Lecture 4.0.0. Concluding Thoughts
This Course 8 briefly analyses the five Crypto Cycles, also called Financial Waves because price moves in waveform. Any genuine crypto asset with specific use case will pass through these five cycles.
The interesting thing you will notice is that at each cycle the crypto asset is confronted with a notable challenge. As it conquers each challenge in a cycle, the crypto asset matures and grows into the next cycle.
Notable Challenges of Primary Wave
In the Primary Wave, the notable challenge is to overcome the Presale and Listing hurdles. Most scam coins do not survive beyond this primary cycle; they die off, leaving investors with cold dry mouths.
The good news is that if you utilize EdaFace SOC Scorecard to assess a crypto before plunging in with your hard-earned money, you’ll identify most of these scam crypto projects before they cause harms to your finances.
Notable Challenges of Secondary Wave
In the Secondary Wave, the challenge is to survive Price Discovery. Many digital assets fail to scale beyond their first Price Discovery, often because of poorly defined use case.
The lesson here is that if you are investing for a long-term, analysing the use case (utility) of a crypto is essential.
Notable Challenges of Tertiary Wave
In the Tertiary Wave, the hurdle that a crypto asset will need to overcome is the capability to maintain institutional patronage.
A crypto project that does not have solid technology that enables for upgraded scalability may not withstand the pouring in of large volumes of institutional money.
Poor scalability can result in the breakdown of the crypto project, causing institutional investors to become scared and eventually withdraw from further patronage, thereby stunting the growth of the crypto project.
This has been the challenge with Solana blockchain. Since 2021, Solana has had at least one major crash that has significantly affected block production.
In January 2022, Solana blockchain experienced six major outages and three partial outages. On February 25, 2023, Solana outage occurred and lasted for 19 hours. Indeed, as of February 2024, Solana has had 11 outages since its launch in March 2020.
These technological faults have caused some institutional investors to tread cautiously with Solana. As at the writing of this manuscript, institutions are focusing more on Bitcoin and Ethereum.
As Solana scalability is upgraded, we expect to see more institutional money flowing into it, especially considering that service charges of Solana blockchain are much lower than Ethereum blockchain.
However, the reverse will be the case if Solana is unable to scale up appropriately.
Notable Challenges of Quaternary Wave
In the Quaternary Cycle, the notable challenge is government regulation. By the time governmental regulators realize the huge institutional money flowing into the crypto asset, they will want to set up regulatory framework for the crypto asset, often with the hidden agenda of recouping taxes.
A crypto project that is not abundantly malleable and friendly enough to flow along with government regulations may suffer great setbacks, which can cause the project to gradually ground to a halt.
However, government institutions should realize that they are set up to protect their citizens and promote human welfare and not to satisfy parochial interest. Crypto is an evolving stream and it is here to stay.
What a good government should do is to find a way to increase the efficiency and effectiveness of the crypto project and not seek to kill it.
Notable Challenges of Primary Wave
In the Quinary Wave, the major challenge that will confront the crypto project is adapting to specialization and departmentalization of its deliveries.
No one crypto project will be able to serve the diverse arrays of human interests and needs. The earlier a blockchain begins to think along the line of specialization and departmentalization, the better it will survive in the future.
Table 8 summarizes the notable challenges that a crypto project will be confronted with in its maturity journey of price movement.
As at the writing of this manuscript, no crypto has entered fully the Fourth (Quaternary) and Fifth (Quinary) Waves. It appears Bitcoin, which is the first crypto and the most dominant in the Crypto Market, will be the first to fully enter the Fourth and Fifth Waves.
The fact is that the Crypto Market is still in its infancy and it is here to stay, and it will definitely disrupt the traditional financial status quo. For you to be studying these emerging facts in the SOC, you are one of the few blessed ones.
Don’t just acquire the information and sleep with it. Until you take steps of faith in line with what you know, the information will remain meaningless and unproductive to your financial quest.
The author’s prayer is that may you not be standing by and be watching the events unfolding pass you; may you rise up and cease this life-time opportunity to dramatically transform your financial life.