The technical director of the Ripple and one of the creators of the Interledger payment protocol, Stefan Thomas, shared with CoinDesk's his thoughts on what awaits the crypto-currency and blockchain industries in 2018.
According to him, the market of initial coin offerings (ICO) will decline, and traditional financial institutions will use digital assets increasingly .
Death of ICO tokens
According to Thomas, the crypto currency was a "buzz word" in 2017, which provoked a rapid increase in the total capitalization of digital money (now it exceeds the equivalent of the largest US bank JPMorgan) and the number of ICO. However, he is confident that in 2018 this direction in the industry is expecting a serious decline.
In particular, crypto-currency fund-raising campaigns attract more and more attention of regulators, and many turned out to be fraudulent. Stefan Thomas is confident that in the future this will lead to legal proceedings, fines and even prison terms for unscrupulous ICO organizers.
In addition, he raises the question of the appropriateness of specialized tokens. For example, why should companies accept Filecoin when ordinary tokens of "general purpose" can boast of higher liquidity and simplicity of transferring to fiat? People do not use separate currencies to buy clothing or electronics, and ICO token holders will eventually realize that the same economic laws apply in the digital world, Stefan said.
Financial institutions will use cryptocurrencies
If in 2017 a lot of speculators came to the digital money market, then in 2018 it is worth waiting for the tide of institutional players, including asset managers, pension funds, payment operators and other financial organizations, Thomas believes.
He notes that today the growth of over-the-counter trading in digital assets has begun - for example, bitcoin futures have already been launched by the CBOE and the CME Group. Thomas is sure that the appearance of derivatives based on other crypto currency is just a matter of time. According to his estimates, the "first swallows" will appear in the summer of 2018.
However, they are waiting for the industry and their difficulties: regulation, forks, banking nuances, etc. In addition, the uncertainty of the regulatory environment in the US, China and other countries can prevent the development of the digital assets market. While countries like Japan and the Philippines have met crypto-currencies with open arms and have created the appropriate legal framework, many states still can not decide on the laws and policies for digital money, Thomas said.
Blockchains will start to interoperate
In 2017, the total share of bitcoin in the market of crypto-currencies fell from 87% to 50%. Hundreds of new coins and tokens were created, but the creator of Interledger thinks that all of them really get into the mainstream, many blockchains should become compatible.
Of course, in the future there will not be any one dominating blockhouse any more, as there is no single Internet provider or e-mail box, however operations with various crypto-currencies should be, first of all, convenient for users.
As an example, Thomas provides his own protocol Interledger (ILP), which in June allowed to unite seven distributed ledgers, including bitcoin, Ethereum and XRP. If all networks activate ILP, then it will not matter what currency the end user prefers: he can, for example, easily and quickly pay off Ethereum coins in a store that only bitcoins accept.
The appearance of hybrid blockchains
Today, blockchains are usually divided into two types: public (for example, bitcoin) and private (Hyperledger Fabric). According to Thomas, in the future this separation will become much less noticeable due to the appearance of hybrid blockhouses combining the advantages of both types.
Such a hybrid blockchain can operate in the open Internet space and be accessible to all users, as well as public, but use a smaller set of validators and focus on specific tasks that are peculiar to private registries.
As a result, "mini-blockchains" can be adjusted to specific needs and tasks, instead of using a standard set of common rules. Such specialized networks will become more popular in 2018, Thomas assured.
Specialization or generalization?
At first glance, it may seem that Thomas contradicts himself: first he praises tokens of general purpose against the background of specialized ones, and immediately afterwards tells about the advantages of specialized blockchains. However, all this is interrelated: the more compatible the various ledgers become, the weaker will be the dependence and connection between the blockchains and tokens. Such a large-scale transformation will not do without its "pains of growth", but 2018 promises to become very interesting for the world of crypto-currencies, Thomas summed up.