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Where do cryptocurrencies and blockchain tech go from here?

So for these reasons, we see a bright future for blockchain, for cryptocurrencies, and for Bitcoin, although we suspect that other altcoins will overtake it in popularity and in real-world uses.

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Image: Flickr / PerfectHue

2018 has been a bumpy ride downhill for cryptocurrencies, with prices of altcoins like Ethereum, Litecoin and of course Bitcoin being cut in half from their pre-Christmas peak.

More and more governments and financial watchdogs are making threatening comments on clamping down on the use of cryptocurrencies. Large online vendors such as Steam and Microsoft no longer accept BTC as a payment method, due to slow and expensive transactions.

Altogether, the future of cryptocurrencies looks a lot bleaker than it did 2 months ago when every new day seemed to bring a new high in Bitcoin, and a new newspaper article about how blockchain was going to revolutionize everything from health to voting to the legal profession.

So where do cryptocurrencies and the technology behind them go from here?

Despite the much-publicized decisions of Steam and Microsoft to stop accepting Bitcoin as a payment method, there are more and more industries which have started to embrace cryptocurrencies.

For example, mobile casinos which accept bitcoin as both a payment and withdrawal method have become more and more prevalent in recent months. This is particularly true for US-facing casinos since cryptocurrencies bypass the financial institutions which are prohibited from dealing with gambling firms.

And while it is true that transaction costs and speeds on Bitcoin have spiraled in the past year, other currencies do not pose this problem.

While Bitcoin is the first and most famous cryptocurrency and thus gets most of the attention, there is now space for faster and more nimble players such as Ethereum and Litecoin to make a serious dent into the payment processing space.

New innovations such as Coingate and Coinbase allow for seamless transfers to and from debit cards and bank accounts to a wide variety of altcoins. Although some banks have made noises about stopping customers from transacting with cryptocurrency exchanges, the likelihood here is that banks themselves will enter the exchange space and will use bigger transaction spreads to mitigate any risks.

In terms of government regulation, again, we see a lot of hot air about what the authorities claim they would like to see, while their actions (or rather, inactions) speak rather louder.

The arrival of Bitcoin futures on the Chicago Merc will – eventually – reduce volatility and dampen the fears of people losing their shirts in one afternoon of trading.

Although Jamie Dimon of JP Morgan thinks that cryptocurrencies are stupid and will lead to the financial ruin of anyone who buys it, his own bank is busy setting up its own exchange.

US Financial regulators this week suggested that altcoins start to regulate themselves, in a clear divergence from calls for the SEC to oversee Bitcoin and Ethereum.

The bottom line is that we should look at what authorities are doing, not what they are saying, and when we do this, we see that governments are adopting a very light touch in regard to Bitcoin and cryptocurrencies.

Will the government shut down the altcoins? Not for a long time yet.

On a wider scope, the blockchain tech which underpins Bitcoin certainly seems to have a rosy future.

The Blockchain has the ability to cut out the middleman in financial transactions and could cause dramatic shifts in the way the finance and other industries conduct business.

As a blockchain is a digital distributed ledger, the information is incorruptible and unchangeable, making it perfect for high-value transactions such as buying property, bypassing the need for realtors and lawyers getting involved.

It may also threaten the need for stockbrokers, mortgage brokers, and ticket dealers, and as businesses are always looking at ways to cut costs, they will look at ways of implanting the blockchain to reduce headcounts.

So for these reasons, we see a bright future for blockchain, for cryptocurrencies, and for Bitcoin, although we suspect that other altcoins will overtake it in popularity and in real-world uses.

Just another guy who likes to write about tech and gadgets.

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