The Blockchain Bubble Will Pop, What Next?

That isn't any objective truth though, it's merely the consensus as defined by the majority of current participants weighed by the processing power they command.

It may seem like a subtle distinction, but I think it helps make the benefits and risks clearer.

I met a blockchain company co-founder at a conference in Silicon Valley that we can call "Alfie" for the purposes of this post. After a brief chat at the conference Alfie graciously took me out for a nice dinner. During the dinner Alfie asked if I wanted to be an advisor to their company. Another well respected friend of mine was already tying their name to the company so I had hope that it would be reasonably legit. They told me that they had raised $30M in foreign funding

The #1 thing I have learned about advising startup founders is that if they don't communicate well then they typically don't do business well. In this case after our dinner Alfie basically vanished on me and stopped responding to my emails/messages. When Alfie finally got back in touch and offered to send the advisory agreement I told them I wanted to take it slow. That I didn't feel comfortable linking my name with their company just yet but I would help them unofficially for now. I've learned to trust my gut and never do something until I feel comfortable with tying my name to it.

A month or so after Alfie got back in touch with me another friend we can call "Sally" reached out to grab dinner in SF. Sally was at that same Silicon Valley blockchain conference that I met Alfie. Sally was visiting SF for work again so we had dinner. Sally told me that they were recently in a foreign country at another blockchain conference when Alfie couldn't muster up the funds to pay for their hotel room. Sally ended up letting Alfie stay in their room for the night.

Sally learned that Alfie has not actually closed $30M in funding yet. They had instead been verbally committed a $30M investment. They had actually raised over $1M but it was spent with all the traveling. No tech built at all. No money to build tech.

I ran into Alfie and their partners again at a NYC blockchain event a few months after that. Alfie confirmed the story but said they had now closed on the $30M. Yet they were at the event fundraising for more money.

It just doesn't add up.

Anyway, Alfie aside there are even bigger scammers out there. Lots of pump and dump nonsense.

However, I believe in the team behind ShopIn (http://www.shopin.com). The founding tech team for PriceLine is being led by a serial entrepreneur I have known for years. I think they have a reasonably good chance of proving that you can do something disruptive with blockchain.

Time will tell.

Maybe, but why is it a bad thing? This can create powerful network effects. Facebook benefited from network effects derived from the fact that people want to be liked. Cryptocurrencies benefit from network effects derived from the fact that people want to get rich. The problem is that the network effects of cryptocurrency are so powerful that people didn't even need to offer an underlying product/service in order to benefit from it; I think that will change in the future though because the market is now saturated.