Lets talk about 2018 and what we can Expect to see from the Blockchain space
Bitcoin started the building blocks for the Blockchain to be recognized in its full valor.
Without Satoshi’s vision for a Peer-to-Peer Value System Bitcoin and any other cryptocurrency “might” not has existed today. The reason why I say peer-to-peer value is because the Whitepaper clearly states “cash” system, which many like Roger Ver Adhere to. Fortunately, the masses DO NOT. While Satoshi converged a database structure with peer-to-peer networking, cryptographic tokenization, consensus formation algorithms, and game theoretical economic incentives to create a means for trustless digital storage and transmission of value, the “Digital Gold” use case, is only one use case.
Bitcoin as a Digital Store of Value is one of the most appealing use cases currently for Bitcoin. Not to say that it’s the only.
While Bitcoin and many other cryptocurrencies are programmable and able to be used as different functions for different financial tasks in society. Bitcoin has really been a mechanism for escape from the traditional systems that plague us all in the real world. Banks and Government have the control because they NEED that control in order for them to keep their heads above water. Take that power away and yoru left cutting the head off the dragon Sounds nice right? Sure, but first lets get through all of the hurdles. Which Bitcoin has overcome several times. People seem to be missing the fact that we’re verging upon the next generation of the world-wide-web.
The Bitcoin protocol is the world’s largest modern-day abacus, it only enables us to move a coin from one side to the other. The ability to do this on a global, permissionless saturate.
While Bitcoin has always been the spot lite even on it’s down days, ICO’s have taken a new light in the cryptocurrency space. That’s another subject all by itself.
Ethereum will continue to be the largest Blockchain developer ecosystem in 2018 by many multiples. But WHY?
Developers, and more Developers
The ecosystems with the most developers typically win. I don’t see how permissioned Blockchains that lack crypto economic incentives will ever stand against public permissionless ecosystems.
Ethereum already has a thriving developer community. Truffle, the smart contract developer framework, has 250,000+ developer downloads. Infura, which can be seen as an Akamai for Ethereum and IPFS, now handles over 2 billion requests per day and smoothly scaled to peak at 4.5 billion requests per day one day in December. MetaMask, which brings Ethereum seamlessly to browsers, has over 500,000 active users.
Blockchain will be the new vessel that fuels economies around the world.
Blockchain will start to see a huge spike in interest in the year 2018, more for Adoption and implementation.
In 2017 we saw the World Food Program employ Ethereum to distribute 1.4 million food vouchers to 10,500 Syrian refugees in Jordan. Now that’s a start right?! And it is aiming for one million transactions, per day. This innovative program, dubbed “Building Blocks”, demonstrates how database efficiency will deliver tangible benefits to the most vulnerable. I applaud the World Food Program’s efforts and believe that its success is a sign of great things to come.
Enterprises will finally learn how to function without it’s training wheels and Blockchain do all the world for them.
As permissionless Blockchains continue their scalability and privacy upgrade process, permissioned Blockchains will continue to lose the developer mindshare and potentially lose their client base similar to how AOL, Prodigy, and Compuserve services lost out to the Internet. There will be narrow use-cases for intranet-like permissioned Blockchains, just as SWIFT never touched the internet, but the long tail will be using permissionless protocols.
Intranets were great training wheels, until the Internet was pervasive. The same trajectory will occur with permissioned
Blockchains in 2018 and beyond.
Proof of Stake changes the Blockchain consensus game
In proof-of-stake public Blockchains, like Ethereum’s upcoming Casper implementation, a set of validators each bet on blocks they deem likely to be validated, and the weight of each validators vote depends on the size of its deposit. Punishments are levied on bad actors who bet on more than one block at a certain depth or who don’t participate when they are supposed to. I really would like to consider the Staking system a Passive Interest Level Income for anyone. Many Cryptocurrencies offer rate far higher than any bank ever COULD!
Benefits of proof-of-stake include:
• The ability to reduce the large electricity consumption and hardware costs to secure a Blockchain.
• Due to reduced energy consumption, token issuance isn’t necessarily intrinsic to the securitization of the network. Negative net issuance could occur, whereby tokens are actually burned thereby reducing the supply and increasing value per token.
• 51% attacks become exponentially more expensive, as you risk what you stake.
The Blockchain ecosystem will ramp up their educational resources tremendously.
“Education is the most powerful weapon you can use to change the world.” — Nelson Mandela
Until recently, the ones learning have been software engineers, but in ’18 there will be customized educational programs for policy makers, lawyers, project managers, executives, and MBA’s to understand the implications this technology has on their respective fields. ConsenSys Academy has rolled out many of these endeavors already, and has some exciting initiatives coming in the new year.
The IRS and their equivalents globally will be demanding their NON-Deserved taxes.
“Nothing can be said to be certain, except death and taxes.” — Ben Franklin
There is already a precedent in US vs. Coinbase Inc., et al. where an exchange has had to divulge their user-base’s trading history. I expect similar outreach to other exchanges. Software like Balanc3 is being used to track the p&l of a person or company’s digital assets as well as trading history. Pay your taxes.
Get yourself well organized.
People will take control of their online identities
The more we interact with Blockchain the more we will need to manage our own identities and finances online. Not having any third party means, YOU’RE THE king of your own domain, for real this time, and machine learning can help manage your identity self-sovereignly rather than by a third party service provider like a bank, Facebook, or another internet service provider.
“For the first time, open source, peer-to-peer protocol developers can monetize their project on a protocol level” — Olaf Carlson-Wee
For the first time we’ll be able to incentivize and monetize open source work, which will feel like adding a match to nitroglycerin in a Cambrian explosion of new Blockchain technology paradigms. With new tokenized projects like Bounties.Network and Gitcoin, we’re adding a cryptoeconomic layer to software engineering.
Don’t just regulate Blockchain….regulate THROUGH the Blockchain.
2018 will be the year of G-to-C and G-to-G (Government to Citizen and Government to Government) — laws, regulations, treaties written in smart contracts, making it 100x cheaper and more straightforward to comply with them and 100x cheaper and easier to do appropriate oversight without having to subpoena personal and company records.
Stablecoins are coming
Stablecoins are the basis of financial instruments for hedging and derivatives that will be necessary for this wild-west industry to cross the chasm to safe and more easily used financial products. Maker DAO, VariabL, and Basecoinare attempting this from the startup eco-system, but I think this is a great space for an enterprise banking incumbent to provide value, liquidity, and validity to the digital asset ecosystem.
I predict we’ll see a bulge bracket bank Blockchain-based stablecoin in 2018 if they can get it through compliance.
Tangoing with Contango
After witnessing the first bitcoin futures products on regulated U.S. exchanges that are cash-settled in 2017, I foresee the market will evolve to physically settled offerings to avoid banging the close to manipulate futures. Moreover, we’ll see other digital asset derivatives, such as ether.These derivative contracts will provide forward pricing curves that are necessary to the genesis and evolution of digital asset exchange traded funds. Many factors will change ofcourse with new projects being born everyday. Its hard to tell accurately but we can say that the future is bright for Blockchain.
Other than that I leave it to the public to decide what new innovations are headed our way.
Thank you all for your time, leave comments below on what you think 2018 hold for Blockchain.
-Ethereal