As 2018 quickly draws to a close, we have included a selection of commentary below from a variety of industry experts from companies utilizing blockchain technology to reflect on the year that was, as well as provide insight on what the next 12 months could potentially hold for blockchain.
Among the topics that are explored include the highlights and low points of 2018, trends and developments to look out for in 2019, short- and long-term predictions for blockchain, the implications of traditional/institutional investors entering the space, as well as the ramifications should the ‘crypto winter’ persist.
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More
Brent Jaciow, Head of Blockchain Affairs at Utopia Music, the cutting-edge, blockchain-powered music tracking and attribution platform, said:
“Throughout 2019, we will continue to see an increased use of AI and machine learning to improve customer experiences, whether it is the use of enhanced chatbots to facilitate quicker client assistance, or the use of imaging recognition software to provide hyper-targeted marketing based on age, sex, and even temperament.
We will also see a lot of buzz in the blockchain space, especially as it relates to security tokens and the new tokenization economy, where once illiquid assets are being made liquid and accessible to nearly all investors. This will create an immense opportunity to allow just about any asset (or idea for that matter) to become investable, crowdfunded or fractionally owned. By increasing the universe of available investors not only will the amounts of investable capital and total number of projects that can be brought to life increase, but also innovation will be greatly enhanced. Though this will also necessitate a large regulatory regime change, as regulatory bodies are forced to find sensible solutions in an evolving sector to ensure investor safety and transparency.
Blockchain will continue to impact the fintech sector in a number of ways, but most notably we will see the continued move to having clients’ “know your client” and “anti-money laundering” information stored in a combination of permissioned and open chains. This will rapidly expedite the onboarding of clients to institutions, as well as enhance the user experience as there is no longer a need to fill out paperwork and repeatedly submit documentation.
In fintech, which most customers see as a commodity, firms will leverage technologies such as Big Data, AI, and IoT to drive operational efficiency, as well as provide more competitive pricing and client-centric, niche offerings.
The main obstacle the industry will deal with in 2019 is regulation playing catch up. With fintech innovation moving at warp speed, the industry must adapt and have an open dialogue with regulators to ensure progress does not grind to a halt. In Capitalism 3.0, innovators must see regulators as their partners, and include them early and often in discussions in order to establish a sense of understanding and get the guidance from said regulatory bodies on a pathway forward which makes sense for all parties.”
Robertas Visinskis, Founder of Mysterium Network, an open source, not-for-profit foundation focused on security and privacy, and the world’s first decentralised VPN blockchain project, commented:
“As 2018 draws to a close, a highlight for blockchain is how the wider space succeeded in differentiating itself from strictly being associated with cryptocurrency. In 2019, we will see privacy and personal data protection trends continuing to grow in importance.
Traditional investors have watched as the bear market took hold of the crypto space in 2018. A more stable crypto market, regulators creating infrastructures within different jurisdictions, as well as emphasizing the importance of cybersecurity could see more traditional investors moving into the blockchain space in 2019.
For companies that utilize blockchain heading into the next year, especially if a bear market continues, product-driven companies will have more stability to withstand the turbulence over hype-driven companies.”
Nicolas Gilot, Co-CEO of Ultra, a blockchain-based, game publishing platform, said:
“2018 has been a year of highs and lows, with the prolonged bear market dominating headlines. Looking ahead to 2019, I believe we will reap the rewards of work put in by industry players, teams, and communities over the past two years. Blockchain technology has a bright future but the road to get there will be full of twists and turns. As with any new and emerging technology, there will be plenty of ups and downs before we see mainstream adoption of the tech, but I believe blockchain will change industries as we know them — everything from finance and banking, to retail, education, healthcare, and entertainment.
This will only be made a reality as more traditional, institutional investors begin to enter the space, and over the next 12 months, financial behemoths such as Goldman Sachs and JP Morgan will play an increasingly influential role in encouraging mainstream adoption of blockchain.
As the crypto market continues its bear run, it’s inevitable that we will witness a ‘survival of the fittest’ situation occur, and market stabilization, coupled with less speculation, will be important as we head into 2019.
Looking back on 2018, there have been plenty of highlights most notably, the launch of the EOS mainnet, which was one of the most important events of the year. While decentralised exchanges received a lot of hype this year, I don’t believe they will be as big next year with the SEC clamping down on the exchange mechanisms. With that in mind, I believe 2019 will focus more on hybrid systems, or centralized exchanges, that can compile with regulations.”
Nydia Zhang, Chairman and Co-founder of Social Alpha Foundation, a not-for-profit grant making platform focusing on social impact initiatives and projects, said:
“2019 will be the year blockchain hits the big time with organisations like the UN, World Bank, and major global philanthropies taking major stakes in using blockchain technology to anchor their initiatives. The price crash in crypto has created a window of focus on the underlying technology that will drive opportunity for billions of unbanked and excluded lives.
Expect to see projects ranging from supply chain, identity, transparency, and governance rolling out of the world’s biggest aid organisations, proving the true value of blockchain.
While a crypto market rebound may not return us to previous highs, we should see record blockchain adoption from the world’s biggest banks, internet companies and even smaller governments.”
Gabriele Giancola, CEO and Co-founder of qiibee, the Swiss loyalty token protocol helping brands around the world run their loyalty programs on the blockchain, said:
“2018 has been a rollercoaster of a year for blockchain and crypto, with the focus being very much on market movements and the need for increased regulation in the space.
Moving into 2019, and further down the line, I believe we will begin to see a separation between hype and reality. We are slowly but surely beginning to witness the gradual disruption of other industries such as retail, education, healthcare, loyalty, banking, and finance. Companies are experimenting with new functions of the technology on a daily basis, and the wide range of applications for blockchain is beginning to emerge.
As the question moves from ‘What is blockchain?’ to ‘How can we use blockchain technology?’, we will witness an increasing number of private and public institutions exploring its use. In a bid to eliminate inefficiencies and streamline processes within their businesses, we can also expect to see an increase in the number of traditional companies incorporating blockchain technology to provide solutions for everyday business problems.
As the number of companies trialling the technology increases, ensuring the security and stability of blockchain will be paramount to its success. It is important to remember that blockchain is still a developing technology and issues surrounding its performance and scalability will need to be addressed in order for the technology to have a viable future. For this reason, regulation for global distributed ledgers and smart contract audits will become increasingly important. I also believe we will see a push towards increased standardisation of platforms and protocols as this is impeding mass adoption of the technology.
Governments, financial institutions, and businesses will not be the only organisations utilising the power of blockchain, and I expect next year we will see an increase in the use of blockchain technology.
Vladislav Dramaliev, Head of Digital Marketing at æternity, the open-source smart contracts blockchain protocol, said:
“In 2019, I expect we will see the first commercial (i.e., consumer-facing) applications of public blockchains go live next year, and the general public will finally experience the benefits that blockchain can bring.
ASICs will continue to increase their lead and dominance over GPUs as a more efficient and effective mining tool, and bitcoin will remain the dominant crypto asset in 2019, further establishing its position as digital gold.
2019 will also see big finance emerge as a significant player in crypto markets. Throughout the global startup ecosystem, as well as with established companies that are willing to go public, security tokens will also gain more traction.
Finally, 2019 will also see regulators warm up to the crypto sphere as they accept that the sector is here to stay.”
Angel Versetti, CEO of Ambrosus, the decentralised IoT network for next generation supply-chains said:
“With the amount of the institutional money entering the space and top-level financiers and bankers leaving their jobs to jump onto the crypto train, it’s inevitable that in 2019, there will be a comeback for cryptocurrencies. Still, most crypto hedge funds will simply buy the biggest coins by trading volume and market capitalization, without necessarily being informed about their underlying technology. As a result, the market may see some irrational buying decisions in 2019.
Most security tokens are simply stocks on the blockchain. Securities are easier for the government to control and shut down, as they have a legal point of failure (i.e. legal entity that can be targeted). As we start to see increased regulation, there will be significant growth in security tokens, whereas with utility tokens, there will be a selection process.”
Xinshu Dong, CEO of Zilliqa
“On the cusp of every new year we ask ourselves ‘will this be the year we witness mainstream adoption?’ Although I would not promise that 2019 is the year, we will see a wave of widespread use cases in 2019 as organisations looking to implement and develop blockchain applications become more focused. So it is very likely that we will see some compelling use cases emerge.
As entrepreneurs and enterprises introduce and implement blockchain technology, a major stumbling block the industry faces is the balance between scalability and security. 2019 may indeed be the year we address the existing challenges, see traction for the technology beyond the testnet phase, and welcome many far-reaching dApps.”
Roger Lim, Founding Partner at NEO Global Capital
“From an investment perspective, 2019 will be a promising year for blockchain as projects move away from a “blockchain-for-everything” approach to implementation. We will see a more sophisticated industry emerge across a variety of sectors, including identity solutions, gaming and, financial services, — one that has tremendous potential, both jointly and autonomously, for cryptocurrency and its underlying technology. With competitiveness rising, the blockchain industry is bound to undergo some sort of consolidation and the projects best equipped with a “survival of the fittest” mentality are the most likely to succeed.
We will also see increased commitment to academia. Higher education institutes such as the University of California, Berkeley and National University of Singapore’s CRYSTAL (Cryptocurrency Strategy, Techniques, and Algorithms) Centre, are already involved in R&D and nurturing developers needed to propel the entire blockchain ecosystem.”
Max Kordek, Co-Founder and CEO of Lisk
“I can see the institutional attitudes towards blockchain continuing to shift in 2019 as rapidly as the technology itself. Mainstream business, traditional finance, and even government institutions will continue to both accept blockchain into their everyday practices, as well as shape its progression through usage and regulation. Developers and the innovative projects they work on will continue to advance blockchain’s capabilities, by creating boundary-pushing proofs-of-concept and new use cases. These, on the other hand, will continue to close the gap between the technology and its centralized competitors. However, I believe the disruption this technology will bring won’t be fully realized over the course of just one year.
We’re dealing with extremely futuristic propositions here and there is work to do. We must strive to meet industry challenges, such as the lack of formal blockchain education and the need to keep attracting top talent into the industry. Most importantly, however, the blockchain industry needs to continue driving the technology’s research and development and share their cumulative knowledge through a strong, global open-source development culture.”
Craig McGregor, Co-founder and CEO of DSTOQ
“The nature of cryptocurrency means that prices are constantly and rapidly changing. 2017 saw record highs, 2018 saw record lows – it’s difficult to predict what the next year will bring. What we can be certain about it that incoming regulation and increased adoption of cryptocurrency will provide stability, which is highly likely to positively impact price.
Recent market volatility has left investors resistant to the ICO model. As a result, more people are looking for a more regulated and secure investment option – which is why STOs will begin to establish prominence as we head into 2019. As trust builds with STOs, I believe we will see both seasoned and first-time investors gravitating towards this model. Security tokens may come out on top.
Blockchain will begin to bring about an even greater shift towards financial inclusion in capital markets globally. Much of the world’s population live in emerging markets, with many excluded from traditional financial institutions. Decentralized exchanges will become increasingly prominent in these markets for cross-border payment and investing. I believe that as more people will embrace Blockchain in 2019, we may begin to shift in these trends.”
Frank Wagner, Co-founder and CEO of INVAO
“I anticipate that there will be a cryptocurrency comeback in 2019. We’ve already seen that bitcoin has bounced back from their recent dip, however the nature of blockchain is that things operate at an exceptionally speedy rate compared to the traditional market. There’s no question that this technology solves real-world issues, so I think it’s inevitable that the market will return to a stable place.
There are a number of unsuccessful coins that have gone under. This is the reality of any new venture. There’s always a risk of failure in finance and investing. It is likely that weak coins, which are not backed by legitimate, promising projects, will continue to fail, and that the more compliant, problem-solving businesses will see their coins survive. I hope that in 2019 regulation will be introduced and will further allow legitimate businesses to thrive, making cryptocurrencies more reliable – while also stabilizing the market as it continues to attract more traditional investors.
In 2019 we will begin to witness more acceptance of blockchain- based offerings across various industries. In particular, I believe that the trend of “blockchain for good” will continue to expand in its reach and attract more traditional investors to the crypto space. As lack of accountability is often a barrier to investing in social impact, we will be able to legitimately fundraise through Blockchain in a more transparent way. I also believe that next year there will be more companies in the blockchain space that will focus on your actual performance, because after all, even today only very few people are interested in what technology Amazon or Netflix is based on – but rather the possibilities and benefits that it gives to the individual or business.”
Casey Kuhlman, CEO and Co-founder of Monax
“Crypto price slumps can often create nervousness about the future of our industry, but it is important to remember that the underlying blockchain technology solves real-world problems. Blockchain technology goes beyond cryptocurrency – in my field of law, for example, the Blockchain is revolutionizing the way that lawyers, businesses, and consumers transact. Although it’s difficult to predict price trends in 2019, as long as blockchain technology solves real-world problems, there will be a base for cryptocurrency to thrive.
Banning of certain ICOs and the failure of other ICOs which offer utility tokens throughout 2018 may seem worrying, but companies with strong product offerings which solve real-world problems will thrive going forward. Companies who are legitimate and have solid ideas will succeed in providing services which will fill a gap in the current market, and therefore will see any kind of token that they offer soar. It’s not a question of what kind of token will come out on top – but what kind of project.
This year has been dominated by price changes. My prediction for 2019 is that the industry will shift its focus more toward the problems that blockchain technology can solve. Taking just one example, the advent of smart contracts offer a technical basis on which scalable, technically enabled legal products can be built and delivered. In 2019, my hope is that we apply the technology not only to the legal sector but to the myriad of industries that can and should benefit from its transparency, speed, efficiency, and reliability.”