This is a friendly warning about fundamentals...
The conversation here is between myself and someone who asked if we should expect an alt coin (in this case Cardano / ADA, but it could refer to most of the alts) to have a sharp pullback.
I'm sharing the conversation (names removed) to highlight what I feel is a massive blind spot for many crypto investors. He actually told me that "no one cares" how far off a project is from actual implementation and business adoption, and that he bought lower than it is now so he's laughing...
Here's the thing. Currently..., he's absolutely correct. Nobody seems to care about progress against road-maps, use case limiting factors and real world economics of these PROJECTS.
And that's just the point. Almost off of the 1,327 coins and tokens listed on Coinmarketcap.com are still just PROJECTS.
Currently the whole crypto space is fuelled on the knowledge that block chain tech will change the world as we know it. But HOW will it do that?
One word. Implementation.
We're watching a race to implementation of a new tech being played out here, and it seems a huge amount of where the money's coming from (i.e. new investors), has little understanding of that very critical fact.
The first to actually implement a scale-able, easy to develop on, user friendly, improvable block chain that can handle real world business use case will have first mover advantage...
While first mover advantage is not the be all and end all, it is an extreme advantage over the runner up and exponentially so over the rest of the field.
Just as ETH was the clear leader in developing useable smart contracts in the year or so prior to its launch, IMHO EOS is currently that clear leader in crypto 3.0. Broad scale, real world business implementation.
I'm not saying they are the only ones with a good project, nor am I suggesting they have the ultimate solution to block chain tech and will rule forever. There will be other projects who also emerge into real world businesses (just like after the tech explosion and bubble bursting of the internet boom).
So what caused the .com bubble to burst as it's now known?
A complete lack of real world implementation and ROI. The use cases weren't there and if they were the economics didn't stack up.
Amazon stock crashed 95% in the .com bubble... 95%!
In the case of the .com bubble we were all very new to tech explosions and mass adoption curves etc. I don't believe we will see the major players in the crypto space devalue by anything like 95% WHEN the alt coin bubble bursts. But I do believe many, many of the alt coins will go to zero.
When that happens, rather than leaving the crypto space entirely, I believe we will see money shift from project speculation and day trading, to backing actual block chain businesses (either through buying their traditional stocks and shares or coins and tokens).
Once the wheat has been separated from the chaff, the more conservative mass markets will be able to see the crypto asset class as more "mature" and conservative money will begin to enter the space.
So what's the moral to this little story?
It's true, "no one cares" right now how far away a project is from implementation when they're buying tokens, and in the short term heaps of people will make a ton on some pretty sketchy alt coins. But when the music stops and your're HODL'ing shitcoins, you've just missed your chance to be a first adopter / investor in the internet 3.0 evolution.
Good luck guys, happy investing and I sincerely hope your favourite project/s get up and I see you posting "Lambo" selfies real soon :-)
If you are HODL'ing, know your asset, know its competition and be realistic about their use case, the economics and their barriers to success.
And as always, knowing these things as well as only ever putting down what you're 100% willing to lose, will ensure you are the one with "strong hands" and can see this through to some real, life changing profits!
Not financial advice, not a financial adviser, just a keen observer of this space who wants to see cooler heads prevail to reduce the damage of going in too early, too hard and hanging on to "shitcoins" too long...
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