How Innovation in Energy follows the Hype Cycle
As unscientific as the Hype Cycle is, it still provides a fair bit of context of where things are heading for most innovations. It is more like an indicator of sentiment than it is an indication of the maturity of an innovation.
In the case of blockchain innovation in the energy industry (or most industries for that matter) the level of interest from companies in the technology can be plotted along the Hype Cycle. But with a bit of tweaking, it looks a lot like the graph indicating the price of Bitcoin.
From my perspective, I feel there are three reasonably distinct phases in how the energy industry has looked at blockchain in general. Some companies are the exceptions to this ‘rule’ and were earlier to the game, but I feel for the most part this is a useful framework.
- The period of 2016 and earlier
- The year 2017
- The year 2018 and later
2016 and Earlier
Most energy companies were either unaware of blockchain or considered it some technology they associated with hackers and the like. Blockchain was not used much in mainstream media and if it was, it was often a story on Bitcoin and some criminal activity. Not an area where a reliable, always-on energy company was going to dive in.
The year 2017
In 2017 something changed. Silly enough, the price of Bitcoin rose, most notable towards the end of 2017. But more and more companies also wanted in on these developments. They also wanted to have a blockchain. Similar to when companies also wanted to have a website/App/Chatbot, etc. To me, this was the year of FOMO for many large companies. A lot of blockchain projects were done for ‘window dressing’ - just to look good for investors. It also helped that:
- With the rising prices, everybody wanted in on this new ‘get rich quick’-scheme
- Most companies had only heard a few things about it and did not fully comprehend this yet, allowing plenty of room for opportunist companies to sell ideas as a white paper and not deliver.
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2018 and Later
With the big crash of the Bitcoin price, we saw a few important changes across the board:
- The ‘get rich quick’-schemes disappeared quickly, but also companies got a bit more cautious and sensible on their innovation projects.
- The true believers in Bitcoin promoted to ‘HODL’, and companies with an actual business case behind their blockchain project also kept at it.
It is hard to pinpoint the trigger, but 2017 looked like the Peak of Inflated Expectations. The year 2018 and beyond, we went all the way down in the trough of disillusionment. I still feel that despite a bit more optimistic outlook in 2019, we could be around that bottom, or slowly going up again at the Slope of Enlightenment.
It sure was a big shake-out, but those still at it, are on to something. The ecosystem as a whole has become healthier and more entertaining. It is good to be ‘BUIDL’ing along with these believers, grinding away towards a next End Game.
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