By Corey Moss
The stock market recently experienced a correction, which it will see at times – a stock market correction is defined as a drop of at least 10% or more for an index or stock from its recent high. It can be seen as an opportunity, and even “normal” volatility – look at it as the speed at which everything goes at this point.
Now, when looking at the crypto market, a 10% drop can almost be passed with the blink of an eye. In January, the cryptocurrency market as known by now crashed, losing $340 billion of value since the start of the month (as was reported on the 17th) – a drop of almost 50% below its December peak when the market had exploded in an uptrend. This coin drop involved almost all major cryptocurencies – bitcoin, ethereum and ripple leading the way with major drops. The big problem – worries about regulatory crackdown by South Korea and China, as governments across the world struggled with how best to regulate bitcoin. Compared to global established monetary units with central banks, there is no rhyme or reason to knowing what bitcoin and other cryptocurrency will do on any given day, nor is there any way for the institutional investor to have a clue of coin market tendencies from one day to the next.
Can the same term correction even be considered for the cryptocurency market? With the major crash in January considered, here is today’s Crypto Coin Market Cap (2/19 4:30 PM EST):
Bitcoin’s market cap and price were recorded at major low points in mid-January, however on February 2, the price was reported to have fallen below 8K – falling 30%. How to account for such huge drops, yet a continued trend for playing in this market? Coin players (is how I refer to them) for the most part don’t seem to ever be concerned with the known volatility, they’ll just look at it as a momentary lapse in which will soon be “corrected.” Call them gamblers even, just without the casino around them, and the coins are their chips. Stock market corrections can be looked upon as opportunities, and certainly not as reasons to panic. It almost looks to be the same with bitcoin and other cryptocurrencies, even in a crash state – call these players decentralized high stakes gamblers if you will – not investors.
Then look at certain companies that are making pivots to blockchains. Kodak (who I wrote about at CES time), created a public ledger for its own platform called KodakOne, managing image rights to ensure that photographers get paid for their work. This was however panned almost immediately, even bordering on scam for some at CES, and will likely not be taken seriously anytime soon (if ever). The KashMiner machine itself is an expense ($3,400), and now, fake KodakCoin is being sold by scammers.
End result: Avoid at ALL costs.
Another is Long Blockchain (formerly named Long Island Iced Tea) reported by Long Island, NY publication Newsday, currently contesting delisting by Nasdaq due to its announced plan to shift its business model to cryptocurrencies and blockchain technology. Thus, the challenge here is real for Long Blockchain, and it may have to face the consequences as to regain compliance, their stock market value must remain at or above $35 million for at least 10 consecutive days. Company shares slumped in recent weeks after an aborted stock offering, a decision to abandon a plan to acquire 1,000 specialized computers used to mine bitcoin, and a decline in the value of bitcoin. The volatility factor in play here potentially undermining Long Blockchain. In fact, the story is also being reported in CoinDesk – dual play for a company working on both sides of “the coin.”
End result: Worth a (market) watch.
Going beyond the day in, day out uncertainty of such a volatile market, there do lie the possibilities for true technology innovation though. Blockchain expert Jamie Smith, CEO of the Global Blockchain Business Council discusses all one needs to know about blockchain (you can watch or read the transcript): http://www.businessinsider.com/blockchain-explainer-and-potential-2018-1.
Watch it, read it, but focus on one particular question – can blockchain exist without cryptocurrency?
OK, now let’s get “technical.”
The answer is, yes. And here’s the hook:
And when the blockchain technology is a different kind of database; it’s a decentralized database; there’s a lot of people who have to hold a lot of information to keep track of everything that’s going on. So it can be clunky at times and it’s not perfect for everything.
There is the notion that a blockchain without cryptocurrency can truly exist as a database innovation, where the conversation of data analytics will trump any supposed “monetary” discussion. Where the world is becoming more interested in analytics vs. the physical and simple numbers, this just might make a ton of sense. While both database reporting and analytics collect data and information from the same data sources, you can’t have analytics without reporting. And without analytics, reporting doesn’t glean the powerful insights that leads to better business decision-making.*
In a Business Insider article A blockchain without cryptocurrency is just a database innovation — and that’s great, Adam Ludwin, co-founder and CEO of Chain, a company that builds software and sells it to financial institutions, discusses how he envisions a future of blockchain without cryptocurrency. Ludwin believes that although a blockchain can support a cryptocurrency, it doesn’t mean it has to, and it has many other use cases. In fact, in a July 27, 2017 report, Cognizant specified how retailers increasingly recognize blockchain’s transformative ability to streamline operations, ensure product authenticity and enable tighter supply chain collaboration, though most were still working to fully understand how to harness its potential inside their four walls and beyond.
Blockchain technology is poised to fundamentally alter the retail industry. Yet, many retailers have not taken the steps necessary to understand how the technology can help their business and what will be required to embrace blockchain thinking and technology. Retailers should begin collaborating with external stakeholders and partners on joint projects to stress-test how and where blockchain’s distributed ledger and shared infrastructure, in combination with smart contracts, can fit into their businesses. Retailers that move aggressively will enjoy an early advantage by converting analog and labor intensive tasks into digitally-automated processes.
Now if this isn’t representative of the notion that blockchain and data analytics can play a strong role in determining business outcomes like never has been seen before, I’m not sure what is. Yes, it might just represent a “first to the table” proposition in determining how blockchain will enhance innovation for any business model, yet as Ludwin alludes to here, the proof is real, and it’s there for the taking.
This from the interview transcript:
But when I don’t understand what someone is saying, I just assume they’re saying, “you know, I don’t like bitcoin, but the underlying blockchain technology…” I think I know how to say that in 20 languages now.
So yeah, I think it’s a false dichotomy. Like I said, they’re both useful and they’re actually on more of a continuum than people appreciate. So a lot of the work we do, for example, is linking private blockchain — where there is no cryptocurrency — into a public blockchain.
But to answer your question, you’re right our protocol does not have a cryptocurrency. And the reason for that is we don’t need one, because the cryptocurrency — or cryptoasset — its purpose is to provide an economic incentive to a decentralized operating group.
The business of blockchain in a “decentralized” world – and cryptocurrency is not a part of the conversation.
*The Difference Between Reporting and Analytics by Tina Nguyen (on Chartio blog)
Addendum 2/20: Chain ‘Chain Core’ is enterprise-grade blockchain infrastructure that enables organizations to build better financial services from the ground up.
Header and other image: CC0 Creative Commons
With over 20 years in audio visual integration and IT/computer sales and consulting, Corey Moss is the owner of Convergent AV. Corey writes for the publication and hosts/produces podcasts – The AV Life, The Collaboration Factor and Convergent Tech Talk. He has written for numerous industry publications about AV, IT, unified communications and collaboration (UCC), cloud and software, IoT, cybersecurity and more. He has also conducted interviews with AV and IT executives and global influencers. Find him talking about a whole lot of things, tech and otherwise.