To Counter the Bubble Narrative, Major DApp Projects Should Release Their DApps on Mainnet. ASAP
There is a highly damaging narrative developing around the blockchain space that it’s all just one big, nasty bubble. This leads to lots of price volatility because whenever there is a price movement caused by liquidity shortages (when a significant share of holders try to cash out for some reason like at the moment), some investors probably panic thinking that the “bubble” is starting to burst. To understand what is meant by liquidity shortages here, consider that the whole total cryptocurrency market cap is supported by perhaps at most $10 billion in actual widely used currencies like USD, EUR or JPY being available for purchasing crypto assets.
In addition, the very liquidity shortages in question are probably driven at least in part by the bubble narrative in the first place as it most probably scares away a large part of the would-be big-moneyed investors.
The biggest single factor driving this negative perception of cryptocurrency markets is the absence at the moment of large-scale use of any of the crypto assets outside of trading.
Furthermore, on the appreciation side of market movements, the lack of technology in large-scale usage creates more uncertainty for the investors with regard to particular projects and motivates many of them to buy crypto assets across the board. Which then only bolsters the perception that irrational gambling is all this is about.
Of course, the dramatic price volatility and the bubble narrative are not potentially fatal problems in themselves. Yes, some investors suffer, some gain, a lot more people are stressed out, but the real issue is that this may lead to a massive, harmful government intervention.
Already, the governments of China, Korea and France (and I’m sure some others of which I’m not aware) have raised serious concern about crypto price volatility. In the end, this may lead to heavy restrictions on exchanges that will seriously hamper public blockchain technology adoption. Consider that if it becomes really cumbersome to buy, say, some Ethereum project’s token to use its service (let’s say if someone has to use an IPFS-based analogue of localbitcoins to initiate a transaction and pay P2P in cash afterwards to do that), it will be really hard, perhaps impossible, to ensure mass adoption of the relevant service, especially if, in order to truly showcase its benefits, it must scale in the first place. For instance, a DApp like Golem or iExec can probably only be much cheaper to use than, say, Amazon AWS if there is a lot of distributed computing power on the provider side.
In other words, in the case of a widespread crackdown on major exchanges, public blockchain technology may find itself in the same position as neural networks did before sufficient computational power became available. They may be capable of producing magic but not be capable of proving it.
And very importantly, government decision-making and politics usually operate with a lag with respect to the real-world experience. Even if the crypto price volatility subsides in a year, it is the current one that will be on the politicians’ and regulators’ minds when they finally get to drafting the rules for cryptocurrencies.
All this means that it is vital to start anchoring the market valuation of cryptocurrencies in real use as soon as possible, and Ethereum is very well-positioned for that.
However, despite years of development, none of the major longstanding Ethereum DApp projects (Augur, Gnosis, Akasha, Golem, Slock.it, Ujo Music, etc.) with serious, direct real-world uses not related to just moving money in one way or another has so far released anything on the mainnet.
The question is whether it is a really good idea to try to release perfectly working apps or it is better to showcase their potential, despite some flaws. For instance, is it really necessary to audit Augur’s contracts for months, given that no one is going to lose huge amounts of money remotely comparable to the DAO or Parity hacks? Or is it really paramount to have the Concent service included in the initial mainnet version of Golem Brass to avoid errors because some weird game theory predicts that some agents will try to game the system or whatever?
Consider what Facebook looked like when it was first released in 2004. There were no walls, no messaging, you could only post one photo and so on. And yet, Facebook captivated people, which allowed it to develop into the giant we now know it to be. It is obvious that most major Ethereum DApps are far further developed than it was then.
It may, of course, be objected that, unlike the early Facebook, blockchain apps handle quasi-monetary assets, and thus, require a lot more assurances. However, does anyone really believe that if people did not abandon the blockchain space en masse after MountGox, the DAO and Parity multisig’s debacles, they will do it because of sometimes losing a few bucks because of an imperfect DApp? I hope not.
So, dear DApp developers, if you can quickly release your DApp on mainnet with the core elements available, it is in your best interest to do it ASAP lest it become too late, however great your final polished product might promise to be on GitHub.