By Laura K. Inamedinova
June 8th, 2018

Predictions for 2018: utopia or reality?

Predictions for 2018: utopia or reality?

By Laura K. Inamedinova
June 8th, 2018

Even though the fever of cryptocurrency will celebrate its first birthday soon, the scope of people and opinions it has already included is especially diverse. Along with the rise and fall of the Bitcoin price, the craziest ideas for ICO projects and the continuing discussions on social media, some popular predictions arose last year. Generally, they concentrate on the destiny of cryptocurrencies for this year; as it has been almost a half of it, a certain framework of potential events can be drawn.

1.Cryptocurrencies will collapse

This argument was widely endorsed by sceptic-minded voices from the very beginning of crypto mania, as, for example, Goldman Sachs which is considered to be one of the essential figures in global traditional banking. Even the biggest representative of crypto and Blockchain had to agree with this statement in some sense. For example, Vitalik Buterin, the creator of Ethereum, claimed that cryptocurrencies should not be considered as the safest financial asset. All in all, the ongoing fluctuation in the price of Bitcoin could be seen as a sufficient argument to support uprising anxiety. However, even though a few changes in prices have been already considered as a bubble burst, the assured claim of the end of crypto era is a bit exaggerated. ICOs are still announced and people successfully invest their assets there. Surely, it has to be admitted that the profit from investments is not that high as it could be during last year. Nevertheless, the core of this sceptic argument has not been realised yet and it seems that it should not happen quite soon.

(The volatility in the price of Bitcoin, February 2017 – February 2018, source: Bloomberg)

2.Blockchain will contribute to sustainability

In the beginning of 2018, Don Tapscott from Quartz predicted that the wide use of Blockchain and cryptocurrencies, despite being ultimately eco-unfriendly due to large amounts of used electricity, might lead to more sustainable approach in both crypto activities and services offered for potential investors. Such an attitude is based on the idea that there were some emerging projects focusing on more ecologic approach as well as the potential to trade sustainable energy with the help of tokens. Even though the idea might sound really innovative due to the unlocked potential of so-called carbon currencies which would be designed as data-driven and separately functioning assets, there are not quite many signs that this step would be fulfilled during this year. As one of the main reasons for the lack of ongoing processes, Colm Gorey from Silicon Republic names the fact that common international regulations do not exist yet as far as cryptocurrencies are concerned. If these would be adopted, some potential solutions would be able to consider in order to promote the higher level of sustainability. According to Colm Gorey proof of stake (PoS), requiring less energy wasting than currently existing proof of work (PoW).

3.ICOs will be more professional

The beginning of ICO era in summer 2017 was marked by many unprofessional entrepreneurs lacking experience in both finance in technologies. As a result, many crypto projects failed or even scammed potential investors. Also, the legal framework of crypto activities was quite weak (hence, breached for many times). These issues resulted in a few different aspects. First of all, the stronger or weaker regulations have been implemented in nearly every country. Secondly, the crypto market naturally threw out the entrepreneurs and projects which were not ready to adapt to quickly-changing environment of digital currencies. As a result, only the strongest ones remained and became successful projects. Consequently, some predicted that 2018 would bring more professionals to the investments where they should fit due to their experience and competence. Same idea could be also applied for the participation of large financial institutions when it come to the announcements of ICOs. Overall, it would not be incorrect to say that this prediction was partially realized. For example, more and more countries are supporting the idea of national cryptocurrencies. Additionally, large companies are also adapting the concept of ICOs while announcing or investing in them. One of the most recent examples is the photo industry giant Kodak: KODAKCoin is widely discussed in the world of crypto, and it probably occurs due to the beginning of relationship between corporations and crypto community.

(Perks of national cryptocurrencies in Venezuela, source: https://twitter.com/rgdom_io/status/985513982067990528)

All in all, the predictions for 2018 demonstrated that the industry of cryptocurrencies is quickly-changing and unpredictable. The mentioned trends were supported by quite relevant arguments and empirical cases, but they have been realized to a tiny extent so far. There is the only thing which we could be sure about: the upcoming year will be quite interesting and challenging regarding the crypto activities. The nature of this field is never calm and always ready to thrill – and it is probably one of the reasons why the world went mad about this phenomenon.