Cryptocurrency is officially here to stay. In 2017, Bitcoin was deemed more popular than Beyonce. By mid-2018 there has been a cycle of cryptocurrency coverage by every major publication.
In the past year, the crypto-space has seen an influx of new startups accompanied by coin offerings. With cryptocurrency growing to the point of no return, here are four trends to keep an eye on.
Gravitation to DEX
Although some market experts believe that decentralized exchanges are not yet ready for widespread adoption, the rise of decentralized exchanges is in the near future.
Factors contributing to decentralized exchanges:
1. Cryptocurrencies are becoming mainstream
Cryptocurrencies are rapidly gaining popularity. In fact, there are more than 16 million Coinbase accounts alone. However, centralized exchanges, like Coinbase, are prone to hacks.
2. Centralization defeats the purpose of cryptocurrency
Traders have gravitated to centralized exchanges because of their liquidity and user-friendly experience. However, the KYC (know your customer) process requires customers to submit identifying information. Although this information is beneficial for government regulation, it works against the ethos of cryptocurrency.
3. An increased focus on DEX
In July 2018, Vitalik Buterin, creator of Ethereum, infamously proclaimed “I definitely hope centralized exchanges go burn in hell as much as possible.” Buterin is not alone in his frustration; Reddit is filled with users voicing complaints about centralized exchanges.
There are a variety of decentralized exchange projects set to launch by the end of 2018. Some of these projects are completely new developments, like LQDEX - which promises a trustless, cross-chain exchange. Other projects are stemmed from existing namesake brands - Binance recently announced development of Binance Chain, which is expected to be a decentralized exchange.
Coins with Utility
The number of cryptocurrencies will inevitably increase as the ecosystem matures. CoinMarketCap currently lists more than 1,600 coins, but many of those coins lack practical use cases. Bitcoin will ultimately continue to reign supreme, and only the future will determine which coins are ultimately valuable - however, it is likely coins with real, functional use will see an increase in value.
Reasons why coins with utility are worthy of an investment:
1. Scamcoins
There is no denying there are are a bevy of scams and pump-and-dump coins. It is plausible that some of these coins have gained traction because newbies are searching for “the next bitcoin.” As the public educates themselves about coin value, they will gravitate towards coins that have a use case. Coins that are developed simply to be another coin will not flourish in the long run.
2. History Repeats Itself
While bitcoin has maintained a steady interest from investors and media, projects like BRIG have dirtied the crypto atmosphere. BRIG was a “scam coin that totally collapsed,” investors lost large sums of money according to DeadCoins, a site that specializes in failed crypto projects. There is no sure-fire way to determine whether a project will take off, but if the coin corresponds to a usage, it is more likely there will be some longevity.
Mainstream Adoption
New research from London’s Imperial College of Research has found that cryptocurrencies have the potential to become a mainstream form of payment in the next decade. William Knottenbelt, Professor of Applied Quantitative Analysis says “the world of cryptocurrency is evolving as rapidly as the considerable collection of confusing terminology that accompanies it. These decentralized technologies have the potential to upend everything we thought we knew about the nature of financial systems and financial assets.”
The cryptocurrency industry is an exciting roller coaster. Decentralized exchanges, utility coins and mainstream adoption are trends to keep an eye on in 2018.