... and what to expect next
In 2019, a huge bear invaded the crypto scene and crushed everyone’s hopes of becoming a billionaire in the blink of an eye. So, the last 12 months weren’t too dreamy. And even though crushes are quite common in crypto, this year’s circumstances are a bit unusual: governments, banks, and regulators are recognizing Bitcoin, more people are being included, large mainstream brands are adopting digital money as a form of payment: more than 20 million people currently use Coinbase, and at least 31 million accounts are registered via crypto wallet provider Blockchain.com. In 2018, Bitcoin death was documented 91 times, but like a cat, it’s still pretty much alive and keeps going.
Let’s reflect on the essential crypto events of 2018 and look at some predictions from the Future Times crystal ball:
The most important crypto bans of the year
January began with a massive news splash from the South Korean government. They revealed their plans on banning crypto exchanges over tax evasion and assigned the police and tax-collecting authorities to do some work in their offices. As a result, Bitcoin rates went down by $2,000 practically overnight.
A couple of weeks later, crypto was in trouble again. This time Facebook chose to ban all the ads associated with any digital currencies. Since it was a dominant driving marketing power for many initial coin offerings, it prevented numerous blockchain startups from creating any easy promos.
Later in February, China followed the banning lead. It’s fairly uneasy to enjoy the freedom in China while browsing the internet, googling or to trying to reach someone’s friend on Facebook. The “Great Firewall of China” restricts all of that. In February, the list of unacceptable international websites was updated with everything bitcoin-related to reduce the financial risks for Chinese citizens.
Some other noticeable bans of the year happened in April when the Central Bank of India (The Reserve Bank of India) prevented financial institutions from allowing accounts to bitcoin wallets transactions.
The largest crypto exchange hack of the year
2018 began with a significant crypto heist. Hackers stole about 58 billion yen worth of NEM from the hot wallet of Coincheck, a Tokyo-based crypto exchange. At the time, this sum was an equivalent of roughly $532.6 million surpassing a well-known Mt. Gox hack, with only 850,000 of Bitcoins or around $450 million (at the time) stolen.
The bloodiest fork of 2018
In November, the arguments over Bitcoin Cash fork grew entirely out of control. The entire crypto community observed the battle between BCHSV (Satoshi Vision), headed by Craig Wright, aka Fake Satoshi and BCHABC (Adjustable Blocksize Cap), led by Roger Ver, previously referred to as Bitcoin Jesus. It rocked the tremendous crypto volatility, spiked trading volume and, as some authorities might assume, made bitcoin nosedive to a new low. And we are still in the midst of that mess.
The most shocking project’s hack of the year
Oyster Pearl’s team intended to build innovative data storage, allowing the owners to be in full control of data privacy. In October 2018 Oyster Pearl’s smart contract was hacked provoking asset price reduction and a massive sell-off. The token rates succumbed from $0,232 to $0,023 within a couple of days.
It’s all begun when the participants of Oyster’s Reddit community started noticing some unusual crypto smart contract activity. Eventually, its ownership was transferred to a new, unfamiliar address and minted millions of new PRL tokens. Those were sent to a cryptocurrency exchange called KuCoin and sold at a highly discounted price.
The team went on Twitter to declare that at least 3 million new PRL tokens were created and the project’s previously anonymous founder Bruno Block is the one to blame.
Later, the team decided to fork PRL into PRL2/PEARL and kept it in a separate corporate entity with zero links to Oyster Protocol Inc. The fork was over by the end of Friday the 9th of November, and the recently launched cryptocurrency was named Opacity (OPQ). While this incident slowed down the project’s development, the team was pretty determined to keep going.
At the moment of writing the token is trading at $0,033.
The largest ICO finished in 2018
Even though raising funds through Initial Coin Offerings lost some popularity points comparing to the previous year, three largest to date ICOs happened in 2018.
A messaging app provider Telegram has accumulated a total of $1.7 billion and “decentralized Netflix,” a startup called TaTaTu, has raised the third largest round ever – $575 million in total. It’s worth mentioning that some pretty well-known celebrities and even royalties were amongst the token sale contributors.
The nastiest crypto quotes of the year
Even with the whole crypto mass adoption, some people are still not happy with Bitcoin including a bunch of “really rich dudes.” Those were very original back in May demonstrating their sentiment. For example, Warren Buffett, a well-known self-made billionaire, mentioned something about Bitcoin being a “rat poison squared,” and Bill Gates, one of the most generous billionaires in the world, identified it as a “greater fool theory.”
The most significant effort in making crypto real
Two companies in the crypto space deserved an honorable mention in this section.
First comes San Francisco-based bitcoin exchange and wallet provider Coinbase and their extraordinary skills in fundraising. Back in October, they managed to secure an additional $300 million funding round. It brought company’s evaluation to $8 billion proving that crypto is not tulips anymore.
Another hero bringing bitcoin closer to traditional business is one of the leading bitcoin miners, Bitmain. They were probably the first company to demonstrate the intention to run an initial public offering, IPO.
The most disappointing news from the regulator of the year
Winklevoss twins and their exchange-traded fund (ETF) proposal were kept being refused by U.S. Security Exchange Commission (SEC). The culmination happened to be in August, the month that was all about ETFs rejections when the whole bunch of bitcoin ETFs was declined.
The most notable bitcoin scam of the year
The range of Twitter hacks occurred during the fall. It’s started with bitcoin giveaway from a someone who hacked Pantheon Books Twitter (@PantheonBooks) and turned it into a fake Elon Musk’s account (@elonmusk). Along with retweeting all Elon’s thoughts the assaulter also mentioned that he is eager to send some crypto to his followers using bitcoin. They only have to transfer some crypto to a wallet provided to receive more in return.
More Twitter accounts heists followed. Amongst brands who suffered were Google (@gsuite and 823K followers at the moment of an accident), the Body Shop (@thebodyshopusa and 42K followers), Target (@target and 1,92M followers), and many more.
What to expect in 2019?
With all the bitcoin deaths and resurrections we still have tremendous trust and enthusiasm for the future of crypto.
Governments of various countries are baking up all sorts of regulatory frameworks. The variety of options is becoming more robust (Malta? Gibraltar? Lithuania?) and that alone makes the survival and the prospects for cryptocurrencies much more exciting. Even without decent regulations, more than $22 billion were allocated in Initial Coin Offerings in 2018 according to Bloomberg.
But, the proper jurisprudential development of the story will most likely positively influence the industry, not even talking about entirely new infrastructural solutions that have to be developed to make it all work: platforms for legal Security Token Offerings, regulated crypto exchanges, wallets for securitized assets, and more.
So, there is still potential to create those comprehensive universal solutions, both for businesses and consumers.
What about the evolution of assets tokenization?
It’s already feasible to acquire ownership of tokenized real estate, like University of South Carolina off-campus residence for students. A blockchain startup called Harbor arranged that fully compliant sale and was offering shares at $21,000 per pop to the general public.
Also, earlier this year, Andy Warhol’s “14 Small Electric Chairs” tokenized 31.5% stake was sold. Blockchain startup Maecenas sold $1.7 million worth of tokenized art “shares” this Summer. The appraised value of the artwork is $5.6 million.
With further progress on crypto-related taxes and regulations, the future of real estate tokenized shares, shares in Silicon Valley startups, art “shares,” rare cars, and more will most likely be nothing else than bright.
The fun has just begun.
Best wishes in the new year. Let’s spend it together.