Cryptocurrency Markets: The Bloom Is Off The Rose, But Blockchain Future Is Bright
For cryptocurrency, 2017’s exuberance was driven by two factors – availability of easy ICO money and lots of new investors trying to catch the wave and not miss out. With ICOs shut down and the continued price decline of cryptocurrencies — the naysayers appear to be right in calling it a “bubble” etc., and I think we are firmly in a “crypto winter.”
For blockchain, 2019 is going to be the year that launches real projects across a range of use cases, industries, and verticals. As the CEO of ChainFront.io, an API-as-a-service company that removes the complexity of using, building, and managing blockchain wallets while maintaining enterprise-grade security, I get to interact with companies that are looking to leverage the power of blockchain to improve the lives of their end users and customers. As a company, we get to peel back the madness of the market and spend time with the doers that are building out the future.
In doing so, we’ve seen five trends coming this year that will shape the blockchain ecosystem for the next decade:
1) Ethereum will continue to face increasing competition as its problems remain unsolved. While Ethereum was one of the biggest winners of 2017-2018, largely as a result of the ICO craze, we’re seeing more developers looking towards contenders like Ripple, Stellar, and EOS as a platform for their dApps that offer enterprise-grade transaction times and code reliability. Look for exciting technologies beyond these three protocols to keep emerging as players looking to drive adoption and scale need real solutions.
2) Tokenization will start to happen – in real estate and art for starters
Question we ask – is where are the incentives? As a real estate owner – the opportunity to sell for a premium because a) you’ve created a liquid real estate asset and b) you can sell a much smaller share in a manageable way. The platforms are are maturing quickly and by late 2019 I expect to see several real world examples.
3) Money transfers continues to be the killer app
The situation in Venezuela and the growing penetration of crypto there reminds us of the unique capabilities and characteristics crypto can provide as a store of value and means of payment under corrupt regimes. This will continue to grow.
4) The ICO will stay dead, litigation will ensue, and the legal landscape will start to clarify
The ICO as we’ve seen it in the past few years is dead, especially in the US. Hopefully, lawmakers will create a framework that allows for a sensible token sale, but before that happens, we’ll see the SEC continue to pursue higher profile projects that raised during the height of the ICO craze, and from that case law will emerge that clarifies what is and isn’t acceptable.
5) Private keys will increasingly be used only by die-hard crypto enthusiasts
Mainstream users are never going to deal with the complexities of crypto wallets en masse. Coinbase learned this early on and turned into one of the most profitable blockchain related companies in the world. They made the process of interacting with blockchain assets as simple as trading stocks on Robinhood. Existing applications and new dApps are seeing that they need to make accessing crypto assets as simple as two factor authentication.
While the market and the price of altcoins is on the forefront of many people’s minds, 2019 will be the year that the real work to advance blockchain toward mainstream adoption happens. We may see a price uptick, but more importantly we’ll start to see actual proof points that blockchain is going to change the way we transact online. When adoption starts to tip, we’ll see the price follow..