“When is the bubble going to burst?” This was the first question dropped about Bitcoin when Mona El Isa, the chief executive and co-founder of Melonport, and Tim Zagar, the chief executive of ICONOMI, were asked about the heated block chain.
Apparently, for El Isa, it wasn’t an unfamiliar inquiry. She gets lots of questions similar to that. For a few times, El Isa has answered the same response like what she said at TechCrunch Disrupt Berlin, “And, um… my response usually… goes something like… so what if it is?”
For both El Isa and Zagar, the question must not be about when will the bubble burst, or if Bitcoin is another dot-com bubble. For them the biggest question that needs to be solved is how we will set up systems that will better support whatever it is that’s coming up next.
El Isa and Zagar believe that the overheating of the token offering market has ended, and we have now come to the rationalization of the token investing. El Isa thinks that the burst of the tech bubble in 2000, was not the end, rather, it’s the end of a beginning. The history supports her claim.
“The dot-com bubble was messy, but if we look at some of the largest companies that exist today they are a result of the dot-com bubble and they are part of our everyday lives,” El Isa said.
For Zagar, Bitcoin offers us the fact that value creation is possible through cryptocurrency. As a gateway to the Ether, Bitcon provides opportunities to develop new technologies and services.
“Bitcoin is the introduction of blockchain accounting and Ethereum is the beginning of blockchain computing,” El Isa said. “The next logical step is that now we build software on top of these.”
Building of the new generation of software companies, topping the blockchain needs the input of the regulators, Zagar believes. He said, “We are also talking with a few different regulators in Europe and helping them structure the setup and the rules.”
The chief executive of ICONOMI said the market needs supervision. “The main concern [for regulators] is to protect investors. You don’t want to have scams and crazy projects. That’s extremely bad for our industry,” Zagar says.
El Isa said that transparency is important among the investors, and a kind of technology that will regulate the investment funds is necessary. “You want to have technology regulate investment funds and remove the conflicts of interest in these processes.”
With all the hype that’s being released regarding the block chain, both panelists agree that when choosing the ‘real thing’, you need to have a proper investment process in place. For now, the hype has exceeded where the technology is, which is where the community is still working on problems that need to be solved. Thus, the excitement towards the coin offerings raising billion-dollars valuation had already subsided.
For Zagar, the move that needs to be done now should be towards the path of how traditional startups generate money. It’s no longer practical for projects to count on a white paper and a solid team to acquire an investment interest. “The team needs to demonstrate a little bit more of the product,” he said.
“The bubble burst in the summer,” says Zagar, as his subtle plug about his company which provides a way for investors to invest in digital assets. “Two or three vendors made a smart contract and made a bunch of money…This is over.”
Here is a theory on how the Bitcoin bubble pop, if it indeed is one as many suspect :
