The ICO is Dead; Long Live ICO 2.0!

The Cryptocurrency World Expo in Berlin at March 22/23, 2018, gave me the opportunity to speech about the death of the ICO: Invest in 2.0 token backed by listed Icecat.

No one denies that inevitably, the crypto market has become a bear market. It’s not the first boom & bust cycle the bitcoin market goes through. 2013/2014 was another one, which I was living through as I am still waiting for part of my bitcoin value that I had in a wallet at MtGox that went broke that period.

This time around, the reasons for the bust are different. Apart from the inevitable downswing after a creepy steep upswing, there are structural issues:

• Bitcoin and its altcoins have failed as a peer-to-peer payment system, as transaction costs, mining energy costs and the price volatility are all too high.
• Ether has proven that smart contracts are of value for initial offerings, but way too many ICOs are complete scams or nonsensical; it makes no business sense to see startups with no notable experience gathering hundreds of millions of crypto value in USD
• Regulators of the G20 make a coordinated effort to crack down on criminality, scammers, tax avoidance, violations of securities laws, etc. At the same time, regulators move in the direction of bringing crypto exchanges into the KYC/AML fold.
• Major advertisement platforms, such as Google, Facebook and Twitter, started to disallow crypto and ICO ads, to protect the interests of retail investors.
• Hackers continue to disrupt exchanges and other activities, which undermine trust in the sector.
• The use case of  Blockchain has been overhyped, and is in the phantasies of many overstretched to complete unrealistic levels. Public append-only ledgers, such as blockchain, can actually only be used for storing metadata. They are not useful for storing real content, as this bears for example the risk of storing illegal materials forever or privacy-sensitive data.

It will be inevitable that in the near future, the crypto and ICO bubble will continue to deflate rapidly. For years to come, the market goes into a post-nuclear winter.

2.0 Tokens: Real Business Pilots with ICURY

Is it then all doom and gloom? No, not at all. A good winter retreat of the crypto and blockchain market, will inevitably lead to the survival of the most healthy and promising business concepts.

We strongly believe that the ICURY has great potential to incentify Icecat’s existing content syndication network. We see this as an opportunity to make ICURY stand out from the crowd, and therefore continue with business pilots in co-operation with our clients and other ecosystem stakeholders. It’s like the internet boom & bust cycle of around 2001: in the following decade the current winners distinguished themselves from the rest.

Martijn Hoogeveen

Founder and CEO of Icecat NV. Investor. Ph.D.