CWC Newsletter #8 (Jan. 1, 2020)

By KJ Kingsley


Top 10 Predictions for 2020: My thoughts on the future developments for EOS, BTC, ETH, and Libra while providing speculations on government regulation and government adoption of central bank cryptocurrencies.


1. Block.one’s social media decentralized application, Voice, will be the biggest and most popular cryptocurrency that will see millions of users onboarding onto the platform. I think that Voice will address many of the problems and issues surrounding Facebook and other centralized social media applications (Twitter, Snapchat, and Telegram), such as security, authentic identity, and selling of users' data.


Voice will provide a means for marketers and advertisers to confirm if their sponsored social media influencers are indeed popular or if their subscribers were bought. In addition, Voice will pay the user for their content and data rather than having a third-party profiting off of users' data. Block.one announced that the beta launch of Voice will be on February 14, 2020.


2. Bitcoin’s halving and Lightning Network will not meet the high expectations of its developers, miners, or users in regards to price, security, and scalability. The halving is an event for Bitcoin miners where about every 4 years the inflation of newly minted bitcoins is decreased 50% while the difficulty of mining new bitcoins is increased.


In other words, halving events have historically increased the price of bitcoin. However, other cryptocurrencies that have copied bitcoin's source code have experienced decreases in prices, such as Litecoin in Fall of 2019. I would be cautious in thinking that Bitcoin's 2020 halving will increase the price substantially because (1) knowledge of the halving may already be priced in, (2) fees for bitcoin transactions will increase, which may discourage usage of bitcoin created downward effect on bitcoin value, and (3) miner capitulation.


The bitcoin Lightning Network is the scaling technology to allow bitcoin to resemble digital cash. Currently, bitcoin can only handle about 3.8 transactions per second causing the current iteration of bitcoin to emulate digital gold.


However, developers and reporters in the bitcoin space have pointed to the list of problems that has arisen with the adoption of the Lightning Network. These problems include users losing bitcoins while sending a transaction through the network and potential for a central authority to censor a transaction, a contradiction to one of bitcoin's core tenets of uncensored, immutable, and trustless transactions.


3. Ethereum’s multi-year long upgrade will see obstacles that will prolong its release. In the early days of 2020, the Ethereum network has already witnessed a quick update to prolong the upgrade for 600 days. Although in the Fall of 2019, core developers of Ethereum announced that the upgrade would be completed by 2021, this new development indicates that the core developers have given themselves one more year of breathing room.


The multi-year long upgrade primarily addresses the scalability of the Ethereum network. Ethereum developers have been developing potential solutions to the scalability issue since 2016. The lead creator of Ethereum, Vitalik Buterin, has tried valiantly to create solutions but this long timeline is a potential opportunity for other competitors to usurp Ethereum's first-mover position in the smart contract platform space.


4. Ethereum’s push to become the leader in decentralized finance will be met with turmoil due to the upgrade flaws/limitations and unforeseen black swan events. In addition to the upgrade delays, I foresee regulators interfering in the growth of Ethereum's decentralized finance space.


I predict that other cryptocurrency platforms that have pivoted to the decentralized finance space will offer competitive financial instruments with regulatory compliance. I am thinking about Worbli, a sisterchain of EOS, and a smart contract platform specifically geared towards regulations and compliance.


5. Government’s central banks and multinational conglomerates will begin to launch their own cryptocurrency and a couple will begin to gain traction on a global scale. China's central bank is already poised to launch their own digital yuan in the near future. The Federal Reserve and the US Government will respond to China's digital currency launch in kind and may be forced to back Facebook's Libra.


6. The SEC will release more judgements on cryptocurrencies on whether or not they are securities, commodities, or utility tokens. These judgements will dictate the players and topography of the cryptocurrency landscape in the US for years to come.


7. Facebook’s Libra will be met with constant pushback but will ultimately be victorious in being able to launch their token to the public in late 2020 or later.


8. The Great Purge in cryptocurrencies will finally unfold in 2020 in the sense that the majority of cryptocurrencies’ prices will head to zero. Only the most robust cryptocurrencies will survive. Or in other words, you will need to assess whether or not your cryptocurrency solves a needed problem in the free market.


9. Gaming and social media is the gateway for the public to onboard onto blockchain platforms. Although many cryptocurrency experts wrongly predicted that cryptocurrency gaming would onboard millions of users in 2019, perhaps their prediction was a year early.


I think that in 2020 we will begin to see the releases of major blockchain games that will encourage users to interact with cryptocurrencies while hopefully creating a mass migration of gamers from centralized games to more open, decentralized platforms.


10. EOSio source code will become the de facto platform to build any communication database in the future. The new database of the internet will be built on eosio code because it will be superior in security to centralized servers, such as Amazon Web Services, while providing a more cost effective solution (because businesses and users will not have to pay for the expensive licenses owned by internet and software companies).


Disclaimer: KJ Kingsley is not a financial advisor and holds the digital tokens or cryptocurrencies represented in the content above. This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this post constitutes a solicitation, recommendation, endorsement, or offer by myself to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. The opinions expressed in this publication are those of the author. They do not purport to reflect the opinions or views of any of the author’s employers.

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