The Disruptive Innovation Potential of Decentralized Cryptocurrencies

The cryptocurrency market could only accomplish a small fraction of what it was capable of since Bitcoin was first popularized. Improving upon Bitcoin, the development of technically superior cryptocurrencies couldn't manage to create a disruptive innovation impact on the market either. In order to understand why the cryptocurrency market couldn't fulfill its perceived disruptive innovation potential, this study systematically reviews the literature. Relevant literature has been thoroughly searched and several studies that use certain methodologies are included in the review. These studies have been categorized based upon their approaches to the subject as supportive studies and contradictory studies. Within these categories, subsections have been created based on the findings and conclusions of each study reviewed. Following the theoretical discussion, the rationality of the movements in the market has been analyzed with regression models supported by sentimental estimation model outputs. According to the interpretation of the studies in the literature, cryptocurrencies seem to need a properly functioning natural selection mechanism, which will only allow the survival of the currencies that have the best "fit" to the needs of the market. Additionally, the findings of the regression analysis are in line with the majority of literature and suggest that the cryptocurrency prices are straight out unpredictable even with the usage of advanced AI algorithms that take human irrationality into account. Collectively, evidence suggests that in its current structural form, the ICO based cryptocurrency market is set to fail in a gradual pattern.