Over-hyped cryptocurrencies such as bitcoin are still in a period of “inflated expectations”, leading tech advisory firm Gartner has found.
As part of its 2015 ‘Hype Cycle’ report on emerging technologies, it included cryptocurrencies among the sectors marked by “over-enthusiasm” and “unrealistic projections”.
Gartner’s annual release – marketed at R&D teams – tracks the maturity of more than 2,000 nascent technologies on the road to mainstream adoption. It has five key stages that follow expectations over time: innovation trigger, peak of inflated expectations, trough of disillusionment, slope of enlightenment, plateau of productivity.
Cryptocurrencies first appeared in Gartner’s hype cycle in 2014, just after the ‘peak of inflated expectations’. This year they have moved a fraction lower, toward the so-called ‘trough of disillusionment’.
Meanwhile, cryptocurrency exchanges – a new entry on the chart – find themselves squarely in the middle of this trough, which is characterised by waning media interest.
They are predicted to ‘plateau’ in two to five years, much faster than cryptocurrencies, which Gartner estimates will ‘level out’ in five to ten years.
The firm’s vice president, Betsy Burton, said Gartner had featured the technologies in its report due to “high levels of interest” and the potential for “significant impact”.
Both cryptocurrencies and exchanges are placed in the firm’s ‘Digital business’ category, which focuses on ideas at the convergence of people, business and things. Augmented reality, the Internet of Things and wearables also feature.
“Physical assets become digitalized and become equal actors in the business value chain alongside already-digital entities, such as systems and apps,” the report explains.
Cryptocurrencies are rated ‘high’ for transformational impact, meaning they can create new ways to save or make businesses money, while cryptocurrency exchanges are ‘moderate’, meaning they provide ‘incremental’ improvements to established processes.
Over the hill?
Although bitcoin has received over $860m in VC investment to date, our most recent State of Bitcoin report indicated that mainstream media mentions have been on the decline this year – as ‘blockchain’ grows as a buzzword.
Even back in 2014, Jerry Brito, now executive director at Coin Center, told CoinDesk he had started to witness a hype slump:
“At one point, bitcoin and virtual currencies were a novel and interesting story. The sexier angles including Silk Road were there. Since the novelty has worn off and the bad actors are being driven out of the ecosystem, they have lost interest.”
Last November, researchers in Poland found a strong correlation between bitcoin’s price and media ‘hype’, whether this – or the descent into the ‘Trough of Disillusionment’ – could explain the currency’s recent dip remains to be seen.
Paparazzi image via Shutterstock