2018 was a mixed bag for the world of blockchain and cryptocurrencies. Bitcoin burst its bubble, sending prices plummeting below $4,500 in November, and confidence in the whole market along with it. We became more sceptical of ICOs, despite $6.3 billion being raised through ICO funding in the first three months of the year alone – more money than what was raised in the whole of 2017 according to Coin Desk.
We also started to see an acknowledgement that blockchain is not synonymous with cryptocurrencies. While there were no breakthroughs of blockchain being used by the masses in 2018, we did see more blockchain-based solutions coming to the fore across a wide range of industries – and not just in finance.
In an industry where things seem to change on a daily basis, it’s hard to make concrete predictions on what 2019 will bring. But there are a few things that have been simmering away that are bound to come to the surface over the next 12 months. Here we’ve outlined our musings on what those will be.
Undoubtedly one of the biggest trends of the last year was the growing call for widespread regulation of the industry. From cryptocurrencies to ICOs and Security Token Offerings (STOs) to blockchain-based “solutions”, the complete lack of repercussions for dodgy dealings or failing to follow through on whitepaper promises has led to thousands of people being scammed out of their hard-earned money.
In 2019 we will see governments finally publish their verdicts on what kind of regulation needs to be put in place and even perhaps made into law. The UK Government released the final report from its Cryptoassets Taskforce in October, which lays out its path to establish the UK’s policy and regulatory approach to crypto assets and Distributed Ledger Technology (DLT) -more commonly known as blockchain. China, the USA, Korea and many other countries are also working on bringing regulation into force and it’s probable that by the end of the year at least one territory will have its regulation in place.
Real use cases
What’s been lacking in the industry for quite some time now are real-life use cases of blockchain. However, many companies have been quietly working away to get data points and case studies of how the technology actually solves real problems. Hopefully, we will start to see less hype and more hard work, with companies sharing what their blockchain solutions can actually do rather than what they hope they will be able to.
If there’s one thing this industry is known for, it’s wild volatility. However, there may be a solution to this major barrier to widespread consumer adoption – stablecoins. Pegged to another stable asset, such as gold or a fiat currency like sterling, stablecoins make the most of the decentralised benefits of cryptocurrencies while having much lower volatility. They mean that we could pay for things using digital currencies on a practical day-to-day basis. Also, as such stable digital currencies are easily trackable on a public ledger, the risk of fraud and identity theft is reduced. With more stablecoins being created, we’re likely to see one really take off in 2019.
With regulation firmly on the horizon, we will naturally see a culling of blockchain and cryptocurrency companies over the next 12 months. Those nefarious businesses out to make a quick win will undoubtedly come up short, along with those that simply don’t have a good enough long-term business plan. As a result, there will be less propping up of badly managed companies, which ultimately will be a good thing in the long run. This increase in instability will lead to less volatility thanks to a decrease in companies flooding the market. With the much-needed death of hundreds of small cryptocurrencies and tokens, we’ll also likely see more stability in the crypto assets trading market.
One of the main problems with blockchains currently is that they can be difficult to scale and link up with other blockchains and technology like IoT and AI. However, with the exponential growth of connected devices and the use of biometrics becoming increasingly more common, we will start to see a real convergence of blockchain with these technologies. A report by IDC predicted that 20 per cent of IoT devices will have blockchain services installed by the end of 2019. Not only will this bring completely unchartered opportunities to create new business models, it will also lead to consumers using the tech without consciously having to think about it; something that has been key in encouraging take-up of all previous revolutionary technologies.
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