What a shake out it’s been! 2018 has most certainly been the year of the shake-out, with people from all across the crypto spectrum running for the hills. From blockchain developers, crypto fund managers, and the average man on the street, the industry is littered with people and organisations who just haven’t been able to stay afloat in this brutal bear market.
Having said that, though, there are still countless individuals and companies alike who remain firmly committed to seeing this technology thrive, and are pressing on through the pain and blood to (hopefully) emerge victorious at the summit of the next crypto bull run. And at this rate, we could wait as long as another 2 years before we see that happen.
There is no doubt that 2018 has been a much harder, and far more boring year than 2017. 2017 was a year where everything happened. You could invest in literally “s**tcoin” and see your money grow by 1000% in 2 months! Those days are long gone, and 2018 has been the year where the real work has begun. People who are truly “in it” for the technology have hung around to build on what matters most to them. From privacy projects to a new monetary system, blockchain needs passionate developers and entrepreneurs who see the immense opportunity for society – and are willing to make serious sacrifices in order to see those opportunities realised. 2018 is the year those sacrifices started to happen for a lot of people.
And it’s with this in mind that we consider that 2018 has been an incredibly important year. With much more work being produced with true value and meaning, we are now seeing what the blockchain industry is made of. We’ve seen crazy things this year, so let’s review the 10 biggest stories from one of the hardest years to date for the industry:
10- HTC Launch World’s First Blockchain Phone
The Exodus 1 was alluded to by HTC back in May, and they officially announced it on 23 October, to much fanfare and noise in not only the blockchain industry, but the tech industry as well. HTC seem to be taking the blockchain seriously, seeing a decentralized future a very real possibility. Their “decentralized division” seem to be the unit that thought up the world’s first “blockchain smartphone”, and HTC trust their division enough to roll it out.
Shipping with a 6 inch display, 6gb of RAM, a Snapdragon 845 processor, a 16 megapixel dual camera, and 128gb onboard storage – this is not some entry level experiment. This is a high end phone looking to speak to an entirely new industry, something HTC are considerably good at. Their “Decentralization Chief Officer”, Phil Chen, joined the company in 2007 and led the company to release the world’s first Android phone, the first GPS phone, as well as the acquisition of Beats by Dre.
This news was pretty significant for the Blockchain industry, not only because it’s the world’s first blockchain phone, but because of how seriously a tech giant like HTC are taking blockchain.
9- Floyd Mayweather and DJ Khaled Busted By The SEC
This news was big because influencers of this stature were brought to account by what must be the equivalent of a mosquito flying around their ear. The SEC are small fries when you’re playing in the big leagues of the Nevada gambling board and Pay per View regulation. But despite that, Floyd Mayweather took the charges seriously, as did his co-accused DJ Khaled.
Everyone in the cryptosphere knew that Mayweather and Khaled promoted a scam ICO in 2017, but because it’s become such commonplace in the industry, not much of us thought anything of it. But the SEC wanted to make sure an example was made. And in November this year they announced they had charged the two high profile icons with “touting a security without disclosure”, citing that the two had both promoted the Centra ICO on their Instagram pages, without disclosing to the public that they had been paid by the company (Centra) to do so.
Both settled out of court, with boxing legend Mayweather paying $300,000 in disgorgement (reimbursement of his promotion fee), a $300,000 penalty and $14,775 in interest. While music icon DJ Khaled paid $50,000 in disgorgement, a $100,000 penalty and $2,725 in interest. Proving that the ICO party was well and truly over.
8- Maduro’s Venezuelan Petro
This was one of the big stories of the first half of 2018, with the Petro getting announced on 20 February. It made sense that the world’s most unstable economy, Venezuela, would launch a cryptocurrency of their own – they had to try anything to keep them afloat. The Petro was backed and owned by the State, and was apparently to be backed by Venezuela’s gold, oil, and diamond reserves.
The story has lingered and turned throughout the year, but was brought back to mainstream attention when President Nicolas Maduro announced the cryptocurrency in an elaborate, televised press conference in October. While it seemed as though his government had crafted a convincing narrative of economic independence and sovereignty, the Petro is yet to offer up much hope in changing the bleak outlook of the forsaken nation.
What the Petro does show is that world leaders are keenly aware of the blockchain’s ability to offer new economic avenues. Hopefully the next government to launch a national cryptocurrency isn’t quite as corrupt as Venezuela.
7- Walmart’s Leafy Green Blockchain Project
2018 was a rough year for leafy green suppliers in the USA. A number of outbreaks of eColi were traced back to Romaine Lettuce, and grocers across the world’s largest economy were scrambling to isolate the problem.
In the midst of this scramble, the world’s largest company by revenue Walmart realised how inefficient their supply chain tracking system was, and decided to move with the times. Recognising the power of blockchain to efficiently, accurately and confidingly track their entire supply chain, Walmart issued a letter to all of the suppliers and contractors that made up the entire supply chain. From seed provider to courier. The letter, which you can read here, stated all contractors had one year to be registered on a new blockchain-based database.
Are you starting to see a pattern? HTC, Venezuela, Walmart. And we’re only on no. 7. Blockchain has made its impact.
6- Roger Ver vs Craig Wright
Oh how the wheel turns. Roger Ver was one of the biggest Bitcoin evangelists before the technology went truly mainstream in 2017. And then he and a group of developers wanted to implement larger block sizes (among other changes) to the Bitcoin protocol, and an ugly and very public hard fork ensued. With Roger’s outspoken and at times downright black-hat media tactics, he’s turned into public enemy no. 1 for many of the Bitcoin community.
But not a year later, almost the exact same thing happened to him, with one of his biggest allies Dr Craig Wright turning against him – over a similar issue: Wright is worried new upgrades would compromise on network scaleability. It has resulted in a very public, ongoing war, which includes (now former) Bitmain CEO Jihan Wu and a number of other prominent BCH developers.
The hard fork debate took up much of 2018’s crypto narrative, and since it happened on November 15th, has been keenly watched by all sides to see where the hashing power would be most focused. As the debate rages on between the two very public figures, Ver’s BCH seems to have won the battle, with Calvin Ayre (wealthy supporter of Craig Wright) all but conceding defeat in a press release published in late November.
If this war did anything: It actually showed the futility of Roger Ver’s claims of Bitcoin Cash being the real Bitcoin.
5- Facebook Announce Crypto Payments Trial For Whatsapp India
It seemed to come out of nowhere. Facebook have been broiled in privacy regulation controversy for longer than a year, but lest we forget that they are still building! News leaked that they had started a Blockchain division in May of 2018, but after that, nothing. Until early December.
Bloomberg uncovered an operation to rollout a trial of a cryptocurrency within Whatsapp in their Indian region. It was welcome news in a year of crashes and capitulation, but whether it will prove good for much of the industry’s vision for a truly decentralized economy is probably a long shot. Nonetheless, Facebook once again proved that if it’s innovative and transformational, they’re on it. And with a Blockchain division hiring at breakneck speed, they’re going to be on it in a big way.
4- South Africa’s Project Khokha
This is by far South Africa’s biggest development in the Blockchain industry to date. A partnership between Joseph Lubin’s ConsenSys, the South African Reserve Bank, and SA’s 7 biggest banks, seems like either a match made in heaven, or a story out of monopolithic hell, depending on what side of the fence you sit ideologically.
But the bottom line is: The South African Reserve Bank convinced the Top 7 banks in SA that Blockchain is a pretty sure bet as the future of finance. And they bought into it enough to trial crossbank payments on the Blockchain. With a standard crossbank payment taking at least 24 hours on a working day to process, the thousands of transactions able to be processed per second between banks on the Blockchain could radically change the economic landscape in South African industry. And from what I hear in the Southern African industry, there are some very interesting developments to come. Watch this space.
3- The SEC’s Positive Announcement On Bitcoin And Ether
Again, in a year of bad news and abandonment, this one couldn’t have come at a more pivotal time. The SEC’s go-to man for the crypto industry, William Hinman, announced at a Yahoo Fintech speech in June of 2018 that Bitcoin and Ether were not securities, and that they wouldn’t come under strict regulation that applies to such securities.
Due to Ether and Bitcoin not having centralized authorities, Hinman said this excludes them from the definition of a security. But that didn’t stop him from warning the hundreds of crypto entrepreneurs that most ICOs were deemed securities based on the same rule: a central authority.
2- $6000 Price Capitulation
The Bitcoin price has been going nowhere. It was boring and lifeless. Hovering between $5800 and $6400 for almost 2 months. Eventually becoming less volatile than the oil price and the S&P 500 for a month. But as SA Crypto’s financial analyst said on numerous occasions, the less volatility meant a big move was coming – and in the context of a bear market, it was most likely to the downside.
And sure enough, he hit the nail on the head. On Wednesday 14th November 2018, the consistently hammered support of the $6000 zone was breached, and breached violently, where it briefly stopped at $5500 only to completely capitulate a week later to a new year on year low of $3700. The capitulation was grand, with cryptos across the board getting absolutely slammed.
December 15th was the lowest prices we saw for over a year where ETH hit $85, XRP slumped to 28c, Litecoin touched $28, and EOS saw $1.60. Prices have since recovered somewhat, but that month-long downward break was pretty painful for a lot of hodlers.
There’s a good chance we see some more downside in the coming months, as we are still in an entrenched bear market, but there’s also the possibility that December 15th was the bottom. But, as our analyst Graeme Tennant says, trading is about the balance of probability – and the probability at this stage is that there is more downward price action to come. What lies in store for 2019 I believe is at least higher prices than our current prices of today, 31 December 2018, but by how much can only really be determined as we go.
1- The Great January Crash
This time last year, crypto enthusiasts the world over were on cloud 9. Many of them were sitting on 1000% gains and more, and every grandmother and her dog were trying to get in on the action. That was probably the sign to get out. And the big boys that knew that did so in December 2017 through to January 2018.
By December 17th 2017, the Bitcoin price touched $19,800, and the cryptoasset marketcap was nearing a trillion dollars. But what followed was a hefty selloff, with many analysts assuming it was simply a case of numerous profit takers.
And when the price rallied back to $17,000 by January 6th, many thought that we were back in business. But it turned out that it was just another opportunity for profit takers to capitalize on their gains, and this time contagion set in. The Bitcoin price alone almost halved in 10 days, losing $7000, and by then the writing was on the wall that the market had turned.
Continuous bounces off resistance as the market tried to recover throughout the year only served to confirm that crypto Winter was coming, and by March it was clear we were in a full blown crypto bear market.
Since then hodlers have tried to occupy their minds with other things, while traders have turned to derivative markets like Bitmex to take advantage of the falling prices. While many have completely abandoned the space altogether.
I’ve heard a lot of people of late tell me that there isn’t much hope for Bitcoin and cryptocurrency, and have had the odd snark and gasp among your average man on the street. This is a sure sign we’re getting close to the absolute bottom of this bear market.
But this Winter we’ve been in shouldn’t deride from the fact that we have seen some incredible developments in the industry this year.
There are some very, very smart people working on Blockchain projects that will change the world we live in. And I count myself privileged to serve this industry in South Africa in some small way.
We at SA Crypto have a number of exciting plans in the year ahead, and like the industry itself, we cannot wait to see how it all pans out!
Happy New Year.