The crypto winter has truly lived up to its’ name. According to Fortune magazine, all the way back in February, we had already lost over 50% of 2017’s ‘ICO’ projects. With that and the fact that we have been in what may be considered a year-long bear market, it is reasonable to conclude that this number is much higher now.
Beyond the continuing drop in crypto prices, lending credence to this idea is the fact that firms like Steemit have decided to cut up to 70% of their staff, while even the Ethereum giant, Consensys has lost around 13%. In short, until recently, it was easy to think that no one was truly safe.
At the same time, a bear market can be an excellent case study in understanding what firms are prepared to succeed through any sort of difficulty. Central to this idea is the example of Blockstack, which Coindesk reported on today.
While their report is quite sprawling on the subject, its’ conclusion on why Blockstack is persisting through the crypto winter are clear. According to quotes from Muneeb Ali, Blockstack’s co-founder, Blockstack’s capital is approximately 70% fiat. Furthermore, the crypto that they do hold is reportedly excluded from being used for anything related to their active operations.
If this seems antithetical to what blockchain-based companies are all about, that is because it likely is. Reportedly, Ali has even gone so far as to say that his company has no plans to change these parts of their capital structure.
Despite this, once a certain amount of time has gone by and a certain level of regulatory approval is achieved, Blockstack does plan to incentivize app development on its’ platform with crypto.
In the end, the blockchain industry is and always will be heavily based on decentralization from the traditional financial system. Therefore, many companies will probably refuse to follow a similar approach from the outset. Even so, in the very least, one could conclude that in a bear market, taking on more fiat could lead to greater longevity instead of failure due to market volatility.
By: BGN Editorial Staff