Is too much of a good thing, a thing?
I guess that while it seems to be true because it turns negative as more is applied, of course philosophically speaking, once it changes it is no longer the same thing, therefore what was good is now bad, with the "too much" catalyzing the change, making it no longer the good thing it was, but something different. Might be confusing, but essentially, it is like saying that too much life leads to death, but really, once dead, it ceases to be the same alive thing. You can't have too much life.
Anyways...
I was looking at the share price of what was one of the Australian darlings about a year ago when it went public, F45 Training. It is essentially a workout program that was franchised, similar to Les Mills classes or CrossFit. It has lost 85% of its share price since launch a year ago. But, is it really a surprise?
What is interesting is that for many of these traditional unicorn companies, the only thing that is driving their sales is hype, just like the launch of some new crypto. Sure, they might have some kind of product behind them, but what makes them popular is that their product is essentially "trending", it is in public favor. However, how many trends last?
Buying into a trend business is inevitably going to lead to exactly what has happened to all trend businesses, they are going to fall out of trend, as more competition comes into the space to compete. Unless the trend is able to establish itself as a must have with significant longevity to generate ongoing demand, and the company itself is able to cement itself into the space and become a go-to provider, the future is quite clear.
Down.
In Finland (and I assume around the world), e-scooters have "become a thing" over the last few years, where pretty much half the population has decided that walking is no longer fashionable. However, while there was the one provider to start with, not long after, the second, third and fourth arrived.
In order to attract new customers, they have to offer something more than the others, which generally means, free rides for new customers. However, this also means that a lot of lower-volume riders, will be able to jump from one to the other, never having to pay any. And, past that, there is a continuous "race to the bottom" on potential value generated, because the services are all pretty much the same, with very little competitive advantage between the providers, reducing loyalty and making switching very easy.
In this case, even if the trend is going to continue well into the future, the barrier to entry into the market is quite low, there is very little specialization and competitive advantage, so anyone can start providing. And, lots of the hype-based businesses are the same, where they latch onto a certain kind of idea that tends to be popular at the time, but isn't going to offer a huge amount of competitive advantage, or barriers to entry.
We saw this in the crypto space in regard to Liquidity Pools and AMMs in late 2020 to mid to late 2021, where there were a whole lot of literally copy and pasted platforms, in a race to the bottom offering "investors" ludicrous returns on their liquidity. As a result, investors were jumping from the old one (a couple weeks old) to a new one, looking for the massive percentages for early-in investment and then, jumping out, crashing the value for those behind.
An unsustainable business model.
What this means is that in order to hold value, a company/ token/ experience needs to add value that people are going to want to keep holding, keep buying and using. It has to be something that hooks them in long-term, not just for the hype period. This is easier said than done, but when there is a trend product, it should be noted that the longevity is far from likely, it is more like a yo-yo craze, a few months, or a couple years for a business trend, and it peters out, gone.
Is this the future of crypto? Well, for a lot of the tokens, yes, this is the future - because anyone can make one, they work on hype and for the most part, they are all largely the same, other than a few functionality numbers jigged here and there. However, it all depends on what kind of activity builds around the token, which is why usecase is so heavily cited as a must have. The usecase alone isn't enough though, it also has to be able to convince users to use it and they have to be willing to want to keep using it, or forced to keep using it in some way.
Hype is a good thing, but too much hype is going to peter out eventually, making what was popular, passé, undesirable and ultimately, largely valueless. There will always be new trends that come and go and unless the business model is able to pivot or accommodate in order to hold or attract a new customer base, it is going to struggle.
I think in this regard, Hive is well positioned as a blockchain, as it is a general-level chain that can support a wide range of potential trends, with more functionality continually being added that will potentially mean that not only can it adjust with the consumer markets, but also potentially be the source of generating new trends through experiences, whilst being protected at the infrastructure level as the continuous provider, even when the trend passes.
On Hive, there can be multiple "good things" at the same time and even on their rise and falls, Hive can keep moving from strength to strength. And, due to the nature of the blockchain, it isn't just a long leash for Hive, it is an endless number of them heading out in all directions. Eventually, several of them are going to attract the attention of the masses, which will lead into the copycats of the trend, but not necessarily any that will be able to copy and populate the infrastructure below, with users who are loyal.
Anyone can make a blockchain, but that is just the start.
Taraz
[ Gen1: Hive ]
