Blockchain Technology Has Become the Paradigm Shift it Promised to Be

Peter Vessenes has a long history in blockchain as the co-founder of the Bitcoin Foundation and its first executive director and chairman. He launched the first Venture-backed Bitcoin Company in 2011: CoinLab, Inc. and has advised the Department of Treasury, FinCEN and the US Senate GAO, among others. His newest enterprise, New Alchemy, provides technology, token game theory and ICO advisory to the world’s most innovative companies. New Alchemy has been involved in over $2bn of tokenization since its launch 14 months ago.

The cryptocurrency market is currently at $200 billion up from 10 billion a year and a half ago. When I started in this industry, the crypto-market was still only at $250,000. Since that time, ‘Blockchain’ has become a misunderstood buzzword; used by enterprises as a stand-in for innovation and trashed by many as a bubble. Those in the know have no doubt about blockchain’s far-reaching impact: Entire industries will change, economies will decentralize, and the nature of transactions will transform.

According to crypto exchanges UK has to offer, technology startups are already embracing the disruption. By using blockchain technology and tokenized models, Cryptocurrency startups raised $3.2 billion in 2017 so far through Initial Coin Offerings (ICOs). It works like this—companies planning to build new services on the blockchain use tokens as a mechanism for the exchange of information and value within their product. They sell these tokens through ICOs early in the evolution of the service, to let token holders get in on the action right at the start. With this new model of decentralized funding, entrepreneurs can fund their companies without ceding any ownership stakes to venture capitalists. It’s a paradigm shift that is upending the $500 billion institution of venture capital itself. And despite reservations about legal, regulatory, and administrative issues, VCs are now taking a hard look at the ICO arena—including backing companies ahead of planned ICOs.

“Blockchain is a paradigm shift that is upending the $500 billion institution of venture capital itself.”

Blockchain technology today seems like the internet did in 1992, poised to disrupt everything. It is opening up a wealth of new possibilities in all sectors including energy, finance, retail, banking, education and government. And as the market scales, there are principles emerging that no business should ignore. Those who view blockchain and tokenization as hype will miss out on one of the most powerful technological and economic shifts of this era. It will be their loss!