December 21st, 2018

10 global crypto trends for 2019

10 global crypto trends for 2019

December 21st, 2018

Being part of the international media about disruptive new tech is one of the most exciting journeys of one’s life.

One day you’re discussing future legislation with an “island country” prime minister over the glass of ice-cold champagne, and in 24 hours you’re furiously arguing stateless society with crypto-anarchists in the former military bunkers of Eastern Europe.

A year ago, BTC was skyrocketing, ICO was supposed to kill greedy Californian VCs, and all of us were promised redemption of the new 4th industrial revolution.

Over the past year, I have seen French left-wing socialists in a luxury villa on the mountain of Mykonos  talking about blockchain enlightenment, “Lightning goddess” Elizabeth Stark in one of the Riga lofts, Moscow “techno cobras” who made a fortune on their ICO campaigns, global crypto scammers from PanamaPapers in their villas near Lake Zurich. Probably that’s what California gold rush looked like a hundred years ago.

On the other hand, however, 2018 felt like the Great War for the whole community. Funds lost their investments, backers – their last penny, and most of the rest – their faith in the future.

For all that, 2019 will do a 180 and here is why according to my global prognosis.

1. No blockchain, No crypto. PERIOD.

Distributed registry technology promised to cut out the middleman and grant us a heavenly life without central banks, financial institutions, notaries, and officials. The outright victory of universal decentralization attracted the attention of international corporations attempting to build private blockchains and supply chain-based corporate solutions. If you remove the whole marketing veil, finding AT LEAST ONE example of an economically sound DLT technology application outside the cryptocurrency world and business process decentralization will be an enormous struggle. An attempt to implement corporate blockchain solutions can only exist in the paradigm of the decentralized financial system, according to Vitalik Buterin recent statement.

2. Security Tokens or The Future of The Global Economy

Crypto promised to circumvent the middlemen and bring the new stage of liberalization. TGE (a slang term for Initial Coin Offering) was just simple repetition, a sample of the world where anyone could be the investor and real business could raise equity & issue shares without overcomplex procedures and control of the greedy underwriters.STO (or Security Token Offering) will shake up the stagnant global economy.There are 3 main ways to bring high liquidity.- Reducing the cost of raising capital- Reducing transaction and operation costs- Being present in the legal fieldThanks to active development and a more liberal approach to STO in the European Union, businesses around the world will be able to get access incredible amount of liquidity, with the majority of such decisions located in the real sector instead of the cryptocurrency one.It is STO that will be the most significant breakthrough of the new economy in 2019.

3. More financial crypto products

Complex & syndicated financial crypto solution is THE NEXT BIG THING for the financial market. Already today we notice new – like startups that allow full-format payroll solutions, both for companies and for ordinary people. Distributed shared register, smart contract based dividend payments, CFD on stablecoins and so on. In 2019, the implementation of standard synthetic financial instruments in the crypto world is to be expected.

4. No more blockchain news, for crying out loud!

At first, amid all the news on blockchain solutions integration, the whole community was ecstatic: another company introduces bonds on blockchain; the first atomic swap happened; ETH rate is growing! While blogs and media portals dedicated to blockchain & crypto began to mushroom, the quality of their content plummetted like there is no tomorrow, dragging the rest of the industry along. The most volitional players simply deleted those endless annoying telegram chats, unsubscribed from the newsletters and now consume only carefully researched information packed thoughtfully into longreads. Next year, we will be (finally!) hearing less of the typical “blockchain news” and more intelligible and well-crafted longreads.

5. Regulation: separate but equal?

More and more countries are attempting to launch a vociferous blockchain strategy: Japan, Malta, Gibraltar, Estonia, and even Belorussia, all in one form or another are trying to ride the hype train and integrate a new economic paradigm into the existing laws. However, the Swiss “crypto miracle” was implemented not because of the new regulation and bureaucracy, but rather in spite of it. Instead, what made it happen was hundreds of years of tradition having absolutely unique and utterly special turnaround based on decentralization and the bottom-up approach. The infamous New York BITLICENSE has already become “the town joke” of the entire industry, and digital assets regulation within the framework of the American Law paradigm slightly resembles some form of schizophrenia let alone helps the business. The pace of technological progress in the field of digital & crypto assets has become intense, and regulators ALREADY cannot keep up with all those changes in disrupting technologies. In 2019, regulators will need as a matter of priority to reflect on how to either catch up and keep the pace or legalize everything in advance.

6. Crypto Valleys or The Valleys of Death

In 2017, we thought that regulation would give the development of the industry a much-needed impetus and attract institutional investors. Though, two years later, it didn’t get very far. Switzerland Crypto Valley has turned into a small private club. Maltese regulation, the one that promised all companies heaven on earth, may sink into the abyss of endless bureaucracy. None of the countries managed to build a unitary hub, a single ecosystem for DLT and crypto projects. Furthermore, this idea of a unitary center will probably forever stay an idea. General development of LTE networks, airline cost-cutting, simplification of global processes slowly reduce the dependence on key hubs: London, San Francisco, Berlin, Zurich, Hong Kong, and Singapore. An attempt to replicate the success of SILICON VALLEY is doomed in advance, due to the entirely different historical factors we have coming into 2019.

7. Apps, not Protocols

The current state of DLT development is more like the Internet at the beginning of golden ’80s.  Mass adoption is still the bottleneck of our industry growth.However, do we really need an additional more “tech-savvy” protocol instead of daily applications?Mass adoption will only happen when complex cryptographical solutions are packed into apps with a sexy interface so easy to use even my grandma could do it.All technologies since the invention of the steam machine went down that road.You don’t need to know how the engine works to drive a car, and in 2019 you won’t need to know a thing about Merkle tree or transaction obfuscation to create an untraceable money transmission.

8. The rise of investigations aka putting bad guys behind bars

Lately, there has been plenty of examples of ICO investors going to all sorts of courts trying to expose fraudsters. Media features more and more cases of projects founders withdrawing money for A+ class offices, new Porsche and overall la dolce vita. Unfortunately (or rather, luckily), all these guys do not know how blockchain transaction analysis systems like Neutrino, Crystal,  Elliptic, and others alike work (and that most of these companies have real MI-6 agents on the payroll) compared to the laughable Classic AML / KYC banking solutions. Alongside the hungry-for-truth journalists, we are almost promised some Sherlock Holmes type stories.

In 2019, there will be hundreds of incriminating cases resulting in real sentences finally clearing the industry of such garbage.

9. Stablecoin – Stable future

Stablecoins (and real asset-backed coins) will give impetus to attract institutional investors and funds to the industry, and provide greater exchange together with assets liquidity. The most liquid USDT is surrounded by endless scandals and speculations about the insecurity of this asset. Exchanges launch personal solutions, every week more and more start-ups plan to sell similar complex products: for example, STASIS, a stablecoin pegged to EURO, intends to obtain legal status in Malta (and the European Union) and is already being audited by BDO. Integrating EURS into current financial crypto flows will ensure a significant reduction in transaction costs and the development of solutions such as dividend payments and the revenue share in EURS based on new smart contracts.

10. The crypto party has not yet begun. Keep calm & carry on.

Satoshi Nakamoto is probably already dead. Moreover, the private keys to his multi-billion fortune are lost forever. There are zero chances you’ll be able to mine another thousand BTC on your NVIDIA chips or raise hundreds of millions on you crazy ICO.

However, the good news is, there are only 20-30 millions active crypto users all around the globe.

Tokenization of real assets is on its way, and Security Token Offering will reactivate the global economy just in a couple of years. There is no “bubble” on the market & we will probably never see it. The whole industry is still in its infancy and will grant a once in a lifetime chance for all of us.

Keep calm & carry on.

Despite all the crypto-anarchist dreams, our industry cannot exist in a separate vacuum deprived of contact with real life and economics.    These past few years have kept the world in its most turbulent state.  The number of “real” startups is plummeting. Venture funds no longer justify their models. Parliamentary democracy does not work the way it should. Elites whom people have entrusted their right to choose are making more and more erroneous decisions. Right choices and understandable future no longer exist.

In February of 1989, the last secretary general of the GDR, Erich Honecker, said that the Berlin Wall would stay erect for the next 200 years come what may just to be disassembled into small pieces in 8 months.

On the eve of 2018, pouring champagne under the New Year fireworks, we were all confident that BTC would break 50K, and in November the capitalization of digital crypto assets lost almost $ 1 trillion. In the upcoming year, the industry will finally cease to be a refuge for dark markets, ICO crooks & anarcho geeks, and take its place among those with an impressive annual turnover.

Something grand is about to happen.