Cryptoeconomics, the beginning: where will the new billionth markets come from
Cryptoeconomics will gradually fill those niches where transactions for some reason were impossible
Among start-up companies, a fashion has begun to attract investments in an alternative way - through the sale of tokens for cryptocurrency. These are the so-called ICO (Initial Coin Offering). Such a tool is often adopted by technology startups, which are subsequently going to use Blockchain as their base technology for their future ideas. Everything related to crypto is not alien to them. They claim to become new players in the cryptoeconomics.
Generalizing concepts such as cryptoeconomics or ICO look beautiful, but many have predictable fears that crypto startups are a soap bubble. And startups are just businessmen playing on the popularity of new trends. And to these theses, if desired, you can find a lot of evidence. At least because the cryptocurrency exchange rate is still very unstable. And it’s not always clear from the end of the funding campaigns what value those collected funds have. And the value of the ideas themselves of new young entrepreneurs sometimes seems greatly overestimated.
But I’ll try to show the other side of the coin and analyze what kind of problem crypto-startups can solve. And why it can hardly be solved using the tools of the traditional economy.
When there are no friends, no reputation
Let's start by looking for similarities. With a naked eye you can find that startups that claim to be global and have recently launched ICOs want to solve problems from the same order. Their goal is to play on the hidden potential of a particular market, the value of which until now could not be extracted by traditional methods. For example, the startup Propy, with the help of smart contracts, is going to solve the problem of quick and easy sale of land, real estate and, possibly, in the future, other property to foreign investors. This is exactly the area where traditionally there were many obstacles. First, due to the lack of a chain of links between real estate sellers from one country and buyers from another. It’s good if the buyer has a competent agent or just friends abroad who will help find the right connections with the owners and establish trusting relationships. But if this is not the case, potential investors simply will not know what investment opportunities they have abroad, they will not trust strangers.
As an example, Propy cites the relationship between sellers and buyers in China and the United States. Now, Chinese citizens are one of the largest groups of foreign investors in US real estate (they own American real estate worth more than $ 28 billion). But the volume of the general local market of the United States is ten times larger - over $ 29 trillion. At the same time, far from all recently wealthy Chinese people know the mechanisms of how to choose and buy something in America. Although probably we would like to.
Blockchain in this case can replace the missing link. In a decentralized registry, anyone can track transactions of interest to him. Such transparent operations, on the one hand, will build the reputation of the seller, agent, and, on the other, the investor. Here, almost everything is like in Uber, where the passenger sees the driver rating, and the driver - whom he will have to fail. The only difference is that Uber centrally invents the general rules, and all its participants in transactions based on decentralized registries.
Another future market place for selling virtual goods wants to occupy about the same market niche that has not been opened up to now. He completed the ICO yesterday and raised $ 11.5 million (in terms of cryptocurrencies) in four days. In the world there are thousands of video games in which players receive or spend a lot of money on pumping their characters, buying virtual attributes. But until recently, a single marketplace for all these virtual worlds did not exist. This did not allow more than 2 billion players to sell their virtual values. Only the most advanced well-known gamers profitably sell their skins on individual sites. Others trust them, so in their gaming worlds they already have a certain reputation. The player who is still no one in his virtual world is unlikely to find a one-time buyer for a virtual product that he no longer needs. For the simple reason that he will not even know how to do it. And here the decentralized Blockchain mechanism can once again play its role and create new values, a new market.
In the foreseeable future, cryptoeconomics can be built on such bricks. It will gradually fill those niches where transactions for some reason were impossible. And the value of goods or services was limited. At its core, what new startups are trying to build is very similar to the ecosystem of services that have now formed AirBnB rental services or Uber private transport services. The only difference is that the constructor from which the ecosystem is assembled will no longer have a centralized collector. The rules of the game will be formed by the participants of this game themselves. This theoretically should open up new opportunities in the field of logistics and cross-border transportation, cross-border transactions and investments. In other words, the world is one step away from becoming more globalized. And only the launch of startups like Propy or Dmarket in 2018 will show us whether this next step is even possible. Moreover, the risk that a bubble just swells around a new trend is very high.