Here at the Blockchain Hub we believe 2018 will be another very strong year for cryptocurrencies and blockchain tech. Here is our underpinning ideas driving this assertion.
On a very large scale, we are seeing various game theory scenarios play out. If your not familiar with basic game theory check out this link to a short clip that explains some of the key principles
The driving forces of this market are outlined in a timeline:
2010 ongoing - individuals have been on-boarding into cryptocurrencies. Starting with Bitcoin and now spreading across many tokens and chains for a myriad of reasons, perhaps the strongest of which is ideological, being part of the decentralized revolution.
2017 and ongoing - we saw the rise of two new players and this has caused the main shifts in the market by way of market cap and volume:
- Banking sector - scared of losing power
- Governments - scared of losing control
From the game theory perspective both the banks and governments have to hold bitcoin and crypto tokens in order to reduce their downside risk of being ‘left out of the market’. For the most part, it is highly likely they do not want to participate, but they are being compelled to for two strong reasons.
- This market is extremely hard to regulate and will continue to become harder. Historically regulation has been the leaver of control used as the backstop.
- Simply, they now must participate in order to achieve the ‘nash equilibrium’.
As this market plays out over 2018 this can only escalate as more money and players enter the ‘game’.
The game changer.
So far there we have seen some multinationals start building and in IBM’s case, offer blockchain as a solution. Many banks are implementing blockchains such as the Ripple (XRP) to replace antiquated technology such SWIFT. However, we have not seen the largest consumer-based companies such as Facebook, Amazon, Google, Netflix etc, offer anything in this space. Perhaps they have been taken off-guard with many of these companies primarily focused on AI, AR and AV. Blockchains may have just snuck up on the market and in 2017 become something that has started to grab some attention. The issue these institutions face right now is; as the blockchain/ crypto market grows they are losing their first mover advantage position and similarly to the scenario with banks and governments above, when one player starts accepting Bitcoin or cryptocurrencies, the others will be compelled to follow, again due to the classical game theory scenario. Or put another way, they need to move or risk being left behind in the latest technological revolution.
To review here are the bullet-pointed nuggets of where we see 2018 moving:
More governments will follow Japan and make Bitcoin and other cryptos legal tender. Some governments will try to create their own chains, such as what Russia has attempted, but this will face ideological resistance and poor uptake
Blockchain tech will start to permeate into our everyday lives (whether we know it or not) as logistics specialized blockchains and banking centric chains will start to roll out and be used industrially at scale. Through this transition, most of the public will not know they are using blockchain technology, but it will be a major part of our lives (similar to how almost everyone uses protocols such as http - but very few understand or consider it a key technology in their life)
As the market rises and falls, Bitcoin and the blockchain space will continue to gain free publicity and awareness, slowly becoming part of the wider public’s vernacular and part of societies overall zeitgeist