Cryptocurrencies. Digital Tokens. Blockchain. ICOs. The Hype is fierce these days around all these subjects. We have written about our intuition of these, and our sense that despite the hype there are some serious forces at work, reshaping the technology landscape if not some parts of money and society.  Nonetheless, there is clearly a bubble around many aspects of the Blockchain ecosystem. As we have said repeatedly, bursting bubbles do not have to lead to widespread misery. In this case, the speculation around many (most?) cryptocurrencies may only affect a small group of fast money people and a small number of byxtanders who have invested more than they should. Buying cryptocurrencies is still so cumbersome that the general public is likely to spared the pain when(!) the bubble bursts.

That being said, there are some aspects of the current mania that we in the tech community have to be on guard against. This struck home last week when we were speaking to a promising esports venture which is now considering how to issue their own ICO. That in itself may not be such a bad thing, but much more worrisome was our conversation with the company’s founder. We were supposed to be talking about esports, but instead spent an hour talking about his cryptocurrency plans and all the money he thinks he can make with these numerous schemes.

At one point in the conversation we suffered a very powerful flashback to 1999. The mania around all things Blockchain today has incredible parallels with the .com era of the 1990’s. Readers may or may not remember this (my founder friend was too young to), but back then everyone was going to get rich with their website and all the ‘eyeballs’ they were attracting.

We remember clearly one sunny day in 1995 when we snuck out for an afternoon movie with some friends. While we were gathering outside the theater, I noticed many of the people in the group looked dazed and stunned. I asked a mutual friend what was wrong with the others. Her reply was “Oh, they are all Yahoo! employees and with the IPO yesterday they are all now multi-millionaires.” One day they were average employees, then the next they were suddenly rich beyond their dreams.

The danger then, as it is now, is that the haze of sudden, immense wealth can become incredibly distracting. Sudden wealth can create its own reality distortion field. Many people today are building solid businesses. These will take time to grow and succeed, but eventually can become meaningful. If everyone, especially the management teams, suddenly gets distracted by shiny Bitcoin billions, the actual business can easily go off the rails. Remember, the venture dollars propping up (non-crypto) start-ups is slowly drying up. If a company goes all-in on a non-core blockchain project today, there is a real possibility that a year from now the blockchain fury will have abated and their core business will have lost a year of progress and the venture money will be gone.

To be clear, we are very bullish about blockchain projects of all stripes. We will be writing more about this soon. However, not everything can be Digitally Tokenized (or at least should be). And once you start digging into many of the blockchain initiatives out there it is clear that the industry is still very far from being mature. Set aside all the coin volatility, the real prospects of building new ‘trust-less’ systems around blockchain will require a broad ecosystem of tools and governance and processes. None of that is in place yet. The risk is that many people are going to reinvent the wheel or duplicate pieces of the system that are better done elsewhere. This can be a real drag on a small company that has other products, and you know, paying customers.

One quick example to close. We recently heard about a company that has created a ‘white label’ cryptocoin exchange system. So you too can go out and build your own exchange. Unfortunately, that is not how markets work. Markets need liquidity, and markets with more liquidity squeeze out those with less. The world does not need an infinite number of cryptocurrency exchanges, it has room for only a small number, and those are all probably operating already.

The Blockchain is here to stay. It will be a Big Deal. That does not mean you should rush out and change everything about your company to follow that glimmering vision. Build your product. Nurture your customers. Grow your company.