The Fourth Industrial Revolution (1975 – present time period) is a fusion of advances in blockchain technology, artificial intelligence, the Internet of Things, 3D printing, genetic engineering, robotics, and other technologies. The Fourth Industrial Revolution is paving the way for transformative changes in the way we live.
If we take the revolutionary innovations of the past as an example, the answer will be neither the former nor the latter. The three phases of destruction observed throughout the history of technology are likely to recur in the cryptocurrency space. Here they are:
Creation Innovations are rapidly developing and capturing the general imagination, generating mega-profits for early investors. The current boom in digital currencies is similar to the Internet boom of the 1990s: then estimates of Internet startups were also taken out from thin air. Neither revenue nor profit was taken into account.
Similarly, digital currencies are constantly appearing today without any practical application, but with extremely high estimates. Gradually, we come to the end of this stage.
Compression Euphoria rises to a non-viable level, cost correction inspires critics, while separating promising projects from dummies. Probably, the cryptocurrency space expects a repeat of 2000, but in the long run, the correction will be beneficial for digital assets.
Institutionalization This is the final and most difficult stage of destruction, when only the best and most advanced projects survive. At one time, Internet business got reoriented to increase revenue and profits, while developing business models that would allow interacting with usual companies.
The final phase of destruction has led to the emergence of new industry giants — Google, Amazon, Netflix, etc. The same thing will happen with digital currencies.
Survivors will choose the path of regulation (self-regulation) and transparency. Investors will know how the money collected during the ICO is used and what profitability can be expected.
If cryptocurrencies go through a cycle of destruction, companies and projects that have survived all its stages will change the familiar financial system, create new sources of capital, investment and financing. They are likely to compete well not only with private investment funds and venture capitalists, but also with banks and trading exchanges, and digital currencies will begin to appear in both private and institutional portfolios.