Amid The Cryptocurrency Gold Rush: Who Are the Shovel Providers With an Eye On the APIs?

This article is part of ProgrammableWeb's series on Crytocurrency and Blockchain. Please check out our articles on Ethereum and a case study on Ripple.

During the 19th-century California gold rush, fewer than 1% of the wanna-be gold barons who flocked westword to mine gold actually made their fortunes. In fact, the businesses who provided tools and services to the incoming miners were the ones who reaped financial rewards.

When you observe the cryptocurrency market, with all its hype, failed initial currency offerings (ICOs), and questionable players, you'll see this noisy space has an ecosystem comparable to that of the miners in the 1800s. In such an ecosystem, will a market for businesses providing tools and services (such as APIs) to the blockchain world thrive?

It's too early to determine any such success, but such businesses are forming in the space.

Over the past decade, an ecosystem formed around APIs in general, including:

  • API management solution providers like MuleSoft (full disclosure, this is the parent company of ProgrammableWeb.com) and 3Scale to manage APIs
  • Tools to design and interactively test APIs like Postman and Restlet
  • Tools to manage API documentation like ReadTheDocs

While this space is still in its most nascent stage, many companies have started to invest in it. One example is Moesif, an API logging company, which began providing support for blockchain applications in April 2018. (Disclaimer: the author of this article is an advisor to Moesif. But this company wasn't involved in blockchain at all until very recently). Another company, Kaleido (under the Consensys organization), builds analytics and monitoring tools for Ethereum-based applications.

Several voices from around the industry say that supportive development tools (for cryptocurrencies) aren't as solid as what's available for APIs in general, and they aren't surprised by this. The amount of time needed before seeing a solid ecosystem formed in support of the API economy is far longer than the race to backfill the blockchain economy.

In fact, tool providers are enjoying a motivated blockchain market in which their technology is in high demand. Just look at all the SaaS companies today that can use supportive tools for security, reliability, and performance in their cryptocurrency initiatives. Naturally, they're designing these new blockchain services to work within the standards they've already set for their non-blockchain services. This can be a challenge, according to Derric Gilling, co-founder of Moesif. "Applications using blockchain APIs can have bugs and performance problems like any application, but the traditional model for DevOps is broken in a fully decentralized world. It's difficult to monitor infrastructure that you don't control. This means we need to rethink how traditional monitoring can fit in a decentralized model," he says.

Like any disruptive technology paradigm, it's volatile, which in turn guarantees that companies will see large gains and heartbreaking losses as the industry grows. Recently, payment processing tools developer Stripe announced the end of its support for Bitcoin entirely. Product Manager Tom Karlo said, "Bitcoin has evolved to become better-suited to being an asset than being a means of exchange."

Although the Stripe integration with Bitcoin wasn't about providing tools for blockchain developers, the volatility and continued experimentation in the industry will lead to more success and failure, in an upward trend. And while many companies involve themselves directly in building cryptocurrencies and decentralized services, the "shovel providers" like Kaleido that come to their aid will experience their own growth.

Be sure to read the next Cryptocurrency article: Banking on Speed, Ripple Makes a Name For Itself Among Cryptocurrency Developers

 

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