Blockchain Analysis 2018-2019
Blockchain

Expert Review: Blockchain Ecosystem Analysis 2018 & Trends for 2019

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Kate
Kate
publish date March 12, 2019 Tags
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The year 2018 was surprisingly productive and pragmatic. Those who came for a quick buck have fled and dedicated developers took the stage again. Although there are mixed feelings about the past year, there are certain achievements and trends. We asked industry experts to share their thoughts about 2018 and expectations for 2019.

Kristen Stone

Kristen Stone

An industry consultant
(ex-Product Manager at Coinbase)

1. Summing up the year 2018, what were the main trends in and contributions to the blockchain ecosystem?

One main trend this year was DApp development in Ethereum. This led to scaling concerns which rounded out the year with a focus on layer 2 technology like Plasma side chains. All in all, it was a big year for the blockchain industry which continued to grow the base layer technology even amidst the volatile market.

2. What were the best use cases of blockchain technology implementation in 2018?

I think 2018 was a focused year for building the basics, understanding governance, growth, and improving the UX of many projects. There were not a lot of business applications that stood to me this year but I attribute that to teams being focused on building the technology. In the past, lower prices are the time teams focus the most and in the next 6 months or so we should start to see applications taking off again.

3. What trends do you expect in 2019?

Great question, I think the next 6 months will be a time of building and preparing for the next wave of use cases. My expectation is to see enterprise blockchain gain traction and implement a few critical uses of blockchain. In addition, I think we’ll see incredible improvements on the technological side with more focus on DAOs, Lightening, and staking mid- to late 2019.

Alex Momot

Alex Momot

CEO of REMME

1. Summing up the 2018, what were the main trends in and contributions to the blockchain ecosystem?

The ICO hype machine stalls

For ICOs, 2018 was a mixed bag. The year started strongly and then fell away. According to ICO Data, blockchain projects raised over $7.8 billion (although this includes tokens such as the Petro and other unverifiable ones) through 1,257 ICOs, but the majority of the activity can be attributed to just the first four months. We then bore witness to a significant cooling off period as the price of bitcoin fell by over 70% during the year.

From exploration to application

The industry made progress as more projects moved from concept into implementation. Businesses exploring blockchain’s potential to streamline and disrupt and actually started to produce practical and useful applications. For example, the Australian Securities Exchange (ASX) replaced their existing CHESS system with a blockchain based distributed ledger.

The ASX was not alone in utilizing blockchain for the first time. According to PwC’s survey of 600 executives, 84% of companies now have some active involvement with blockchain. 15% have a live solution in production, another 10% are running pilot programs, and 32% are in active development.

Executives cite transparency, security, and reduced reliance on intermediaries as the main reasons for exploring blockchain. As business interest in blockchain continues to grow, Remme received a great response from our pilot program, with 289 applications from interested companies large and small from all over the world.

With that in mind, we see a very positive future for the industry, a belief back by Gartner which predicts that by 2030 blockchain will have a global business value of over $3 trillion, with blockchains powering 10-20% of the world’s economic infrastructure.

2.What trends do you expect in 2019?

#BUIDL is the new #HODL.

If 2018 brought an end to crypto-hype and unfettered optimism, it also paid witness to the blockchain sector developing an identity beyond currency and payments. In 2019 the public will become ever more aware of other use cases for blockchain technology as increasingly diverse projects develop MVPs. As the sector evolves and matures, blockchain technology will prove its worth beyond crypto – and the projects with the strongest ideas and dApps will prevail.

After #BUIDL will come #SELL

Blockchain-based solutions with real use cases and business value will be bought by enterprises only after the infrastructure has been fully developed. After the first wave of initial coin offerings, the market faced the problem of the technology not being mature enough. The market needs solutions that have been fully developed. In addition, it will be necessary to find a market fit to the products, that are already developed.

Should crypto winter persist for another season, lots of companies that haven’t found their niche will be forced to sell their dwindling crypto assets and become bankrupt. Companies that can identify their clients and build solutions geared around their needs, however, will be able to survive and become future Amazons or Googles in the world of blockchain and crypto.

Binance Launchpad

Binace will come to host the majority (about 70-80%) of all leading ICOs in the near future through its Launchpad platform.  

Hybrid Models

We predict the big winners of 2019 will be companies that are able to bridge the crypto and fiat worlds, enabling digital links between the two. This linkage is a necessity across multiple industries from storage, trading and asset management, bringing digital assets to real-world applications. Such companies will become billion-dollar startups and will benefit from all the liquidity of enterprises. Their token value will rise significantly because the next interaction between representatives of institutional economy and crypto world will appear not so soon.

3. What were the best use cases of blockchain technology implementation in 2018?

For now, it is more practical to talk about successful use cases in the framework of successfully built projects rather than their implementation. The most successful examples of blockchain implementations to date have largely been the blockchains themselves, and the ecosystem they’ve spawned. For example, the development of Ethereum platform brought positive value to ICOs, launching projects such as Binance, which went on to become the world’s largest cryptocurrency exchange. Then there are the prediction markets and decentralized finance products that have been built on top of Ethereum, many of which thrived in 2018, which further attest to the network’s success.

Tim Kozak

Tim Kozak

Head of Technology at Intellectsoft Blockchain Lab

1. Summing up the year 2018, what were the main trends in and contributions to the blockchain ecosystem?

Despite storms in the crypto space last year, it was a significant year in terms of blockchain technology itself. I already shared my thoughts on this in our blog: you can find a detailed article here. Anyway, here is my quick summary:

  1. 2018 shaped the hall of fame for the leaders of public blockchain platforms and frameworks. Some have just started in 2018, but most have gained momentum on the market. EOS, Ethereum, Hyperledger, Corda, Stellar — all of them have passed the first trial and keep on searching for the new market niches.
  2. Ethereum has secured its position on top of the public ledger hierarchy. It fostered the development of the entire industry and established a strong community with a rich ecosystem. But 2018 also showed an urgent need for the network update: the community has been waiting for the promised updates for a long time while the interest in the platform and trust are slowly declining.
  3. Dedicated blockchain infrastructure solutions appeared on all major infrastructure providers such as AWS, Azure, IBM, Oracle, Google. The outcome is the emergence of templates and frameworks for solving typical business problems. It also means higher standards and lower entry barriers for businesses, and a greater push towards the technology mass adoption.
  4. Consortium networks — without a doubt, this is the first and most obvious case for DLT adoption. As expected, this is the area of the most robust company development with cases of We.trade, Food Chain, BITA, MOBI.

2. What were the best use cases of blockchain technology implementation in 2018?

The capability of blockchain technology is quite clear to a technical specialist like me. But the state of the underlying technical infrastructure and its application readiness are also clearly visible. The current condition makes blockchain effective for internal processing of various sensitive data like financial transactions. I am sure that many companies use this technology without much disclosure for the reason of this data sensitivity. Mass adoption for everything except cryptocurrencies is still a few years away.

3. What trends do you expect in 2019?

There will be even less hype and overpromising. Steady and sustainable growth will be happening instead. It’s too early to say about mass adoption and breakthrough cases, but it could happen. In my opinion, the most expected trends in 2019 are:

  1. Fearsome competition between blockchains and frameworks. EOS vs Ethereum, Stellar vs Waves, Hyperledger vs Parity… Expect some projects descending to the graveyard while others to establish their leadership. For the developers, this is good news because there are way too many overly ambitious blockchain projects and the job market is too hard to navigate. Here is the link with the comparison between main DLT’s.
  2. 2019 will be the year of showcasing MVPs of multiple projects and scam allegations lawsuits for multiple projects.
  3. Long awaited Constantinople update for the Ethereum. This could go both ways —either market leader status conservation or an exodus to the other platforms.
  4. Industry standards will continue to improve, especially in the area of identity management.
  5. Consequently, it will boost interoperability. As we are still on the eve of the blockchain technology development, the adoption will progress by expanding two current bottlenecks: product development to solve particular tasks and legal support for the decentralized decision making.
  6. Corporative blockchain will be democratized. The market will be gradually filled with more than just rapid deployment infrastructure but all-in-the-box modules for business processes in various industries like business process tokenization. The consortium entry barriers for the businesses will drop and more experimenting with blockchain business integration is at hand.
  7. Governments will start adopting blockchain
  8. …and Bitcoin will be used for international transfers more often. Most innovative companies will switch to Bitcoin network which will see a robust development of smart-contracts, sidechains, and Dapps.
  9. As a result, BTC will evolve as the main custodian chain while various accounting service will be performed on sidechains.
  10. Lightning Network will grow and improve its application UI mimicking modern mobile banks but having no central oversight. Real breakthroughs in scalability and performance are coming, and the blockchain trilemma can be expected to be solved in two to three years from now.

Dmytro Budorin

Dmytro Budorin

Co-Founder and CEO of Hacken

1. Summing up the year 2018, what were the main trends in and contributions to the blockchain ecosystem?

2018 was the year of the “crypto purge”. After extremely rapid growth of 2017, the newly formed crypto community started to realize where the industry actually appeared during the previous year. Many projects, which collected $50M+, announced their bankruptcy or just exit-scammed with their remaining funds. During this year, we’ve seen that some projects revealed their intentional backdoors in smart contracts which allowed them to withdraw funds from their projects. Obviously, all these events were supported by the general bear trend in crypto.

All this said, on the other side, blockchain technologies were developing last year. The most honest projects with stable business models survived the purge. 2018 has shown that most crypto/blockchain related projects didn’t want to develop their products. Rather, they wanted to cash in on the inflationary market. Those who really came to crypto with the ideas and solutions – made it. Thus, right now there are a lot of projects whose products actually work.

At the same time, there was a trend of stable coins which has ended the era of USDT dominance. This appears as a good trend, because the concerning part of crypto can’t depend of the random organizations which are afraid of auditors. Now, at least, people can choose which of the stable coins are to be trusted, while before it was impossible.

Finally, last quarter of 2018 saw a rash of crypto exchange closures. Even more, this trend has only started and is continuing right now. Thus, it appears that more exchanges will die in the coming months.

2. What were the best cases of blockchain technology implementation in 2018?

At this time, it seems inappropriate to comment on specific projects, as we can’t be sure of the lasting success of many projects initiated in 2018. Furthermore, if an evaluation of such projects were to be undertake, most of the projects would likely be unknown to most readers.

Cryptocurrencies are only a part of the huge prospects of blockchain use cases. The blockchain contains potential for application in logistics, identification security, and many other fields.

Perhaps (at least right now) the best use cases of blockchain as a technology are not in crypto sphere. Private blockchains created for defined and targeted use cases of an entity, such as governments, corporations, or communities appear to be the best applications of the technology to date.

It’s safe to say, the era of really outstanding blockchain application in crypto is still to come.

3. What trends do you expect in 2019?

First of all, the major trend of decreasing the amount of exchanges will continue. Even more, I expect a snowball effect of this. If anyone think about the role of exchanges in crypto industry, they come to the sudden truth – they are almost similar to traditional banks. Now they just hold “corporate money”, which are issued in the form of different cryptocurrencies.

You know that banks are regulated very strictly in any jurisdiction in the world. So the regulation of the crypto exchanges is just a matter of time, because almost no one has understanding of what’s going on after your funds are deposited to an exchange. A perfect example that something needs to be changed manifests in the fact that exchanges are used as the best and most popular mixers for stolen funds.

Another trend, which I see in 2019, is diversification of the crypto project into two groups. First will be the projects which developed their products and found the first real customers and started generating revenue. Second will be the projects which fail to do so. After all, projects can’t postpone the releases of their products forever, while the ICO funds have a trend to come to an end one day. In general, I think that the trend of the “crypto purge” will continue in 2019 and will last until the market will get rid of all the projects, which contributed to the vision of crypto as “scam and fraud” by the vast majority of people in the world.

Pavel Kravchenko

Pavel Kravchenko

PhD, Founder at Distributed Lab

1. Summing up the year 2018, what were the main trends in and contributions to the blockchain ecosystem?

To me, the main trend was the abandonment of the ICO approach because people realized they can no longer sell tokens to investors. Moreover, regulators went after all these companies; we’ll see more court cases in the future. That was the main trend.

Talking of technical advancements, probably the main newsmaker was EOS with all its improvements. Ethereum followed suit, but expectations were much higher. The results obviously are not that great because it is not just about technology or not about the amount of money you raise.

Apart from that, there were a few other trends that have happened. First, it is the security token (STO) model, even though it is not yet fully functional. The second trend is marked by switching from B2C to B2B. Today consumers do not need all these technologies right away. As a result, we see startups trying to sell to enterprises, before they die due to the price collapse. The market is being cleaned up.

2. What were the best use cases of blockchain technology implementation in 2018?

One of the biggest newsmakers was supply chain management from IBM, Wallmart. These use cases, however, are yet in a PoC phase.

3. What trends do you expect in 2019?

I expect more startups dying and more investigations going on. Some of them are underway right now so the results will be revealed soon. I would say that a few stablecoins must collapse, and probably that will affect the price of cryptocurrencies even more. Also, I expect the first release of products, not just platforms. As a result, I foresee that we will pass the bottom of the market in 2019 in all senses: in price, in interest, in disappearing projects.

Enterprises will pay more attention to blockchain as there will be new waves of interest—with more detailed analysis. They won’t follow hype but rather will analyze real problems and look for real solutions. This will challenge a lot of startups. As a result, there will be only a few of those capable; others will simply fade away.