MADANA Reviews the Crypto Market in 2017
The year 2017 was a big one for the Blockchain industry. A total market growth of 3000% did not pass unnoticed among investors and media. Therefore, MADANA recaps all the major events that occurred in 2017 and sheds some light on the hype, the drama, the good, the bad, the Blockchain. Let dive straight into it.
A History Lesson
Let’s face it, the industry exploded suddenly and many critical voices are asking “why the buzz?”. A legitimate question. But to understand what happened one must first understand the events that led to this situation. To give you all a mild overview, we will recap the main events that occurred after the last major interest increase in Bitcoin and Blockchain in late 2013, after Bitcoin reached over 1000$.
Mt.Gox. Once the haven of all Bitcoin, initially a Magic: The Gathering trading platform, Mt.Gox was the first major Bitcoin exchange in the world. In February 2014 Mt.Gox announced that 850,000 BTC were extracted from their companies wallets, unauthorized. This started a downward spiral that left the Blockchain market in stagnation for years. In the meantime, the altcoins sensed their opportunity and the following altcoin explosion led to the birth of Dash, Ethereum, Lisk and many other major cryptocurrencies.
Scalability. After gaining a whole magnitude of new users in the network, Bitcoin, for the first time in history, started to struggle to push transactions through. This can be traced back to an intentional spamming with low fee transactions and also to the sheer amount of new user in the network over time. Many feared that a growing fee market would damage Bitcoin’s key argument to be a low-cost value transfer network and thus ultimately kill it. A hunt for a solution began and the hope was to upgrade to Segregated Witness (SegWit) to implement the Lightning network.
Halving. In July 2016 the Bitcoin network celebrated an ever occurring event, the halving of the block reward. As miners got used to a constant 25 BTC reward around every 10 minutes, they had to adjust to only getting 12,5 BTC from than on. This led to lower supply in the market and pushed Bitcoin once again over 1000$ in the beginning of 2017 , slowly breathing new life into the market. Which in turn generated more interest and even fuller blocks…
The year 2017
Fork. The new year began with a debate, the scalability debate. As Bitcoin scratched an all-time high followed by a noticeable correction, the transaction amount in the network led to constant full blocks thus creating a fee market with over 0.5$ average transaction fees for the miners. The community got divided, as some wanted a fast transition to SegWit and Lightning for a sustainable solution, while others, mainly miners, preferred a more pragmatic approach to scale: increasing the blocks.
Altcoins took advantage of the whole situation and positioned themselves as the solution, with Litecoin implementing SegWit without much drama and chain split. Ethereum earned a huge interest as a new kind of crowdfunding platform through the convenient use of ERC-20 tokens. A new era of start-ups emerged: ICO-Startups. The market exploded and ethereum quickly rose over 100$ per Ether and gained huge interest from different industries around the world.
The tension in the Bitcoin community was high as by summer as they did not reach consensus over how to hardfork. The fear of missing out was real, new ideas and proposals popped out of nowhere. The community tried to take things into their own hands and overcome their “hostage-like” situation because of miners simply refusing SegWit. #UASF was the buzzword, a method to bypass a miner activated fork. After many backs and forth Bitcoin ultimately forked into Bitcoin (SegWit activated) and Bitcoin Cash (BCH) on August 1st, with Bitcoin promising to further upgrade their block size to 2mb later this year (which was canceled in November). As Bitcoin holders made “free money” from the chain split because the same amount of Bitcoin Cash remained on the new chain on every address, forking Bitcoin became a business leading to further forks like Bitcoin Gold (BTG), Bitcoin Diamond (BCD) and even more by December 2017.
MADANA. After a long tradition of organizing Bitcoin Meetups since 2014 in Aachen, the Bitcoin Aachen student initiative of the RWTH Aachen University grouped together to form a project with a revolutionary goal to give data producers control over their valuable asset. Their digital identity. Following in the footsteps of our well-respected colleague Max Kordek, who successfully co-founded Lisk, the MADANA team began their work on the MADANA project, changing the way we look at data analyses forever. Overall 2017 was a very successful year for MADANA as we managed to convince industry leaders, politics, and partners that the privacy issue is a serious one and that our approach is the right way to tackle it.
Conclusion
The year 2017 was more than a success for the Blockchain industry with a total market growth of more than 3000%. The huge interest in startups using Blockchain technology helped MADANA get with the right people at the right time and we are happily awaiting 2018 with many surprises and announcements for you guys! We from the MADANA team wish you all happy holidays and a wonderful new start into 2018 with all your wishes and goals to be fulfilled and that the world finally accepts Blockchain as the new way to approach problems for the good of us all.
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