The first half of 2018 has been difficult for crypto investors. The fervor that dominated the market in late 2017 has waned, leaving questions about regulatory uncertainty, ICO governance, and market manipulation. Even investing in “large cap” tokens, which seemed like a sure bet to some, has been revealed to hold sizable risk — Bitcoin, Ethereum, and Ripple have all seen their prices slashed to less than a third of their highs.

While this price volatility has resulted in some retail investors exiting the space, we haven’t lost enthusiasm about the fundamental value of blockchain. We believe that the true opportunity in crypto lies not in speculative trading and “get rich quick” schemes, but in the long-term development of coins that function as currency and enable improved communications, transactions, and other enterprise and consumer processes. (Mike Maples from Floodgate expanded more on this mindset in his great article Slow Money Crypto).

That being said, the first “killer app” of blockchain is undoubtedly cryptocurrency. Recent fluctuations have prevented most coins from being used as true currencies, but as prices stabilize, we believe that crypto has huge potential to beat out fiat currency in two of the three functions of money (and at least tie the third):

Medium of exchange — crypto arguably represents a big improvement as it can be transacted P2P or B2C instantly, permanently, anonymously, and without fees between anyone around the globe.

— crypto arguably represents a big improvement as it can be transacted P2P or B2C instantly, permanently, anonymously, and without fees between anyone around the globe. Store of value — Bitcoin was originally intended to create a more stable currency that could not be manipulated by a central bank or government (by interest rate policies, inflation, etc.). As crypto continues to develop, we believe more of this initial use case will be realized.

Bitcoin was originally intended to create a more stable currency that could not be manipulated by a central bank or government (by interest rate policies, inflation, etc.). As crypto continues to develop, we believe more of this initial use case will be realized. Unit of account —like traditional money, each cryptocurrency can be expressed in units that allow for setting prices of goods and completing transactions. If a few coins were to become a global standard, this could represent another advantage in standardizing price units worldwide.

We’re hopeful that as blockchain technology develops and some of the investment buzz dies down, we’ll see crypto gain widespread adoption as currency. In the meantime, we’re excited to see signs of life in other parts of consumer blockchain. Cryptokitties exploded onto the scene in late November, 21 Inc. pivoted from hardware to a commercial social network (Earn.com, later acquired by Coinbase), Steemit grew to more than 350k users and distributed upwards of $30M to community members, and Telegram announced a $2B ICO (preceded by Kik and YouNow).

According to Dapp Radar stats (data pulled on 7/20), gaming currently dominates dApp usage, representing the plurality (42%) of the top 50 dApps, followed by Exchanges (22%). These are currently the only two categories whose top 50 dApps see upwards of 100 DAUs and $100k weekly transaction volume, on average. (Check out Chris McCann’s awesome post for more stats!)