Crypto is one of the most innovative and groundbreaking technological developments to have occurred in recent history. The question is: is crypto still innovative, and are new cryptoasset platforms being increasingly expected to provide significant technical improvements over their predecessors?
According to experts speaking to Cryptonews.com, some people are always on the lookout for the next ‘big thing’ in crypto, with many of these people motivated more by financial speculation than any specific desire for technological evolution.
However, an arguably bigger group of people within crypto appreciate the relative stability of platforms such as Bitcoin (BTC) and Ethereum (ETH). By updating themselves in a more gradual and secure manner, such platforms provide the solid foundation on which innovations can grow.
Cryptoassets: the new smartphones?
Some people view cryptoassets as a new kind of consumer tech product, one that has to be constantly updated, upgraded and superseded. This kind of thinking is typified by a tweet this April from Huobi:
Innovation inspires, let’s show it!
— Huobi (@HuobiGlobal)
Looking at Twitter, or searching the web for the “most innovative cryptocurrencies,” you’ll find no shortage of people championing any given new cryptoasset as the greatest token ever developed. You’ll also find something very similar for new platforms and services built on top of various blockchains, particularly those related to decentralized finance (DeFi).
Our team is always happy to support innovative DeFI projects. From now on @UniswapProtocol’s $UNI # will be availab… https://t.co/a5lLEYtIBe
— Changelly (@Changelly_team)
However, while there does seem to be a noticeable tendency in crypto for some people to talk in terms of which project is more ‘innovative’ than the other, industry figures don’t believe it’s a dominant tendency. What’s more, CoinRecoil, an India-based crypto exchange, Founder Kunal Barchha told Cryptonews.com that a desire for ‘innovation’ is often simply driven by a desire for a new coin to pump.
“I would say a very few percentage of people view cryptos as consumer tech products. Most of the people are interested in riding the wave and making profits,” he said.
Barchha acknowledged that those most dedicated to and personally invested in a project may be focused more on its technological aspects than anything else.
However, he argued that many people “are mostly waiting for the ‘next big thing’ to make decent profits. We have seen that during the [initial coin offering] boom, then [initial exchange offerings], and now DeFi.”
Tim Rainey, Chief Financial Officer at New York-based mining co-location provider Greenidge Generation, also suggested that the crypto community is generally split between two basic mindsets:
- One sees cryptoassets as a speculative hedge against the current financial system,
- The other wants to get in on the next big thing at the ground floor.
“The former value things like stability, network effects and branding, and generally gravitate towards BTC due to these qualities. They view its stability as a feature not a bug as evidenced by Michael Saylor’s explanation for putting MicroStrategy’s reserve cash in BTC,” he said.
As for the latter group, it’s “motivated by the possibility of being among the first to invest [in a new crypto] before it can potentially reach the popularity and price appreciation equal to those of Bitcoin or other well-known cryptocurrencies.”
Technological foundations and standards need stability
Central to this split are two key factors which make stability a good rather than bad thing in crypto.
Firstly, in the case of Bitcoin, its growing status as a store of value arguably means that it doesn’t really need to constantly innovate.
“Bitcoin is a world-class brand like Coca-Cola or Disney now. It’s known and trusted,” said Guardian Circle, a community emergency response network that uses the GUARD token, Founder Mark Jeffrey, who argued that Bitcoin’s cautious approach to change is one of its strengths.
“Yes, it’s slow. But as a store of value, it’s more than good enough,” he told Cryptonews.com. “Bitcoin’s purpose in life is to replace gold. It doesn’t NEED any more features. And for brand and trust purposes: older is better. I don’t think anything can or will supplant Bitcoin now as the primary digital store of value. That race is done.”
Secondly, many blockchains essentially serve as infrastructure for the varied third-party projects built on top of them. According to Bitcoin SV (BSV) developer Brendan Lee, this means it would be unwise to frequently update and change them.
“The whole idea is to create a system that can be used as a foundation layer for future technology. This means that it must be simple enough to build anything, but also that it must have a locked protocol,” he said.
Lee argued that few people would accept a system for storing value that might get an ‘upgrade’ which renders their money unspendable or their financial application unusable. “It is not the protocol that must change to add new use cases, but the protocol which must be flexible enough to accomodate all use cases.”
Still, for cryptoassets that don’t aim at becoming infrastructure or a store of value, some degree of regular innovation is necessary.
“Blockchains whose main aim is not to be a store of value would be expected by their users to continue evolving to better meet their original vision. If such a blockchain stops innovating, other blockchains that aim to solve the same problems may take its place,” said Igor Runets, Founder and CEO of BitRiver, a Russia-based mining services provider.
In light of this, we can continue to expect a regular flux of new projects, particularly when it comes to projects built on top of blockchains like Ethereum and Bitcoin. But as the above has shown, there’s no innovation without some degree of underlying stability.
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