Blockchain and Cryptocurrency Predictions for 2019
By almost any measure, 2018 was a challenging year for the blockchain/cryptocurrency industries. Beyond the usual issues facing young businesses in hiring, marketing, technology and financing, companies were engaged in a crisis of confidence with investors, as the crypto markets lost 80 percent of their overall value from the beginning of the year.
Add to that the magic fountain of funding caused by the curtailing of initial coin offerings, increased government scrutiny and outright bans of certain activities, and the bitter battles between technology developers that caused market gyrations, and it’s amazing that any company survived such severe headwinds.
But heading into 2019, the survivors of this industry wide winter are showing faith in the underlying technology of blockchain and the continuing promise of cryptocurrency. They point out that institutional investors are still on the sidelines, and many retail backers are still not in the game in any huge way.
Add that to the continued interest of big businesses and the spirit of innovation shown by blockchain and crypto pioneers, and the story looks a lot brighter than mere numbers would suggest.
Block Tribune asked thought leaders in the industry for their takes on what may happen in the coming year. Now through the end of the month, we’ll spotlight their thoughts on what may happen in what all hope will be a happy and prosperous 2019.
Founding Partner, Truth Cartel
BLOCK TRIBUNE: Where do you see Bitcoin heading?
Though this isn’t the year Bitcoin becomes the new global reserve currency, I expect we’ll see growing consumer interest as well as substantial experimentation with Bitcoin and blockchain technologies by governments and businesses, which should be reflected in greater demand for BTC, thus increasing the price.
With Ohio accepting BTC for tax payments and countries from Estionia to Malta fighting to become the crypto haven, political adoption is growing, as is regulatory certainty in the United States. Though I don’t expect any federal adoption in the United States, I expect US financial regulators to continue laying the groundwork for a regulated crypto market, which will increase industry confidence to get involved.
I predict more favorable policies to come at the state level, while other growing economies in Europe, Asia, and Africa trial cryptocurrencies for regular use. In the meantime, with more industries — especially in finance (like Fidelity), telecom (like Cisco and Samsung), logistics, and possibly in energy — moving from proofs of concept to partnerships and active investing, we’re likely to see positive halo effects on BTC price from the adoption of blockchain technology in business.
Last, as blockchain technology moves from the infrastructure to deployment stages and we collectively start to break through the scalability trilemmas with off-chain transactions and sharding, many of the walls to daily crypto use will start coming down, hopefully driving consumer adoption and, again, demand.
Have recent crypto plunges affected your outlook and/or plan?
They haven’t. If you base your plans on the movements of the market, you become incapable of any sort of long term vision.
My focus is the same as it has always been: to increase blockchain adoption by helping technologists get their projects to market, to capture value by focusing my work on offering shovels and pickaxes versus trying to time the gold rush, and to have a little fun with it all by exploring crypto-inspired, non-technical ideas like physical products, media, and events.
As decentralization isn’t just a financial or technical movement, but also a cultural one, giving everyone a chance to participate in our memes — to be informed and entertained through blockchain’s culture, even without having anything to give back yet — is key to mass adoption. Though market cycles can increase or decrease public interest in crypto — what we call hype — no crash to date has killed public curiosity. If anything, it has cleared the market of self-interested scam artists.
What will be the impact of stablecoins in 2019?
Stablecoins are to the finance industry what a good protocol is to a new dApp — that is, a necessary infrastructure layer to doing business. I expect the rise of stablecoins to have three effects.
First, it’ll allow financial institutions to engage with the crypto market and capture some of the benefits of cryptocurrencies without as much exposure to crypto’s volatility, which should make institutions more comfortable with crypto long term.
Second, stablecoins will act as a necessary tool for tokenizing real world assets like commodities and real estate, a la TrustToken, which have historically been slow to jump on the blockchain bandwagon when pegged to highly volatile cryptocurrencies.
Last, stablecoins are a likely party to guide the first wave of compliance of security tokens as — being less volatile and usually asset-backed — present a simpler starting point for regulators than many other cryptocurrency projects.
Which sectors — energy, e-commerce, gambling — do you think will have the biggest impact in the blockchain industry in 2019?
Though I expect logistics, blockchain infrastructure, and finance to remain the driving industry actors, I think 3 more industries will join the roster as “big for blockchain.”
First, gaming, which covers gambling, collectibles (through non-fungible tokens), and enabling technologies (like scalability solution — because the promise of entertainment always tends to increase incentives for technical adoption.
Next, real estate and commodities, which will be exposed to tokenization and increased liquidity, enabled by the rise of stablecoins.
Last, decentralized internet infrastructure, let by projects like Akash, which will begin to fulfill the promise of a truly decentralized internet. Though I was excited to add energy to this list, the difficulty in moving a good that usually depends on decrepit, physical energy grids not optimized for transaction (but rather one-way delivery) makes this a hard proposition.
What event would you like to see happen in 2019?
I’d like to see legitimate blockchain founders and technologists be given the chance to educate government officials and the CEOs of established legacy businesses on ways blockchain might be applied to their industries.
We need to teach the existing power brokers on what’s coming and how they can get involved — or get out of the way — versus seeking to purely compete or circumvent them.
Is the ICO dead as an effective fundraiser? Why or why not?
Not dead, just different. Good blockchain projects have reacted to new compliance requirements, a decrease in hype that used to drive mass market investment, and a more educated investor class.
They haven’t abandoned ICOs, but often, simply restructured their offering into a security token or coupled equity purchases with token disbursements that are now distributed through private placements that look a lot more like venture fundraising than crowdfunding.
The primary innovation of an ICO was the presale of assets that can be consumed in exchange for eventual utility, offering high liquidity — versus equity, which is generally the sale of an asset tied to a company’s cashflow, with very low liquidity.
We haven’t seen the end of the ICO — nor the end of its evolution.