Without a shadow of a doubt, this past year has been huge for cryptocurrencies and the blockchain technology. Whatever the future may hold for Satoshi’s brainchild and all that it has given birth to, 2017 will forever hold a singular position on the timeline of events in the crypto world.
But as a new year approaches, the urge to get caught up in all that has happened over the past 12 months could prevent us from considering what 2017 did not bring – and why.
Admittedly, it is hard not to be mesmerized by the numbers: the more than 1,300 cryptocurrencies, the $700-plus billion market cap they have produced or the eye-popping ICO raises of Tezos, Filecoin, Bancor and others – oh yes, and the gut-wrenching ride of bitcoin’s price as it climbed over $20 000 – and fell back down.
And yet, it is worthwhile taking a step back and considering what is still missing and what exactly this might mean for the year that is almost upon us.
1. We did not see mass adoption of blockchain for enterprise
While there has been plenty of talk about blockchain patents (Mastercard is one example) from big-name companies along with a surge in sign-ups to the Enterprise Ethereum Alliance, 2017 did not bring a whole-hearted embracing of crypto by established players across various industry verticals.
Some will point to concrete financial and technology implementation factors to explain this – “How can you invest in something that’s still so immature?” and “If it can’t scale how can we depend on it?” – and certainly those may be valid points.
Education (its lack and its acquisition) also plays a role. On the one hand, many executives still do not grasp how it actually works and yet still want to dabble in the space, if only to use the hype for marketing purposes.
On the flip side, the more informed decision-makers in large corporations become, the more they realize how much the blockchain world challenges the very core of current systems and paradigms. For many, this knowledge makes them pull back and refuse to “take the leap.”
I also suspect that – perhaps subconsciously – the hype surrounding ICO funding also served as a reactionary force, ironically as the very buzz that put bitcoin and blockchain on the lips of thousands also made many fear its disruptive force.
If the wave of token sales slows in 2018 and regulatory uncertainty clears up, this may change, and arguably it must change if cryptocurrencies and token economics are going to stick around for the long haul.
It may also depend on the outcome of the next point…
2. We did not see a clear distinction between blockchain, tokens and cryptocurrencies
No one in particular is to blame for this, but the fact remains: 99.9 percent of people outside the technical crypto/blockchain community associate blockchain with bitcoin and cryptocurrencies. Period. Unfortunately, this is enough to block adoption by many.
If anything, the huge ICO numbers that 2017 produced only reinforced this association as headlines around the world flashed dollar amounts with each new token sale.
The problem with this is that, to the wider world, it inherently reduces crypto to “a new way to make money through fundraising and speculation.” This is, and will continue to be, a major handicap going forward.
I personally applaud voices such as that of William Mougayar and guests of his Token Summit series, who add more perspective to the discussion and differentiate the various levels of technology and token models.
For blockchain to reach its true potential, these distinctions will need to be made and explained.
3. We have not yet seen self-regulation take hold
With major attention focused on the SEC, FCA and Swiss FINMA, regulation has never been far from the crypto conversation over the last year.
And in the face of expected scrutiny, numerous self-regulation initiatives have been formed with the Crypto Valley Association announcing a Code of Conduct and Waves setting up a foundation for ICO standards, among others.
So far, however, these initiatives haven’t produced much, with the afore-mentioned Code of Conduct still unpublished.
In some ways, this can’t be surprising since it isn’t hard to imagine “self-regulation” as a clever tool to, on the one hand, keep governmental watchdogs at bay, while promoting a “higher standard” which can be used for financial gain.
The coming year may, indeed, bring more visible results on this front – and it should – before scam projects over-multiply and influential advisors over-abuse their positions to artificially pump projects of little-to-no value, compelling governmental regulators to take over in full force.
4. We do not have inter-chain operability.
Finally, in a more technical note, inter-chain operability remains (for now) an elusive holy grail.
The past year saw serious efforts to tackle it. Polkadot grabbed most of the attention (and its creator as well, for different reasons) and Cosmos not far behind. They’re not the only ones, though, with quieter projects like Block Collider working with unique angles on the same problem.
Maybe it seems unreasonable to expect inter-chain connections to come along so soon, even as blockchain and crypto continue to in their relative infancy. But if there is one thing that 2017 didn’t give us, one gaping hole that 2018 can fill, this is it.