgary event. And she would know, her team invested in Coinbase way back. While the bubble has deflated, who is to say it won’t ‘reflate’? The technology is solid, perhaps immature, but blockchain and cryptocurrency are here to stay.
Similar to how few understood the stock market in its nascent years and truly grasped how massive it would become, I see the deflation of the cryptocurrency bubble as parallel to an industry which has massive potential but just needs a bit of framework to protect the public interest.
We at NDAX are taking aim at this long game. It has been said, ‘the things you do today, determine who you are tomorrow’. At NDAX, our today is building the structure for this new industry to bloom tomorrow. Registering with FINTRAC was our first step. It allowed us to set up AML procedures and policies from day one. This diligent attitude led to us having an unprecedented banking relationship with a Canadian financial institution.
We believe that patience and building the framework brick by brick is the only way for this industry to survive the pop.