Having nearly forgotten the meaning of blockchain over the winter vacation, I’ve returned to work overwhelmed by the number of predictions about what the technology will bring us in the new year. The bear market will continue; a bullish phase is approaching! Bitcoin will climb back up to five figures; the price of bitcoin will hit zero! Stablecoins will be the talk of the year; what are stablecoins? Anyway, predictions vary.
To reacquaint myself with this rollercoaster of an industry (if you can even call this collection of speculation, payments, and hopeful business applications that), I looked at a number of predictions about blockchain and cryptocurrencies in 2019. Here’s what came up, from (roughly) most to least plausible. But honestly, who’s to say? New year predictions don’t have a historical reputation for accuracy, and cryptocurrency predictions are about as trustworthy as Vitalik Buterin saying he’s “giving away Ethereum” on Twitter.
Emphasis will be on products and applications more than just big ideas. –A lot of people
The running joke this past year was that blockchain will solve all of society’s ills, from E.coli-infested lettuce to the global refugee crisis. Now that the hype has died down with the enduring bear market, many believe the focus will shift from these high-reaching, bigger picture goals to focused, concrete projects that people will actually be able to use and participate in. (A few specific expected-to-ship projects mentioned included Fred Wilson-backed Filecoin and Algorand, Intercontinental Exchange’s Bakkt, and OpenLaw.) It’ll be about time.
“Institutional investors will be wary of owning too much of the much smaller but still risky [crypto] market.” –Paul Vigna, The Wall Street Journal
Vigna wasn’t the only one to discuss institutional investors playing a bigger part in cryptocurrencies this year, but his cautious outlook about their investment seems the most likely. Sure, Goldman Sachs, Morgan Stanley, and especially Fidelity have all been working on making it easier to invest in crypto, but the market is still volatile. After last year, institutions probably won’t want to jump in head first, but rather wade cautiously.
“There will be pressure on the crypto sector in 2019.” –Fred Wilson, Union Square Ventures
While venture capitalist and blockchain investor Wilson is “most concerned” about regulators taking misguided aim at “high quality projects,” he also cites the endurance of scams, hacks, and failures in the relatively nascent space. It can be hard to remember that cryptocurrencies are so new, what with all the lambos bought and ICOs come and gone. But they are, and they’re overdue for some government attention.
“Crypto funds will continue shutting down.” –Anthony Pompliano, Morgan Creek Digital Assets
“Many fund managers didn’t receive their performance fee for 2018 because of high water mark issues,” writes Pompliano. Enthusiasm for investing in cryptocurrencies has dwindled, so it seems likely that smaller funds—”the bottom 200-250 of the [roughly] 400 crypto funds that reportedly exist,” according to Pompliano—will close up shop.
Cryptocurrency/token adoption for content creators will increase. –Pompliano/CoinDesk
It’s hard to imagine people gaining trust in the value of cryptocurrencies right now, but many have grown discontented with centralized payment processors and content platforms (think PayPal, YouTube, and Facebook) taking percentages and changing how they operate on a whim. Decentralization harkens back to the ideals of the early 2000s YouTube and the democratization of entertainment.
This will be the year of stablecoins. –A lot of people
Judging by the number of press releases I get about a new stablecoin every week, people will almost certainly be talking about the concept this year. Whether they’re buying them is another story.
The killer app will finally arrive! –Micah Winkelspecht, Gem
What will that “first breakout killer app” be? Winkelspecht doesn’t say, but he’s certain it’s arriving. Maybe in gaming—probably gaming. “It’s a natural fit,” he says. While that sounds reasonable, it’s hard not to be skeptical when we’ve already read 87,234,987,234 articles on the ever-elusive killer app.
“Major retailers could start accepting crypto.” –Maria Smith, Starbucks
Easy enough for a global corporation that’s decided to be “the flagship retailer” for this experiment to say. Just a few minor details to sort out before we’re paying for our lattes in bitcoin…
State-backed digital currencies will catch on. –MIT Technology Review
To be fair, the MIT Technology Review hedges this bet. Discussions about, though not necessarily the issuance of, state-backed digital currencies will be big in 2019. Venezuela’s petro, however, has not set the most promising precedent.
“Malta will be the epicenter of the blockchain industry.” –Silvio Schembri
“2019 will see the materialization of The Blockchain Island,” Schembri, Malta’s junior minister for financial services, digital economy, and innovation, told Forbes, which sounds more like a (boring) post-apocalyptic YA novel than a coming reality.
“It will be disclosed that Craig Wright is in fact Satoshi Nakamoto and the CIA ordered him to make bitcoin.” – @CryptoGayGuy
Hey, you know what? Why not?
“Blockchains will start to become boring.” –MIT Technology Review
Since my job depends on the excitement inherent in the fascinating developments of distributed ledger technology, I’m inclined to put this prediction last on the list. After all, “boring” is in the eye of the beholder, and this beholder never grows weary of well-documented digital transactions.
Correction: Fred Wilson is a partner at Union Square Ventures, not Andreessen Horowitz.