Original title: "Pantera partner Paul 韦拉迪塔基 Special: 2020 Industry Forecast encryption" (Pantera Partner Paul Veradittakit's Crypto Predictions for 2020) Author: Paul Veradittakit, investment institutions Pantera block chain partner Translator: Lu Jiangfei
Lianwen was authorized to publish by the author
2019 is an incredible year for the blockchain and cryptocurrency industries.
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In the past year, we have experienced huge market fluctuations, regulatory disputes, financial scandals, U.S. Senate hearings, and various key abstract technologies that have provided powerful support for many interesting applications.
In fact, for 2020, almost every cryptocurrency practitioner has high hopes, because people have already seen innovations in 2019 that have made cryptography use cases more diverse, and some important areas have also been improved. The technology and complexity of the crypto industry have made tremendous progress.
Paul Veradittakit, Partner of Blockchain Investment Agency Pantera
Accuracy of the review over a year ago
One year ago, I made similar predictions for the development direction of the blockchain in 2019. Below I will first review the performance of the previous related indicators in the past year, and score the prediction accuracy according to the 1-5 level. 1 The score represents the least match between the prediction and the actual result, and 5 represents the most accurate prediction.
Merging (forecast accuracy: 4 points)
Some major acquisitions took place in 2019, which also greatly promoted some of the most important crypto projects of the year. Among the most notable acquisitions include:
1. ConsenSys's acquisition of Infura, Infura mainly provides Ethereum node hosting services; 2.Coinbase's acquisition of Neutrino, which is a crypto industry analysis company; 3. Facebook's acquisition of Chainspace, most of Chainspace's employees participate in Facebook digital currency Project Libra works with digital wallet company Calibra.
Security token issuance (prediction accuracy: 3 points)
From an institutional perspective, many important securities tokens (STOs) have achieved effective growth, such as:
1. Blockstack, the first STO blockchain project approved by the U.S. Securities and Exchange Commission; 2. The World Bank issues Bond-i worth $ 33.8 million; 3. Santander Bank of Spain on the Ethereum blockchain Issuance of US $ 20 million bonds; 4. Asia's largest real estate investment trust launched Link REIT through cooperation.
However, although this area has developed, it is slow for two main reasons:
1. Regulation is still a concern; 2. In addition to relatively high liquidity, STO cannot add value and is not enough to attract most investors to switch to STO.
Death of ICO (prediction accuracy: 5 points)
It turns out that compared to 2018, there are very few initial coin offering (ICO) projects in 2019. You know, there were no ICO projects listed in August and October 2019, and there were 160 ICO projects in January 2018. However, from the perspective of the average financing scale, the average amount of funds raised in ICOs in 2019 was more than 6.8 million US dollars, compared to only 132,000 US dollars in 2018. There are three main reasons why ICOs are becoming unpopular:
1. More and more worried about the funded ICO projects; 2. There are many regulatory obstacles to selling ICO tokens; 3. Crypto bear market.
Institutional capital entry (prediction accuracy: 2 points)
As society becomes more aware of cryptocurrencies, compared to the past few years, more institutional investors are interested in cryptocurrencies in 2019, and they are also starting to invest in the market. such as:
1. JPMorgan Chase launched the stable currency JPM Coin; 2. Fidelity International launched its subsidiary Fidelity Digital Assets; 3. Other major institutions such as Goldman Sachs and the World Bank also Started a "low profile" exploration of some proposed cryptocurrency projects.
Despite this, we still don't see too many substantial projects in the field of encryption, but as the encryption technology continues to mature, the traditional financial giants will definitely be more and more interested in this field.
Expansion (prediction accuracy: 5 points)
Expansion is an important issue for the crypto industry in 2019, mainly sharding and payment channels.The growth of Lightning Network is one of the most critical tools in the decentralized application development wave in 2019. Developers are no longer concerned about the high cost and low speed of blockchain, but have tried to use other functions to provide users with similar convenience to traditional development platforms. Similarly, we can also see some abstract work for developers, such as the Alchemy API.
Seven key areas to watch in 2020
For 2020, there are some key blockchain and cryptocurrency concepts and projects that will make great progress, and my ideas will be discussed below:
Libra and its digital wallet Calibra
In 2019, Facebook announced the launch of its own digital currency project, Libra, and said that it would integrate this digital currency into the new digital wallet platform Calibra and related product suites, such as Facebook social network and instant messaging application Facebook Messenger and WhatsApp. If this thing goes smoothly in 2020, it may be the world's most successful and largest mainstream cryptocurrency release and use case. Facebook's user base is very large, with a size of at least 2.45 billion. Calibra may provide an easy-to-use and convenient platform for these users, allowing them to use their Facebook account for single sign-on to perform mutual payments, online payments, etc. operating.
Although many Facebook users have little background in using cryptocurrencies, such a large-scale digital currency release will give millions of users a completely new idea that everyone can manage their assets and make payment transactions with cryptocurrencies. At the same time, the release of "Libracoin" is also a good test, because many people think that cryptocurrencies cannot be widely used on a large scale. However, Libra and Calibra need to have an important dialogue with lawmakers on regulatory and data privacy issues, and David Marcus, the project's leader, has attended multiple hearings in response to questions from the U.S. Senate. In fact, Facebook's data scandal has been criticized by Congress and regulators, which also highlights that platforms such as Libra / Calibra need to have corresponding strong privacy features and necessary optimizations.
Bitcoin block reward halved
For Bitcoin, the second half of 2019 will not be easy. Although the price of Bitcoin reached a high of $ 13,000 in mid-2019, it quickly fell back to about $ 8,000. But in terms of the full-year dimension, the price of Bitcoin has almost doubled compared to the beginning of this year. More importantly, Bitcoin block rewards will be halved in May 2020. In simple terms, halving block rewards is a protocol built into Bitcoin that aims to "halve" the rewards miners receive for mining a block every few years, thereby forcing the total amount of bitcoin to be limited to 21 million " Hard cap. " After the next block reward is halved, the reward for mining a bitcoin block will become 6.25 BTC. If calculated at the current bitcoin price, it will be about $ 40,000.
Halving the Bitcoin block reward may bring a huge bull market to the market for two main reasons:
- First of all, in terms of perceptualness, "halving" means that the remaining BTC supply is reduced, and materials are scarce and expensive. This will also allow investors to foresee that each new unit of BTC mined will have higher value;
- Secondly, due to the decrease of Bitcoin mining rewards, it may lead to fewer miners verifying transactions and mining on the blockchain. Therefore, compared with the status quo, miners will become relatively scarce, which will also promote Bitcoin Value increases.
The halving may keep the price of bitcoin relatively high throughout 2020 and may bring more confidence to the entire cryptocurrency industry.
Game developers and enthusiasts have also begun to explore blockchain, hoping to understand what advantages this emerging technology can bring to their gaming systems, and how to integrate crypto assets into games. Then, the advantages that blockchain technology can provide are:
1. Ways to provide technical resources; 2. Support for built-in purchase functions of different player assets, credits and other games.
Nowadays, some related products can be seen in the market. For example, Splinterland on Steem and Enjin have started to cooperate with Microsoft's Microsoft Azure Heroes, but we still have a lot of work to do.
Blockchain games may rise in 2020, because some games could not use blockchain technology well in the past, but now we have better architecture smart contracts, second-tier solutions, and abstract infrastructure / Digital asset storage, all of these high-performance tools make it easier for game developers to build digital assets in gaming and character experiences. If game platforms such as Steam or Twitch can use blockchain technology, it will be very helpful for mainstream promotion, and it will also bring blockchain technology into the horizon of ordinary players.
There is no doubt that one of the biggest growth areas of the cryptocurrency industry in 2019 is Decentralized Finance (DeFi). I expect this trend will continue until 2020, and the monthly active users of services such as Maker, Compound, InstaDapp will grow, and the value locked in these DeFi products will also increase, and mainstream consumers and cryptocurrency enthusiasts will be more Actively explore the potential of DeFi in the real world-borrowing, mortgages, retail payments, arbitrage, and more.
DAI may become the "stable currency standard". Due to strong performance in 2019, mainstream users have set high expectations for DAI's potential growth performance in 2020. Due to the earlier shift from single-collateral DAI to multi-collateral DAI, we may also see more users join its platform, and the collateral behind DAI will also become more diverse, all of which provide DAI as a stablecoin Important advantages. In addition, consumer financial products and large banking institutions have an increasing interest in blockchain-we are eager to see more growth in this area in 2020.
Central bank digital currency
The central bank's digital currency is unlikely to happen in the United States, but China is expected to launch "digital RMB" in early 2020 and will support various users such as loans, retail payments, taxation, etc. The central bank digital currency is not strictly a "cryptocurrency" because it is provided through a centralized institution, but the central bank digital currency represents the global central bank's interest in the transformation of the online financial ecosystem. "Digital RMB" is a positive signal that people will see the performance of digital assets in mainstream use cases-especially on online platforms such as Alibaba and Baidu.
The central bank's digital currency may indicate that people are full of confidence in the field of digital finance and will eventually bring greater confidence to the cryptocurrency and DeFi industries.
Infrastructure and Web 3.0
For blockchain infrastructure solutions, some key developments have also been made in the past 2019, including:
1. The development of Lightning Network has provided speed and scalability improvements for distributed applications; 2. Alchemy provides a set of application program interfaces (APIs) and infrastructure tools, which greatly simplifies the decentralized development process.
These advances are likely to bring a new wave of decentralized applications and Web 3.0, with support for abstraction and enhanced simplified development.
With the growth of cloud technology and Software as a Service (SaaS) technology in 2020, we hope to see more decentralized computing platforms, such as Orchid, a VPN configuration solution based on a decentralized digital token system. At the same time, decentralized computing will also expand to more consumer-oriented use cases, such as privacy-centric browsers, games, social networks, and information retrieval services.
Whether it is a crypto project that has been launched in 2019 or an upcoming crypto project in 2020, with the increase in diversity, these emerging technologies are bound to encounter some regulatory obstacles. Some key factors that need to be noted include:
1. Supervise technologies that employ zero-knowledge proofs (such as Zcash), as this technology will provide a powerful and difficult-to-supervise tool for financial crimes; 2. As blockchain and electronic digital finance become mainstream, regulation will focus on Data privacy issues, such as concerns surrounding the release of Facebook's digital currency "Libra"; 3. Regulators will continue to debate how to identify specific tokens, currencies, and securities and commodities.
The nuances between crypto projects are getting more and more specific. Therefore, we hope that regulators will learn more about these projects so that they can understand the nuances and how these projects will affect regulation and characterization.
Emerging things like cryptocurrencies, it is difficult to accurately predict what will happen in 2020-some projects have achieved great success, some projects have suffered fatal failures; some cryptocurrency prices have skyrocketed, and some cryptocurrency prices are Forced to return to zero; there are incentive debates and a test of confidence in the blockchain industry.
Regardless, I believe 2020 will be the most important year for the blockchain and cryptocurrency industries, and I will also see many incredible innovations. I wish you all a Happy New Year!