There have been some misunderstandings among investors and businessmen about the differences between public and private blockchains.
Ethereum, for example, has been described as a blockchain solution that does not involve the burden and regulation of Bitcoin – but as a public blockchain (one that is not regulated by a private company and is therefore mostly traded on public exchanges), ETH faces the same virtual currency regulations as Bitcoin (KYC, AML, MTL, etc.).
Only private software that is not traded as a commodity is excluded. However, this category faces other problems, such as security and trust.
I see these trends this year for public blockchains
1. ICOs will exist, increase and diversify
Token Crowdsales (also known as “initial coin offering” or ICO by all others except lawyers) started about two years after the first “Altcoins” appeared. (BitAngels was the largest investor in the first ICO in Mastercoin (now OMNI), which received up to $600,000 in August 2013).
Ethereum was the first big winner of the ICO Marketplace in June 2014. In the amount of financing (18 million US dollars, while Bitcoin stood at 600 US dollars) and appreciation (peak at around 70 times the original ICO price of 0.0005 BTC).
Maidsafe, Factom and Storj also had a successful ICO in 2014. Augur was one of the few winners of an ICO in 2015 (a weak year for Bitcoin and ICOs).
In 2016, immense sums were collected for The DAO (see next punk for more), Waves, Lisk, FirstBlood, Golem Network and Iconomi. Some of them, but not all, saw some good sales at the ICO (Lisk and Augur were best received when they started trading in 2016).
This movement is maintained and accelerated for so long
The average “serious” ICO barely reaches the minimum it wants to collect (which is complicated by the number of ICOs).
ICOs remain a faster financing option than traditional angel investors
Regulators, especially in the USA, maintain their attitude of “attentive observation
While we are counting the first days of 2017, there are at least 35 waiting or ongoing projects on ICO-list.com. I can imagine that there will be at least 200 ICOs for 2017 – with a total sum in the 9-digit range, of which the top 10 will receive most of the financing.
2. innovation is balanced by caution
Fear and greed are the two driving forces of any market. The DAO ICO has raised an incredible $160 million (almost 9 times the Ethereum funding). The fear to miss the next big train à la Bitcoin and the possibility to pull out his money again, fueled the whole thing.
And then came the hack and the split. And not only the DAO died before it could take action, Ethereum itself has not recovered completely since then.
In 2017 there will be a lot of interesting use cases for public blockchains that will use an ICO to get attention and funding.
Some will be successful, but the bar will be set higher. Those with a suitable history will be preferred (no more anonymous developers). 3.
3. not every blockchain will be funded by an ICO
Zcash was last year’s most controversial listing, yet it was fully funded by private sources and mining is still the larger part of its distribution strategy. Other leading private coins, such as Dash and Monero, also acted in the beginning.
Steem, a digital currency linked to a social media network, reached the top 10 tokens traded in 2016 without an ICO.
Private blockchains will also continue to develop this year. Consortia such as the Linux Foundation HyperLedger Consortium, or VC-supported private companies, will target industries such as banking, medicine, insurance and real estate.
The big question that will be asked in 2017, however, is to what extent private blockchains can be successful, as the industry has few talents. Public blockchains have already recruited small armies of developers who are reinventing already known code.
In my opinion, Angel investors stay away from private blockchains for this reason.
Disclaimer: This article was originally published on CoinDesk. CoinDesk sponsors the Bitcoin Investment Trust. Michael Terpin is an investor in digital currencies and assets, including Augur, bitcoin, dash, ether, Factom, Lisk, MaidSafe, monero, Omni, Storj and Waves. This is not an investment tip and is not representative of BTC-Echo.