Our ancestors are going to look back on the era of The "Crypto" Scambrian Explosion in awe as they wonder how we seriously thought there was going to be a world of thousands of tokens with specific functions and freely floating prices that would peacefully coexist in an affordable fashion. The era of bucket shops spun up in the cloud run by people whose business models revolved around extorting "projects" for their tokens in order to get listed will be laughed at. The era of exchanges trying to use their clout and VC connections to make fetch happen in the form of a corporate backed "decentralized cryptocurrency" will be a flash in the pan.
"How could they be so stupid?" Our great grand kids will wonder. "How could they not see the rising infrastructure costs they were accruing as these protocols gained network effects and more people started using them and as blockchains were extended into the future?"
The Scambrian Explosion isn't going to fizzle out because people suddenly come to the realization that a world built on barter tokens doesn't make any sense. Though, that can certainly help accelerate the process. The Scambrian Explosion is going to be doused with water from companies that are hyper focused on running a secure business and delivering their customers a quality product. The tech debt that is accrued when an exchange opens up the floodgates for every altcoin and their unique codebase is massive. To ensure they aren't getting scammed, exchanges are forced to spin up and maintain nodes. Making sure they're staying up to date with the next hard fork that may come, the changes to certain chain scripting languages that dictate how some coins are spent, and constantly playing cat and mouse with hackers looking to attack their hot wallets.
Having to keep all of that in mind and under control as demand for Bitcoin continues to grow, as Bitcoin adds second layers like Lightning and Liquid and as competitors continue to hone in on Bitcoin presents very high opportunity costs. "Am I really better off dedicating engineering resources to all of these altcoins? What if I were to move the Tron maintenance team and have them focus on creating a unique Bitcoin multisig setup for our clients? Should we be implementing Lightning like all these other exchanges are? Are trading fees a long-term business model or is the Scambrian Explosion a fad?"
I think the hot trend in 2020 may be more exchanges making like Coinfloor, Cash App (disclaimer: they're a hot sponsor of the pod), River Financial, Bittr, and many other exchanges. It may not be a Bitcoin-only focus at first, but a mere culling of the altcoins to a select few. At the end of the day though, the few that remain behind Bitcoin will still present opportunity costs to maintain over Bitcoin. We'll see if they're worth it.
These costs exists and as Bitcoin continues to slowly seep into the mainstream, they are rising at an exponential rate.
Cold rain. Lovely.