The Future of ICOs: Looking Ahead to 2019
2018 is ICOver, but 2019 promises to bring new life to the ICO market, as discussed in this article by Michael Lachar of Rubiix.
2019 will be a great year for ICOs.
It’s been a wild few years for blockchain, with definitive highs and lows across thousands of ICOs.
What qualifies as a viable blockchain project has changed drastically in just a few years, and the crowd of ICO contributors is driving a change toward higher standards.
Here’s a brief look at the distinct eras of ICOs we’ve lived through so far, and a look forward to 2019.
2017: The Year of the “Whitepaper ICO”
2017 was the year of the “Whitepaper ICO.” If you had any idea for a company (even not a very good one), you could dress it up in a whitepaper, slap the words “disintermediated” and “decentralized” on it and before you even knew it, in came the crypto.
There are famous cases of outright ridiculousness. There’s the iced tea company who slapped the word “blockchain” on its name and instantly saw its stock soar 200%. And there’s the digital kitten company who sold virtual cats for $6.4 million.
Then there were also more noble projects that had great intentions but haven’t yet channeled that raw determination into a working company. Even with freshly-minted war chests, they slowly found that all the money in the world couldn’t get them properly to market.
There was a data marketplace which promised to help users monetize their own Facebook data. They raised $40 million before realizing that Facebook itself was already pretty good at doing that. Then there was the home-sharing service, which aimed to obliterate Airbnb with blockchain. They raised $15 million, but Airbnb’s most recent round was $1 billion and they’re currently valued at $31 billion.
Those companies, and hundreds of others like them, completed their ICOs after riding a tidal wave of hype that swelled during the year prior.
In 2017 we learned that Blockchain can do a lot. It’s transformative and powerful and here to stay. But it is not a replacement for solid product development and product-market fit.
2018: The Year of the “Killer Whales”
In 2018, a lot of the immature projects (and most of the outright scams) got flushed out of the industry. That’s the good news, but that was only part of the problem. As more mature companies started to fill the cracks, people often overlooked their motivation for turning to blockchain.
We were so happy to have real companies doing ICOs that we never stopped to ask ourselves if influencer marketing really needs to be influenced by blockchain, or whether or not a mobile payments solution really needs to create micro-economies in every community in the world.
As more and more people bought the hype, the economics of the token they were buying became less and less in focus. In addition, so-called “Crypto Whales” purchased and dumped huge quantities of tokens, sending the value into a tailspin.
2019: The Year of the Product, Purpose, and Protocol
Any project hitting the market these days should be judged against three main factors: product, purpose, and protocol.
If “project” used to be the key word in evaluating an opportunity, 2019 is the year of the “product.” If you don’t have something that is already built and working, it’s really hard to make a case for yourself in today’s ICO market.
Purpose is also increasingly important, and this refers to the need for blockchain in your product. Companies “going blockchain” in 2019 should have a legitimate use of this amazing technology in order to enhance their product or enable its full potential.
Lastly, while solutions built on top of current blockchains (such as Ethereum) are effective, the real opportunity for transforming industries lies in the ability to create standalone, proprietary, and highly customized implementations of the technology. This calls for more and more companies creating their own blockchain protocol. It also demands higher-level development talent and a full commitment by the company to throw its weight behind the blockchain movement.
If ICO contributors support companies like this, 2019 will be a great year for ICOs.
Michael Lachar is the CPO and Co-Founder of Rubiix. As a product specialist, Lachar has designed and built multiple consumer-facing tech platforms in the fields of hospitality, digital marketing, and fintech. Lachar started Rubiix to solve the growing gap between data-providing consumers and digital media platforms and to help improve brand and consumer relationships.