I’ve often made parallels between blockchain (Internet of Value) and Web (Internet of Information) in terms of the disruptive potential and societal benefits.

They hold (though I do think blockchain will be bigger).

Another parallel that is starting to emerge is one that, as a student of history, I’m aware we’ve seen many times over: the “speculative bubble.” Whether it’s the South SeasDutch Tulips, or simply Internet 1.0, investors who want a piece of the action jump on board and drive prices to insane heights.

What’s been going on in the blockchain market over the past few months seems to be reaching that point.

Accelerating this trend is the new form of crowdfunding known as ICOs — initial coin offerings, where pretty much anybody can raise money. It’s definitely a legal gray area, but whatever the facts are around the so-called Howey Test (to determine if something is a security), the fact is that it’s happening and pretty much anybody can join in.

In Internet 1.0, for example, most of the early stages were driven by venture capitalists. Today, it’s the venture capitalists who are following the crowds. (This fact actually makes me wonder if we’re going to see a disintermediation of the venture capital business. To their credit, I think Blockchain Capital’s “digital liquid fund” shows one potential new model.)

In my mind, this wave began in earnest last May with the original DAO raising $150 million via crowdfunding of Ether. While the story ended poorly, it highlighted an entirely new way of raising money.

That’s the really important part of the DAO.

Now, it seems like we have a new ICO every week (or multiple per week). Some of these have ideas with definite long-term potential. Some I don’t quite see. And others make no sense at all.

Even for those that do make sense, the valuations are starting to get crazy.

Case in point: Gnosis. The decentralized prediction market (we’re going to have a few, to be sure) that offered only 5 percent of its tokens, has a whitepaper, and has basically no working product, raised $12.5 million in 15 minutes, giving it a valuation of nearly $300 million.

Since then, speculation has taken it to over $1 billion.

I am sorry, but there’s no scenario where that makes any sense.

The effect is rippling (pun intended — you’ll see why) to many others as well. Ripple, which is an enterprise-focused blockchain for international settlements, has a token, XRP, that has exploded in recent weeks.

Don’t get me wrong — I believe Ripple actually has a great idea, is serving real customers, and has a working product. I also think it has good potential (disclosure: I own some). Still, the recent run-up seems excessive.

But, if I had to guess, I would say the recently-postponed ICO for Tezos, coming up in June, is going to be the equivalent of Netscape’s IPO. It will be the moment where pretty much everyone else turns to this industry and says, “Oh wow, what the hell is going on over there?”

Why do I think that? A few reasons:

1. Tezos hasn’t set a specific amount to be raised.
They will keep their ICO open for two weeks so people can keep putting money into it. And, as word gets out that more money will go in, FOMO will kick in.

2. Big names are behind it.
Olaf Carlson-Wee, the founder of Polychain Capital and original Coinbase employee wunderkind has said he likes it, but bigger than that is Tim Draper saying he would invest directly in it.

3. At it’s core, Tezos is a good idea, not a point solution.
I’ve talked to Tezos and read their whitepaper (four times, mostly because it’s SO deep), so something LIKE Tezos (a community-driven blockchain that can update itself) makes a ton of sense. On its own, it’s not a bad investment.

4. Greed.
The returns on many of the higher profile ICOs have been ludicrous. 400 percent on Gnosis in three weeks? That may be an outlier, but combine that with the run-up in Bitcoin and Ethereum and you have a potent cocktail.

Honestly, I wouldn’t be surprised if Tezos raised $300-500 million or more.

Think people will notice that?

I actually feel a little bad for Tezos because that amount of money, attention, and expectation is going to make it difficult for them to execute and deliver. Maybe I’m wrong.

I just sense that, in the midst of all of these hyped ICOs, we’re seeing a true bubble emerge, which, invariably, will create a crash.

That’s fine, and I hope everyone can protect themselves (although some won’t be able to). While this is all going on, however, the true foundation of blockchain-driven innovation is being laid. Tezos is part of this, but, to my earlier point, too much attention at too young an age could kill it.

Instead of surface-level things like decentralized casinos and prediction engines, it’s the people building decentralized application platforms that are going to emerge from the rubble. They are building the infrastructure of the decentralized economy. But it’s not as sexy (or even understood yet), and the hype noise is drowning a lot of it out.

Frankly, I’ve been very surprised by how quickly this market has gone from the proverbial 0-60, but it has. So, since we are living in the Age of Accelerations, as Tom Friedman writes, I imagine that the boom-bust-rebirth cycle for blockchains will happen relatively quickly.

The key thing, in my mind, is this.

One of the first game-changing elements to the blockchain revolution is the fact that, now, raising investment funds is becoming democratized.

It’s Kickstarter + a share of ownership. That’s cool, and it gives anyone the chance to get VC-like returns.

Of course, it introduces a caveat emptor scenario of epic proportions because of how early and extreme some of these offerings are. Still, it’s exciting and definitely liberating.

Next week, I’m going to the Token Summit in NYC to do a deep dive on this.

For now, understand the new ICO funding models, but don’t get caught up in the hysteria.

Jeremy Epstein is CEO of Never Stop Marketing and currently works with startups in the blockchain and decentralization space, including OB1/OpenBazaar, Internet of People, and Storj. He advises F2000 organizations on the implications of blockchain technology. Previously, he was VP of marketing at Sprinklr from Series A to “unicorn” status.

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