‘Twas a big year in the cryptosphere—a roiling rollercoaster of a ride, during which many people, who obviously weren’t hodling on, fell off, causing much wound-licking and many worthy pronouncements. Early adopter, Roger Ver—having seen it all before—recycled his response. “Price is the least interesting thing about bitcoin,” he said. Again.
If you lost gazillions of dollars, you have our condolences. But for the rest of us, Ver was right. Here are some of the more interesting things that materialized over the past year in our burgeoning new world.
1. It was a good time to be a lawyer
The US Securities and Exchange Commission has had its eye on crypto and finds it... utterly fascinating. In 2018, its actions against ICO’s intensified and hundreds of startups discovered they were in violation of securities law. Nor were crypto exchanges spared. This was in fact a good thing for the common man (and institutional investor). But crypto companies are still clamouring for clarity, with legitimate businesses looking to live within the law and new ones trying to start off on the right foot. That's excellent news for lawyers, especially in Malta, where they are now even tokenizing themselves. Listen to your mother when she says go study law. (Disclosure: the author has a law degree).
2. The emerging community is "colorful"
Taxi drivers selling bitcoin. Panhandlers begging for it. (See picture, above.) And some of us musing about whether to sell our personal data a la carte via a mobile app. Decentralized betting marketplaces, such as Augur, where people can bet on who will die next. Cats mining crypto. Crypto for kids. A currency that started as a joke, is doing pretty well, while an entire nation that launched its own crypto to bail out its economy has become a (cynical) joke. And in Dubai, the government is securing token happiness while putting the whole city on a blockchain. The decentralized world is just starting to take shape, and it is as weird and wacky as any primitive culture you read about in Anthro 101.
3. The people are even more colorful
While there’s no doubt that technical prowess is the anchor to crypto’s boat, influencers in this industry have extraordinary powers. Dogecoin’s maverick inventor Jackson Palmer; Bitcoin Cash zealot Craig Wright; Ethereum’s Gandalf and even Dr. Doom—all are influencers who mould ideas and lead conversations. From the ex-cop planning for the apocalypse to the self-proclaimed Apache Chieftain using blockchain to rebuild his scattered tribe—these early adopters are potential change agents and community builders. Boxers, footballers or former child actors—their name attached to a currency can be the difference between failure and success.
4. All nodes lead to China
Bitcoin may be decentralized, but it’s largely decentralized in one place: China. Chinese mining pools control 80% of the hashrate–the computing power which generates the unlocking of new bitcoins on the network. Until now, it's been taking advantage of some of the cheapest electricity costs in the world. But, as the bear market rumbles on, even China-based Bitmain, the world’s largest mining operation, is has been losing its footing, with potentially disastrous consequences for the whole industry. China has a love-hate relationship with crypto and, while Chinese regulators keep up the pressure, rumors now surface that investors are becoming disaffected. Last Chinese New Year was widely considered to be the catalyst for the current downtrend in crypto; what will this February presage?
5. The tech is evolving fast
Remember the flippening? That was when Ethereum was supposed to overtake Bitcoin in market cap. It hasn't happened yet—and in September, Ripple’s took over from Ethereum and rose to take second place in the crypto charts. Ethereum’s struggles with scaling have created an opening for Dfinity and Polkadot, rival platforms that have the money, troops and ideas to execute. Technology comes at you fast.
Meanwhile, in mining, just as GPUs were replaced by ASICs, so they must give way to FPGA mining, leading to increased efficiency at every click. And even the blockchain itself is under siege, as startups such as Hedera Hashtag evolve technologies, at an ever increasing pace.
6. The first killer app will probably be a game
It's just a matter of time. With Sony now onboard, the chances of a major publisher soon releasing the first blockchain-based title have increased. In gaming, blockchain enables a player’s individualized, tokenized creations to move seamlessly across game platforms and to be bought, sold, or traded. That portability of data—and total control of it by the user, rather than a company—readily (and simply) illustrates some of crypto's mass allure. And the potential for the masses to "get it" within the $140 billion video game industry is huge. Gaming is making blockchain tangible and exciting for consumers.
7. Everything is just a test, until it's not
From Ethereum’s experiments with scaling to Tezos’ tinkerings with governance and consensus, the blockchain is being tested in every way. Aeternity is walking the tightrope between centralization and scalability, Radix is getting rid of the blocks in blockchain and blockchain interoperability is around the corner. With the internet of things, drones, energy, real estate, healthcare and more coming onto the blockchain, things will get very exciting indeed.
8. The lions are circling crypto like it's a tethered goat
FAANG is out to to topple decentralization. Facebook, Apple, Amazon, Google and Microsoft are not only building—private—chains of their own, they’re closely watching the liquidity (trading power) of the top ten coins. And preparing to move in for the kill. Until that day, struggles to stay decentralized rage on within crypto land and generate much debate, from Ethereum’s attempts at closed door-meetings to decentralization-friendly experiments in governing blockchain’s code. Watch out for Amazon Coin and the growing reality of Facecoin.
9. The wars are nasty, brutish and without surcease
In 2018, Decrypt covered the War of the Fork. We brought you action live and watched as values tumbled in the aftermath. It was exciting, even if nobody knew what was going on. The repercussions rumble on.
10. Despite the number of “experts” in the space, no one really has any clue what’s going to happen next
But rest assured, in 2019, that won’t stop us from trying to find out.
Happy Holidays, from Decrypt to you!