Despite the pain that cryptocurrency investors likely experienced in 2018, the upcoming year brings a lot to look forward to. Fundamental progress on blockchain and new evolutions of the fast-growing decentralized world—regardless of their effect on the price of cryptocurrency—are in the works and will rear their heads in 2019. While some may help to catalyze the next bull run in Bitcoin or Ethereum, for example, true enthusiasts know that the industry’s market cap is largely irrelevant when compared with the usefulness of blockchain to everyday users. It hasn’t broken into the mainstream yet, but the following milestones just might give it the momentum to do so.
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Constantinople & Lightning Network
Both Bitcoin and Ethereum, perhaps the two most famous names in blockchain and cryptocurrency, are looking to make big changes in 2019 which could further expand the sector. Ethereum is the world’s preeminent “decentralized computer”, and in 2019 many expect that its blockchain will switch to the more economic Proof of Stake (PoS) consensus model. PoS brings with it two significant concepts.
The first is that users who hold ETH can stake it by locking their coins into a node in the network and then earn more ETH when the node processes transactions of data on the blockchain. The second idea is connected to the first, in that this new expansion—dubbed Constantinople—will make the Ethereum network faster and more efficient for decentralized applications.
Bitcoin is also slated for a big upgrade in 2019 as many people anticipate its Lightning Network to receive a first full release. The Lightning Network is an off-chain software product adjacent to the Bitcoin blockchain that helps to make transaction speeds much faster, thereby pushing the sluggish Bitcoin past its current seven-transactions-per-second and towards the goal of competing with payment networks like SWIFT or VISA.
XRP is Finally Listed on NYSE
One of the most potentially groundbreaking events in 2019 is actually twofold: the launch of NASDAQ-affiliated cryptocurrency exchange DX.Exchange and its consequent listing of Ripple (XRP) pairs. While the exchange is just partners with NASDAQ, it’s the first to use the influential equity exchange company’s own trading engine in the cryptocurrency market. This also means that the new exchange will be fully licensed and regulated in multiple jurisdictions from the outset. It also has the resources of NASDAQ behind it, including customer support and marketing departments on a scale that the crypto world has rarely seen.
That XRP pairs will be first up on the exchange is an immense opportunity. After all, DX.Exchange’s ambitions as a more accessible exchange for retail traders means that Ripple will have a central place in the line of sight of millions of new investors, thus providing further evidence that the popular coin’s forward inertia simply cannot be stopped. 2018 saw XRP in a ceaseless fight with ETH for the second highest market cap, but the latter may be usurped for good.
New Financial Products (ETFs)
Exchange-Traded Funds (ETFs) are a pipedream for the cryptocurrency community for many reasons. Not only are these assets highly accessible for retail traders through the traditional financial system of brokers, they can also be settled in the underlying currency, meaning that brokers who make ETFs available are a source of demand for the cryptocurrency they represent. This is the opposite of Bitcoin futures, for example, which are merely derivative assets that mirror the price of Bitcoin.
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Most know that it’s the special supply and demand side of most cryptocurrencies that help to push their price upward, given a finite supply that produces deflationary behavior as demand ramps up. Retail demand for Bitcoin via an ETF would naturally help to put upward pressure on prices and would itself be a bullish signal given the consistent rejections that all ETFs put in front of the SEC have so far endured. 2019 might see regulators change their tune, however, which will create large ripples in the market—no pun intended.
Major Decentralized Applications
Greater network strength and cost-efficiencies promoted by upgrades like Constantinople have a single purpose: to make the blockchain a better place to develop new applications. The next generation of dApps will land in 2019 and demonstrate to people with no interest in blockchain that there’s something of value in the idea. The best way to do so is simply to host fun, useful applications that illustrate how blockchain can deliver a better deal to everyday users.
Many blockchains are busy working on fleshing out their development environments by implementing virtual machine modules, which make it easier to create apps in any programming language and port them to the blockchain. Ethereum, QTUM, EOS, Cardano, and others are optimizing their networks for a greater variety of dApps in 2019, and all users need to do is watch and wait.
Security Token Offerings
The Initial Coin Offering (ICO) business model has been through the wringer during the last year, with regulators such as the SEC determining that most tokens sold via ICO are considered securities and therefore must be compliant before being used to crowdfund new startups. Countries like China banned ICOs altogether, citing the risk for investors and rampant opportunities for fraud, speculation, and capital flight. However, classifying these tokens as securities is giving rise to a new type of token that classifies itself as such intentionally.
|Read Also: What is A Security Token Offering (STO)?|
Instead of equity ownership over an intangible idea built on blockchain, security tokens transplant the immutability and cost-effectiveness of tokens to real equity products. Real estate, fine art, automobiles, and traditional assets like commodities will soon be “tokenized”, meaning that asset owners get access to greater liquidity and retail investors to a greater variety of assets for their portfolios. Splitting a ’65 Mustang into 1 million tokens lets someone with just a few dollars expose their capital to the appreciating value of such a car, and the car’s owner can suddenly mobilize the value sitting in their garage—a win-win for all involved.
The Launch of Bakkt
Heralded as a potential impetus for the bull market’s return, and for good reason, the launch of Bakkt in 2019 is something that traders look forward to. Bakkt is a new Bitcoin futures exchange that is notable for several reasons, chief among them its settlement of BTC futures contracts in Bitcoin, rather than cash. This should provide real pressure on the supply and demand equation unlike futures contracts from CME and CBOE. Bakkt is also being launched by one of the most respected institutions in the world, Intercontinental Exchange, which also owns the NYSE.
Bakkt plans to offer crypto cold storage to clients as well, which means that the wider financial industry, including everyday retail traders and institutional funds alike, will finally have a universal solution plugged into the real cryptocurrency market. An emphasis on total compliance is the best thing that Bakkt will offer, of course, and precludes its existence in the first place.
2019 is set to be a killer year for blockchain, and the groundbreaking potential described above is just the icing on the cake. There are countless other exciting developments such as decentralized exchanges and blockchain in the VR space which deserve a mention, but must take a backseat to the necessary upgrades to push blockchain towards where it ne