In the late 1990s, New York City partied to the tune of the internet.
I was in the middle of it, Mr. Pinstripe Suit, topped by a nifty fedora. I was also the skunk at the garden party, warning that the end was near, that the boom would bust. When it did bust, and I heard the first stories of ruined young dot-com millionaires, I laughed.
The party returned to New York this week with competing conferences by Coindesk and Ethereum supporting cryptocurrency.
I got a chuckle out of it.
Cryptocurrency prices are not responding to the hype. An after-hours buying party late on May 14, the first day of the Coinbase event, was not followed-up. By midday on May 16, the price of bitcoin was below $8,200, off from a May 14 high of over $8,800.
Ethereum, whose supporters gathered at the Ethereal Summit in nearby Queens, fared no better. When the conference opened May 11, ethereum traded at over $750. By the time it ended the next day, prices had fallen to $650.
The New Game is Blockchain
While cryptocurrency advocates toss each other charges of complicity in scams, action has shifted decisively from tokens like bitcoin and ethereum to applications using blockchain technology.
The battle is now among companies I call the “cloud czars” — Microsoft Corp. (NASDAQ:MSFT), Facebook Inc. (NASDAQ:FB) and Amazon.Com Inc. (NASDAQ:AMZN) foremost among them, along with smaller enterprise players like Oracle Corp. (NASDAQ:ORCL) and International Business Machines Corp. (NYSE:IBM).
The cloud czars see blockchain as a big future market for their infrastructure, the smaller players as an essential market for their software tools. Their targets are financial markets and industry groups. They don’t want to be the dealers who take a cut on the hands, they want to the casinos which host the new action.
Microsoft is pushing its Coco Framework and Blockchain Workbench, both built on its Azure cloud, and drew a crowd of 1,000 to its Build conference this month for a lecture about them.
Amazon is partnering with a startup, Kaleido, to help it sell Amazon Web Services to companies building blockchains.
Facebook has put together a development team to work on blockchain applications. While analysts scratch their heads, Facebook’s clouds need traffic, and quick access to 2 billion sets of eyeballs has to have appeal.
IBM has been pushing blockchain for over a year, and recently issued its own cryptocurrency tokens on Stellar. Stellar has a market cap of roughly $6 billion, against over $140 billion for Bitcoin.
The purpose of the coins is to enable trade in carbon credits, in partnership with Veridium Labs. Stellar coins are worth about 33 cents, down about 2 cents from the time the the system launched.
Oracle also says its blockchain application is coming soon, a blockchain as a service offering it will push to current customers in areas like banking and drug distribution.
Analysts are now getting out their “hockey stick graphs,” the ones that predict quick mega-growth, an essential ingredient in any hype train. IDC’s claims blockchain applications will be a $9.7 billion market in 2021, a compound annual growth rate of 81%.
The Bottom Line on Blockchain
Bitcoin was a demo for blockchain.
Blockchain automates contracts, trading and legal obligations — meaning it can eliminate more high-paying jobs than Uber ever dreamed of by running out cab drivers.
Bitcoin was the dot-com boom for blockchain. Blockchain will be one of the drivers of the cloud era’s next decade. As search drove the cloud’s creation, so blockchain will drive the cloud’s adoption.
If your job involves pushing papers or analyzing contracts, be afraid. Be very afraid.
Dana Blankenhorn is a financial and technology journalist. He is the author of a mystery novella involving Bitcoin, The Reluctant Detective Saves the World, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AMZN and MSFT, but no cryptocurrency. To follow the value of cryptocurrencies bookmark https://coinmarketcap.com/
