"Blockchain" is the Future.

Every successful new technology undergoes a Cambrian Era-style explosion of growth in which we try to use it for everything. Email, search, social networking—each passed through its “this will solve all our problems!” phase before we figured out what its best applications and limitations were. With the Bitcoin bubble testing astronomical prices every day, cryptocurrencies and the blockchain technology that drives them are now taking their turn in this one-tech-fits-all role.

A blockchain is a cryptographically protected distributed ledger—it’s what protects you or anyone else from making a copy of that Bitcoin you just bought. You’ve probably heard about the popularity of blockchain tech in the financial business. In fact, anything that you can make a list of, you can manage with blockchains. Ambitious developers and entrepreneurs are aiming to use them to rework everything from how we track land ownership to how we distribute medicine and how we grant diplomas.

What Is a Token?
Initial Coin Offerings (ICOs) started out as an alternative means for funding new protocols and infrastructure in the crypto universe. Through this process, companies create and sell tokens; the tokens can be hoarded as investments, or used to accomplish tasks on their platform.

In 2018, the smartest move on the part of companies making ICOs and Bitcoin-related products will be to wean the public and the media off the “digital cash” concept. It’s a metaphor that no longer makes sense, and it’s getting in the way of our properly understanding a new technology that’s looks like money but really isn’t.

Those bets will continue as long as the market keeps rising. The cryptocurrency boom has been built on abundance—both in capital (because interest rates have been so low for so long) and in technical resources (because there were lots of idle CPUs before the cryptocurrency frenzy commenced). As BitTorrent inventor Bram Cohen says, “Bitcoin does a very good job of wasting every available resource it can get its hands on.” The technical resources have begun to dwindle, which is why gamers have to pay more for their graphic cards—the Bitcoin miners have bought up all the hardware. The slightest whiff of a financial crisis will tighten the available financial resources, too. The real test for cryptocurrencies, next year and beyond, will be whether they can evolve to be more efficient. Remember: The Cambrian Era ended in mass extinction.