5 Crypto-Predictions for 2018
As the crypto-currency bubble reaches a new all-time-high every day — too many people don’t know what to do with their bonuses — we’ll try to make a few realistic predictions for 2018 out of all this craziness.
1. Bitcoin will remain #1
If 2018 is the year where Mr & Ms Smith start drying their 401k to get into the crypto-game, then Bitcoin will not only remain #1 but will also increase its weight in the Crypto-world valuation.
Not because it’s the best crypto-currency on the market, not because it’s the most promising one, nor the most technologically advanced one (BTC network can only process 7 transactions/second) but simply because it’s the most famous one.
As crypto-currencies become widely available to the traditional financial world through derivatives, Bitcoin will be the first one to benefit from these investments (cf. Bitcoin Futures from CME approved last month). Additionally, from the average Joe standpoint, there’s still only one crypto-currency: Bitcoin, and this is the main one he’ll find in the user-friendly exchanges like Coinbase.
In a nutshell, the new cashflows coming from the progressive opening of the crypto-currencies trading to the “real world” will be invested in Bitcoin, hence increasing its weight relatively to the others.
2. Scalability will become a real concern
One major challenge the crypto-world will need to overcome in 2018, if it wants to legitimate at least 10% of its current valuation, will be: scalability. Currently Visa can handle up to 24,000 transactions per second (TPS) and Mastercard is said to be at 38,000 TPS. In comparison, Ripple Network which is supposed to replace the interbank transactions only reaches 1.5k TPS while Ethereum lags behind at 15 TPS, leading to frequent congestion of the network for reasons as futile as the launch of a “breed your own cat” game.
If the decentralized ecosystem ever wants to become the new backbone of the internet, it’ll need to solve this scaling issue while maintaining its highly-secure features. This can happen in two ways in 2018:
- Blockhain-less technologies (IOTA, Raiblocks, Byteballs, Hashgraph etc...) will keep growing but will need to drastically improve their security aspect to be as attractive as Blockchain technologies (cf. IOTA flaw discovered by the MIT & BU)
- New features for existing Blockchain-based crypto-currencies. Ethereum roadmap gathers could exemple of what could be done. It focuses on solving this scalability issue with new features such as off-chain transactions to avoid overloading the network with small volumes, sharding and Proof-of-stake implementations
3. Crypto-currencies will finally become anonymous
How many times have we heard that Bitcoin was the fuel of the dark net? Of the hackers, drug dealers and other hitmen of the 21st century?
It is true that creating a Bitcoin “account” and receiving funds on it doesn’t require you to prove your real identity to any Bitcoin Bank. It is also true that there is no limit in the number of Bitcoin “account(s)” one person can create. However, if I ever manage to tie your real identity to your Bitcoin “account(s)”, it is actually easier for me to find about all your transactions than if you had different bank accounts. This is due to the intrinsic definition of the Blockchain: An immutable ledger tracking all transactions happening on a decentralized network.
Many people still believe that Bitcoin protects your privacy however what it actually does is let you pick one or several pseudonyms — your Bitcoin address(es) — to receive the funds and a password — your private key — to access it and send them. Once I know your pseudonym, I can track all your transactions since the beginning of the time.
To address this false anonymity of the blockchain, many new coins have been created. Among the most famous ones: Monero, Zcash & Dash.
2018 will be the year where crypto-users will start giving more and more importance to their privacy so the dark web can go darker & the most dishonest of us will be able to hide their profits to the IRS.
4. The ICO-craze will cool down
2017 has been the year of the apparition of ICOs on investors’ radar, however it has also led to dramatic FOMO behaviors pushing many people to invest several millions in projects based holy “Whitepapers” — 30 pages pdfs describing the new asset and why it would make the world a better place. The ICO craziness has mostly cooled down in Q4 2017 leading to only 23% of the ICOs reaching their hard cap.
In 2018, we should expect the legal framework towards ICOs to be clarified in order to protect the small investors. We should also see traditional Venture Capitals and Whale Investors move in this market to get involved as early as possible in the next FB/Google.
In short, 2018 will be the year where fewer but more serious and advanced projects with an actual working product will get funded during ICOs.
5. The Crypto-Bubble will: [Insert your answer]
Is the decentralized ecosystem initiated by the Bitcoin truly revolutionary? Yes.
Shall we expect the Bitcoin and the other crypto-currencies to be there in 10 years? Yes.
Is the Crypto-world currently experiencing a bubble? Yes.
How can the 2000-ish decentralized networks and related tokens be valued $ 800 Bn while the value of the business driven by these assets should be much closer to $1 or $2 Bn — most of it actually coming from the trading exchanges? It would be crazy not to acknowledge the bubble currently inflating the values of the different crypto-assets.
However, the disruption and opportunities created by the newly decentralized networks whether they’re called Ripple for the banks, IOTA for the IoT or Ethereum for the decentralized Apps is here to stay. From a technological standpoint, the security and theoretical large scalability of these network make them truly attractive. From a financial standpoint, their finite quantity and / or predictable production make them very interesting as stores of value — which could explain the high-value of the Bitcoin.
We can foresee two options for the crypto-bubble in the next few years
- Either a massive explosion similar to the Internet bubble where only the true business would survive and all the “Shitcoin” would be wiped out of the surface of the Crypto-world
- An actual implementation of several business lines on top of the blockchain that would progressively bring the business value of the crypto-currencies as high as their market-value. This will mainly depend on how fast the start-up world starts leveraging the advantages of the blockchain to create new products.
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