BLOCKCHAIN INDUSTRY REVIEW FOR 2019

Facebook’s Cryptocurrency Libra, Binance Abandons The US, IEO Overtaking ICO

In the world of blockchain and digital assets the first part of the year has been filled with a plethora of developments, exciting news, scandalous claims and wild price predictions. As we approach the end of June and look back on the year to date, we believe the first six months of 2019 will be remembered for three outstanding trends that have arisen in the industry:

• The recovery of crypto asset prices, particularly Bitcoin.
• The world’s largest enterprises revealing plans to support blockchain applications or develop own digital assets.
• The dramatic emergence of Initial Exchange Offerings (IEOs) as a start-up funding model.

The publicly available evidence suggests that these trends are not isolated but have re-enforcing effects and inter correlation between them. Looking from the top down, the conclusion of 12–14 month-long bear market (depending on how you make your calculations) has a spiked interest and brought back some confidence to the ecosystem in terms of new entrants and new start-ups which had rescheduled, delayed or prolonged their ICO fundraisers last year.

The form in which the hype started to return changed a bit although — the new upward movement introduced a phenomenon also known as Initial Exchange Offering or IEO for short. Typically, IEOs are fundraising events conducted through cryptocurrency launchpads such as Binance, Huobi, ExMarkets and such which act as an extra security layer for retail users, helps to protect from phishing attempts and scam exits.

The advantages of IEO vs. ICO has been discussed on multiple occasions even by myself and will not be repeated again.

There are basically two routes that newly born crypto start-ups and retail investors can choose:
-Either try to squeeze in among the ‘mega’ IEOs with the largest industry players like Binance or OKEx that require huge upfront payments, can be extremely picky about the projects they work with but represent an instant community for the selected few;
-Or cooperate with fast-growing IEO launchpads such as ExMarkets which host screened projects with high upward potential at a reasonable cost and gives the opportunity for their existing user base and market newcomers to access a diverse mix of vetted projects at inception stage with the chance to reap financial gains when these projects grow in the upcoming future.

However, these new launchpads have to establish themselves first to earn user trust. This need pushes companies behind them to get regulated and get operational licenses, and in turn, makes the whole market a more transparent and trustworthy environment. No one wants another year of hacks like 2018.

What also should be a sign of growth is the fact that the major global technology & communication companies are integrating blockchain technologies into their native frameworks. Initially, it was Samsung that announced plans for crypto wallet support in their upcoming phones, followed by Apple and the nearing introduction of ‘crypto kit’ into the iOS. But without a doubt, the biggest bomb was dropped by Facebook’s Libra cryptocurrency & Calibra digital wallet.

The news about the world’s largest social network stablecoin cannot be classified as anything but grand. Facebook is said to have over 2 billion users in its network and Libra might potentially be a true enabler for a vast number of people, especially those who are considered to be unbanked.

Some large backers have already been announced whose names include Paypal, Visa, Mastercard and a lot other notable brands will help to spread Facebook’s digital currency. But we should call it that digital currency and not a cryptocurrency. From how it has been shaped so far, it will be only a token issued by a private corporation and will have zero resemblance of Bitcoin or other decentralized currency.

Also, there still remains a question of how western society perceives Facebook’s new endeavor given their recent issues with Cambridge Analytica and data privacy. Personally, I will think twice with whom I will interact sending and receiving Libra, however it might prove a very useful way to send/receive micro payments for everyday operations. At the end of the day, for most people usability beats privacy in regards to trivial small-sum payments.

Some experts claim that Libra may be a huge competitor to the controversial Tether and might take a large chunk of its market cap that currently stands at $3.5 billion. At this point it’s only speculation.

I am sure that Libra will get a lot of attention which will spill over to the blockchain and crypto industry and that’s a good thing. However, if you value your privacy and believe that decentralization of money is a feature of a greater society, Bitcoin and other permission-less means of exchange is still a better bet than Libra.

Special thanks to Dylan Sharkey, who helped me to co-write this article, provided insights from the industry and was a generally an outstanding bloke to bounce ideas from. Kudos to you, Dylan.

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