Cryptocurrency has taken the world by storm as it is the most popular topic of the barroom conversations and global media outlets. The discussion, which started with the bitcoin frenzy, has now evolved into a serious and comprehensive discourse with direct links to multiple industries, technologies, and use cases.
Currently, there are two fundamental trends or areas of discussions: First is Blockchain as a technology, and second is cryptocurrency as a potential disruptor in the financial markets. Blockchain, which is the backbone of the digital currencies, is being widely studied for a number of prospects – fundraising, product development and cybersecurity. Every company and industry aspires to use it to her advantage, and excel in the race of innovation.
While trends, practices, regulations, and prospects are still evolving, there are at least 5 things that we can learn from this frenzy surrounding cryptocurrency.
**1. Regulation vs Innovation **
The most prominent characteristic of Innovation is it being anti-status-quo and disruptive, and it require free floating resources and ideas with greater demand for autonomy. Conversely, regulations are meant to bring stability, control volatility, and get control. One of the fascinating developments of the next decade will be to see the cryptocurrency community innovate toward greater autonomy, and the governments and regulators struggling to exert control.
With the growing incidents of cyber-attacks, fraud, and thefts, the voices for regulation have become louder than ever. It would be interesting to see how to the industry takes this up and ensures due autonomy and decentralization.
2. Order vs Disorder
The global communities are the major player in cryptocurrency market. If they are able to autonomously dictate the terms and method of ideal financial exchange, it will be a revolution. There is a strong possibility that financial freedom is not linked to the interest of states or regulators. How the governments take up this issue will shape the way the wind blows for the next 10 years.
As of now, there are countries who have controlled development, trading, and investment of Blockchain and indicated deep regulations. Contrary to this, there are countries where Blockchain development and trading is strongly encouraged and will continue to be.
**3. Diversification vs Centralization **
The frenzy around bitcoin has attracted too many individual investors too, who are in the market to make some quick and short-term gains. However, we would not encourage any investor to be misled with the positive market movements in cryptocurrency. A positive market momentum does not replace the importance of a diversified portfolio.
4. This is Not Settling Somewhere Soon
Creation of a new potentially very disruptive technology or product drives interest from all aspects of life. However, the inclusion of different players creates volatility as well. While there have been a number of regulatory and political steps by states to protect the investors and players, one thing is sure – this is not settling somewhere soon.
The industry is here, and the interest will keep growing with every passing day. However, since the entire industry is evolving, it is vital to separate the news from the noise and keep a check on the investment decisions.
5. Invest But After Due Diligence
We have been covering the issues of thefts, hacking, and fraudulent practices in the industry. As an investor or startup, you must conduct due diligence to avoid spam and fraud. In this regards, study the product, the team, and the technology behind as it’ll enable you to develop the right understanding and make better business decisions.
At InWage, we are committed to facilitating startups in ICO and fund-raising. If you are interested to learn more about the process and best practices of ICO, read a comprehensive guide by our Co-founder, Jonathan, here.