2017 had the most robust crypto market ever seen. In comparison, 2018 has had quite an unimpressive run within the crypto space with almost all coins careening down by at least 80% from their all-time highs. We closed last year with both November and December seeing the highest in crypto market growth rate; Bitcoin alone made a staggering $600 billion in Market Capitalization. Consequently, its price shot up to $20,000. Since similar trends were also seen with altcoins, the market players weren’t prepared for the plunge this year. While bears might interpret this as the end of cryptocurrency as we know it, nothing could be further from the truth.
Analyzing 2017-2018: Latest Crypto Trends
Although 2018 did not see the extrapolated positive growth expected, and it can be expected that there will be no dramatic change until the end of the year, there have been some of the most important developments in the crypto and Blockchain industry.
We attained considerable market stability, which could easily indicate that the market is maturing. In the early days of Bitcoin, there was a great deal of confusion as the technology was not well-developed. All we had was a White Paper and a novel technology, and 10 years later, we are yet to figure out who developed it.
It took some time for people to understand this uncharted territory until in 2017, Bitcoin exploded. In retrospect, it was quite obvious that a peak had to be reached, then a fall before plateauing at a much lower but comfortable price as we figure out “what is next?”.
Governments could not ignore the rising crypto craze and were also did not know what to make of this new market – are cryptos assets or securities? The question still lingers. Even the G20 came up with recommendations for regulations during their 2018 summit in Buenos Aires, Argentina. Some countries went for total blanket bans, others partial (opting to ban Initial Coin Offerings only) while others took to the sidelines expressing lukewarm or indifferent stands.
Along the way, we experimented with the new technology and tackled the challenges that might not have been so obvious at the start. Bitcoin’s Blockchain low scalability shot transaction fees on the network up to 2,000%. This compounded with slow transaction speeds, eventually necessitated the introduction of the Segwit protocol that created Bitcoin core’s relatively successful hard fork Bitcoin Cash. Other interventions were suggested and Bitcoin Lightning network was developed. Ethereum similarly developed Plasma and Casper. Still, we were not out of the woods. Initial Coin Offerings (ICOs) were marred by scams, and then the hackings on Crypto exchanges.
Evidently, it has not been an easy year. But Cryptos still refuse to go away. If anything, we are seeing more interest as technology and infrastructure develop hand-in-hand. Firstly, the space is able to separate speculators from those who are in it for the long run. It is expected that institutionals will soon want to invest after Goldman Sachs has taken an interest. Meanwhile, heavyweights such as IBM, Starbucks and International Exchange (IEC), started accepting crypto payments on their platforms. Also, more importantly, after lots of dead ends with redundant projects (you only need to throw in the word Blockchain to get attention from investors), we can tell which projects have real potential and project their expected growth.
Sectors that flourished in 2018 and will be with us in 2019
Finance and E-commerce
Changing the financial sector was Satoshi’s primary target. Sadly, he was not successful due to low scalability. Today, however, strides have been made and the game has changed. This now allows Blockchain to be integrated into payment gateways through off chain transactions and the use of masternodes. Ripple Foundation owns XRP, (the best performing crypto in 2017), and is in contract with leading banks to offer Ripple products. This will pave the way to incorporate cryptos into the banking sector. While Ripple targets institutions to enable global transactions, a similar network, the Stellar Network, is more focused on individuals with pretty much the same goal. Through them, we are seeing large strides being made towards making crypto a functional means of exchange – this is the endgame. These notable developments are certain to continue into 2019 as we continue to create a functional crypto financial system for the future.
Negative sentiments and bear markets may sound scary in the news but trading and investing in cryptos seem to remain hugely unaffected. Exchanges continue to move billions of dollars in transactions per day. According to a 24hr ranking by volume compilation by coinmarketcap, OKEx had moved in excess of $513 million in 24, Binance was second with over $464 million while ZB.COM transacted over $430 million. The top three exchanges alone accounted for over $1 billion trade volume. The list contains more than 200 transactions. This shows that trading is a primary actor in the crypto space and will not go away anytime soon. It is paramount to ensure that the entities entrusted with such huge amounts are safe and secure. To reduce the risk of the loss of millions of dollars via hacking, the next hurdle in 2019 will be the development of decentralized exchanges.
Binance, which has covered several countries to position itself as a global leader, announced its intention to launch a beta version of their Decentralized Exchange (DEX) in early 2019. This, they say, is in anticipation of the development of custodial wallets that they feel are inevitable in the future. Custodial Wallets will enable P2P trading while still broadcasting transactions on the Blockchain. This will incur minimal native fees which will be much cheaper than the current transaction rates. With the risk of hacking and high fees eliminated, trading in Crypto can only get bigger and better.
Social Networks are an integral part of our day to day lives. Thanks to them, we have become a truly global village. Blockchain projects which seek to create improved third-generation networks that address the shortcomings of the second generation web, have been developed in the recent past. Steemit on the Steem Blockchain is one of the most well known among crypto users as it rewards users for using the platform. But just like most pioneers in this industry, it did not have the impact that it hoped to. Luckily, it is not the only Social Network working hard to give Blockchain a breakthrough. There is Indorse, a Social Network that sells Ads and rewards users in IND tokens. Rewarded tokens are used to create a user activity index. Indorse raised $9 M in its ICO and is set to continue developing in 2019.
Other networks that use the reward model are Nexus and Synereo. Another interesting platform is Humans.net, which endeavors to create a global one-stop shop for service providers and job seekers to conduct peer-to-peer networking. The core of its operations is based on a DNA system of verification to ensure users are legitimate. The platform does not impose any form of fee to use its services while efficiently ensuring data protection. Data for advertisements are only used with the express permission of the user, furthermore, users are guaranteed a 25% share of the advertisement revenue. Interestingly, the platform caters for all and sundry. Unlike other similar networks that strictly offer services to certain target professions, Humans.net is a truly wholesome platform where you can find a medical consultant as well as a cleaner.
Immediate need for Blockchain based Social Networks
In successive instances, the social media giant Facebook has been faced with damning security breaches. First came the Cambridge Analytica scandal where Facebook was accused of selling user data to third parties. The data is said to have been used to manipulate elections in the US and Kenya. Right after, 60 million Facebook user accounts were reported to have been hacked. This shows that the consequences of data centralization are too far-reaching. Not only does decentralization ensure security, it gives users control of their own data. Civic Network ensures once a user deletes data, it is deleted on every other network. Thus, users do not have to worry that their data is in other people’s hands. The Steemit website reads in part:
“While most social media sites extract this value for the benefit of their shareholders, Steemit believes that the users of the platform should receive the benefits and rewards for their attention and the contributions they make to the platform.”
By ensuring users are anonymous and do not need any form of identification that link them to accounts, Blockchain Social Networks can help ensure freedom of expression especially in countries that censor what users post on social platforms. This is the tactic used on the Obsidian platform by totally removing the requirement of user accounts.
The capability to earn money from one’s own creative content is crucial – without having to pass through brokers. Through these networks, case in point Humans.net, users interact directly with each other, negotiate terms, and execute contracts and payments without involving third parties who not only charge fees, but can also compromise security.
While most general networks have tried to integrate payment options on their platforms, issues of third parties arise all over again. This raises transaction fees as well as making transactions dependent on third-party applications. If there is a mishap during a transaction, the resolution process takes long as three parties are involved. Blockchain networks can trade on the platform utility token and use them for transactions at minimal or no fees. Additionally, transactions on Blockchains are trustless as they employ Smart Contracts to execute transactions.
Steemit which started in June 2016, has over 1 million users registered on the site. Indorse, a skill matching network similar to Humans.net, uses consensus and AI bots to confirm and endorse skills. David Moskowitz, an Indorse co-founder, describes this process as follows:
“If someone is an expert in NodeJS, they put up a claim and attach proof such as their GitHub repos. Other members in the same domain on Indorse verify it. Based on the consensus, the claim is either ‘indorsed’ or flagged.”
The Indorse platform has over 70,000 users monthly. The number is impressive for a platform that started only in the third quarter of 2017, making it barely a year old. Statistics on platform popularity seem to favour unique startups that think and act differently. One of them is Humans.net which is at its expansion stage and already has over 200,000 users in the US. It hopes to continue expanding into more countries after receiving a $10 (?) seed funding. If this is anything to go by, the prevailing indication is that Blockchain Social Networks have the capacity to attract users because of their more favorable features. With the increase in concern over personal data security and the increasing big data appetite that puts them at risk, people are more likely to turn to the more transparent and ethical Blockchain.
The CEO and founder at on G.Social Christopher J Kramer aptly put it in a nutshell when explaining what Blockchain Social Networks are all about:
“The blockchain is transforming social media through censorship resistant, global ledger technology that puts each person in control of their data and monetization without the requirement of top-down control’’.
Blockchain Social Networks may not have high user numbers compared to other rising Blockchain projects because it lacks the urgency. The health sector for instance easily attracts the development of Blockchain networks because it is a sensitive and delicate area. However, the effects of data theft, manipulation and general abuse of mainstream Social Networks will draw more users towards Blockchain based Networks.
On August 6th, 2018, John Mcafee expressed the need for decentralized Social Networks after a suspected coordinated ban of conspiracy theorist broadcaster Alex Jones by 3 top Social Networks. The numerous failures in centralized Social Networks could on their own, show the need for, and could be the beginning of their decentralized counterparts.