During Bitcoin’s peak performance in 2017, numerous projects cropped up to fill in various voids in the crypto-ecosystem in terms of functionality and stability. But, only a few could survive the market roller-coaster and the crypto-winter that followed. A recent report by The Relevance House highlights the same by pointing out that over 1600 coins have been deemed defunct ever since. These were supposed to embody three types of blockchain applications – value token, security tokens, and utility tokens.
While highlighting the altverse’s spectacular fall, the report also suggested that the price of Bitcoin was a key indicator for the success of blockchain technology. It read,
“It’s encouraging to see the price curve has recovered, entering the “Slope of Enlightenment” after suffering through the “Trough of Disillusionment” according to Gartner’s Hype Cycle which is often applied to new disruptive technologies.”
As highlighted by the above graph, over 90% of all blockchain-based projects failed during the crypto-winter. Diving deeper into the predicament, the report tried to uncover the exact reasons for the sudden downfall of such crypto-projects and its related technologies. It said,
“It boils down to flawed human emotions; crowd mentality, greed, lack of due diligence, haste, and “Fear of Missing Out” (FOMO).”
Additionally, the industry had also recorded a spike in scammer businesses that “sensed the opportunity to make a quick buck off of hopeful ICO investors and crypto-enthusiasts.” Further, the circumstances also created a new set of anonymous billionaires, while carving out the road for future crypto-entrepreneurship.
While the preceding factors re-stirred the debate on trust and credibility, the crypto-ecosystem successfully showcased blockchain’s disruptive capabilities “in the form of lower infrastructure and personnel costs, cutting out the middlemen, streamlined transactions, and higher data security.” Interestingly enough, experts within the industry speculate that as blockchain finds applications within different various industry verticals, it will propel the use of cryptocurrencies and catalyze the ongoing crypto-adoption spree.