What the Crypto "Trough of disillusionment" means to you.

"What has been will be again, what has been done will be done again; there is nothing new under the sun.." - King Solomon.  Following is the Garner hype cycle of technology. Without going into it in great detail, it is a cycle that nearly every breakthrough technology proceeds through. The graph accompanying this article shows us where we are in terms of the hype surrounding financial technology.

The technology trigger was the release of Bitcoin in 2009. As people began to consider that we could think differently about money, the climb toward the peak of inflated expectations began.

  • "Bitcoin will replace Central Banks' money."
  • "Bitcoin will replace gold and silver."
  • "Bitcoin will create world peace!"

And after people began looking under the hood at blockchain, the rocket really took off.

  • "Blockchain will replace law firms."
  • "Blockchain will replace the stock market."
  • "Blockchain will replace national IDs."

This is how the climb goes. That's why it's called a "hype" cycle. Hundreds, if not thousands of start-up companies pile into the space as does hundreds of billions in venture capital investment. Only this time, things got really rollicking! Initial Coin Offerings (ICOs) replaced initial public offerings (IPOs). Hundreds of new digital tokens flooded the space. People began taking out loans to buy the next hot crypto.

That is when the peak hit. While all this hype was being stirred up, some very smart people started pointing out real, structural problems with the blockchain technology and all these coins which are based on it.

  • "Bitcoin transaction fees are too high. It can't be used as money."
  • "Blockchain transactions are too limited.  It can't scale."
  • "World governments are going to regulate cryptocurrencies out of existence."

And so it began...  The crash into the trough of disillusionment. While it is tempting to think that we have hit bottom, I don't think we're there yet. It takes time for reality to set fully in. This is 2001 all over again, only instead of internet technology, it's financial technology.

Some of you, like me, have painful memories of the technology boom and bust. In fact, learning the painful truth about the Garner hype cycle after the turn of the millennium is what drove me to write my first book on money. I find it interesting timing (God?) that my next book is due out in the midst of the financial technology bust.

Fear not, however! Many of the hyped up concepts during the heyday of the tech bubble turned out to be accurate. It just took them a decade or more to see them come to reality. I see a similar path with financial technology emerging.

In the ashes of the trough of disillusionment, hundreds, if not thousands of start-up projects will fail. Scammers will be sent packing. This is the environment that is needed to produce innovation that is based on reality, not hype. Thoughtful partnerships will form that will transform the world of money forever.

Today, those fledgling relationships are being worked out. We will not see the full fruit of their genius for months, if not years. Netflix, Apple, and Google did not take the world by storm in 2002. Or 2003. Or 2004.  The world then was ready for tech giants to emerge.

Not so much in 2018. There is a decided bias against large, centrally managed corporations. And when it comes to something as important as money, I don't think the people of this nation - or the world - are going to be satisfied with the big banks absorbing and monopolizing financial technology.

In fact, I'm certain of it.

Over the next few years, you will see a fledgling eco-system of monetary systems emerge. They will begin with an awkward dance with the existing national currency system. They will do battle with global interests that like their monopolies. However, like the internet in 2000, new and exciting ways to imagine the future have been unleashed.

Money will never be the same. What it looks like ten or twenty years from now is more dependent on you and I than you might think. That's why my co-workers and I have been avoiding the hype and intentionally building solutions that will lift us out of the trough of disillusionment. It won't be long before we will be ready to unveil the plan.

Until then. Stay tuned. Don't worry. This is all part of a well-worn cycle. It's just going to take more time to put it all together.