Analysis of the Development Cycle and Project Types in the Blockchain Industry

Emerging industries typically follow a pattern: going through multiple cycles of rises and falls until they reach a peak. This process usually repeats at least three times. Research shows that the rise of things often goes through three stages: undervaluation, value discovery, and bubble. The current situation of the Blockchain industry is quite similar to the early development period of the internet.

Looking back at history, in the early 1980s, it was hard for people to imagine the level of dependence we have on computers and the internet today. At that time, mainstream media generally viewed these technologies as mere toys. Similarly, in the 1990s, many believed that the stock of a certain tech giant had reached its growth limit. However, it turned out that these predictions were all wrong, and the company's stock value has increased a hundredfold to this day.

Bitcoin, as the pioneer of the Blockchain industry, has gone through 11 years of development. From its initial niche applications to the subsequent regulatory controversies, and then to the forking events, the development journey of Bitcoin has been full of ups and downs. Every fluctuation in Bitcoin's price affects the nerves of the entire cryptocurrency market, especially those shocking crashes.

In such a market environment, blockchain projects can generally be divided into two categories:

The first type of projects is usually known for rapid price increases in the short term. These projects often depict a seemingly grand but actually flawed application scenario. Their white papers are typically lengthy, but they rarely mention the actual implementation of the project, instead focusing heavily on price, promotion, and fund allocation. Such projects often use "decentralization" as a gimmick, while actually adopting centralized operational methods, such as concentrating investors in groups for "pump and dump" style promotions. When the project fails, investors often face huge losses, yet some still hold onto fantasies, hoping to achieve high returns.

In contrast, another type of project may perform mediocrely during a bear market. These projects, while occasionally attracting attention, have teams that focus more on practical work, such as continuously updating code on GitHub. Although the price of the coins may stagnate for a long time or even decline, the project teams and loyal supporters persistently push for technological development. These projects are not keen on participating in high-profile summits or conducting large-scale promotions, but rather concentrate their limited resources on the most important goal – achieving widespread application of Blockchain technology. They recognize that only through continuous technological research and development can Blockchain truly integrate into daily life, rather than remaining in the theoretical stage.

In a bear market environment, the performance differences between these two types of projects are particularly noticeable. Some speculative projects use various means to attract investors, while some projects focused on technological development quietly work hard. In the long run, true value creation is the fundamental driving force behind price increases.

Historical experience shows that bear markets often present the best investment opportunities. Some projects that emerged during the 2015 bear market performed outstandingly in the 2017 bull market. However, technological development is a continuous process, and former star projects may also face new challenges, such as network congestion issues of a certain smart contract platform, or disputes over the consensus mechanism of a certain cryptocurrency.

Fortunately, there is always a group of people in the Blockchain industry who are constantly exploring and innovating. From privacy protection protocols to cross-chain technology, and the emergence of new consensus mechanisms, we can see that Blockchain technology is continuously evolving. These innovations are not limited to Bitcoin; they also include many lesser-known project teams that have made significant contributions to the industry's development. With the popularization and advancement of Blockchain technology, we have reason to expect it to bring more revolutionary changes in the future.