This article is written by Sarabdeep, co-founder of Sipacoin.com. He also co-founded Bodhik.com and before that was Head of Digital Marketing and CRM for eBay India. He writes on Personal Finance, Cryptocurrencies and is published on top blogs and publications in India.
About 3 years ago almost no one had heard about Ethereum, bitcoin was priced at about $350 dollars. Blockchains were popular in academic circles and niche developer communities.
As of today, Bitcoin has gone main stream so much so that there are Ponzi schemes running on top of it. All big governments China, Russia and India are scurrying to launch their own digital currency or at least trying to understand digital currencies.
Bitcoin has crossed record prices and commands total market cap of more than $100 Billion. Track live bitcoin prices in INR. Total Market capitalization of all cryptocurrencies put together has reached about 198 Billion Dollars. Ethereum market cap has touched about 20 Billion Dollars.
In short, as we live this moment a new revolution is happening and a new generation of Crypto start-ups are leading this revolution.
Quoting Naval Ravikant Co-founder and CEO of Angel List and one of the best Angel Investors in Silicon Valley.
“The technical advantages of cryptocurrencies are bootstrap mechanisms for mass-belief. Once enough people believe in a currency, it’s real”.
Where is this Revolution Happening
As is expected most of the Crypto start-ups are based in the United States but there are other geographical hotspots which are coming up in a big way. The United Kingdom is growing fast in Europe. In Asia, Singapore is leading the way. Japan is rapidly progressing.
Here is a geographical heat map of Crypto start-ups as it stands today.
Source: CB Insights
One other interesting insight is Within in United States there are lot more start-ups happening outside Silicon Valley the traditional technology companies’ bastion. One reason being lot of these start-ups start as open source projects run by diverse distributed developers. Secondly, most of the funding in the Crypto start-ups is not following the traditional Silicon Valley VC methodology and is being currently driven by ICOs many of which are community driven.
What are the Big problems Crypto Start-ups are solving
There are essentially 3 kind of Economic/Business models being created in the Crypto world.
Cryptocurrencies as a payment token/mechanism/currency
This is the basic and most popular use case for cryptocurrencies. They provide anonymous, secured way for P2P money transfer. Bitcoin by far the biggest Cryptocurrency by market cap is the post popular use case for this.
While bitcoin has gained popularity and has seen its value sky rocket in the last year. One of the key ingredients that any currency should have which is means of Payment is still missing. Bitcoins is still not used as means of payment in any big way not lot of retailers are accepting bitcoins essentially due to high volatility, long transaction confirmation time and the fact that bitcoin still remains quite geeky.
Cryptocurrencies with some Kind of Utility Value
There are many use cases some of the bigger ones include smart contracting. A big example for the same is Ethereum. In the words of Vitalik Buterin Ethereum is a next generation smart contract and decentralized application platform. Primary use case of ethereum is to be a platform for smart contracts which are run on blockchain assets, executed with a bitcoin protocol inside the ethereum network which is powered by a crypto currency or token called ether (ETH).
Cryptocurrencies as a fuel for Micro economies
Another key use case of cryptocurrencies can be to power private micro-economies. Like Uber or Airbnb. There are currencies like Siacoin or File coin which are trying to disrupt the likes of Dropbox and AWS by building distribute storage systems. Unlike Amazon or drop box who have to build server farms to store data and files, Sia uses distributed computing to store files. As a user you can download Sia software and they will start hosting some encrypted files on your hard disk. And the currency for this ecosystem is Siacoin.
At the forefront of the crypto revolution are start-ups who are disrupting incumbents. Ethereum, Stratis, Sia , TenX are leading the charge of blockchain revolution and along the way disrupting big fat incumbents like AWS, Dropbox, legacy payment systems. Some of the best crypto start-ups are also creating entirely new generation of enterprise products for banks and other organizations. Ripple already enable international payments for multiple banks across the world including banks like Yes Bank and Axis Bank in India.
Crypto wave is touted as the biggest innovation wave after the Internet wave. Like it happen with Internet in late 90s early 2000 all Crypto start-ups are not going to change the world. Similar to internet in early 2000 there are elements of bubble in the Crypto space also, especially with how some of the ICO funding is happening. But when the dust settles down and some of these bubbles burst more stable bunch of Crypto start-ups will emerge which will change our lives like Internet did 20 years ago.