Ethereum has been the dominant smart contract platform since 2015, but the race to build the Googles, Amazons, and Apples of smart contract platforms really started heating up in 2018 — and the stakes are high. The platforms that dominate the burgeoning internet of value could easily command trillion dollar market caps.
TL;DR: See the full list of crypto tech to pay attention to in 2019 at the bottom.
At the end of 2018, developers are tired of waiting for scaling on the EVM to become a thing. Emerging technologies like Raiden Network’s arrival on Ethereum mainnet bring long-anticipated hope to Ethereum developers, but it may be too little too late. This year, alternative blockchains with faster layer 1 consensus baked in are starting to attract developer attention. Where developers go, apps and users follow.
It’ll be hard to catch up, though. Ethereum has thousands of developer courses, tutorials, articles, and Stack Overflow answers, and that’s quite a head start. They also have the largest, most active community working on improvement proposals and core protocol development.
Developers may be frustrated with slow transactions and terrible user interfaces, but Ethereum still owns the developer mindshare by a wide margin. Over 3,000 ICOs have launched on Ethereum, and its closest competitors are still in the low hundreds. Ethereum has suffered some major blows in 2018, but a big rally this week serves as an answer to challengers: Don’t count Ethereum out just yet.
The dominant crypto theme in 2017 was the ICO big bang: The dawn of Initial Coin Offerings (ICOs). That explosion continued to expand through the first half of 2018, before regulatory concerns cast a chilling effect over the crypto industry.
There were two dominant themes in 2018:
The BUIDL runway — can we get our crypto projects to market before the money runs out? Sub theme: Waste in the crypto industry. Many companies spent outrageous money flying all over the world for conferences before they built a viable product. Spending money on marketing before you’ve built an MVP is the opposite of LEAN startup philosophy that has dominated wise tech leadership since the 2001 dot com bubble burst.
The crypto “winter” — At the end of 2017, the crypto market crossed another 10x growth marker. Every time that happens, the market pulls back before climbing to another 10x multiple higher than the last. 2018 was the first year following a 10x peak, so naturally, we took another tumble. Unfortunately, many crypto projects kept the money they raised in the market during an 80%–90% slump in prices, and now the money is running out. This has led to a lot of layoffs. (See also: “BUIDL Christmas: The Story of the Blockchain Christmas Layoffs”)
What does that mean? The Crypto market has predictable ups and downs. Based on past performance, we know that after we hit the next 10x marker, the prices are very likely to tank 80% — 90% in the following months. What this means for treasuries is that they should plan out the project runway — traditionally at least 18 months of operating expenses, and stash that money in fiat currency to protect it from the market down cycle. That way, they can keep operating no matter what the crypto market does. If there are extra funds after putting that runway into safekeeping, sure, keep that money in the market and hope for long-term gains while you BUIDL.
Many projects failed to do that. Those companies are forced to cut staff, and IMO, they should start with the treasurer.
Savvy crypto investors are aware of the market cycles, and plan strategies for long term investments that they expect to stay in for 7–10+ years. To those investors, prospects for crypto investments are starting to look good again.
A note about the “the crypto winter”: The crypto market has never seen a winter like the one that the AI industry experienced between 1987 and 2009, which likely inspired the “crypto winter” name. During the very real AI winter, researchers used euphemisms like “machine learning”, and “analytics” to secure funding to avoid the stigma of “AI”, which many had begun to see as utopian sci-fi that would never be real. Today, advancements in AI have led to some of our most exciting technologies, including self-driving cars, self-flying drones, and major breakthroughs in robotics.
What will be the themes in 2019?
If 2017 was about ICOs, and 2018 was about survival, what will be the primary crypto themes of 2019?
dApps had a tiny audience in 2018, but 2019 may be the year that we see the first multi-million user dApps, and non-crypto geeks will finally begin transacting in cryptocurrencies.
According to DappRadar, the most popular Ethereum dApps in 2018 currently have less than 1,000 daily active users. But already, a new breed of crypto apps is emerging.
Sliver.tv is a video game streaming site which lets video game players stream their gaming sessions live for other game lovers to watch. It recently integrated the Theta cryptocurrency, which allows viewers to earn cryptocurrency by watching streams and sharing their network bandwidth with other viewers.
They can also win Theta, donate it to streamers, and use it to purchase virtual and physical goods in the Sliver shop. With more than 20k monthly active users, Sliver.tv may be the most popular crypto-enabled app to date for use by a general audience (i.e., not an investment/exchange/wallet app).
Sliver.tv is a very promising start, but it uses a centralized, custodial wallet and users can’t withdraw funds.
Cent.co is a look at the future of content-based social networks. Imagine the best of Twitter and Medium: Long form content presented in bite sized content streams that you can expand for the big picture. You can tip users who create the content, and you get rewarded when other people tip, too. Tipping is called “seeding”. When you seed content, a portion of that money goes to the original content creator, and a portion goes to everybody who seeded the content before you did. It creates a financial incentive to post high quality content, and to seed content that you think will become popular on the platform.
Cent started life as a way to offer bounties to get some work — any kind of work — done by the users of the Cent ecosystem. You can ask a question and offer a bounty for the answer. You could ask for logo design help, or ask for help editing your latest post. Anything that’s worth money to you. You control how much money you’re offering, and the number of recipients who will receive that money, so you’ll never accidentally blow your budget if your offer goes viral. The idea behind Cent was to create an economy that could allow its users to quit their day jobs and start earning money online using only their talents and the Cent platform. I’m not sure how much money people are making per hour on Cent, but what I am sure of is that it looks very promising.
It’s also one of the most user-friendly dApps I’ve seen to date, and so far, I’m not seeing any signs that it’s being bogged down by Ethereum scaling issues. To use Cent, you’ll need a Web3 browser like Trust or Coinbase Wallet.
I’m still anxious to see a dApp with a user-controlled wallet reach more than 10 million users. Will it happen in 2019?
Ethereum challengers are rolling into production and community building phases in 2019. Ethereum has a huge head start, but 2019 may be the year that the competitive pressure really begins to squeeze. Ethereum challengers come primarily in two shapes: ICO platforms and dApp platforms.
Potentially, many challengers will fill both roles, but it may help to look at them independently, anyway.
ICO platforms — Almost since the day it launched, Ethereum has been the standard platform to build on if you want to launch an ICO. Smart contract applications have yet to gain any real user traction, but ICOs were a smash hit in 2017 and 2018.
Ethereum is no longer the only choice for launching an ICO in 2019, and may not be the best choice. Competitors are starting to step up. In 2018, hundreds of cryptoassets launched on competitors. In particular, Waves recognized that launching cryptoassets was the killer app of Ethereum, and set out to make it easy. They did just that. You can issue a new token on Waves with absolutely no coding required.
They also have a mass transfer feature that lets you easily distribute your tokens to lots of people — to conduct airdrops or distribute tokens from your ICO, for example. The hard part of conducting an ICO is exchange listing. The Waves wallet includes an integrated Decentralized EXchange (DEX) so users can start trading your new token immediately. The Waves DEX functionality compares favorably to centralized exchanges, and easily beats the user experience in any of the competitive Ethereum-based DEXs. Unlike centralized exchanges, DEX funds are managed by user-controlled keys, so they don’t have to trust a centralized exchange with custody, or worry about what happens if an exchange gets hacked. The Android Waves wallet has been downloaded more than 100,000 times.
Ethereum is still the most popular token launch platform by a huge margin, but Waves has managed to attract hundreds of projects. Stellar is another popular alternative ICO platform that’s not far behind. A few projects have launched on other alternative platforms including NEO, EOS, etc., but it looks like Waves and Stellar may pull away from the pack in 2019 for new token launches.
There’s a good chance they’ll attract a lot more projects which would have otherwise launched on Ethereum in 2019.
The promise of the crypto space is to build the internet of value, and you might say decentralized applications play a central role. But what exactly is a dApp? Why are they important, and which dApp platforms will reshape the game in 2019?
What is a dApp? dApp is short for decentralized application, and it’s essentially the antithesis of what centralized applications are. A centralized application controls the user’s data. For example, your banking app helps you manage your bank account balance, but you technically don’t control that money — the bank does.
Facebook is another great example. If Facebook wants to share your list of friends with a 3rd party developer, they can do so without your permission. If they want to share your private messages, they can. If they want to shut down a feature and kill your app, they can.
Decentralized apps, on the other hand, don’t store all your user data in a centralized database. Instead, they rely on decentralized technology like blockchains and other DLTs (Distributed Ledger Technologies), decentralized databases, and decentralized file storage systems. dApps can put you in control of your own identity, currency, and data. (They don’t all do that yet, but I suspect the ones that do will win the Web 3.0 disruption).
dApps frequently need to transact value across the network. To do so, they usually rely on a blockchain, such as Bitcoin, Ethereum, Waves, etc. They typically need to interface with a wallet in order to authorize transactions.
My favorite current dApps have wallets built-in, and are either custodial (meaning they manage the hard stuff like the private keys for you, e.g., Sliver.tv), or integrate directly with wallets (e.g., Brave).
The dApp user experience is getting better. There are now two popular browsers with integrated dApp support , so there’s no need for confusing browser extensions: Trust (recently acquired by Binance) and Coinbase Wallet (which was Toshi until Coinbase acquired it shortly after the Trust acquisition). Both have much better UX than alternatives like Metamask, and provide integrations with the Web3 API, which helps dApps integrate with the Ethereum blockchain.
My favorite dApps use blockchains for consensus, but they connect to fast databases and load quickly, as well. My favorite dApps also don’t require user approval for every little transaction that could possibly take place on the blockchain. The key to good dApp user experience is to be selective about what you hit the blockchain for. For example, it’s possible to have a virtual account backed by a database that only needs to sync to the blockchain periodically, for settlement or security, or both.
In the beginning of 2018, the Lightning Network launched as a 2nd layer protocol sitting on top of the Bitcoin blockchain. In December 2018, the Raiden Network launched an alpha on the Ethereum blockchain. Both networks provide peer to peer off-chain payments using payment channels connected by Hashed Timelock Contracts (HTLCs). What this means for end users is that it’s now possible to transact with your dApp almost instantaneously instead of waiting for blockchain confirmations which can take up to 10 minutes.
Smart Contract Platforms
Solidity has ruled the smart contract programming language ecosystem since it became available. It’s ubiquitous for smart contract programming on the Ethereum Virtual Machine (EVM). But Solidity has some serious issues, including arithmetic overflows and underflows, type errors, and the delegatecall vulnerability which froze $300 million. All of these vulnerabilities are examples of issues which exist at the programming language level. In other words, a better programming language could create more secure smart contracts.
The challengers are coming.
- Waves RIDE: A Turing incomplete (no loops or recursion), Haskell-inspired functional programming language for the Waves blockchain features static types, lazy evaluation, pattern matching, and predicate expressions which determine whether or not a transaction is allowed to complete. A Turing complete version is also in the works. Waves’ smart contracts support is currently live on mainnet. We should see the first Waves dApps appear in 2019.
- Plutus (Cardano) is another Haskell-inspired functional programming language, this time for the Cardano blockchain. Cardano is planning two big releases in 2019: Shelley, which provides full decentralization and staking, and Cardano-CL, the virtual machines that will support programmable smart contracts.
- Scilla (Zilliqa) is a formally verified smart contract language designed with separation of computation and effects in mind. This means that calculations and communication of state transitions are strictly isolated, which makes Scilla smart contracts easier to test and statically validate to minimize the chances that something will go wrong. Zilliqa’s mainnet is scheduled to launch at the end of January, 2019.
- Rust (via ewasm, Cardano client) is a lower level language (like C) with some of the safety features of languages like Haskell. Rust features guaranteed constant references to avoid accidental mutations, static prevention of null pointer exceptions (options must be explicitly declared), stateful types which only provide access to operations meaningful to the current state, pattern matching is analyzed to guarantee function completeness (an unmatched pattern will result in a compile-time error), etc. Basically, it’s like C++ and Haskell had a baby that inherited none of the scary stuff. Rust can compile to ewasm, or be used to build client code for blockchains like Cardano. Modules for Lisk can be built in Rust and compiled to wasm to import in Lisk projects.
You Might Not Need Smart Contracts
You might not need a smart contract programming language to produce a production dApp in 2019.
Most dApp developers create nodes that ingest data from blockchains and pull it into a database that can be queried efficiently. That process is not a lot of fun, and adds a lot of maintenance burden to crypto apps. The Graph makes it easy to query blockchain data using GraphQL. Decentralized nodes aggregate blockchain data, supported by IPFS.
You can send compute jobs to iExec, and even handle intense graphic rendering with the Render Token. With all these protocol tokens flying around, we might need to do some cross chain atomic swaps to exchange tokens across multiple blockchains.
You can use verifiable claims, batched and anchored to your blockchain of choice (suggestion: Bitcoin) to record any kind of data, including ownership and transfer of assets like real estate, car titles, and NFTs. You can store those claims, supporting files, and various database records (see OrbitDB) on IPFS or Storj.
OK, that was a lot. Let’s review the tech you should pay close attention to in 2019:
Wallets & dApp Browsers
Smart Contract Languages
Decentralized Compute Services (AWS for dApps)
We’re BUIDLing the future of celebrity digital collectables: cryptobling.
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