While critics and proponents trade jabs, cryptocurrency continues its steady march forward.
Individual cryptocurrency coins will remain volatile in 2019.
The individual cryptocurrencies will remain volatile in 2019 and beyond, but the game-changing power of the technology as a whole can’t be denied. Sure, those trying to make a quick buck in a deregulated market might have clouded the waters recently. But as the crypto landscape takes shape, doubters will see that crypto is destined to succeed.
Creating Lasting Value
New research from Satis Group shows that crypto trading volume will increase by 50 percent this year. That’s enough to overtake the trading volume of corporate debt in the U.S.
Short-term coins will come and go, but smart companies will increase their use of crypto for things such as supply chain tracking. These uses of cryptocurrency in other business and commerce settings — and not quick coin exits — will drive long-term value for the currency.
Businesses and their leaders should pay more attention to these use cases to discover new ways their organizations can find value in crypto. In the quest to make the best use of emerging technology, the winners are rarely the ones on the sidelines — and the crypto game is no exception.
The Bubble Is Dead
People remembered the big bitcoin crash early in 2018, and they’re now wary of thinly veiled cash grabs hidden behind initial coin offerings (ICOs). Businesses seem to have followed suit. With last year’s market collapse, large companies that previously dipped their toes into the crypto-pool — think Morgan Stanley or Citigroup — have seen those projects stall. In the long term, this deflation of speculative hype is a good thing.
The technology behind the coins will stick around, however, and audiences will become more interested in crypto technologies with real-world value and staying power.
The bumpy road toward crypto acceptance should surprise no one. It takes time for general audiences to accept any new technologies. Crypto is hazier, perhaps more misleading, but mostly less understood than most other tech fields.
As popular as crypto has become, its star applications remain unknown for now. Businesses such as Spot are currently experimenting with new offerings and functions as a gateway into the world of crypto. When the killer use case for crypto comes, many users won’t even know that it’s the technology behind the curtain.
Long Live Crypto Laws
Regulators are normally slow to move on disruptive tech. With crypto putting so many dollars on the line, though, Washington can’t twiddle its thumbs forever.
This year will likely see lawmakers introduce new waves of crypto legislation. If they’re structured properly, new rules could help the industry by pushing bad players out. Good laws will clamp down on sketchy ICOs and clean up some of the suspicions that surround crypto today.
Some lawmakers have already begun the process. U.S. Reps. Warren Davidson of Ohio and Darren Soto of Florida introduced the bipartisan Token Taxonomy Act late last year. This Token Taxonomy Act operates to clarify crypto’s exemption from securities laws after it forms a functioning network. The new legislation will also define a “digital token,” paving the way for better laws regarding the technology moving forward.
How to Get Ahead of the Crypto Hype
When advocates tell companies to “get into crypto,” they don’t mean that businesses should start paying employees with Ethereum. Anyone looking to join the crypto movement and get the most out of this business opportunity can follow a few basic guidelines:
1. Don’t let the hype get to you.
Crypto often makes news because of what it is, not because of what it does.
Only understanding what a sector of business leads to tons of speculation and questionable informants using platforms of authority to mislead. Don’t listen to just anyone who claims to be a crypto expert. Those people who claim to be in the know, or who claim to have special expertise are targeting the massive forecasted increase in personal crypto investing this year.
As has always been the case in new technological fields — an individual may or may not have any degree of intelligence or insight about how the technology actually works. Don’t get wooed by someone who has memorized some technical jargon.
2. Focus on technology, not trading.
Crypto and blockchain refer to distributed ledger technology. Essentially, the distributed ledger will allow the creation of secure public records of transactions.
The fundamental truth of crypto is not that it’s magic money born of computers; it’s a distributed system of record that can, if applied properly, have beneficial benefits for all of its user in many different sectors of business. The distributed ledger can provide safety for purchasers, where there was none before. One such benefit is storing and keeping track of financial value.
3. Look for use cases that show value.
For anyone who runs a company that has some form of digital currency, asset tracking, or a need for distributed quality control, crypto offers too many potential uses to ignore.
Unfortunately, would-be entrepreneurs like to throw a crypto component atop haphazard tech architecture to generate buzz. Make sure crypto will add value to your business processes. Exercise caution around proponents, and ask to see demonstrated cases. At the very least, a crypto partner or advisor should be able to explain the usefulness and the reason why crypto will help in plain English.
4. Quit telling. Start showing.
No one cares about whitepapers in this arena anymore — the crypto crash and subsequent ICO scams exposed many of them as the fraud they were.
The only companies with a legitimate claim to a future in crypto are the ones that will be able to showcase useful prototypes. Yes, crypto companies need to document their tools and explain what they do, but they don’t need to fill a couple of pages with jargon to do it.
Consumers and business leaders alike fell into a trap when crypto burst onto the scene in 2017, but the rocky road crypto saw in 2018 doesn’t represent its future. This year will see the pace of crypto and blockchain accelerate as more legitimate uses of the technology come to light.
Let the bitcoin acolytes have their fun. And in the meantime, keep an eye on the legitimate uses (and promising future) of 2019’s most exciting technology.