SEVEN things I’ll look for in Crypto and Bitcoin in 2018

1) Will the real price of crypto currencies get dominated by “financialized” paper markets?

There are now Bitcoin Futures trading on the CME and CBOE.  At least two ETFs are being organized, and dozens of hedge funds are participating in the crypto space.

I think the answer is no.  Crypto currencies and their communities are explicitly designed to resist and explicitly wary of middle men and “paper” markets which substitute for real goods.  I think the financialization will firstly bring a lot of new money into crypto, and secondly, lose influence as many people realize that they don’t need brokers.

2) Will Bitcoin finally resolve its latency issues?

Bitcoin is plagued by high fees and slow transactions.  Various technical solutions have been discussed for years, most notably, the “lightning network”.

The value proposition of some alternative crypto currencies is directly aimed at this weakness.  Bitcoin Cash, and to a lesser extent Dash and Litecoin are valuable because they’re convenient for small every day purchases.

I think the answer is yes — in the second half of 2018 Bitcoin will make this and other technical innovations (atomic transactions).  It will probably not get 100% community support, so this will create a hardfork, but unlike with the Bitcoin Cash fork, this time the majority of the network will adopt the innovation.  As a result, the hype-train that is Bitcoin Cash will fall off its rails.

3) ICO reconing.

The ICO space circumvents traditional and deeply entrenched investment infrastructure.  With ICOs, entrepreneurs can go directly to crypto-investors with few if any middle men.

There’s a lot of fraud in this space.

I expect disillusionment 2018, as well as winners proving themselves.

5) Will Ethereum remain the top token platform?

There’s a lot of competition in this space, and ethereum, though first, does not have as comanding a lead as Bitcoin does over the money space.  There are serious competitors in NEO, NEM, Cardano, Waves, and others.

I suspect the top ten players to divide the market and find niches.

6) Tokens start working.

Tokens are still an unproven concept.

Quick review:  ICOs issue tokens to investors.  Utility tokens are tokens used in some protocol.  For example, the Basic Attention Token is the medium of exchange used in the model of digital advertising visualized by the Brave Browser project.  Advertisers will spend Basic Attention Tokens to show their ads.  Equity tokens act like stock and come with the promise of dividends.

This whole thing started in 2017, and some skeptics, like Silicon Valley VC Jason Calacanis correctly points out that there aren’t really any use cases yet.

I predict that in 2018 things will begin working.  People will use tokens in some of these unique services.

7) Will decentralized exchanges take market share from the centralized exchanges?

Different technologies, most notably “Atomic Transactions” promise a secure, peer to peer method of trading crypto currencies with other people.

Currently the exchange market is dominated by a few dozen centralized companies which run enormous exchanges.

I expect the technology to become viable and popular, but for the market to continue to be dominated by centralized exchanges.  There are many new people in the space who aren’t tech savvy, and centralized exchanges will probably offer a better user experience.