All that cheap capital, initially invested in underdeveloped projects and a lot of vaporware -Pets.com, Boo.com, Webvan and so forth – helped pay for the infrastructure upon which the future internet was built.
That money paid for the rollout of fiber-optic cables, went into R&D in 3G mobile technology and funded massive data centers. All of that “stuff” was then available, at deeply discounted rates, for developers to work with after the bubble burst. It enabled everything that came afterward: smartphones, social media, algorithmic search, cloud computing, e-marketplaces, Big Data, etc. The sharing and platform economies were made possible by this infrastructure.
The tokens that are part of this current investment mania for ICOs are incentivizing the formation of collaborative networks of developers and entrepreneurs. Together they are coming up with new ideas, each one iterated on top an earlier one. These ideas will shape the decentralized economy of the future.
Importantly, these ideas are being codified in open-source software that everyone can access. Just as Satoshi Nakamoto built bitcoin upon a series of pre-existing technologies – public key cryptography, Merkle trees, Hashcash and peer-to-peer system design – so, too, will future developers be able to take the pieces of this open-source code that they like and devise new composite technologies.
The good news, then, is that the crypto bubble is in some respects an affirmation that the technology we’re all so excited about it does indeed have huge potential even if it is still too nascent for major, disruptive deployment in the mainstream economy.
The bad news, for those heavily invested in speculative tokens – many of you readers, no doubt – is that the bubble may have to burst, even more painfully than it has, before we can properly unlock this technology’s profound potential.
Here, the dot-com bubble is informative. The more sophisticated analyses of that otherwise painful event recognize how much the boom contributed to the development of the Internet.