Blockchain and Cryptocurrency 2019 Predictions – Vol. VII

Opinion | December 21, 2018 By:

We continue our series of predictions from the industry’s thought leaders on what may happen in the coming year. 

By almost any measure, 2018 was a challenging year for the blockchain/cryptocurrency industries. Beyond the usual issues facing young businesses in hiring, marketing, technology and financing, companies were engaged in a crisis of confidence with investors, as the crypto markets lost 80 percent of their overall value from the beginning of the year.

Add to that the magic fountain of funding caused by the curtailing of initial coin offerings, increased government scrutiny and outright bans of certain activities, and the bitter battles between technology developers that caused market gyrations, and it’s amazing that any company survived such severe headwinds.

But heading into 2019, the survivors of this industry wide winter are showing faith in the underlying technology of blockchain and the continuing promise of cryptocurrency. They point out that institutional investors are still on the sidelines, and many retail backers are still not in the game in any huge way.

Add that to the continued interest of big businesses and the spirit of innovation shown by blockchain and crypto pioneers, and the story looks a lot brighter than mere numbers would suggest.

Block Tribune asked thought leaders in the industry for their takes on what may happen in the coming year. Now through the end of the month, we’ll spotlight their thoughts on what may happen in what all hope will be a happy and prosperous 2019.

Gary Peat, Chief Financial Officer, SIGNiX 

BLOCK TRIBUNE:  Where do you see Bitcoin heading in 2019 and why?

ANSWER:  Bitcoin, like any currency, will increase in value if the volume of transactions it facilitates is increasing and the number of Bitcoins remains fixed (like it is).  The opposite is also true. Less use of Bitcoin for transactions like commerce (the “real economy”) will cause a decrease in the unit value of any currency, including Bitcoin. Bitcoin use for commerce is very, very low and even had some decline recently with less places accept Bitcoin today than a year ago.

In addition, investor accessibility would allow more retail and institutional holders of bitcoin, causing a liquidity improvement premium to increase the value of Bitcoin. But, this is a source of volatility increasing value from investor supply / demand, rather than increase value on the fundamentals. The fundamentals of usage of Bitcoin for commerce as a medium of exchange to  (what economists call the “real economy”) is the only reliable way to see meaningful long term appreciation as a currency.

The long term trend of slowly increasing Bitcoin use as a currency for real economy transactions is increasing the value of Bitcoin.  The rapid acceleration in the velocity from investor speculation in 2017 has reverted back to the long term trend of increasing commerce with Bitcoin as a currency, not a store of value for retail investors.

BLOCKTRIBUNE:  Have recent crypto plunges affected your outlook and/or plans for 2019?

ANSWER:  Yes. We are the perfect “anti-ICO.” Most ICOs have very, very, very few users and their tokens collapsed 90-99% since ICO as a result. Smartract.io is starting with a volume of digitally signed contracts of about 50 million per year in 2017 from its launch partner SIGNiX, the leading digital signature HQ’d in North America.

Many of those digitally signed contracts are candidates to become smart contracts that operate autonomously on the blockchain. Even a penetration of 1/100 of 1% produces 500,000 users that will be using the SMRT token to create, stake, and operate smart contracts that can be as long as decades of operation.  All together, the digital contract potential of the existing SIGNiX digital signature platform is about 100 million parties signing as much as 1 billion contracts per year.

BLOCK TRIBUNE:  What role will stablecoins have in the market in 2019?

ANSWER: They are trying to present a currency stability via traditional economies’ pegging of a currency or investment product to a constant value. Thus, a good currency for commerce (real economy).  Since Bitcoin is a niche that is less than 1% of all fiat currencies, and since stable coins are a tiny fraction of the value of Bitcoin, it will have nearly zero impact in 2019. It will take years for stable coins to have meaningful use. So, they are relevant well after 2019 and not much in 2019.

BLOCK TRIBUNE:  Which sectors – energy, e-commerce, gambling – do you think will have the biggest impact in the blockchain industry in 2019?   

ANSWER:  Gaming, e-commerce and law.

BLOCK TRIBUNE: What event would you like to see happen in 2019?

ANSWER: A dApp takes off to show a killer app outside of the base protocol layer like ethereum, Ripple or EOS.

BLOCK TRIBUNE: Is the ICO dead as an effective fundraiser?  Why or why not?

ANSWER: Yes. Why? ICOs are going back to the future: ICOs now have to have both a token investment opportunity and an equity upside opportunity. That means there must be an underlying company worth investing in like an established, successful company like SIGNiX.

Since most ICOs were startups, they have no equity to be attractive as an investment.  Startups doing ICOs also lack any of the traditional governance and reporting discipline of venture-backed companies generally. ICOs of startups have NO real accountability, no real governance system.

Governance is critical, including basic concepts like shareholders elect a board, board employs management, etc. Not to mention bylaws and/or protective provisions to address issues like “don’t rent a $300,000 McClaren supercar for the founders for $14K / month each” and other similar problems that have cropped up at post-ICO companies.

Matt DiPietro, CMO of Kin Foundation

BLOCK TRIBUNE:  Where do you see Bitcoin heading in 2019 and why?

ANSWER: Bitcoin certainly has a bright future, but I think 2019 is going to be the year of utility. Because Bitcoin is so hard to use, both as a developer and a consumer, its use cases are fundamentally limited. In 2019, we are going to see other tokens battle for the mantle of “most used.” Bitcoin and Ether, for example, still suffer from a critical lack of real-world use cases. They work great for speculation, but there is vanishingly little real-world use. That’s going to change in the coming year.

BLOCK TRIBUNE:  Have recent crypto plunges affected your outlook and/or plans for 2019?

ANSWER: Not at all. I’m actually relieved to see some correction in the markets. This kind of correction has a tendency to separate the wheat from the chaff; the real projects from the vapor. At Kin, we’re taking a very long view. We’re concentrated on proving real use cases at consumer scale.

BLOCK TRIBUNE:  What role will stablecoins have in the market in 2019?

ANSWER: Making predictions for the long-term role of stablecoins in the industry still feels like reading tea leaves. It’s fascinating technology with a ton of promise, but like Bitcoin and other traditional cryptocurrencies, there are still few, if any,  proven use cases.

BLOCK TRIBUNE:  Which sectors – energy, e-commerce, gambling – do you think will have the biggest impact in the blockchain industry in 2019?  

ANSWER: Consumer apps. I think that 2019 will be the year of what I call “consumer crypto.” What I mean by that is that we will finally see consumers start to use select cryptocurrencies in an everyday kind of way. We’re already seeing Kin being used in gaming, social, and even health and fitness apps, and we expect these categories to expand even more in 2019.

BLOCK TRIBUNE: What event would you like to see happen in 2019?

ANSWER: World peace.

BLOCK TRIBUNE: Is the ICO dead as an effective fundraiser?  Why or why not?

ANSWER: I don’t think it’s dead, but I doubt that we will ever see another year like 2017.I think that ICOs will evolve in fundamental ways, and that we’ll see companies start to utilize cryptocurrencies in other ways like offering equity to employees, for example. Companies that missed the ICO craze of 2017 may begin looking into coins that are already in the wild. Already, several of the companies that we’re working with or courting started the process of an ICO, but decided to explore a previously launched token, like Kin.