2018 — A year in review
What a year it’s been for globaliD and the state of digital identity.
We closed our Series A funding round and began a number of fruitful partnerships — with companies like Dwolla, Uphold, Coti, Gatehub, and Yoyo Wallet — and initiated the planned re-launch of our flagship product.
We also brought onboard a key hire — Taku Kawane, our VP of Products — who has been instrumental in overseeing the re-launching of our flagship product, the globaliD app, including the successful initiation of the beta release this month.
Along the way, we helped shape the very necessary conversation around the state of identity with organizations such as the World Economic Forum and the Brookings Institute — both of which have acknowledged globaliD’s framework for digital identity.
More importantly, people are getting the message. Whether it was the WSJ or the US Treasury Department, the issues of the status quo and the potential for a new framework was contemplated throughout the industry. Meanwhile, the European Union’s sweeping privacy regulation — the General Data Protection Regulation or GDPR — finally went live.
All of this culminated at Money 20/20, where it became clear that digital identity had become one of the most talked about topics within the fintech industry.
All of which leaves us incredibly excited about what’s to come in 2019 — including the official re-launch of the globaliD app as well as the publication of new whitepapers next month.
But given the holiday mood, we also wanted to have a bit of fun so we decided to review globaliD co-founder and CEO Greg Kidd’s predictions for the defining narratives of 2018:
1) Is crypto tech bubble 2.0 or gold 2.0?
While some would say that a valuation of a half a trillion dollars that surpasses the value of all the startup unicorns in Silicon Valley appears a bubble just waiting to burst, there’s an opposing plausible view.
If you view Bitcoin as digital gold then the half-trillion value is small in comparison to its physical cousin of actual gold, which has a current value of 7.7 trillion dollars suggests that there’s still a lot of headroom for crypto’s growth as an asset class.
A lot of people were on the wrong end of this bet now that crypto winter is upon us! But Greg’s prediction that crypto’s valuation still has room to grow isn’t necessarily wrong. It just didn’t pan out in 2018. And to his credit, it was certainly a defining narrative.
2) Separating the crypto-wheat from the chaffe
If 2017 was defined by a rising crypto-tide that lifted all boats, 2018 will be defined by winners and losers. The “wheat” will be currencies and ICOs that: i) scale ii) are compliant, and iii) have liquidity/secondary markets supporting them.
With the precipitous decline in the crypto markets and the headlines surrounding ICOs going bust, there’s never been more pressure on blockchain companies to deliver. As it stands, it seems like only the strong will survive.
3) The currencies and ICOs that will emerge as winners in 2018
Those currencies and ICOs that have a practical use case will survive the bursting of the bubble for the many wannabes and knock-offs. Coins that have crossed the divide include: 1. Bitcoin (as a store of value) 2. Ether (smart contracts) 3. Ripple (settlements). ICOs that has crossed the divide includes: 1. Filecoin (proof of work for data storage).
A hard one to analyze since it’s been a down year overall, but Bitcoin, Ether, and Ripple have all maintained their positions at the top of the mountain. The situation with Filecoin is less clear. Only time will tell.
4) Addressing unmet needs in the crypto-system
Big needs still to be met are the emergence of a coin that scales to support retail and micro payments, and an identity naming and reputation system that crosses global and company borders. Expect efforts in these areas to continue to shine when the ICO equivalents of dot.com loser pets.com start to wear thin.
With the success of Bitcoin’s Lightning Network, the launch of Ripple spinoff Coil, and a growing ecosystem around identity and reputation, we think Greg hit the nail on the head with this one. And because many of those questionable ICO ideas are certainly wearing thin.
5) The beginnings of a backlash against identity politics
In the case of identity politics, the Democratic party may finally begin to realize that a party built upon a collection of narrow interest groups is not a formula for a governing coalition.
2018 has been perhaps the most chaotic political year on record in some time — perhaps in part due to the issues Greg points out. It’s worth pointing out that according to an Axios end-of-year survey, Democrats, when compared to Independents and Republicans, are least hopeful about the state of things.
6) When tech takes ownership for society’s deepening divide
Social media titans will face mounting criticism for their role as a divider rather than a force for uniting our society. Fake news will be addressed by an increased realization that the identity of the parties representing points of view matters. Just as there is a concept of “UBO” (ultimate beneficial owner”) to staunch money laundering, there will be political pressure to establish standards to determine the true voice behind trolling postings that divide, rather than inform, engage and enlighten us.
7) Increasing scrutiny of tech’s elite
Finally, we’ll see an increasing need to regulate tech titans that are abusing their powers will be recognized as necessary across party lines fueled by growing consumer resentment over a rigged economy that outrageously benefits the few over the many.
Again, nailed it. Just look at the public reaction to Amazon’s HQ2 announcement.
8) But remember, this is just the beginning for crypto
And OK, as a final prediction on crypto, my best guess is that the market capitalization still has a ways to go on the upside and that there’s no reason that the market cap of these offerings will end up between $1-$2 trillion dollars even after a bubble correction.
Similar to his first prediction, we’ve now seen the bubble correction — which was perhaps deeper and more violent than many might have predicted. The question is where we go from here.
9) And ICOs are here to stay
More importantly, the ICO model is here to stay — displacing venture capital as the best source for funding truly innovative insights, business models and teams. Why would folks suffer the dilution of VCs when the best and the brightest can buy tickets to the future without the handcuffs and tunnel vision and me-too thinking that most venture money entails. ICO money will back much chafe, but it’s plentiful enough for some real wheat to come to harvest.
This is perhaps the prediction closest to being wrong. It’s been a rough year for ICOs, not only because of the markets but also due to increasing regulatory scrutiny. Of course, that doesn’t mean ICOs are dead. The initial over-exuberance might be matched with the current doldrums, but maybe that’s just part of the process. Let’s call them growing pains.
Which brings us to a score of 5 out of 9 — a number that might only increase with time. In all, not a bad performance from our fearless leader!
Stay tuned for Greg’s predictions for 2019!
But most of all, have a happy new year!