The remainder of 2018 could be a tough time for energy blockchain startups, as research suggests many blockchain-based projects will be “quietly shelved” this year.

“The hype surrounding blockchain technology will recede sharply in 2018 as the cost and complexity of implementing blockchain solutions becomes apparent,” said research firm GlobalData in a press release.

“Over the next 24 months, the more outlandish claims made by proponents of blockchain will be debunked,” commented Gary Barnett, GlobalData’s chief analyst for technology thematic research.

“Technology providers and users alike will begin looking with clearer eyes at the narrow but significant set of use cases where blockchain and distributed ledger technology can add real value.’’

Although GlobalData’s research does not focus specifically on energy-related blockchain companies, the idea that interest in blockchains is on the wane seems to be borne out by figures.

According to industry bible CoinDesk, the amount of money poured into initial coin offerings (ICOs), the preferred financing method for blockchain startups, has fallen precipitously after surging over the last year and peaking in February.

February and March this year were the hottest months ever for ICOs, with a total of more than $4.5 billion being raised in just eight and a half weeks, according to CoinDesk’s ICO Tracker.

The amount represents more than 35 percent of all ICO funding to date, CoinDesk figures show.

But while the number of ICOs per month has remained high, climbing from 63 in February to 69 in April, the total money raised in April was less than $726 million, not far off September 2017 levels. It remains to be seen if investor interest in ICOs will pick up again.

In the energy industry, though, it seems the blockchain craze of the last 12 months has given rise to an already crowded startup scene.

In March, GTM reported that 122 blockchain companies were operating in the energy space, with 54 having been launched since January of last year. The prodigious launch rate, around one a week, was fueled by $322 million of investment between Q2 2017 and Q1 2018.

ICOs remained the preferred method for raising cash among energy blockchain hopefuls, but around 20 percent of investments came through venture capital.

The money flooding into blockchain schemes, energy-related or not, has led observers to speculate that the technology is on the point of turning from a boom to a bust.

The most vehement criticism to date seems to have been reserved for bitcoin, the blockchain-based cryptocurrency, which Credit Suisse Group CEO Tidjane Thiam has said is the “very definition of a bubble.”

But even insiders believe many other blockchain-related ventures could be set to fail.

Pieter Coetzer, CEO of Benchmark International, which is touting a cryptocurrency to fund sustainable projects, told GTM that the large amounts of cash achieved through ICOs could be “the reason why many blockchain companies are doomed.”

Up to 80 percent of today’s blockchain schemes would most likely disappear within five years, Coetzer estimated. “The overabundant exuberance of much of 2017 did lead to the financing of many undeserving entities [that] will not deliver on their promises,” he predicted.

“Many of these simply did not undergo intensive evaluation to justify the claims made,” he said.

Colleen Metelitsa, grid edge analyst with GTM Research, said it is likely that blockchain technologies are in the contraction period of the hype cycle. Those being developed for the energy sector might not yet have hit their peak in terms of proof of concepts (POCs), though.

“In energy, we are just seeing POCs be picked up by U.S. utilities and many are still in the exploration phase, so I would be hesitant to say they will contract in 2018, though we may see other markets do so,” she said.

Serious energy blockchain players such as the Energy Web Foundation are working to a time horizon of several years just for technology development, she said, and might end up coming to market with something that has little in common with today’s blockchains.

However, she said, with ICOs apparently on the wane, it’s important for startups to stop making money and to start using it. “The community needs to actually start building products that can be used in mass markets,” Metelitsa said.