Accusations of “bubble” abound even as Bitcoin price surges back toward its record high of $5,000. There are also suggestions that Bitcoin’s price should be viewed in terms of the S-curve of rapid adoption.
Others say that Bitcoin will reach $50,000, or even $1 mln, in due course. Hardcore skeptics such as Chase CEO Jamie Dimon believe that the government will ultimately shut down Bitcoin and bring this grand experiment to an end.
User “dashfriend” on the Dash Nation Slack comments:
“Isn’t ease of use one of the main catalysts for a bubble? I don’t see ease of buying yet for non-tech people.”
User “foxtrot” agreed:
“In order for a bubble to exist there needs to be saturation of the market…and with the crypto market still [in] its infancy, that seems highly unlikely…Hasn’t Bitcoin supposedly been in a bubble since it was $2?”
A powerful disconnect
Many digital currency investors and traders are focusing on the presence of institutional investors: banks, pension funds, mutual funds and the like. While such mega investors would certainly help push the price up, it seems that retail investors and users are always forgotten in such discussions.
With so many working on creating ETFs, regulated futures markets and so on, who is focusing on the little guy? Who is working to make sure that digital currency gets in the hands of as many ordinary people as possible?
It’s the apps
According to TechCrunch, the apps market is expected to reach $6.3 tln by 2021. By the end of this year, there will have been a total of 268 bln apps downloaded, with revenue exceeding $77 bln.
This is a staggeringly huge market, and with Google and Apple taking over a 30 percent cut of the profits, it’s a market ripe for disruption.
While many startups are trying to find ways to profit from this enormous market, to date they have been hampered by the Blockchains they build upon. Both Bitcoin and Ethereum are capable of about seven transactions per second, which is clearly not enough capacity to support a transformation of the apps market.
Competition is stiff
Among companies that aim at using Blockchain to disrupt the app market are Mobius, ChainLink and IOTA.
Cyrus Khajvandi, co-founder of Mobius, is anticipating the creation of “Smart Markets” where data from connected devices can be traded freely between other devices. According to Khajvandi, Mobius gives the example of connected appliances which contract with decentralized electricity generators to provide machine-to-machine payments. Such a system would use “smart contracts” and “smart auctions” to run appliances, using as little energy as possible at the lowest possible prices.
Mobius boasts Jed McCaleb as an early investor and advisor. McCaleb is the founder of Ripple and Stellar, and, somewhat unfortunately, the founder of doomed Bitcoin exchange Mt. Gox.
Mobius intends to be a leader in the Internet of Things (IOT), but to do so, they will face stiff competition.
IOTA has a significant head start in this area, seeking to “[make] every technological resource a potential service to be traded on an open market.”
Even in terms of their current product for app payments, Mobius has competitors such as ChainLink. In fact, ChainLink’s services sound similar to Mobius’ product. ChainLink’s website says:
“ChainLink is Blockchain middleware that allows smart contracts to access key off-chain resources like data feeds, various web APIs, and traditional bank account payments.”
Nothing is certain
BlockTower Capital cofounder Matthew Goetz probably said it best when he compared the digital currency and Blockchain boom to the Internet boom of the late-1990s. Goetz warns:
“You could be right on the thesis that cryptocurrencies are transformative, and you could make what you think is the right bet at the time, but remember one time you had Yahoo and then this thing called Google came along.”
Mobius, IOTA, ChainLink and others all sound interesting, but the market will ultimately decide on the winners and losers. Even if you can predict the general trend, it’s much more difficult to bet on exactly the right horse.