Tag: blockchain

How Crypto Follows the Hype Cycle

Between 2013 and 2021, Cryptocurrency has followed the Hype Cycle exactly as expected. Let me explain.

What is the Hype Cycle?

The Hype Cycle, coined by Gartner, is a law that describes how humans accept new and emerging technologies and adopt them into our everyday lives

Its a generalized way of estimating and predicting the rise and fall of a new technology and the way people react to it.

Figure 1: Phases of the Hype Cycle Curve. Source: Wikipedia; Olga Tarkovskiy – Own work

The curve above is a graph of TIME on the x-axis, and EXPECTATIONS on the y-axis.

In cryptocurrency, expectations is quantified by looking at the price or market cap of cryptocurrencies. For years, the price of cryptocurrency was not interesting. Price was flat.

Hype Cycle Phase: Technology Trigger Pre-R&D

Crypto wasn’t being discussed all over Twitter. It was a nerdy, boring conversation.

Cryptocurrencies like bitcoin were only being used by a few small groups of people, and was nowhere near mainstream discussion or adoption.

Just look at the market cap of Bitcoin between 2013 and 2017 below. Relative to where it is now, this is extremely insignificant

Figure 2: The market cap of bitcoin between 2013 and 2017. Source: CoinMarketCap

Bitcoin’s price and adoption wasn’t even relevant at this point. Compared to the Hype Cycle phases in Figure 1, cryptocurrency wouldn’t have even been on the charts.

But while the public vernacular and mainstream media ignored cryptocurrency, engineers and enthusiasts were quietly building. On the Figure 1 Hype Curve, at this point crypto is leading up to the R&D phase; it still early.

This is why venture capitalists like Marc Andreessen are famously interested in “what the nerds do at night“. By recognizing emerging tech trends before everyone else, you have the opportunity to invest in them at a favorable discount… when the technology principles have been proven, but the applications have not quite been built, they are not user friendly yet, and the mass majority of people aren’t even aware of the technology.

Vitalik Buterin was funded by Peter Thiel in 2015 to found Ethereum. As the potential applications of Ethereum started coming into light, a buzz started happening within tech circles.

Hype Cycle Phase: Early Adopters Investigate

People started to understand the power of this thing called blockchain, and could envision the possible smart contracts and more.

While Bitcoin was built to serve as digital gold, Ethereum was built as a platform from which blockchain applications would grow.

Coinbase.com became the de-facto place to purchase Bitcoin and Ethereum. It was easy to use and wasn’t that different from purchasing stocks at a place like Fidelity or Charles Schwab.

Working a desk job at a cubicle during this time, it felt like colleagues in the office were all starting to think about crypto and were considering buying it on Coinbase.

A few viral memes and Twitter conversations happened and before you know it, the prices of Bitcoin and Ethereum, the two big flagship cryptocurrencies, were pushing all time highs almost every day.

I hate to include a disclaimer here, but as you can tell, I’m going to be generalizing a lot in this post about the crypto community. I mean no disrespect. I love blockchain technology and the projects it has enabled… I want nothing more than what’s best for crypto as a whole. As an owner of bitcoin, ethereum, and other coins, I’ve seen the emotions of early adopters around me have experienced when the prices rise extremely fast (and inevitably fall just as quickly).

Hype Cycle Phase: Inflated Expectations

Towards the end of 2016 and into 2017, everyone started buying crypto. If you took a 10 minute uber ride across town, you would almost undoubtedly hear your driver mention something about the price of bitcoin.

Crypto millionaires were created. A friend of mine even managed to pay off his student loans from selling his stake in Ethereum, which he had acquired just months earlier.

At some point, it felt like people didn’t necessarily care about the applications of blockchain technology. Your average person was interested in trading, buying and selling, getting rich quick and only focused on the price rather than the underlying technology.

At the peak of inflated expectations, a few things can happen:

Engineering and developer teams tend to over-build. More crypto’s launched between the end of 2016 and early 2017 than anyone could keep track of. But the projects being built were not being used by anyone. The projects had no customers…

What the projects DID have, however, were investors. There was an abundance of over-eager individuals looking to throw $100 bucks into any coin with a slim chance of making it in hopes of returning 1000X on their investment.

The problem with this is that there are more people in the crypto community who are focused on making money from the technology than there are users and customers who are actually using the technology for the value it brings into their lives.

This fixation on price is a problem with the crypto community and it still exists to a large extent today.

Hype Cycle Phase: Trough of Disillusionment

As more cryptos were launched than there were users or customers, the over-inflated expectations started to become apparent.

The thing is, no one knows just how HIGH the peak of inflated expectations might go.

Peak of Inflated Expectations leads into the Trough of Disillusionment. Source: CoinMarketCap

In order to capitalize on investments in crypto, the smart ones on Twitter and Reddit communities preached the importance of holding onto the investments, not selling, and riding out the wave.

The thing is, this is a tricky thing to do. It is easy to decide to sell at the top, and even easier to decide to call it quits as an investment tanks and you lost 80-90% of your the value of your portfolio.

In some cases, those that sell at the top end up exiting while they’re ahead. In other cases, people with intentions to sell at the top end up waiting too long, and end up making an emotionally drastic decision to exit their crypto position at the worst possible time, during the trough of disillusionment.

Because the trough can last for years. In the case of Bitcoin and Ethereum, it lasted from the beginning of 2018 through late 2020.

The thing about cryptocurrency and blockchain technology (at least so far) is that the rise and fall of price of different cryptocurrencies are heavily correlated with each other.

As bitcoin rises, ethereum usually is rising also. As bitcoin enters the trough of disillusionment, ethereum was too. The same can be said for the other crypto’s that made it through the trough.

Bitcoin didn’t really start to enter the next phase until the coronavirus pandemic was in full swing mid to late 2020.

Hype Cycle Phase: Enlightenment to Productivity

Between late 2020 and today, the market cap of all cryptocurrencies has continued to push all time highs.

As of 2021, bitcoin has pushed all time highs. Source: CoinMarketCap

The reason for this may partly have been accelerated by the pandemic, but there’s more to it than that.

Within the crypto community, there is a large amount of funds going into projects that are receiving mainstream adoption.

NFTs (non-fungible tokens) are one example of an application that is seeing close to mass adoption.

Although it is still a fringe hobby, NFT collectibles have some resemblance to the enthusiasm around collectible sports cards and even Pokemon cards.

People are creating NFT masterpieces using artificial intelligence and listing them for sale as unique, one-of-a-kind tokens on websites like OpenSea.

For a fraction of an Ethereum, anyone can go on OpenSea and start collecting their own NFTs.

This is just one example. There are a number of other projects being built on top of Ethereum and discussed but we for many of these applications, it seems we still have a long way to go before mainstream adoption.

So as we’re pushing all time highs in almost every cryptocurrency, my question for the world is: are we entering another peak of inflated expectations? Or is this time for real? Are we truly in the Plateau of Productivity?

And this brings up a few follow up ideas and questions about the future… because at the end of the day, we can’t truly predict the future, we can only form hypothesis based on historic trends, proven laws, and observable principles.

Final Thoughts and Additional Questions

Could a technology go through the various phases of the Hype Cycle more than once?

Will cryptocurrency enter another trough of disillusionment?

How might other technologies follow the hype cycle?

Are there examples of technologies that do NOT follow the hype cycle?

As a technology follows the hype cycle, will the peak of inflated expectations ever over-extend the value of the technology as it reached the Plateau of Productivity?

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Buying and Selling NFT Artwork made by Artificial Intelligence

For a fraction of an Ethereum, you can purchase NFT artwork – many of which are created by an artificial intelligence.

by Project Argo – titled Fading

Combining two exciting emerging technologies, both blockchain and artificial intelligence, you buy and sell unique NFTs and AI-generated NFT artwork on website is called OpenSea.

Project Argo is one collection I’ve browsed through. What’s interesting about Project Argo is that the artist has been able to use AI to develop artwork that seems to have characters or entities within each piece.

As seen in Fading on the right, the NFT appears (to me at least) to feature a face.

Artworks become much more interesting when they appear to feature individual characters and facial expressions.

All types of art – whether painting or literature or music – seems to have a positive or negative connotation.

Some artists create more uplifting artwork (Norman Rockwell or Michelangelo’s Sistine Chapel) while others create artwork that is mischievous or scandalous work, and other artists create powerfully dark and emotional works.

Looking through the list of images made by AI, I can’t help but wonder about the baseline emotion evoked by artificial intelligence.

What connotation and sentiment does the neural network create when generating these graphics?

As the lay observer, every photo seems to evoke the same balance of emotion, somewhere between darkness and excitement.

If we had a way to measure emotional sentiment, where might each image fit on a scale that measure how optimistic or pessimistic each image looks?

To me, it feels as though each image is quite close to neutral.

Zen by Project Argo

The surprising thing is that, looking through all of these photos on Project Argo, I get the sense that each piece of artwork is depicting entities that are saying and feeling the same representative emotions.

And yet its difficult to put it into words.

Its like trying to explain what is experienced under the influence of psychedelics – often impossible to do so in worldly terms.

The resemblance to faces in the photos are approximately accurate. Although there is no true face, the outline of eyes, nose, mouth, etc. evoke a baseline facial expression that a person might have when their face is at rest.

The entities depicted in these photos all have the same, neutral facial expression. Not a single smile, eyebrow raise, or wink. They all have the same, neutral look – one that you cannot quite figure out.

Yet the images don’t feel expressionless or emotionless.

They feel as if they are showing life at work. Life doing what life does – here to experience our world for the sake of its own existence.

Except that these entities are in a different place. They don’t exist in our world, but in an unknown realm generated by AI.

Project Argo’s creator, in naming each photo, seemed to air on the side of futuristic Armageddon.

“The last island party” and “robot revolution” for example.

Of the list, Dreamy City and Penguin one stood out. They’re all worth a look.

When artificial intelligence designs an image for humans to look at, what is it trying to say to us?

Is AI trying to tell us something?

As artificial intelligence looks back at us in society, could the message be “you can do better”?

Perhaps we can gather a sense for what AI feels, by looking at the artwork it creates, and by interpreting the conversations it has.

But we’ve got to focus on safety when dealing with artificial intelligence. AI safety is something I’ve spoken about since the beginning of this website.

I’m planning to start selling my own NFTs on OpenSea as well and donate 50% of all revenue to medical research aimed at helping humans live healthier for longer. Please follow me and consider donating or contributing!

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SHIB Crypto Community Supports Dog Rescue and Artwork

There are enough projects out there that are actually doing nothing. Admittedly a meme coin, SHIB is building a strong community:

It goes without saying, THIS IS NOT INVESTING ADVICE. Do your own research. We all know that crypto tends to follow the Hype Cycle pretty accurately, so ups and downs are to be expected.

SHIB token mascot
source: happy doggo

Since the SHIB token community is actually helping raise money for Shiba Inu dogs to get rescued and adopted, it separates itself from 99% of the other coins out there.

The SHIB token and community actively promotes the Shiba Inu Rescue Association.

The Shiba Inu Rescue Association is a 501(c)3 non-profit organization. The SHIB crypto community does the service of encouraging members to leverage Amazon Smile, which can donate a portion of your Amazon purchases to the nonprofit.

As fellow dog lovers, when we heard that SHIB crypto community is helping Shiba Inu’s get rescued and adopted, we wanted to be involved. So, yes – we purchased some SHIB token with no intentions of selling for the foreseeable future 🙂

Is the coin garbage? Quite possibly. If by owning SHIB coin, more cute little Shiba Inu puppies are able to find homes, will you regret your ownership regardless of how the price turns out in the long run? Doubt it.

Why The SHIB Token Crypto Community Matters

shib token mascot 2
yep, that’s a bucket of shiba puppies. source: pinterest

SHIB is one of the few communities doing something in the real world.

For that, the community deserves some respect.

The thing about the world of crypto today is that there are a never ending number of new projects and tokens available for purchase.

New crypto projects are launched every. damn. day.

Building a cryptocurrency token on the blockchain has become commoditized.

Although Blockchain can be difficult to wrap your head around, the technology itself is surprisingly simple and elegant compared to the complexities of other types of software.

Development is relatively simple…. the average college student majoring in computer science can write a few lines of code and create a blockchain.

In a market of commoditized goods and services, the one thing that will never be a commodity is the human. People will always determine the value of any cryptocurrency token. The people are the ones that build the community which can create something meaningful.

If you’re looking for a strong cryptocurrency to get on board with, find a token that has a dedicated community.

That being said…..

When two of the biggest names in technology are involved with a project, its a good sign. I’m talking about both Elon Musk (CEO Tesla, SpaceX) and Vitalik Buterin (founder of Ethereum).

Their online publicity for SHIB is another signal for the dedicated and committed community that the SHIB token is building:

Elon Musk Subtweets SHIB Token

Say what you will about shitcoins being overhyped and “pump and dump” schemes. SHIB might even be a scam, who knows… and there has certainly been some big action on the “pump” side.

elon musk tweets about getting a shiba inu

Tweets from Elon Musk about getting a Shiba Inu was likely a subtweet referencing the meme that SHIB as well as DOGE have become.

Vitalik Buterin Gifts $1 Billion in SHIB to India Relief Fund

SHIB token mascot resting his weary head
source: lifehacker australia

Vitalik Buterin was gifted billions of dollars worth of SHIB token, $1 Billion of which he first donated.

But Vitalik had even more SHIB – he only donated 10% of his holdings – and his next move was unexpected.

As seen on Etherscan, Vitalik actually burned the equivalent of more than $12 BILLION in today’s value, since SHIB has appreciated since then.

Vitalik explained his rationale for the whole endeavor in a note.

In the note, Vitalik mentioned that he was “impressed with how the dog communities have treated the recent donations” and focus on “making the world better as a whole“.

For a crypto community, this is quite inspiring to see, and might just restore our faith in humanity.

SHIB Token Artwork

Aside from donating, the SHIB community encourages its members to create artwork.

Its unclear from the website how the artwork is related to the SHIB token, but it can be expected that at some point, NFT artwork may be involved.

There are all sorts of different artwork creations being made featuring the cute little Shiba Inu puppy mascot, just look at a few of them below.

SHIB token community artwork collage

As far as a Shiba Inu coin art incubator, it looks like they’ve started taking applications and we’ll look forward to seeing more exciting creations that the community comes up with.

So, its a fact that SHIB token has had more than a few positive impacts on the world: donating money to India Relief fund, as well as helping raise money for Shiba Inu dog adoption.

And if we’re going to risk betting on a cryptocurrency, we want to bet on one where we know there is at least some good in the world coming of it, because there’s always the chance that we lose our money.

Regardless of whether or not we go to the moon, funds are being raised, and dogs are being helped.

Because dogs are our best friend.

Which cryptocurrencies do you like? Which tokens do you think are actually doing something in the real world?

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