stages of defining, building, and implementing protocols, but this time, billions of dollars of value are at stake at the protocol layer instead of the application layer THE INTERNET Innovation in Information Transfer Network: ISPs Killer App: Email Application Universe: Streaming video and music, data sharing, cloud computing Protocols: TCP/IP, HTTP, DNS, FTP THE BLOCKCHAIN Innovation in Value Transfer Network: Miners, Full Nodes, Staking Pools Killer App: Bitcoin Application Universe: Smart contracts, distributed computing, tokenization Protocols: Bitcoin, Ethereum, IPFS, RSK, Blockstack @Melt_Dem 4
$11 $22 Jan-15 Jan-16 Jan-17 Jan-18 Thousands ETHEREUM $0 $600 $1,200 Aug-15 Aug-16 Aug-17 RIPPLE $0 $2 $4 Jan-15 Jan-16 Jan-17 Jan-18 As of 8/2018 Up 874% As of 8/2018 Up 14,408% As of 8/2018 Up 2,854%
Big bang Crash Institutional Adjustment Next big bang Time Degree of Diffusion of the Technological Revolution INSTALLATION PERIOD DEPLOYMENT PERIOD Intense funding Decoupling of paper value and real value Rampant speculation Focus on production Recoupling of paper value and real value Decreasing growth opportunities Source: Carlota Perez, Technological Revolutions and Financial Capital
2! ARDENT - 1! 1! 2! " EARLY ADOPTERS INNOVATORS EARLY MAJORITY LATE MAJORITY NO-COINERS LAGGARDS Each successive wave of new applications changes the adoption curve and addressable market Source: Geoffrey Moore, Crossing the Chasm
OR REPLACE MANAGE t = 0 t = 1 t = 2 t = 3 Speculation Utilization Specification A BRIEF ANALYSIS OF POPULAR CRYPTOASSETS (ASSET | LIFESPAN) BITCOIN | 9.7 YEARS | $111B ETHEREUM | 3.1 YEARS | $21B LITECOIN | 4.6 YEARS | $3B RIPPLE | 5.1 YEARS | $11B ZCASH | 1.9 YEARS | $590M TRON | 1.0 YEARS | $1.3B EOS | 1.2 YEARS | $4.6B Source: Market data retrieved Sept 7 2018 from OnChainFX, personal assessment of lifecycle state @Melt_Dem 12
make censorship economically difficult / impossible • CONTROL ü Inability of a single entity to change the system • EFFICIENCY ü Consensus can be achieved efficiently
A legal obligation of one party to act in the best interest of another. The obligated party is typically a fiduciary, that is, someone entrusted with the care of money.
funds and industry insiders 1x 10x 50x Larger, later stage funds, family office, VC, and angels Final FOMO lap on the fundraise trail Exchange listing hype and FOMO, retail buying Early investors start dumping to recoup principal Puke up 75%+ of value in first 30 days Bag holders waiting for the moon that never comes time a race to the bottom
adoption of various applications 1000s 100S ? ? ”Ecosystem” Amount of capital dedicated to ecosystem? $B $B $M $M Network Cost Annual ”mining” reward or cost to maintain network ~$6B ~$1B $0 $0 Nodes in Network # public nodes in network 100K+ various types 10K ? 156 Node Concentration # entities with >50% of network power in consensus 4 3 2 1 Distribution of Tokens % supply held by top 100 accounts 19% 34% 81% 62% Development # client codebases that account for >90% of nodes 1 2 1 1 MEASURE METRIC Source: arewedecentralizedyet.com, OnChainFX, BitInfoCharts.com, Blockdaemon research, my back of the envelope math @Melt_Dem 27
Smart contracts, distributed computing, tokenization Protocols: Bitcoin, Ethereum, IPFS, RSK, Blockstack @Melt_Dem 28 Governance Layer Voting, polling, community updates, forums, foundations • Not enough to implement decentralization at the technology layer • Have to add in a governance layer which links to the protocol, network, and application
MANAGE t = 0 t = 1 t = 2 t = 3 Speculation Utilization Specification The market needs more robust infrastructure to enable assets that create true utility to be functional in a market economy @Melt_Dem 29 Source:Proprietary analysis using publicly available news sources.