At first glance, it seems that the crypto industry is dying and will not reach the heights that we saw in 2017. If you look deeper though, we will see that current industry development fits perfectly with one specific trend theory, the Hype Cycle.
Every innovation goes through a similar development cycle.
- An idea is born.
- If you’re lucky, a hype swells around it. This hype will invariably roll into disappointment with the first round of beta-testing.
- Once the heavens align and all your hard work and progress results in developmental success, the technology enters the stage of practical application.
What is the Hype Cycle?
Hype Cycle for promising technologies was first published by specialists at the Gartner research company in 1995. It is now one of the fundamental concepts of Industry high technology. This cycle describes the standard implementation model and process, as it is undergoing new stages towards maturity.
- Innovation Trigger – ACME Company has a potential technological breakthrough that launches the industry and society into motion. Early success stories of the new technology applications and interest are gaining significant media coverage. At this stage, this new technology probably does not have practical products and its commercial viability has not yet been proven.
- The Peak of Inflated Expectations – Early publicity generates several success stories of implemented technologies. Unfortunately, these are often followed by a large number of failures. Some companies try for a successful implementation of the new technology, the majority fall inactive.
- A Trough of Disappointment – Interest in this new technology subsides as testing and implementation attempts do not live up to expectations. This shake leads to the falling out of many manufacturers from the emerging market. The remaining will need to do some “sobering up”. Investing only continues if those suppliers remaining in the market can improve their products sufficiently to satisfy their initial customers.
- The Rise of Enlightenment – More and more examples of how this emerging new technology may be useful to the industry are making headlines. This leads to a more broad and accurate understanding of it. Suppliers begin marketing second and third-generation products. An increasing number of enterprises are undertaking attempts to introduce the new technology and more conservative companies continue to peer at it with caution.
- Plateau of Productivity – Mass implementation begins. More clear criteria for assessing the viability of suppliers are defined. A wide range of practical applications and the relevance of this new technology are becoming hard for skeptics to deny.
What does this mean for enterprises and investors?
The Hype Cycle is a model designed to explain the up and down cycles all promising new technology inevitably goes through on the way to maturity.
It should not be regarded as the ultimate truth. Nor should you fully rely on it in your charting assessments. But enterprises and investors can use this cycle as one of the tools in your arsenal while making decisions about investments or developing a new strategy. It can also be useful for risk analysis and management of expectations.
Of course, investing too soon or too late, you take a risk. If you wait and get in late, you risk being left behind by competitors or even completely lose the market. Hurry and jump in ASAP and you risk losing your money by investing in immature technology in which markets are not ready.
And although the blockchain ecosystem is currently experiencing hard times, it also shows clear signs that it will cope with difficulties sooner or later and will continue to develop. Right now is probably the time for businesses and investors to act. This does not mean that you must immediately invest all your money in the blockchain industry. Right now, the most important investment you can make is to invest in your knowledge in order to understand the following:
- What potential benefits can Blockchain technology bring to your organization?
- How can this technology affect your industry?
- At what stage in the Gartner Maturity Cycle is blockchain technology currently located? What are the pros and cons associated with this position in the cycle?
No one knows for sure when blockchain technology will reach maturity and mass adoption. Nevertheless, it is already becoming clear that this technology will sooner or later grow into a revolutionary force that undermines the prevailing foundations. Admittedly, current conditions and moods of the market are far from the best. And many projects have nothing to make them stand out, while even more projects have yet to overcome many technological shortcomings.
On the other hand, some cutting-edge projects and initiatives are steadily building on excellent products and services while quickly solving all issues that arise along the way.
Finally, take a moment and take a look at the much larger picture taking into account the current state of world affairs. I think we will look back at this point in history and see it was very clear that blockchain was on a very typical path to maturity and mass distribution.