Is the blockchain investment boom a thing of the past? Because technology development is on the right track

Recently, a large number of media have reported that the investment in the blockchain field has weakened, and that the technology is no longer the focus of people's attention. Is this phenomenon just temporary, or is the investment amount really declining? Is it an industry correction, or a natural reaction to the mature stage of technology development? Or is it an ominous sign?

Strong development momentum

Blockchain has been gaining momentum in 2015 and 2016. Bitcoin and Ethereum (fork) have been growing faster than ever, the anonymous currency Zcash has set new records, and tech giants Microsoft, IBM, and Amazon have all opened the door to blockchain technology.

I know quite a few entrepreneurs who have unique insights into blockchain and are always committed to building their own blockchain systems.

I have been in the technology industry for 35 years and have personally witnessed the development of many technologies. Here are my views on the current state of the blockchain community.

First of all, most entrepreneurs who have created their own blockchain systems can be called "geeks". They are computer scientists, cryptography experts, or data scientists. I admire them very much. There are also some business managers with professional knowledge who decided to start their own business because of a private visit and became a real technology entrepreneur. But how do professionals in the real world run a business?

Second, a large number of startups successfully raised seed and even Series A rounds in 2015 and 2016, but have almost exhausted the money by developing cool things, modifying code, setting up labs, and recruiting developers. Like a child playing with the latest toy, they seem to have forgotten the goal of investors - to earn income through project investment.

Third, many startups firmly believe that in this open source liberal world, only selling a large number of proof-of-concept projects is the key to development, and they believe that end users are not ready to accept commercial or product-level blockchain solutions. However, in fact, only real blockchain use cases can bring them higher revenue and expand blockchain services.

Fourth, several entrepreneurs I met were naive, full of the importance of open source, and insisted on giving away the code they developed. They had no concept of money, and they didn't even know who downloaded their code, and those who downloaded the code never made any form of return. However, perhaps it is precisely because of the ingenuity of blockchain entrepreneurs that investors are willing to pay, because even though these emerging technologies are already in front of them, investors still don't know what blockchain, Solidity, LLP and Serpent code are.

Fifth, banks jumped on the blockchain train because they were afraid of being eliminated. Their status was threatened, so they recruited a large number of experts and concentrated a lot of resources. However, it is still a mystery whether the projects they initiated can come to fruition. The more banks promise, the less likely they are to adopt blockchain technology prematurely, because they face strict supervision and compliance, and they cannot do without the traditional technologies of their industry. Banks' blockchain activities and investments are to some extent deceiving the market, but they will definitely choose to accept this technology after blockchain goes mainstream.

Sixth, investors see blockchain investment as a way to enrich their portfolio. Investors throw money at geeks, smart guys who are creative, can write convincing white papers, and support early adopters, many of whom are looking for investment opportunities. The problem is that the way opportunities are generated is very different, but they continue their blockchain journey only through ICOs, blockchain crowdfunding, and external investment, which are usually not eye-catching enough.

Seventh, many topics in the Western world revolve around Asia, the Middle East and North Africa, which are very active and can achieve technological breakthroughs. In addition, the regulatory authorities, central banks and governments in these regions are closely connected and are usually leaders in the development of emerging technologies, while in the Western world, coordination among various departments is always inevitable through meetings again and again.

Act 2 is about to begin

I don’t think blockchain development has slowed down, I’m seeing quite the opposite in London, a hub of innovation.

Every week I meet a lot of entrepreneurs who have great ideas about blockchain technology, but many of them complain that they are unwilling to realize their dreams through venture capital channels.

This is just the end of the first act of the blockchain drama, which is a great opening. The second act may be carried out in private, and countless use cases will be generated in the meantime. 2017 will be a year of transformation for blockchain technology. This second act will be more profound and attract more investment activities. This time, investors can feel the real thing, and many projects have moved out of the concept stage and into the actual production application stage, so investors want a piece of the pie.

With the diversification of commercial investment, the development of blockchain is on the right track!