CryptoMarkets are under fire which is a good thing in the Long Run !
Blockchain-related companies and projects must cope with market prices far lower than they had planned for. The most complacent among them go out of business. Others survive by slashing all non-essential spending to the bone.
One of the best examples of this is IOHK, the company behind Cardano. It also used to be one of the main developers of Ethereum Classic, but scrapped it during its last round of belt-tightening.
That was exactly the right thing to do. An innovative distributed ledger like Cardano that's pushing the frontiers of crypto is a much better investment than a me-too Ethereum clone that brings nothing new to the table.
Meanwhile, ConsenSys, the biggest firm working on the adoption of the Ethereum Network, laid off staff to save money.
Previously, they say, “it was good enough to do cool projects.” But going forward, they will focus "rigorously across the different business lines on accountability, and financial sustainability.”
In plain English: It’s OK to spend resources on pet projects when the market is booming. But when the market turns and money’s tight, it’s profitability and positive return on investment that rule.
Even giant Bitmain is not immune
Bitmain controls about 80% of the market for mining hardware. But to cut costs, it recently shut offices in Holland and Israel. It closed down a big mining operation in Texas. Plus, it laid off an entire team of developers dedicated to a previous pet project, Bitcoin Cash.
What do these stories all have in common? Trimming the fat. Companies are abandoning projects once-considered fashionable to focus on projects that can actually make money.
Some see this as proof of a declining industry. But they're wrong.
The crypto markets went through massive expansion in 2017. The sky was the limit. During those heady days, lots of resources went into projects that were loaded with sex appeal, but had little chance of turning a profit.
Unusual? Quite to the contrary, it is standard fare in the history of financial markets. After a period of major expansion, comes a period of consolidation. And …
The consolidation moves the industry from proof-of-concept ideas to real-world solutions.
End result: A leaner, meaner crypto industry than ever before — one of the fundamental factors needed to sustain a new bull market.
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Published by Mr. Crypto Lemon
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Reminds me of the experiences from the dotcom bust as just because a project is related to blockchain doesn’t translate to growth or profits. Not only will consolidation reduce the competitiveness but also secure the best talent available to continue development on the most promising projects that can follow their roadmaps and achieve adoption.
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Exactly, efficient allocation of capital and ressources.
Hopefully it will end up with companies or projects having the same success in the long run 😄
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As the same occurs with internet, crypto creates a huge massive expansion in 2017. After that many projects are disappearing and the most awesome are continuing to exist.
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Amen 🙏 ! I completely agree with you.
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The explosion picture was a little distracting! I bet its from Syria or Iraq or something. Many projects have died because of the bear market, they had been to opportunistic. We at Ambr also experienced this, but we never held an ICO, only private and institutional investors. The market shows signs of stabilizing, it will probably not go down much more, so the only way to go is up and away! Upvoted and resteemed, for the quality of your article!
Hello 👋 !
Thank you for your comment. Maybe I chose a picture a bit too aggressive 😂.
You are right by as fake projects die, investors will be more confident to be in this space as more serious projects will remain.
Thank you 🙏 and good luck to you ;).
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It is an healthy phase to bring the killer app for the mainstram population!
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Indeed, I can’t wait for more dapps as @dtube or @steemmonsters !
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What withstands this bad weather will be the real heroes of crypto market.I am hoping we will see some good days in the coming times
Indeed, this Is the time when good projects will emerge.
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Hi. in such situations it is that the capacity to be able to grow is tested and it seems to me very well what you say.
Thank you for your comment. Let’s see how it develops.
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