The dynamically changing cryptocurrency market environment definitely saw the breakthrough of its ecosystem at large in 2017. Many industry experts are confident that this year will bring a lot of new tech features. At CryptoBuzz News Network we bring you the major trends for 2018 that will be significant during next few months.
1. Bitcoin goes mainstream .
The top dog had been the one of hottest topics in 2017 and we envision Bitcoin everywhere in 2018. In leading world countries it will gain more popularity as a means of payment in retail stores, at local events etc.
The overall Bitcoin mempool is only going to become larger each day, driving up the transaction fee even higher and generating record profits for the miners along the way.
During 2017, Bitcoin’s market cap as a percentage of the total value of all cryptocurrencies dropped from over 95% at the beginning of the year up to 41% at the time of writing.
The main reason is the advancement of different blockchain applications, a trend that is sure to continue as projects with superior technology gain more traction. Bitcoin’s development, particularly in relation to the scaling issues as of late, is too conservative because of political concerns as well as infighting.
As many people are anticipating the Lightning Network implementation to help alleviate the transaction fees, it is risky to relay the future of BTC entirely on it — this project that started in 2015 still does not have a definite time-frame for publicly launching on BTC.
If the scalability of Bitcoin doesn’t improve this year, it runs the risk of being overtaken by another coin(LiteCoin, anyone?). The cryptocurrency community had already seen Ethereum‘s price surge against the ETH/BTC ratio in the early days of this year, and this may be only the start of what’s coming next.
2. The DApps Revolution
The blockchain based game CryptoKitties burst onto the scene during late 2017 as it managed to clog up the Ethereum network offering a rampant purchase of digital cats tied to the blockchain. And this particular example was undeniable proof that DApp’s can – and will – be popular, but it also put a highlight on how far the Ethereum network has to go if one viral video game can jam up the entire Ethereum mainnet.
2018 will witness an explosion in the number of “decentralized apps” built on Ethereum as well as other platforms trying to capitalize on the hype train that CryptoKitties started — right now there are thousands of different decentralized applications being developed.
According to State of the dApps current data, there are more than a thousand dApps built on Ethereum.
Even if only a small fraction of the upcoming projects will takeoff, we will still see a number of popular dApps come forth. Some of them aimed on tokenization of assets, payments and lending, gambling, and even insurance.
With more and more functioning dApps we at CBNN believe the market will have a higher bar for ICO projects in 2018.
Investors will now have a choice to back up the projects at more advanced stages so the ICO projects will need to show further progress in order to compete for funding.
3. Governments getting more involved and CryptoCurrency regulation getting tighter.
Cryptocurrencies are taking the world by storm and the governments all around the world had to do something in order to bring some order to things — as per usual.
The entire point of the new crypto system all along was to eliminate the government from the equation entirely, permitting anonymous as well as secure transactionss, exchanges, and payments.
While the governments can’t control the cryptocurrency owners through intrusive means, they’ll surely contribute to the regulation of certain currencies in the near future.
It’s unfortunate, but in 2017 the cryptocurrency world already saw a taste of how government regulations can be very impactful: the Chinese government’s move to ban Bitcoin exchanges made the space temporarily flinch and the regulatory ambiguity that’s been fomenting in Southern Korea in the early days of this year has all cryptocurrency traders scrambling.
Cryptocurrencies will rise in the near future, but more regulatory tumult is certainly coming.
4. Scalability Development Issues
With the explosive popularity growth of cryptocurrencies last year, the number of transactions made on the blockchain has grown exponentially.
As a result, there are now congestion issues with the more popular blockchains such as Bitcoin and Ethereum.
Ethereum has already shown that it can handle over one million transactions per day, however this is not going to be nearly enough when the flood of dApps begin to launch next year.
There are different blockchain protocols aiming to solve the scalability issue.
The ones that can solve the issue while maintaining decentralization and security will be able to gain substantial network value. For example, the SegWit2x was a proposed hard fork of Bitcoin.
The implementation of Segregated Witness (segWit) in August 2017 was only the first half of the so-called “New York Agreement” by which those who wanted to increase effective block size by means of SegWit compromised with those who wanted to increase block size by a hard fork to a larger block size.
5. More Hardforks to come
One could say that last year had been the “Year of the Fork” and they would be right.
The world has seen a total of Eight forks during the last year in particular: Bitcoin, Bitcoin Uranium, Bitcoin God, Bitcoin Diamond, Bitcoin Cash, Bitcoin Gold, Super Bitcoin, Bitcoin Platinum, and Bitcoin Silver.
The very successful Bitcoin forks like Bitcoin Cash do encourage many more attempts at forking coins in 2018.
These had proved the investors that forks can generate a large amount of value quickly and Initial Fork Offerings will become more prevalent in 2018.
6. Advertising Technology Reaches New Levels
We have already seen some interesting plot twists on traditional advertising models that step outside of the Google Adsense box and into cryptocurrency sphere in the past few months.
In particular, the use of in-browser mining of cryptocurrencies while a user is on a website.
However, while it had mostly been practiced without a user’s explicit knowledge it may become more popular – but in a more legal way — like with the website asking permission first to start the process.
Further, the new advertising platforms trends like Basic Attention Token (BAT) will take the lead on new and creative ways for content generators to get paid while users don’t have to be inundated with ads.
This Basic Attention Token (BAT) is based on the Ethereum blockchain.
It is a decentralized, transparent digital ad exchange that relies on two core parts: the Basic Attention Token (BAT) and the Brave Browser.
The Basic Attention Token (BAT), meanwhile, is a unit of exchange between publishers, users, and advertisers.
The token is derived from a user’s attention.
Attention can be defined as focused mental engagement. In this instance, users are focusing on an ad. This leads to a transparent and efficient digital advertising market based on the blockchain.
Everyone benefits: publishers receive additional revenue because middlemen and issues of fraud are reduced.
Users who opt-in receive fewer ads, but better-targeted ads, that are less prone to malware. Advertisers get better information about their spending.
7. Crypto-exchange Issues & Development Innovations.
Modern crypto market exchanges face a certain number of serious problems at the moment. One of main drawbacks for decentralized exchanges is the lack of liquidity compared to the more popular centralized exchanges. Moreover, a crackdown on crypto currency exchange platforms via stricter rules had been agreed by the European Union states and legislators in December 2017.
Another issue is the complexity of using the assets — multiple applications are usually required for an effective work, which is certainly time-consuming and confusing for users. The traditional existing exchanges tend to have huge commission fees which don’t incentivize the user. They also implement the new rules such as additional ID-verification and double-checking.
All these factors lead users to search for an alternative concept that will make the trading more efficient and simple to implement, as well as easy for new upcoming investors.
8. ICO’s Will Spread Beyond the ETH Platform
One of the factors that really led to an explosion of interest in Ethereum this year was how the Initial Coin Offering craze took off in the first half of 2017.
This fundraising model fueled by Ethereum, had led to ICO mania, as investors poured money into anything that was launching a new coin or token.
ICOs are slowly, but steadily begin to branch out beyond Ethereum: NEO is starting to launch ICOs now, Stratis is also a major competitor in the field, and more is on deck in the nearest future.
For instance, the NEO platform advantages are certain it works toward developing a product for the future.
NEO’s objective all along, while ultimately utilizing many of the same technologies as Ethereum, is to be the platform for a new “smart economy”.
NEO uses a Byzantine Fault consensus mechanism which is an improved version of proof-of-stake.
It can process ten thousand operations per second, while Ethereum can handle only fifteen transactions per second.
In any event, it is obvious to us that the Ethereum status of the first mover is going to be challenged further and further.
9. The Rise of Atomic Swaps
The ground breaking atomic swaps bear the promise of being the future of decentralized cryptocurrency trading for many known blockchains.
Some notable breakthroughs were made regarding atomic swaps last year, and it would be expected that further considerable breakthroughs happen in 2018.
Basically, atomic swaps are a way for people to swap cryptocurrencies with one another without incurring transaction fees, and also without having to rely on a Bitcoin exchange or another third-party. All trading in the years to come may in fact be decentralized, and atomic swaps are one of the technologies to power that reality.
10. Nation-state Cryptocurrency Projects Will Take Off
The rise of talks surrounding national cryptocurrency creation has also been around for some time — we are talking state-backed digital assets.
For instance, political discussions surrounding the ruble in Russia reigned over headlines in the latter half of 2017. And Russia was not alone in this — nations such as Venezuela and Estonia and even some in-between looked at the feasibility of creating their own cryptocurrencies.
The main question is which nations are going to take the leap and start exploring cryptocurrency projects of their own first.
Whether these projects will ever go anywhere is a whole different ballgame which we expect soon to see.
11. Banks Will Continue to Lose Investors Money
The traditional financial institutions have seen huge amounts of money leaving the traditional investment world behind in order to become cryptocurrencies.
This left some banks in a dizzy to play catch up.
As everyone now wants a piece of the crypto-action in 2018 we think there will be more people leaving traditional banks in order to store their wealth in cryptocurrency and therefore entrusting it to the blockchain.