We have been in a Bear Market for a year now, it's the time to start selecting projects that will rise from the ashes and will build a better digital economy.
The Blockchain represents new ideas, a different vision of the world as we know it. Decentralization and distributed trust networks are opening the doors to freedom of speech, freedom of transactions and financial freedom from corrupted corporations and monopolies.
We have been earing much criticism from media and many well-known influencers trying to undermine this new break throw in technology but it's understandable, it's like asking a taxi driver about the potential of Uber.
Why I'm so optimistic about the future of Blockchain and cryptocurrencies overall?
I'm going to present 10 reasons based on my opinion and some facts on why Blockchain technology is here to stay and will have a significant role in developing a new digital society. Many industries are about to get disrupted, improved even.
In a simplistic way Bitcoin is like putting gold in a distributed trust network, it's a store of value for many people in emerging countries, a payment method and a payment network like for example PayPal.
- Bitcoin Transaction Volume surprassed PayPal, which means people are using Bitcoin for daily transactions and not only trading. In emerging countries Bitcoin is getting more used everyday for paying goods and services. It's also used for a store of value in emerging countries, because their national currency is devaluing at a rapid phase. In 2013 due to Brexit until 2015 de British pound has devalued over 20% against the euro.
- Blockchain posting Jobs - the crypto industry is growing at an incredible fast phase, even though we are currently witnessing "the winter", there are a lot of Startups and Traditional companies hiring for crypto related positions. In a recent Deloitte report, it's showed that China, Canada and the United Kingdom are investing in hiring staff with Blockchain experience. The same report contains statistics of investment done and the increase in interest from companies and institutions throw out the world.
- Existing industries are about to get hammered with Blockchain innovation and implementation, according to the same Deloitte report. Industries involving financial services, Life sciences (Biotech, Medical Devices, Pharma, Health Care) and Consumer Products & Manufacturing will get transformed and improved in the upcoming years.
- Regulation is coming and that´s a good thing - here is how i see legislation being implemented. In 9 January 2019 was released a esma (European Securities and Markets Authority) report describing the risks and issues for consideration by regulators. It's disclosed the need for legal certainty and the legal qualification of crypto-assets. This clarification and attention that is being made is important to give trust to investors and users, to clear all the bad actors on the industry. Very frequently you might hear twitter or youtube influencers calling out "the whales are joining the market" but for them to enter with big money, being Pension Funds, Mutual Funds, Hedge Funds, Venture Capital firms or products like ETNs and ETFs, it's first important to clear the regulatory uncertanty.
- Currently we have utility tokens, digital currencies and a new wave of Security tokens, but what about spending the actual cryptocurrencies for daily goods and services? It's not all about investment and speculation, it cant be, Bitcoin and other digital currencies like Litecoin, Nano, and many others were created to be used for commercial transactions, but how can we achieve this? The major stores on the neighborhood don't accept Bitcoin, so how can we spend it? We have a short-term answer and a long-term. The short-term answer is debit and credit crypto cards, that convert crypto into fiat, there are already a few crypto cards in circulation. Another short-term solution is Bitcoin ATMs, the number of crypto ATMs installed over the last few months surprassed 4000 worldwide, that's a exponential growt in Bitcoin ATMs despite the Bear Market. The long-term solution is worldwide acceptance of Bitcoin as a payment method.
- ICOs and STOs provide a unique and attractive combination of funding to new businesses. There is a recession aproaching, the CBOE Volatility Index (VIX) has been above 15 in average for the last few months, indicating that volatility is returning to the stock market. There are a lot of indicators that show strong probability of a near end to the Bull Market, like S&P 500 PE ratio, the S&P 500 Index vs S&P 500 Median Price/Sales Ratio, the S&P 500 vs Household Equity Assets as a percentage of disposable Personal Income, number of Russel 3000 companies trading over 10x revenue as of Q3 was close to 2000, Volatility Index 50 Month Moving Average, Homebuilders Index, S&P 500 Financials, S&P GSCI Total Return/S&P 500 Index, and many more, these are just some fundamental indicators. When the next recession begins, the access to credit for smal companies and micro companies will be very difficult due to the rise of interest rates and the colapsing of the banking system in many banks around the world, meaning that companies will have to figure out a solution and the solution is ICOs and STOs, it's cost-effective and way faster than traditional banking credit. It's a powerful resource that many entrepreneurs can use to give birth to their ideas and imagination without having to give a percentage of equity to third parties.
- Crypto will become so easy to use that even our grandparents will understand how it works. It's all true, creating a Coinbase account, passing KYC for multiple exchanges for different tokens and coins, having to setup multiple wallets for different blockchains, it's all a pain in the ass and it needs to get easier for the average user to understand it. The core wallets take ages to sync, they are a terrible user experience and the lack of communication between blockchains represents a barrier for digital communication. When all these annoyances are fixed, when we have a wallet that communicates with all blockchains achieving full interoperability, then we have the path created for mass adoption.
- A killer dApp that puts the existing applications on a "painting of a cave". We already have some cool dApps like steemit, the awesome synergy between Brave Browser and the BAT token, the beta card games of different projects, still we need a better dApp that gets millions of users and shows the world Blockchain Technology without them noticing that they are using it. The infrastructures are being built for better scalability and better user experience, the next step will be to build amazing dApps.
- TA (Technical Analysis) has become a trend in the crypto industry, people enjoy looking at graphs all day, so let's dive a little into TA. On the daily chart Bitcoin shows a lot of similarities to the weekly gold chart. In a log monthly scale Bitcoin chart shows historical patterns. There is also a long-term channel that puts Bitcoin closer to the Bottom.
- The long-term cycles of every technological break throw. The Lindy Effect represents very well what might be a cyclical process going from the beginning of being used by Nerds, Ancaps and Cyberpunks to a reliable Store of Value and a Widespread Medium of Exchange.
Some honorable mentions are the increase in the number of active Bitcoin wallets and more regulatory institutions releasing reports on crypto-assets, which is one of the most crucial reasons that can allow the indutry to grow.
Take the time to reseach the projects you like, the communities you want to see grow and the applications that you would like to use some day. Patience is the key of long-term capital gains, new technologies will need time to flourish.
Wheter you are a Neoclassical or keynesian fan, an anarchist or a capitalist, religious or not, it doesn't matter because blockchain will give birth to a new decentralized society.
Disclaimer: I'm a corporate finance student and a tech enthusiast, I'm in no way an expert on these discussed topics. This article does not consist in financial advice or investiment advice. It's only my opinion and the purpose of this article is to try raising awareness to the readers about technological break throws and where in my opinion i can see the current systems shift to.