2018 has been a difficult year so far for cryptocurrencies with many hitting all-time highs in December 2017, this year seems to be plagued with FUD, rumors, hacks and a general bearish attitude to coins and tokens in general.
Bitcoin IS scaling
Contrary to the naysayers, those pushing for Bitcoin to lose its place as an indexing coin, or those who believe that Bitcoin Cash is what Bitcoin should be, Bitcoin is the single most important cryptocurrency that exists today. Bitcoin is the first and most well known. Bitcoin is the currency that anyone who knows nothing knows about. Most importantly, Bitcoin needs to succeed for other cryptocurrencies to succeed. Maybe not in the long term, but definitely the short to medium term. In twenty or thirty years time Bitcoin may be completely irrelevant, but until Bitcoin becomes successful and is adopted on a far larger scale, other cryptocurrencies can’t succeed.
Let me clarify: Ripple might succeed in accomplishing their goals of using XRP to give liquidity to banks, businesses and remittance companies. But XRP was not intended to, and probably will not become an everyday usage currency. So while Ripple is being adopted by the commercial world, and is on its way to success in its own right, it couldn’t even attempt to be a successful cryptocurrency without Bitcoin succeeding.
This is simply because Bitcoin and all of its supporters have spent near a decade marketing, defending and spending it. It took nine years to catch on to a massive audience, and in December 2017 all of that hard work came to fruition. In a complete frenzy the world listened and bought Bitcoin and the price skyrocketed. Was this good for the market? Certainly not. While the price went up and up, and “tech-celebs” promised to eat their own, well… organs, the price of transactions went up too. These transaction fees were so ridiculous that Bitcoin became unusable as a currency, and many of the bigger brands that accepted Bitcoin no longer accepted it as a payment method.
Since then, however, the Lightning Network has gone live on testnet, SegWit wallet support has gone into development by the Bitcoin Core Development team and core 0.16.0’s release and adoption is imminent. This will include SegWit wallet support, which was approved months ago. These two solutions will massively improve Bitcoins scalability and since exchanges have also come on board with SegWit support, we have seen transaction fees go below 1 satoshi per byte. Just yesterday I sent some bitcoin to a new hardware wallet that I’m testing, and it cost me $0.06. This is the Bitcoin we were promised, this is the Bitcoin that is being built.
Scalability has long been a concern for those wanting to throw blows at Bitcoin, and very soon it will be something that can no longer be brought up as a weakness.
Projects like these two coming to fruition could hugely affect not only the use cases of Bitcoin but also the actual value of it.
ICO’s and Regulation
While many cryptocurrency proponents and enthusiasts are very much against regulation of any kind, I believe that certain regulation can be beneficial, in particular with regards to ICO’s. ICO’s are a risky investment because there is currently no real way to know whether a company (or people pretending to be a real company) intends on delivering their promises, or if they intend on taking your money and disappearing into cyberspace.
Regulation should not be a dirty word in every context. The Japanese model for cryptocurrencies, I believe, is truly aimed at protecting consumers and this is what I think that 2018 has in store for ICO’s in many countries. For now, regulation seems to be the way to get a wider range of acceptance and adoption. While it would be impossible to regulate Bitcoin, Ethereum, Monero and the like, ICO’s would definitely be easily regulated as they have publicised teams and registered businesses.
The second point I should make is that I think that 2018 also has a lot of potential for really talented teams of people to deliver amazing new products and services. The quality of idea’s, beta’s and proof of concepts are truly astounding so far, and I think that as blockchains and blockchain derivative technologies develop and become more accepted throughout the year, we will be exposed to far more ICO’s with great pedigrees.
A great idea or beta for an ICO will undoubtedly be seen by the current community, but I also believe that we will see far more commercial applications and interest in the technology this year, which will greatly benefit early investors and adopters of these ICO’s
By no means is this list in order of importance, so don’t mistake Ethereum being third on the list to mean that I value it’s importance any less than ICO’s or Bitcoin. Ethereum has become an essential part of the cryptocurrency ecosystem, as a currency, but more importantly, as a platform. Ethereum has in many ways embodied what some would consider Satoshi’s vision of not only having a currency, but also a platform that people use to innovate and experiment with.
There are a few issues with the Ethereum platform, scalability being one of them, but there are many ideas and experiments floating around with their development contributors and I am certain that after seeing the benefits to the Bitcoin platform scaling will create an environment that realises the benefits of expediting scalability issues before it causes users and enthusiasts to lose confidence in it, which was clearly visible when merchants stopped accepting Bitcoin in late 2017.
Ethereum, until late 2017, was undervalued and as its value is now seemingly growing proportionally to its usability, Ethereum’s price should continue to rise along with the great ideas that are being built on it.
I don’t think that 2018’s bear market is over yet, but I do see many, many more reasons to be excited about the next 10 months. These are but a few factors in my outlook on 2018, and them, combined with innovation, ideas, and interest from newcomers to cryptocurrency I see a great year ahead. While we may not see as many multipliers in price as we did in 2017, we will see a healthier market as a result of lessons learned in 2017.
How do you feel about the outlook of the cryptocurrency market for 2018?
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Tiaan Wolmarans is a cryptocurrency investor and trader, airplane pilot, musician, and writer.
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