The Gartner Hype Cycle

1. Technology trigger.
   A scientific or methodological breakthrough triggers the birth of a new technology. The technology holds much promise for new products or new solutions. Many early phase proof of concepts are developed. There is much excitement in the early adopter communities, but regular people and the mainstream press are mostly unaware of these developments.
2. Peak of inflated expectations.
   The early proof of concepts show promise. More and more people learn about the promise of this new technology. The mainstream media catches on. Investment capital flows into the industry. The number of projects experimenting on different use-cases and technical improvements explodes. Some of these projects are legitimate but others are grifts. Startups are formed and early companies in the space become household names.
3. Trough of disillusionment.
   Technical and commercial challenges, over-investment of capital, over-promised and under-delivered expectations, all lead to the failures of multiple projects and startups. Investment capital dries up. Interest in the technology wanes and the mainstream press regularly declares the technology dead. Yet, there remains a core group of believers who continue to develop the technology and focus on the most promising use cases.
4. Slope of enlightenment.
   Now that the bad ideas and the grifters are shaken out, the remaining community can focus in on the best ideas and most promising use cases of the technology. They gradually learn what works and what doesn't work, and a natural growth curve emerges as the technology improves due to the natural feedback between user and developer, free from the wild expectations of the hypemen and hucksters.
5. Plateau of productivity.
   Most of the technical wrinkles have been ironed out. Best practices have been established. Use cases become well defined and demonstrated. Mainstream adoption continues to grow, and development will focus less on technical specification and more on bringing products to market.

Criticisms of the Gartner Hype Cycle

Bitcoins, Shitcoins, and the Gartner Hype Cycle

1. Shitcoins were, initially, either A) failed attempts to solve Bitcoin technical challenges, or B) misunderstandings of the appropriate use cases for Bitcoin technology.
   • Examples of (A) include Proof-of-Stake and all the other coins purporting to solve Bitcoin's energy "problem". It would also include Monero which aims to solve Bitcoin's privacy "problems". The key point is that many alt coins were originally developed purporting to address a real technical challenge relevant to Bitcoin's design.
   • Examples of (B) include NFTs, Ethereum's attempt to become a distributed computer, and drivechains. These are alt coins developed with the purpose of extending the concepts behind "blockchain technology" to use-cases beyond money.
2. Because shitcoins were originally attempts to solve technical challenges or extend use-cases, they acquired an air of legitimacy. They became thought of as experimental projects that extended or improved Bitcoin, and thus fell into the same technology category as Bitcoin.
   This is the origin for why Bitcoin and crypto are lumped together; because that's how many of the project founders and early investors originally thought of it. I should remind everyone that during that time, everyone was hyping "blockchain technology". The idea of Bitcoin as sound money was taking a backseat to "blockchain".
3. Because shitcoins came about during the peak of inflated expectations, they made early investors filthy rich. This not only meant that they had an air of legitimacy, it also meant that they had an air of genius to them as well.
4. The next thing that happened was that these projects failed. They over-promised and under-delivered. NFTs are a case in point. They promised a new means of transacting digital art, but it was never properly specified why proof-of-ownership matters for something that can be freely copied and distributed. Ideas like decentralized computing also failed because it was never clear why decentralized compute cycles mattered for use cases outside of money.
   As to proof-of-stake, it was a misspecification from the very beginning, because Bitcoin's energy use was never a technical problem. It was a solution to the sybil problem in the first place! Instead, proof-of-stake only increased the self-referential nature of these shitcoins.
5. Not only did these projects fail, but they also attracted a large number of copycats who weren't interested in solving Bitcoin technical challenges or extending use cases. Rather, the objectives of these grifters was to capitalize on the hype cycle and make themselves rich. They learned to speak the jargon that would cloak themselves with the same air of legitimacy and genius that other shitcoin founders had, but they had none of the original vision or technical chops to back that up.
6. The result of this is that the crypto ecosystem became a game of musical chairs, or ponzi scheme to be more blunt about it. A major turning point happened with the collapse of FTX. In the minds of many people, this revealed that the crypto ecosystem was a ponzi scheme.
7. But the mistake people are making is that the collapse of FTX had nothing to do with Bitcoin. It had everything to do with A) the failed projects that were misguided attempts at fixing/extending Bitcoin, and B) the copycat shitcoins that were never more than a grift. Unfortunately, regular people and the mainstream press do not yet understand that. They still associate crypto with Bitcoin because of the history of shitcoin development and the jargon which has seeped into mainstream consciousness.
8. What will happen moving forward? I think people will gradually begin to disassociate crypto with Bitcoin. Because there hasn't been a legitimate blockchain project that has gained any sort of mainstream attention since FTX blew up. Outside maybe a few lost souls, almost everyone understands that $TRUMP and $HAWK are nothing more than a memecoins, get-rich-quick schemes for those who want to gamble on finding a bagholder to dump on.
   But the air of legitimacy on any new coins is completely gone. The time between the pump and the dump is getting shorter and shorter. Some of the older coins still have an air of legitimacy, but I believe that the interest there is slowly waning as well. As far as I can tell, nothing is being built on Ethereum except more ways to trade memecoins.
   The thing is, politicians, journalists, and normies are slow to catch on. Their knowledge lags reality, sometimes by a lot. So they are still in a mode of thinking where Bitcoin and crypto belong to the same category. Thus, they either view all as scam or all as legitimate. But they haven't learned to discern the difference between A) Bitcoin, B) failed blockchain projects, and C) actual scams. I believe they will, in time.
9. All that being said, I think for "crypto" as a whole, normies are currently in the "trough of disillusionment", but real Bitcoiners are on the "slope of enlightenment". That's because we've seen and learned from all the failed blockchain projects. We've explored some of those misguided use-cases and realized that Bitcoin is first and foremost a monetary technology, and should stay that way. Being now enlightened, we can focus on building products aligned with the idea of Bitcoin as money, without getting distracted by other things like decentralized computing or proof-of-stake.

Conclusion

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• Pleb Economist #4: I orange pilled my class today #899199
• Pleb Economist #3: On the political economy of blocksize #875560
• Pleb Economist #2: Politics is Provably Hard #849906
• Pleb Economist #1: The Art of Economic Communication #839278