Bitcoin And Crypto Asset Markets’ Top Pressing Questions And Concerns For 2019
The Pressing Crypto Questions For 2019
It's been a decade since the publication and creation of the virtual currency Bitcoin and there has been a lot of traction since. But with the Cryptocurrency world burning rubber, it leaves a lot of questions up ahead for 2019.
While it was widely dismissed as a novelty system of payment and storing value, Bitcoin deserves a more serious analysis than just dismissal.
If money is to evolve to meet the wants and needs of a 21st-century population, blockchain technology, and cryptocurrencies need to be analyzed and put to use. One of the problems that cryptos face is the fact that there are few use-cases from the world of business.
And while we play with a number of theoretical applications are fun, we need to put it to use.
The Lessons So Far
We have yet to really crank out as much value from the internet as we would expect to see, but Blockchain and cryptocurrencies allow that to happen with greater ease. They offer far more solutions to issues such as user-verification, network costs and privacy, to name a few.
So what benefits can this bring to an international economy? It can account for an increase of 7.5% for the US GDP. So how do we leverage it? That's the challenging question. It needs to redress a number of limitations that it has such as scale, interoperability, privacy and security as just some.
The plus side is that there are a good number of businesses such as Hyperledger and Quorum which show that industry is trying to put it to work.
One other question is this: how can blockchain companies position themselves and their tech-facing projects so that their Initial Coin Offerings are capable of drawing in previously skeptical investors?
Public Policy Frameworks
The only credible way for these markets to gain credibility and realize their abilities is through creating a tried-and-tested framework of public policy. This can prevent the otherwise unscrupulous activities which emerge from an unregulated market.
For an effective, fair crypto ecosystem, there needs to be legal protection for investors. Dark markets can only exist where there is lax legislation and an otherwise grey government.
A great percentage of these crypto exchanges operate without a strong registration and regulatory framework. Without this, manipulations of the market and token thefts can go completely unchecked.
According to statistics from the October Exchange Review from CryptoCompare found that, out of all exchanges in operation, only 47% of them followed through with KYC obligations.
But what about insurance or safeguards? They're unsuitable for what they're developed to allow. And wholly below what is in effect with MoneyGram, for example.
These cryptocurrency traders need to be treated in the same system as these older money exchange systems. Along with this, illicit activities need to be reprimanded, along with firm imposition of anti-money laundering policies in place.
Moving onto 2019, we're seeing good signs from exchanges within the US, under the need to register as brokers under Regulation ATS and legislation.
Initial Coin Offerings
Among those ICOs that are there, a great deal fail. How many exactly? EY found that 86% of major ICOs traded far below their original listings, with an even smaller minority having a viable product.
Filecoin is an example; from raising over $250m, it won't be going live until mid-2019. ICOs inhabit a particularly dicey area of legislation.
The sorts of risks, profitability and reliability are all thrown into question, and take a lot in order to make them effective to a better extent. There are some that try to get known as utility tokens and are not investment contracts – which is wishful thinking.
In America, ICOs all need to come under its test for securities (Howey Test). This means that we're seeing a more uniform definition of what tokens are. 2019 will possibly see a continuation of ICO failures, dragging down funding totals as a result. But it's likely that they will be held far more legally accountable.
Central banks are steadily walking towards blockchain and cryptocurrency marketplaces. Its objectives? cost-cutting, greater efficiency, and stability.
Examples of use-cases include Singapore (Project Ubin) and Canada (Project Jasper).
There are some banks that are looking into increased public access to banking payment systems and digital reserves. This is through something that it calls a ‘central bank digital currency' (CBDC). There are two examples of this; one good and the other terrible.
- The Swedish E-Krona
- Venezuela's Petro
2019 And Beyond
Bitcoin has come a long way since 2008, but where does the future bring for it as we walk into 2019. Rather than blockchain being brought forward as a public chain, financial institutions are leaning more towards permissioned Private chain apps instead.
At this moment in time, the underlying cost of using blockchain is outweighing the uses. But how soon will we see this change?
As for various projects and tokens, will there be a future initiative that brings more value than a novelty to users?
All is left to be seen in 2019.