Year in review: Killer apps have not yet appeared, compliance is still insufficient, 2020 still needs work

2019 is fleeting, and a year of bleak market disappoints practitioners. However, "there is no way of knowing the good fortune", the cold winter may motivate the practitioners to move more steadfastly and work hard to achieve their ambitions. To this end, Cointelegraph interviewed members of the cryptocurrency community to learn about the unfulfilled promises of the cryptocurrency industry in 2019.

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Is there any progress in the adoption of cryptocurrencies?

Nouriel Roubini said last year that "the blockchain still has only one application: cryptocurrency." To this day, many people in the industry are still waiting for the killer application of blockchain. Lanre Sarumi, CEO of cryptocurrency derivatives exchange Level Trading Field said:

What is most disappointing in 2019 is that no groundbreaking project has appeared that can open the eyes of people who question the blockchain. Libra is the closest one, it has a big vision, but it is not really realized in 2019.

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Of the 50 top fintech companies listed in Forbes this year, only 5 cryptocurrency and blockchain companies were shortlisted, including Coinbase, Ripple, Bitfury, Gemini, and Circle, compared with 11 in 2018 .

The blockchain industry is still looking for the emergence of killer applications. Chris Hart of Civic Technologies said in a recent report:

People need a simple use case like email to understand the advantages of blockchain technology simply and clearly.

Few institutional adoption cases

Killer applications, scalability, and institutional adoption are the three elements missing from the widespread acceptance of blockchain. With the addition of institutions such as Fidelity and Bakkt, some progress has been made on institutional adoption of cryptocurrencies in 2019. But is this enough?

Sarumi told Cointelegraph:

The failure of the cryptocurrency market to attract institutional investors is certainly disappointing. Bakkt's futures contracts were specifically designed to attract institutional and retail investors, but the response was modest. In addition, the recently launched Eris (credit and interest rate) futures have performed poorly.

Consumer adoption lags

Many experts believe that the availability of related applications must improve before the wider adoption of cryptocurrencies and blockchains by the public. In Zage's survey of 102 blockchain technology project leaders, 41% of respondents believe that the seamless user experience is the key to large-scale adoption of cryptocurrencies and blockchain. The DApp experience needs to be like the user experience of the Internet and mobile phones. Kory Hoang, co-founder and CEO of a stablecoin platform, said:

At present, most blockchain and cryptocurrency products have high usage thresholds, and users need a lot of expertise to operate.

According to Stephen Pair, CEO of Bitpay:

If we want more people to accept cryptocurrency, we need to make it easier to use. For example, users do not have to directly manipulate the Bitcoin address when transferring money. If we can solve similar problems in accordance with industry standards, then the status quo will definitely improve.

Pair is also disappointed with the portfolio of products currently purchased by users using cryptocurrencies:

I want to see more users paying for daily consumption and services with cryptocurrencies, such as paying for mobile phone bills or paying DirecTV bills.

He also said that people tend to spend bitcoin when prices are high, such as buying expensive goods such as Lamborghini. There is nothing wrong with this, but he still hopes to see more people use Bitcoin for daily necessities.

Insufficient compliance

Compliance is still a big issue in the cryptocurrency and blockchain space.

In late November last year, a report from security company CipherTrace revealed that about 65% of the top 120 cryptocurrency exchanges did not support KYC (know your customers).

In addition, 24% of exchanges have "poor" compliance, and CipherTrace researchers have found that these exchanges can easily withdraw 0.25 bitcoins per day without requiring users to authenticate.

Henry ArSLANIAN, PwC's global cryptocurrency leader, told Cointelegraph:

In 2019, those who open cryptocurrency exchanges without supporting KYC or AML (Anti-Money Laundering Law) did not take into account the future of the cryptocurrency ecosystem at all. Regulatory non-compliance, especially anti-money laundering, remains a major obstacle to the widespread acceptance of cryptocurrencies. A large-scale anti-money laundering or sanctions violation scandal is enough to obliterate years of community effort (that is, cryptocurrencies are not just the Silk Road or the Dark Web).

The industry must not only comply with regulation, but also embrace regulation, Fønss Schrøder, CEO of Concordium Blockchain Solutions, told Cointelegraph:

I am convinced that the blockchain projects of large companies will stay in the proof-of-concept stage until they are approved by the regulatory authorities. Businesses need to be recognized by regulators.

Education for All

The mainstream misunderstanding of cryptocurrency and blockchain technology still exists. When Nordic Bank banned its 31,500 employees from trading in bitcoin or other cryptocurrencies, the bank told Cointelegraph in December last year that it was concerned that employees might "participate in unethical or completely illegal activities."

In this regard, Schrøder states:

Most people are still worried about the ubiquitous blockchain, cryptocurrency and ICO scams. In the blockchain field, we have a responsibility to jointly educate business leaders and tell them what blockchain is, and more importantly, it can help businesses and What the agency does.

In order to cooperate with the academic community to promote the use of blockchain, in late December 2019, Concordium announced the establishment of the Blockchain Academy Network.

Nick Saponaro, co-founder and CIO of the Divi project, added in an email to Cointelegraph that the industry needs to better publicize:

The industry's educators and conferences have failed to attract more people. Expensive ticket prices and luxurious venues have kept the general public away.

Crypto-related crimes still exist

CipherTrace's report states that cryptocurrency-related crime declined significantly in the third quarter of 2019. But "a large number of cryptocurrency crimes still occurred in 2019, which has caused $ 4.4 billion in losses so far," compared with 2018, there is still a significant increase.

Theft, hacking and scams

Chainalysis details several large-scale fraud and fund misappropriation cases in 2019: $ 2.9 billion involved in PlusToken; $ 192 million in QuadrigaC; and $ 851 million in Bitfinex. Among them, the Ponzi scheme PlusToken is likely to disrupt the cryptocurrency market, Chainalysis reported on December 16 that:

We believe that those scammers may drive down the price of Bitcoin when they clear stolen funds through OTC brokers.

Shortly after Chainalysis's report was published, the price of Ethereum fell by 10% in a matter of minutes-some believe this is what PlusToken did. According to a report from Cointelegraph on December 19, several large-scale transfers related to PlusToken will put Ethereum under greater selling pressure. The industry obviously needs more self-monitoring. Arslanian says:

As a community, we need to do a better job of identifying those garbage projects.

Integrity issues

According to Saponaro, the most disappointing thing for him in 2019 is the lack of integrity in many projects. "Ponzi schemes, market manipulation, and extortion still exist in this area."

PwC's Arslanian said that the cryptocurrency and blockchain communities have always lacked integrity, which has hurt the industry's reputation.

Hartman Captital's managing partner Felix Hartmann said:

"Those who are willing to make a long-term deployment, whether it is creating a community or putting technology and usability first, are more likely to succeed."

Gains and losses in 2019

Civic co-founder and CEO Vinny Lingham told Cointelegraph:

When the cryptocurrency community looks back on 2019, maybe it's just more disappointment that comes to mind. This is not surprising, because 2017 was a landmark year. But the bigger the foam, the more harmful it is when it breaks. We have not completely escaped the effects of the last bubble burst.

Sarumi stated:

After the cold winter, the departure of speculators will make true believers roll up their sleeves and be practical, realizing the true value of blockchain and cryptocurrencies.

However, one may underestimate the progress made this year. An industry executive told Cointelegraph that we are only seeing the tip of the iceberg. Once these blockchain projects reach a certain scale, "in the next three to five years," people will see the great value it brings.

Sarumi concluded:

Maybe it takes more time for cryptocurrency and blockchain technology, and I think it is most disappointing that no killer applications have appeared this year. Hope that things will change in 2020!

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