Pierre Rognion, senior consultant to the French company Twelve Consulting, a specialist in the field of crypto-currency technologies, shares with Hacker Moon his vision of what will happen to the digital currency market in 2018 and in the longer term.
Since I started studying crypto-space, I've managed to spend hundreds, if not thousands of hours, of collecting and analyzing everything that would help me understand this new market. And I managed to find, I think, extremely valuable information that I want to share with you.
It does not matter whether you are a beginner or a crypto-veteran: I hope that when you finish reading this post until the end, you will have new ideas that you did not even think of before.
The most valuable economists are crypto-economists, since they themselves can create, analyze and manage economies.
Nawal Ravikant
The post will consist of seven parts:
Decentralized exchange protocols will change the game
Coinbase (and other centralized exchanges) have the opportunity to drastically change
Protocols and scalability: the process has gone, but we are still waiting for "killer applications"
Crypto-currency geopolitics: why cryptomir is similar to the "Game of Thrones"
What will happen after 2018
Fresh thoughts and aphorisms
A couple of tips, mostly for beginners
Decentralized exchange protocols will change the game
If you hope that the world is waiting for us with thousands of different tokens, it is critically important to support them all.
Fred Erzam
Decentralized exchange protocols will change the game, because they are the key objects of the cryptoinfrastructure. They have the potential to create crypto-economies and help them to reach heights.
Protocols with the support of decentralized exchange are likely to be the leaders in 2018-2019. Look closely at 0x Project (ZRX).
If we see more decentralized applications using the 0x protocol (such as Paradex), this can greatly increase the capitalization of the etherium and 0x.
OmiseGo (OMG) is one of the most ambitious projects of the cryptosphere. It is aimed at creating a decentralized exchange, a mechanism for providing liquidity, an information center, a network for messaging and an asset-secured lock-gate. At first I was an ardent supporter of the project, but then I began to have some doubts about how I could integrate his transactions into the blockbuster. The OMG team is going to use the Cosmos Network and a complex transaction algorithm. It does not look very convincing, but it's very interesting. Therefore, it is worth following their news.
Other projects that deserve attention are Airswap (AST) and Kyber Networks (KNC).
Decentralized applications of the future (including mobile applications) will require several tokens to use. For example, an etherium for carrying out transactions in the blockroom, Filecoin for storing and reproducing data, Golem (GNT) for complex calculations and, of course, a token of the application itself.
Since users will not always have all the necessary tokens at hand, you need a mechanism for their quick purchase on demand.
As a result, decentralized applications on the blockbuster will require simple and easily customizable smart contracts and open decentralized exchange protocols for convenient operation. Most likely, in 2018 we will see a large number of decentralized applications that will spur trade on decentralized exchanges.
Another advantage of decentralized exchange protocols is that new tokens are automatically supported. This will be relevant for complex applications that create and support thousands of tokens.
Networks like District0x (DNT) will support the implementation of such schemes using their virtual places - the so-called districts. These are the markets and communities that will work on the blockbuster etherium and IPFS-protocols. Control can be implemented using Aragon (ANT)
Do not think that everything can be translated into a block. But much can be done. With the development of technology, we will see how it will replace the increasing number of services that require parallelization.
It is worthwhile to follow projects like NEO (NEO) and Qtum (QTUM), which tend to become an alternative to the etherium. They will support the creation and use of decentralized applications, especially for mobile devices.
Coinbase (and other centralized exchanges) have the opportunity to drastically change
Coinbase - the most popular resource of centralized trading at the moment. Centralization is the Achilles' heel of this exchange: a weak place in a strong mechanism that can lead to its collapse.
According to Coinbase CEO Brian Armstrong, in 2018 we should wait for the appearance on the site of many new tokens. Historically, the tokens put up there have been successful. An example is the lightcoin that appeared on Coinbase in 2017.
Coinbase plans to become an "exchange 2.0". Perhaps, soon we should expect "baskets" of coins by analogy with Vanguard index funds, for example, using the SET protocol.
Do not forget that Coinbase is especially interested in the ERC20 tokens. Do you want to know why? - Read this article carefully.
Coinbase, without a doubt, is one of the most influential and large companies in the crypto space. I believe that soon she will be able to solve the problems of scalability and security with the transition to a hybrid and decentralized model.
There is a reasonable question: what will be the business model of Coinbase? Most likely, the company will use the 0x protocol and will earn by supporting book orders outside of the blockbuster. By the way, most of the consultants 0x Project - former employees of Coinbase.
If Coinbase one day really starts using the 0x protocol, imagine how the total value of the companies will soar. Remember that at peak times Coinbase collects millions of visitors and processes a myriad of transactions.
I note that although it is believed that Coinbase and decentralized sites are waiting for a bright future, most popular exchanges, such as Bittrex and Binance, remain centralized.
Binance, part of the top 5 crypto exchange, suspended registration of new accounts due to system overload. Soon, Kucoin, which is actively promoted by YouTube users (who have lost the ability to use referral links from Binance), can quickly get around it, unless Binance again opens the registration and offers a more interesting referral program.
Protocols and scalability: the process has gone, but we are still waiting for "killer applications"
Bitcoin spends a little less than three transactions per second, the etherium - about five per second. Uber - 12 per second. Blocking will take a couple of years to replace Visa.
Vitalik Buterin
Now we are at the stage of developing protocols. Investments in applications look prematurely risky, since we do not have the final versions of the protocols on which they are based.
And, as we realized in recent months, scalability is the main stumbling block for the entire cryptosphere. But this may change by the end of 2018.
If the 2017 was the year of bitcoin, the 2018 may be the year of the etherium, since the etherium will remain the largest platform for blockbuster developers. We can also see the rise of NEO in the next few months and the growth of the ICO organized on it.
The current limitations of the protocols do not allow the development of applications with a large number of users. In this respect, CryptoKitties have become an interesting experience. By the way, if you still think that CryptoKitties are a seal, you miss the point of this phenomenon. In general, while it is rather risky to engage in long-term investments in blocking applications.
Some may find this amusing or strange, but I believe that the first major application will be something related to pornography. I will quote blogger TwoBitIdiot: "Gambling, entertainment, nerds and porn are always at the forefront of new technologies." It will be quite interesting to see how SpankChain (SPANK) will grow. Some advantages are obvious: for example, lack of linkage to the country and anonymity.
Let's talk a little about the new ambitious newcomer - Cardano (ADA). The development team offers a draft of the first detachment with reviewing technology. Charles Hoskinson, who previously worked on the airwaves, is engaged in this project, and as you can guess, he has good ideas about solving the scalability problem, which now affects the big players.
Despite the fact that many people are skeptical in the network, Cardano has entered the top ten most popular projects for investment already at the initial stage of development. One way or another, the 2018 will be a decisive year for him.
Whether we are talking about bitcoin, etherium, Cardano, NEO or any other project, it is obvious that managing the blockbuster is one of the most important problems, and in the long term protocols with built-in mechanisms will help them to evolve. Interesting times ...
Oh yeah, I almost forgot about Ripple (XRP). Maybe because it is not decentralized? Its main advantage at the moment is the speed of transactions. If the Lightning Network for bitcoin and sharding, Raiden or Plasma for the etherium are successfully implemented, Ripple may lose its value. I think that Ripple has chances to be like the company, but I'm not sure that the tokens themselves will withstand competition.
Crypto-currency geopolitics: why cryptomir is similar to the "Game of Thrones"
Entangle your enemies. If they do not know who you are and what you want, they will not guess your next step. Sometimes it's better to make a move that does not make sense or even works against you. Remember this, Sansa, when you start playing.
Petite "Little finger" Beilish
The study of cryptomania is similar to viewing the "Game of Thrones". You observe a lot of actors, as well as intrigues and manipulations that are conducted among investors, major players, central banks, states ... and in posts at Reddit.
Let's focus on institutional investors - banks that are too large to go broke. Immediately after the head of JP Morgan Jamie Dimon called bitcoin fraud, users noticed that JP Morgan is one of the largest buyers of bitcoins.
Banks will make peace with Bitcoin, because they have already seen the potential of this technology. For example, the same JP Morgan experiments with the blockbuster and recently integrated ZCash technology into its Quorum blocking project.
At the same time, central banks diminish the importance of bitcoin, considering only the speculative aspect of interaction with the crypto currency. How long it will be going on? The least that we can say: central banks with a crypto currency "everything is complicated." If the general interest does not subside, they will not have the opportunity to continue inaction.
In fact, this is a very difficult issue for central banks and states. Crypto-currencies are just the first major incarnation of the blockade and decentralized communities. The concept of blockade and decentralization can be applied to a variety of areas: identification, communication, ownership, settlements, finance, which ultimately may call into question the need for centralized power.
Money was easiest to transfer to the block, because it eliminates the need for centralized management. Digital "cash" is possible, since any transaction is written in blocks and the whole community agrees with who sends money and who receives it.
I think that China starts to guess: mass recognition of the crypto-currency and the concept of decentralization (that is, the lack of centralized power) can have political consequences.
In August 2017, when China announced its approach to regulating crypto-currency and banning ICO, the public was seriously afraid that China would cover absolutely everything: exchanges, mining farms, bitcoins and other currencies. But this did not happen. And I think that this is very important. This is a good sign. This means that the state authorities understand: it's too late, it can not be stopped.
Since then, banks have also changed their attitude to the crypto currency. In 2018, we are waiting for a lot of new and interesting: futures trading, storage of digital assets, bitcoin-trading Goldman Sachs and, most likely, exchange funds (ETF).
Cboe, Goldman Sachs, Nasdaq, JP Morgan ... the Wall Street guys clearly do not want to lag behind the cryptology, despite the fact that it is still too small in comparison with the gold markets, securities, money reserves, government bonds, e.
I believe that it is extremely problematic to regulate and even more to prohibit crypto-currencies to the states. First of all, because authorities can not control the movement of crypto-currency, especially on decentralized exchanges.
Secondly, if the regulatory measures prove to be too rigid, they risk "shooting their feet", closing one of the ways to finance the innovation sphere, which can subsequently bring in good income from taxes.
I believe that the best way for them will be to support innovations, protect citizens from scams and try to collect taxes from the crypto currency turnover. And this leads to ... insanity around anonymous tokens.
People will need anonymity (with "good" or "bad" goals), and during 2018 we will often hear about anonymous crypto-currencies. I do not have a crystal ball, and I do not know how exactly events will develop, but it's obvious that regulators will not leave such tokens without attention.
Among the anonymous crypto currency ZCash (ZEC) now causes the most respect from a technological point of view. Edward Snowden confirmed the security of ZCash, Nawal Ravikant is interested in it, and Vitalik Buterin once said that the technology behind this crypto currency is underestimated.
Monero (XMR) - the most popular at the moment anonymous crypto currency, behind which stands a large community, especially in darknet.
Reminder: beware of sudden ups and resist the fear of missing the opportunity (FOMO). I do not presume to say that Verge (XVG) is fraud, but think three times whether it is worth investing in the digital currency that jumped by 688,256.46%. I will refrain from spoilers, although ... perhaps, winter is close.
What will happen after 2018
Let's stop for a minute and think about what awaits us later. After 2018 th.
In the future, tokenization expects the following areas: personal investment accounts, salaries (or their part), records of ownership of real estate, luxury goods, as well as companies and personal data (similar to the current Apple Watch or Fitbit).
Imagine a giant application such as Salesforce or SAP, working on a blockroom and manipulating thousands of different tokens for processing, storing and protecting information.
Among other things, blockade will be a solution to the problem of Internet security of things, because it is almost impossible to hack it.
Also think about the video game industry, where the use of supercomputer capacities on the other side of the globe can be very useful.
Decentralized social networks, unlike their centralized counterparts, will not have a governing body that can collect and sell your personal data, and the work of content creators will be better rewarded (think about PROPS).
States are very interested in detachment and may soon use it for some public services. For example, a detective may store sensitive information, citizens' identification data, social insurance data, contracts in the format of smart contracts. Perhaps management through the block ... why not? It can happen even earlier than we ...