Home CRYPTOCURRENCY New Protocols and Super-fast Transactions; What to expect from Cryptocurrency in 2019 – Forbes

New Protocols and Super-fast Transactions; What to expect from Cryptocurrency in 2019 – Forbes

Mass adoption in 2019?The Currency analysis

There is still Blood in the Streets

Roughly a year after the cryptocurrency market exploded and surged to unimaginable heights, there is absolutely no doubt that the market is continuing to exhibit bearish signals. The current state of affairs in the cryptocurrency space is of sharp contrast to the status quo. While news articles with negative sentiments and statistics of unsuccessful projects seem to be in unlimited supply, previously enthusiastic community members appear to have lost interest and are selling all of their crypto holdings or restlessly waiting along the sidelines which appears to exacerbate the problem of low volume and tight liquidity within the crypto market. Even worse is the fact that these fence-sitters and critics of crypto are having a field day rooting out and having a field day with the bad nuts in the cryptocurrency industry. At the same time, regulators have also been breathing down the neck of ICO teams and the current regulatory landscape is still somewhat vague.

While the picture of the cryptocurrency market looks increasingly gloomy, not everyone is in despair or complaining about the state of affairs in the sector. Blockchain developers, ICOs and those from well-funded organizations like the Ethereum Foundation, TRON Foundation, and the Litecoin Foundation, understand that to bring about real change and improvement using crypto technology, more time and effort will need to be spent on building solid projects that do not simply churn out speculative instruments and to the moon valuations. Rather, blockchain and crypto-projects need to provide useful solutions that can be easily applied to everyday life. Instead of engaging in finger pointing and blaming individuals and projects in the industry, time must be better spent creating or supporting projects that deliver real-world solutions.

The Focus Should be on Good Projects Capable of Driving Adoption

As mentioned earlier, some experts, including Ethereum co-founder, Vitalik Buterin, are of the opinion that before there can be a turnaround in the crypto market, there has to be a change of focus from hyped speculative tokens to projects with real use cases. This way the utility of the crypto projects for users would naturally cause the general public to have a more positive outlook on the entire cryptocurrency space. World-renowned cryptocurrency technical and trading analyst, Tone Vays, is among industry influencers who believe the majority of overhyped projects are still overvalued. In his opinion, the cryptocurrency market must get rid of most of low fewer quality projects before any possible bull run can occur since such projects are unlikely to survive the current bear market.

As the audience is well aware, there are multiple use cases for blockchain technology. The world realizes this and there are a plethora of fantastic cryptocurrencies in existence that are seeing absolutely zero use even though they have strong use cases. Naturally, a significant portion of the crypto-community views cryptocurrency as a store of value and others simply use them as investment instruments but this is not sufficient enough to catalyze greater adoption of the blockchain technology the majority of tokens are built upon. Additionally, few of these use cases foster the actual use of cryptocurrencies like the payment use case does. What this means is if crypto-payments are the lynchpin to wide-scale adoption then crypto-payments technology needs to improve to the extent where the network can rival current non-blockchain based payment systems. Hence, it makes sense to put more effort into supporting quality payment-focused projects.

It’s not Rocket Science, but it is Complex…

One could say that discussing the need for competitive crypto-payments infrastructure is ‘kicking a dead horse’ but it is equally important to address the biggest stumbling block in the adoption of payment oriented cryptocurrencies. This has to do with exchanging different cryptocurrencies during the process of making payments as well as transferring the different tokens across different blockchains. The typical discussion about crypto-payments tends to revolve around fiat to crypto or crypto to fiat transactions, or how to convince people to acquire crypto securely and effortlessly in order to spend it on consumer goods. Making and accepting crypto payments has an added layer of difficulty that has not yet been resolved with a universally accepted solution. For instance, when merchants accept cryptocurrencies as payment, crypto to fiat exchanges are not the only difficulties they face. There is also the challenge of making crypto to crypto payments and exchanges on the fly without incurring loss of funds due to variable exchange rates of crypto-to-crypto pairings, exposing oneself to tax liabilities, or losing invaluable time to logging in, entering 2FA, waiting on transaction confirmations (which greatly vary between cryptocurrencies) and then making the swap (or in some cases sale) into fiat or a different cryptocurrency. In order to have a more bullish 2019 for the cryptocurrency community, such challenges will need to be tackled by various projects and a universally accepted solution is what the traditional financial and business sector will be looking for.

At the moment there are projects that are highly motivated to integrate hard solutions that will help crypto-payments reach the point where they can be adopted on an institutional scale. Some examples are the Lightning Network, Light Network, and DPoS. Additionally, there are also cross-chain payment projects that are working on solutions to improve the user experience of consumers, small businesses and institutions hoping to embrace digital currencies.

The Market Requires more than just ‘Proof’

Proof of Stake (PoS) is one of the more commonly adopted consensus mechanisms in the cryptocurrency space; the system essentially requires that the user prooves and maintains ‘stake’ in a pre-specified number of tokens. Block producers are chosen in a somewhat random method which is determined by a user’s stake. In exchange for their loyalty and labor, block producers, also known a ‘forgers’ are rewarded in transaction fees instead of tokens. In the spirit of constant improvement which is definitely required to propel cryptocurrencies to the next level, Delegated Proof of Stake (DPoS) was developed in order to improve the PoS consensus mechanism and make networks more efficient by addressing scaling challenges. DPoS speeds up transactions and block creation while preserving the decentralized nature and advantages that make blockchain superior to other networks. The magic of DPoS is that users are able to vote for ‘witnesses’ whom they entrust with validating transactions. Ideally, voters are then choosing trusted individuals to maintain the network and voters also have the option of ‘delegating’ their voting rights to other users. Ideally, within this democratic, decentralized system, users and validators are encouraged to maintain ethical behavior and infractions can result in the loss of reputation, voting and validation right and the income that is the result of transaction fees for block production. While this concept is ingenious, the payments sector does not require arbiters and morally upright validators, those looking to send and receive crypto payments need payments that are convenient, secure and quick.  

We’re getting close but not all the way there yet

Bitcoin is supposed to be the ‘King of all Cryptocurrencies’ and as would be expected of any sovereign, one must lead from the front. The kings and generals of days past would lead their men into battle and duke it out on the battlefield as a way to preserve honor and maintain the morale of the troops. Bitcoin’s opening salvo to push through the dreck and present itself as a legitimate payment option saw the development and launch of the Lightning Network. The idea was that increasing the capacity and speed of the Bitcoin network as a whole would make the digital asset a more suitable payment alternative that could favorably compete with existing traditional payment networks like VISA. The exponential growth seen by the network since it’s mainnet launch is expected to continue in 2019 and at the time of writing the network has a capacity of 448.47 BTC. This figure represents a 314% increase in 24 hours and there is also an 8.8% and 36.8% increase in the number of nodes and channels respectively. Improvements like the Lightning Network have made using Bitcoin more convenient and less costly to use. Adoption and use of Bitcoin have increased but not to the extent that the market requires.

What’s Hotter than Lightning? Plasma!

Similar to the Lightning Network, Plasma, a series of autonomous smart-contracts which will be built upon the main Ethereum blockchain, will help reduce congestion and high gas fees on the Ethereum blockchain. This is yet another innovative improvement on a DLT that addresses the scaling issue and readies cryptocurrency for mass adoption. The future implementation of Plasma will also facilitate the creation of more power dApps that are designed to solve real-world problems since developers can worry less about congestion and high transaction fees.

What’s Faster than Plasma? Light!

The Light Network is another innovative blockchain technology that has the capacity to take crypto-payments to the next level and actually acknowledges that cross-blockchain / cross-crypto payments is a real challenge hindering mass adoption. The network is designed as a foundational layer for the construction of decentralized applications and provides a tailor-made solution(s) to a host of problems. The Light Network has the advantage of facilitating interactions between the various applications built upon it and is also suitable for situations that require speedy development of applications.

For example, payment applications built on the Light network will allow users to make contactless payments for goods and services using fiat or cryptocurrency with QR or Near Field Communication (NFC). The QR-code system and the NFC technology were chosen by Foton, the creators of the Light Network, and users can make uber-fast transactions that are secure and effortless. Similar to Stellar Lumens, Stellar X exchange, the Light Network and its apps have access to a built-in decentralized exchange which allows users to use the platform’s native ERC-20 based token as the medium through which one can exchange or swap for other cryptocurrencies. This is actually a fantastic example of a solution that could effectively address the payment challenges plaguing the sector right now. If the Lightning Network, Plasma and Light Network would combine forces to offer a triumvirate style product that addresses, scaling, transaction speed, fees, and the universality of digital asset exchanges this would surely make it bulletproof and would lead to widespread adoption of cryptocurrency. What the crypto and traditional financial environment requires is a brand and blockchain agnostic solution that makes it easier for any person, business or institution to swiftly, securely and seamlessly send and receive any digital asset whether it be ERC-20-based, on Bitcoin protocol, a stablecoin, security token or any other type of digital asset that retains and reflects value.

In Order for Mainstreaming to come about, Adoption must be Easy

While this may sound callous, adoption should be easy…or at least easier. Adopting a baby should be easier and if it were more people would go through the process of adoption. The same rationale can be applied to cryptocurrency and cryptocurrency payments. Right now, regardless of what the expert developers and pro-crypto denizens believe, adoption cryptocurrency is too difficult. Point blank, that is just a fact. If if were as easy as they propose then more businesses, institutions and individuals would have done it already.

Bitcoin is not obscure. Bitcoin is not unknown. Bitcoin does not suffer from a lack of popularity. Even Jeff Sprecher, the CEO of the Intercontinental Exchange (ICE) and the Chairman of the New York Stock Exchange (NYSE) believes that Bitcoin has a bright future ahead as the according to Sprecher, “somehow Bitcoin has lived in a swamp and survived.” That says a lot, and Sprecher is not the only CEO or billionaire from the world of institutional finance that recognizes the growing value of Bitcoin and other digital currencies.

So, in a nutshell, the value is there, the theoretical and applicable use cases are there, but the merging of existing technologies into a bulletproof universal product that can be easily integrated into or better yet, replaces traditional payments infrastructure is not yet feasible. In order to achieve mass adoption, and perhaps another bull run in 2019, greater efforts and attention must be paid to new protocols focused on facilitating super-fast, universal transactions.

It makes sense to assume that as more individuals use cryptocurrency for payments, the crypto community will transition from the casino-like speculation that thrives on hype and illusions of market cap grandeur to the development of products that can be easily applied in everyday life. Real positive change will not come as a result of the name calling and criticism by one blockchain startup of another but from the collaboration, promotion, and support of projects that push for a real-world use case that is easily adopted. As reviewed earlier in the text, there are a handful of fantastic projects which are already on the path to delivering very useful solutions. In general, the cryptocurrency space would benefit immensely from each developer supporting such projects.

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