Crypto is on the rise again.
Ever since Bitcoin, the first decentralized cryptocurrency, was created in 2009, there have been various fluctuations on the crypto market.
In 2017, the cryptocurrency market enjoyed a huge boom, which was followed by an equally dramatic value drop. During this 2018 Cryptocurrency market crash, the price of Bitcoin plunged by 65% over a 6-month period, and at their lowest point, digital currencies lost 80% of their value. All this makes the 2018 Crypto Crash even worse than the burst of the dot-com bubble.
However, the Bitcoin price is on the rebound again, and given that it’s still an alternative to traditional money, we can’t be sure what the future brings, especially given that the cryptocurrency industry is a fickle and volatile one.
But one thing is for sure – cryptocurrency isn’t just a fad, but a concept that has the potential to revolutionize different industries. And we can predict its upcoming trends based on different factors and circumstances.
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1. Regulatory Issues Will Be Solved
Cryptocurrencies have been designed in order to override government and institutional control, which means that their goal is achieving freedom and decentralization in the realm of finance and information.
Therefore, it’s nothing uncommon that this concept encountered certain growing pains, particularly regarding its regulations. The rampant speculation and price manipulation gave Bitcoin a bad reputation and alienated serious investors and enterprises from perceiving it as a stable, long-term asset.
However, it’s hard to believe that a widespread financial model can exist independently from any form of governmental involvement.
Although this may seem in conflict with the original idea that Satoshi Nakamoto had in mind when creating the first decentralized cryptocurrency which was supposed to prevent any governmental interference, it’s only fair to admit that the field of cryptocurrency can survive and fulfill its potential only if it enters the mainstream at least partially.
Many countries have started initiatives to regulate this area, and it immediately resulted in improving traders’ perception of Bitcoin as a safe and secure asset to invest in.
Not only has the UK created Crypto Taskforce to encourage innovation in this industry, while the U.S., the Middle East, Asia, and the Pacific Region have created guidance on initial coin offerings and investing in cryptocurrencies, but some governments have also started to support blockchain-backed projects.
So, we can expect law and order in the crypto space, and this will only strengthen and contribute to its steady growth because having a legal framework means that all parties feel safe.
2. Major Players Will Embrace Crypto
Facebook announced its Libra cryptocurrency in June 2019, which will allow you to send money to other people and make purchases with almost no fees.
The social media behemoth hopes to create an evolved and advanced crypto version of PayPal and disrupt the financial sector by introducing a simpler, more accessible, more efficient, and more affordable payment method. Given that the fees for sending money abroad are on average 7% of the amount, it’s clear how beneficial this new system can be.
Bitcoin, although gaining a great deal of awareness, was never considered something that people could use on a regular, daily basis until Shopify announced integration with the cryptocurrency back in 2013. This move paved the way for Bitcoin to become accepted throughout the e-commerce industry.
Fidelity, a US-based asset manager, started offering its institutional investment clients an opportunity to invest in Bitcoin. At the same time, JP Morgan announced that it would launch its own cryptocurrency.
Although we can say that this increased interest in crypto investments is caused by the saturation of the traditional investment as well as low by investment returns in stocks or gold, it can’t be denied that major players see a great investment opportunity in this industry.
And with governments jumping on the crypto bandwagon, it’s safe to say that within the next couple of years the market will grow.
3. Chatbots Will Revolutionize Crypto
The synergy of these two new technologies can bring both of them closer to the general public.
Cryptocurrencies operate in the cloud, which practically enables the implementation of automated systems. Paired with machine learning and artificial intelligence, these automated systems can be used for financial management as well as handling and predicting risky trades.
AI-powered chatbots can play different roles in the cryptocurrency industry, and we’ll soon see them acting as brokers. If we bear in mind that chatbots are extremely powerful when it comes to crunching numbers, analyzing huge volumes of data, and adjusting their response depending on the situation and the purpose, it will be possible to train a chatbot to perform transactions in your place.
And what’s great about this is that you can feed your trading chatbot all the relevant information, such as the current market prices and dealings, which will then be analyzed with the help of the big data algorithms, thus allowing it to make the best decision without your interference.
Chatbots can also be your personal financial advisor.
Many people don’t manage their assets properly, which can have a significantly bad impact on their future. By taking advantage of a smart chatbot, it’s possible to create your budget and plan your spendings wisely. And there already are numerous applications that can help you with this.
Something similar will be available for the crypto markets. For example, if you invest but you do it recklessly and without taking into consideration red flags such as the circumstances of the market or your own financial situation, a crypto financial advisor will inform you about the potential risks. Even more, if it’s pre-authorized, it will even be able to prevent you from making a bad financial decision.
4. Blockchain Will Be Used to Secure IoT
Blockchain is the technology that powers cryptocurrency. It went through a somewhat rough patch in 2018 due to the drop in value of Bitcoin as well as because of certain reports showed that its pilot projects failed to hit the mark.
Even so, it’s still one of the most hyped technologies out there. And for good reason. Giants such as IBM and Walmart don’t want to give up on the blockchain, believing that it will show its true value in terms of secure record-keeping and transactions.
A field in which the use of blockchain technology doubled in 2018 is Internet of Things. The superior encryption used for securing digital ledgers prevents cybercriminals from easily breaking into computer networks – in order to do so, they would need a lot of time and tech expertise.
Blockchain’s decentralized nature poses another obstacle for malicious hackers because it doesn’t allow them to bypass security simply by disabling a single-point-of-failure.
And that’s exactly what makes the blockchain perfectly suited for IoT. Given that we’re talking about a network of connected devices which are remotely controlled via apps, it’s obvious that it’s extremely vulnerable to cyber threats.
Stats say that a growing number of connected devices such as baby monitors, webcams, or routers have been hijacked in order to target victims with DDoS attacks. This means that these devices were infected with malicious software which turned them into botnets and allowed cybercriminals to hit their target and flood it with onslaughts of overwhelming traffic.
Many IoT devices suffer from security issues that could be overcome with the help of blockchain technology.
Namely, the IoT ecosystem is based on a centralized paradigm – a central server that practically identifies and authenticates individual devices, which makes it a low-hanging fruit for all kinds of brute force attacks.
When blockchain enters the picture, it is possible to create IoT networks based on the peer-to-peer system that is trustless. This means that devices don’t have to trust each other, thus eliminating a single point of failure.
In other words, it would be virtually impossible to hijack IoT devices and take control over them by using DDoS attacks.
The cryptocurrency industry is still in its infancy, and despite some bumps on the road it’s beginning to be taken seriously. These new trends will help it solidify its position and become more widespread than it is today. New players in the arena such as Facebook’s Libra and J.P. Morgan’s cryptocurrency certainly show that crypto is a disruptor whose time is yet to come.
Michael Deane is one of the editors of Qeedle, a small business magazine. When not blogging (or working), he can usually be spotted on the track, doing his laps, or with his nose deep in the latest John Grisham.