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The crypto winter is cold. Real cold. A year ago, when token prices started to nosedive, many startups were in the middle of ICO preparations, still trying to capitalize on the insanity of 2017 and early 2018. Crypto gurus continually reaffirmed that the next bull run was going to kick off any day.

When the “getting was good,” startups could hatch an idea, launch an ICO, and rake in millions of dollars overnight. While this model was blatantly unsustainable, for many players in this brand new industry, that kind of immediate success was just the modus operandi.

No one wanted to believe the boom was over for good.

Just 12 months later, crypto is out of the headlines and, while the market is not dead, it is a very different looking place. ICOs are few and far between. Utility tokens? Largely out of fashion. With the basic business blueprint rendered useless, who is surviving the crypto winter?

Hardly anyone.

The few ICOs in 2019 that are being conducted are following what has been dubbed the “reverse ICO” model. You can think of this as a “build and they will come” strategy. Instead of fundraising first, these startups are attempting to build ready-to-go platforms before onboarding users.

This model seems like common sense, but the industry’s previous mode of operation was to talk big talk, raise money, and execute later.

The current harsh conditions are forcing startups to tackle tough challenges, and that’s good for the industry as a whole. While the first wave of ICOs brushed off hurdles like scalability, regulatory compliance, and more intricate parts of their models, ignoring the trickier details is no longer an option.

startups are making valuable progress, but the crypto winter is simply too desolate to support them. Many are staying afloat by acquiring funding through incubators and venture capitalists, but actually launching and fostering an active network is nearly impossible for any company at the startup level. But why?

Token distribution hurdles

One of the main rationales behind conducting an ICO (besides scammers exploiting the format for quick cash) was that it presented startups with a way to establish a widespread user base — a crucial component of any blockchain network.

However, in the cold, cold crypto winter, this is too difficult a task for even the most well prepared ventures. User bases are hard to build, especially when no one will take a chance on a new token.

The most popular blockchain network, Bitcoin, never had a token sale, organically garnering users for years and years before becoming valuable and useful. For most blockchain networks, that method is not an option. But if token sales are limited at best, how will the next wave of crypto products come to market?

Here comes Facebook

On February 28, the New York Times broke the news that Facebook was reportedly shopping around its own stablecoin to crypto exchanges. If Facebook succeeds in bringing its own token to market, it could tap into its large user base, the likes of which the crypto world has never seen before.

The most straightforward path to establishing a widespread user base is through preexisting platforms, with tokens to seamlessly integrate into the platforms we already use every day.

Between WhatsApp, Messenger and Instagram, Facebook has over 2.7 billion active monthly users. Facebook’s stablecoin could allow all of those users to transact freely across borders for the first time.

While it may not be the decentralized revolution Bitcoin’s mysterious founder, Satoshi Nakamoto, envisioned, mammoth players like Facebook seem to have the greatest chance of actually bringing about a truly global currency.

Why stablecoins?

Right now, the general public couldn’t care less about stablecoins, but these tame cryptocurrencies are going to be at the forefront of new crypto business models.

For the average Joe, stablecoins aren’t exciting in the same way Bitcoin was a year ago because they are explicitly designed to be, well … stable. No more meteoric rises. Stablecoins won’t “moon.” You won’t wake up tomorrow and find that your stablecoin holdings have increased in value and you can now quit your job. Not going to happen.

But, on the flipside, if everything works as intended, they won’t crash like so many crypto assets did.

The last time I wrote for VentureBeat, I lamented about how volatility had rendered most crypto assets useless for transactions. Stablecoins could solve this problem.

Think of a stablecoin as a borderless U.S. dollar that can be spent and sent anywhere across the globe. No need to exchange currencies when traveling internationally or sending money to friends, family, or businesses abroad. Stablecoins could finally make good on Bitcoin’s promise of a borderless, universally accepted currency, used on a global scale.

Big corporations love this stability. Rolling out stablecoins gives them a way to transfer current wealth into safe, digital tokens that minimize their risk and maximize paydays, but it comes at a hidden cost to users.

The crypto dream deferred

Stablecoins might only fulfill half of Bitcoin’s promise. The elephant in the room remains, “how decentralized will these tokens from large corporations like Facebook be?” If we’ve learned anything in the past few years, Facebook loves to leverage its control, and a decentralized cryptocurrency would be a far cry from Zuckerberg and Co.’s usual way of doing things.

Zero crypto startups are finding widespread user bases right now. That’s just the reality of the crypto winter and the price we’re paying for flying too close to the sun. Widespread adoption will have to wait for Facebook or another tech giant to get the world hip to what will likely be a diluted version of crypto.

Satoshi envisioned a new way to transact, free of corrupt intermediaries. Now Facebook could be in the driver’s seat? Hold up. How did this happen? Are borderless transactions really worth allowing Zuckerberg to be in control of the new international currency? If that doesn’t make your stomach churn, I don’t know what will.

The crypto winter isn’t over yet, but when things finally thaw, it’s going to be a very different landscape.

Dima Zaitsev is international is chief of business analytics and PR lead at ICOBox. He has a PhD in Economics.

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