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How Digital Technology Will Bring the End of Traditional Banks



Digital technology has introduced a new era of innovation that will change consumers’ relationships with banks. What many people both inside and outside the banking industry do not realize is that these changes could, in fact, bring the end of banks as they have existed for centuries.


Alex Lipton, David Shrier and Alex Pentland of the Massachusetts Institute of Technology’s Connection Science & Engineering recently authored a paper titled, “Digital Banking Manifesto: The End of Banks?”

The paper begins with an overview of what purpose banks serve, followed by a summary of digital technology’s impact on banking to date, and an overview of what future changes are to be expected, including the possible disappearance of banks.

What Is Banking?

Banking is the skillful record keeping in a double-entry general ledger. Banks can be seen as dividend producing machines that seek deposits and issue loans at the micro level. At the macro level, they create credit money.

Successful bankers are able to attract a large pool of reliable borrowers. They also have to attract long-term depositors who they must serve well retain the deposits. Otherwise, the bank exhausts its liquid reserves and defaults.

Digitization Suits Banking

Because banking activity is mathematical and technological, it is suited to digitization. Nonetheless, legacy systems inhibit banks from embracing innovation to survive in the digital economy.

Mobile banking

While other industries such as communications, mass media, retail and travel have changed their business models in the last 30 years, banks are static. As a result, customers are generally dissatisfied with banks’ customer service.

Negative or zero deposit rates have made keeping money in the bank risky and unprofitable.

There is also a large group of people in undeveloped countries who are unbanked or underbanked since traditional banking systems are not flexible enough to address know your customer (KYC) needs or assess credit worthiness.

‘Digital Bank Of The Future’

Developments in mobile telecommunication adoption and data technology portend a third wave of banking innovation, the “Digital Bank of the Future (DBF).”

The first wave of digital innovation in banking were the “incrementalists.” The mid-1970s brought the ATM. The concept was to deploy machines to process transactions. Banks had historically had limited business hours. The ATM addressed the needs of two-income households.

Online banking came in the 1980s and gathered momentum in the 1990s with the Internet. Browser-based tools gave consumers access to banking transactions, including bank statements, money transfers and electronic bill payments.

Internet banking gave rise to the dedicated Internet bank such as NetBank.

Digital hybrids like NetBank brought the second wave of digital innovation. These hybrids took advantage of front-end systems to connect with consumers, but they were hindered by legacy back-end infrastructure, labor models and risk modeling systems.

Other hybrid banks used purpose-built IT that was less costly than legacy banks. But these “digital hybrids” still used centralized databases, primitive user data protocols and cloud-based storage. They marked a bridge between the legacy bank and the fully-digital bank.

New Technology Arrives

A new set of technologies has emerged allowing banks closer integration with consumers’ lives, access to the 2.5 million underbanked or overbanked, and more financial flexibility for the 45 million small and medium-sized enterprises (SMEs).

DBF will use the new technology to address the 50-year -old and under generation that grew up with computers. A mobile-first strategy will deliver ease of access and fast adoption. DBF will dispense with a central data depository that can be easily attacked. Instead, it will use an encrypted distributed system.

What Role For Banks?

The question arises: what role do banks have in the new economy? Is fractional banking facing its end with the introduction of government-issued digital cash that can be stored in digital wallets outside of the banking system?

On the retail side, DBF must provide the following:

• A holistic, intuitive, interactive overview of the customers’ money, encompassing their financial life, including information on their current account and deposit balances, recurring payments, pension contributions, transactions, outstanding loans and securities accounts.
• A holistic digital experience for customers, including paperless application and passing the KYC process. This includes an intuitive, interactive financial planner to organize financial life and optimize resources. It will provide immediate cash flow needs, tools for automatic savings, education, retirement, medical expenses, robo-advisory services, and tools for trading securities. This digital experience will empower customers to electronically apply for a mortgage and access competitive insurance contracts.
• Mobile e-payment solutions, such as domestic and international payments and remittances, peer-to-peer payments and automatic bill payments.
• Seamless and inexpensive foreign exchange services, such as protection against exchange rate fluctuations by offering multi-currency accounts. A full range of instruments will allow for hedging against foreign exchange risks, such as spot contracts, forward contracts, swaps, and exchange-traded options.
• Biometric technology like face and voice biometrics.
• A bank e-credit card based on customer preferences with pre-set limits and permitted transactions. This will include an electronic ID for secure online purchases, and tools to view, pay, analyze, organize and archive e-bills, and generate tax documents.
• Access to “crowd-everything” including P2P lending and payment opportunities.

Digital Banks’ Advantages

Digital banks have no real estate overhead or the need to spend on legacy IT systems. They expect to grow multibillion-dollar balance sheets with a fraction of staff compared to traditional banks.

The U.K.’s Atom Bank plans to grow into a £5 billion balance sheet business in five years with 340 full-time staff, compared to legacy bank Metro, which has the same size balance sheet with 2,200 people.

Digital banks can generate value in the following ways:

• Digital payments include mobile, online and P2P interactions. They allow banks to raise fees and interest income and connect with a broader set of customers with more diverse services.
• A digital wallet is essential for digital ecosystems built on value-added services. It optimizes funding costs for banking operations and transaction costs for customers.
• Artificial intelligence (AI) assisted sales of banking products include loans, mortgages and deposits that are conducted through direct channels, such social media.
• A seamless multi-channel approach to sales improves the bank’s share of customers’ wallet, strengthening customer loyalty.
• An AI-based digital financial planner manages monthly income, savings and investments, and recurring payments, increasing interaction between the bank and its customers. The bank serves as a trusted source defining financial needs.

• Robo-advisory services optimize investment portfolios based on individual goals and preferences.
• Advanced analytics enables the bank to transform its data into more personalized client services aimed at data monetization.
• AI- and Big-Data based credit models allow risk-managed provisioning of credit access to SMEs, banking the underbanked SMEs. By 2018, banks in Western Europe are forecast to have half or more of new inflow revenue from digital-related activities in most products.

What The Future Holds

projecting the future

A digital bank will be a cross between a fintech company and a bank. A digital bank can be organized into five divisions: retail banking, private and business banking, analytics and IT, finance management and operations, and risk management. The relationship between the divisions is different in legacy and digital banking, with IT and analytics being the cornerstone of digital banking. Success is measured by technologies and analytical methods rather than the product line.

Digital banks will include the following:

• Novel IT infrastructure. Building a digital bank from scratch allows the creation of a flexible IT infrastructure, providing state-of-the-art risk management. This can optimize the balance sheet to achieve a return on capital higher than the return of the incumbents, guaranteeing compliance with changing banking regulations in real time.
• Database design. Database technology based on a distributed ledger framework can cope with the growth in data, new Internet technologies and analysis methods.
• Advanced data analytics. The bank can consolidate data across deposits, consumer finance and other accounts for a unified view of customer activities. Customers’ in-store payments are more accurate than conventional profile data in predicting their future financial activities and credit worthiness.
• Artificial intelligence. Autonomous selection of best methodology when presented with arbitrary data lets banks build financial profiles of its customers, including debt capacity, credit worthiness, and risk appetite for financial planning. AI can present the best offers at the right time, changing as the customer evolves.
• Security and discretion. Security and protection is a competitive advantage for digital banks compared to other financial service providers.

Digital Bank Constituencies

Digital banks have natural constituencies. These include consumers with at least an undergraduate college education and digitally educated consumers who will form the foundation of the customer base for the digital bank.

Central and private banks are actively pursuing the creation of digital currencies. Considerations for this dimension are:

• Non-bank digital currencies. Bitcoin is not suited for high volume transactions due to its low transactions per second capacity. Other digital currencies based on consensus achievable by means other than proof-of-work will be used in digital banking.
• Central bank digital currencies. Several central banks are exploring whether a state-backed digital currency can reduce capital outflow, tax evasion and money laundering, making economic activity more transparent and efficient. The free or inexpensive deposits commercial banks have benefited from will disappear.
• Private bank digital currencies. Advances in digitization have made private bank currencies a viable idea. Bank of Tokyo Mitsubishi UFJ (MUFJ) is developing its own digital currency and a smartphone application to authenticate digital tokens on a P2P platform.
• Distributed ledger. Distributed ledger reduces transaction costs, improves the resilience of the system and mitigates operational risks. Distributed ledger will be part of operational procedures of a digital bank and its interactions with other digital banks.

Also read: Successful banking blockchain test shows core banking possibilities

Future Financial Ecosystem

A well-designed digital bank will be the cornerstone of a much larger financial ecosystem. Insurers, wealth managers, brokers, credit card issuers, robo-advisors, cross-border payment providers, P2P lenders and currency exchanges will all be part of the ecosystem.

The ability to satisfy the financial needs will be enhanced by access to a wider financial system through the digital bank. At the same, the bank will benefit by gaining additional information about customers’ habits and needs, thus closing the information feedback loop.

Digital cash issued by a bank can provide a lubricant allowing the wheels of commerce to spin faster and more efficiently. In addition to financial businesses, a digital bank can incorporate into its ecosystem various non-financial actors.

All such developments will enhance the social utility of the bank and its appreciation by the public while improving its profitability.

Banks Have Competition

Banks have to realize competition for their customers’ digital wallet is coming from current digital champions, such as Google, Amazon, Facebook and Alibaba.

The key is to have customer-centric data across all areas of life, held in a standard format with standard APIs working across all the digital ecosystem and not just its financial services. Given the rather uncertain and limited capacity of P2P networks to provide credit, digital banks have to come to the rescue.

The legacy banking model will need to disappear over time. But in the transition, digital banks will have a role in daily life as transaction lubricants and enablers.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.

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How You Could Profit From The Fairfax County Investment In Morgan Creek Digital



Morgan Creek Digital recently scored what it says is probably the first investment in the known crypto asset universe from a U.S. pension fund.

Two pension plans in Fairfax County, Virginia are anchor investors in a new $40 million venture-capital fund, according to a statement from the company. Other investors include an insurance company, a university endowment and a private foundation, said Morgan Creek Digital founder Anthony Pompliano, who declined to provide further details.

Fairfax County Retirement Systems manages three separate defined benefit plans, two of which invested in the Morgan Creek Digital fund, said Pompliano. Katherine Molnar, chief investment officer of one of the funds said in a statement that blockchain technology is an “emerging opportunity” that offers an “attractive asymmetric return profile.’’

Morgan Creek Digital, which is an affiliate of the investment manager Morgan Creek Capital Management LLC, exceeded its original target of $25 million for the fund. Its pitch: all traditional assets will eventually be represented by digital tokens, while the influx of intellectual capital into digital assets will create positive returns. It also argues that cryptocurrencies are not correlated to traditional assets, giving investors unique exposures.

The fund created by Morgan Creek Digital in New York is investing in cryptocurrency giant Coinbase, which was recently valued at $8 billion, and several lesser-known startups, including Blockfi, RealBlocks, TrustToken, Harbor, Open Finance Network, CityBlock Capital, Namebase, Good Money and Digital Assets Data.
As much as $4 million of the investment could eventually be used to purchase cryptocurrency directly, though that has not happened yet.

This sort of development is crucial for the digital asset markets to evolve. Let’s take a closer look at Morgan Creek Digital’s other blockchain companies, and see if there might be equity or token opportunities.

CityBlock Capital

CityBlock Capital offered a digital security token sale on the SharesPost platform, representing perhaps the lowest-barrier investment opportunity for someone looking to tag onto the Fairfax County investment in Morgan Creek Digital.

CityBlock’s NYCQ Blockchain Infrastructure Fund invests in companies building blockchain-based capital markets infrastructure. From the instantaneous settlement of trades, elimination of intermediaries, and the reduction of fraud, the fund’s portfolio companies include clearing houses, exchanges, depositories, makers of market aggregation tools, securities services firms, data analytics, smart contract auditors, and issuance platforms. Its focus is early-stage firms, with ten percent of its funds going to late-stage companies.

CityBlock’s digital tokens are designed to represent ownership interests in the fund. Investors will be able to buy and sell these assets on SharesPost’s Alternative Trading System (ATS), which is registered with the U.S. Securities and Exchange Commission.


If you’re looking for a stablecoin, this Morgan Creek Digital-backed option might be a nice tool to escape crypto-volatility. TrustToken’s first token is TrueUSD, a stablecoin redeemable one-to-one for U.S. dollars. Over its initial four months of trading, the coin’s market increased to $85 million as investors look for stability in the unstable world of crypto. The token has a $61 million hard cap on the token allocated over three tranches of $0.12, $0.14 and $0.16 per trust token.

In the TrueUSD system, dollars are kept in the escrow accounts of multiple trust companies, not a bank account. Those accounts verified by an independent third party that issues monthly reports on the funds held in collateral.


In need of liquidity and have a lot of crypto you could put up as collateral? Blockfi is now operating in the US, and could be the business solution you need. BlockFi is a New York-based secured non-bank lender of  USD loans to cryptoasset owners who collateralize the loan with cryptoassets. Blockfi iquidity is available to both individuals and institutions. Client Bitcoin and Ether is held with a registered custodian. Loans are issued in USD to their bank account.

BlockFi currently operates in 35 US States, lending to retail investors and companies. It raised approximately $1.5 million in seed funding earlier this year from ConsenSys Ventures, SoFI and Kenetic Capital, followed by Galaxy Digital Ventures investment of $52.5 million. $50 million, the lion’s share of the capital, will be used to loan to BlockFi’s customers. The remaining $2.5 million represents an equity investment in the company from Galaxy and earlier backers.


Namebase offers probably the most unique idea in which Morgan Creek Digital invests. This platform enables the registration of top-level domains on the Handshake blockchain. As a fork of Bitcoin, Handshake allows users to register domain names. Registration records are maintained by a decentralized network of nodes. Handshake is compatible with the existing domain name system. It is easily integrated with mainstream browsers.

Handshake uses the Bitcoin software with some extra transaction types allowing users to bid on names on-chain. Handshake forked everything about the Bitcoin node software while not forking the UTXO set, like in the case of Zcash. The Handshake project plans to distribute 70% of the coin supply to open source developers, projects, and non-profits without any contractual expectation of work.


The Bakkt Bitcoin Daily Future is a physically delivered daily futures contract on Bitcoin traded in BTC/USD. It’s still subject to regulatory approval, but ICE plans for them to be traded on its electronic trading platform which is regulated by the CFTC. ICE Clearing US, the main counterparty for all ICE cleared forex futures trades, will clear and guarantee all trades, to be settled in physically delivered Bitcoin “in the regulated Bakkt Warehouse.”

Bakkt raised $18.2 million to develop a global digital assets platform and a bitcoin futures product. Owned by Intercontinental Exchange (ICE), which in turn is owned by the New York Stock Exchange (NYSE), Bakkt’s investors include Boston Consulting Group, Galaxy Digital, Goldfinch Partners, ICE, M12 (Microsoft’s VC fund), Pantera Capital and Protocol Ventures.

Digital Assets Data

This financial technology and data company build enterprise-grade software and data feeds for crypto hedge funds and other market participants. The companies data, information and transparency tools will be applied to crypto assets, including currencies, platforms, applications, side chains, security tokens, and initial coin offers (ICOs) through subscription services offered to hedge funds and other institutional investors.


While companies like Polymath stole much of security token show in early 2018, Harbor’s blockchain-based platform and compliance protocol has also been built to transform private securities like commercial real estate offerings an investment funds into more liquid forms of private investment.

This institutional-grade onramp for issuers and investors is an end-to-end service. Investor on-boarding to the platform encompasses KYC, AML, accreditation and tax forms, signing of documents, funding, and other tasks. The Harbor compliance protocol manages complex rules and regulations governing securities on issuance and secondary transfers.

Open Finance Network

Created in 2014, The OpenFinance Network (OFN) uses blockchain technology to create an U.S. regulated security token platform. “We wanted to give users the control over their funds. Since with security tokens, there is a lot of overhead holding tokens on a centralized platform. So to put capital to better use, we went with self-custody. We are not entirely decentralized though, and we think this is attractive to all types of users.”

Open Finance Network is comprised of the ledger, the token and the adaptors. Open Finance’s a global registry of assets that are represented by security tokens as well as entities such as broker-dealers, transfer agents, custodians or escrow agents that can be used on different security token processes.

Good Money

Good Money is a new type of banking platform founded by Gunnar Lovelace. When a new customer signs up with Good Money, they receive an equity share – in other words, they become co-owners. Lovelace says customers could hold as much as 70% one day.

Good Money operates similar to a credit union, which are non-profits, and offers members no ATM or overdraft fees. 50% of its profits are invested into green projects and charitable donations. The platform’s customers vote on where profits should be invested, but the options will only include sustainable investments, like clean energy and reforestation efforts.


RealBlocks is creating a real estate capital markets platform designed to connect users globally so they can more easily raise capital for real estate. Built on the Ethereum blockchain, the platform allows organizations to raise capital through the issuance of tokenized securities.

On the platform, investors can directly purchase ownership interest in real estate with digital and fiat currencies. The platform also claims to provide a mechanism for peer-to-peer liqudity. According to RealBlocks, “anyone in the world is now able to directly invest, raise capital, and obtain liquidity for investments in real estate.” The platform also provides a mechanism for peer-to-peer liquidity. By using RealBlocks, anyone in the world is now able to directly invest, raise capital, and obtain liquidity for investments in real estate.


“There’s a belief in the institutional world that if the industry will be around for a long time, it will be very valuable,’’ Pompliano said in a phone interview. “The smart money is not distracted by price but looks at the long-term trends, and believes they’re betting on innovation as a great way to deliver risk-mitigated returns.’’

Today, even police officers and other state employees in Virginia’s Fairfax County are now looking forward to retirement with potential dividends from bitcoin. Two separate pension funds that collectively manage $5.1 billion in assets for the state’s police force and other employees have joined a $40 million investment in the Morgan Creek Blockchain Opportunities Fund.

If you look at the startups in which Morgan Creek Digital is invested, there are few token options. Using TrueUSD to hedge your crypto-investments offers one opportunity to augment your investment strategy. More interestingly, the CityBlock Capital security token represents an alternative to other VC-backed securities tokens, such as Blockchain Capital’s BCAP.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 2 rated postsJustin O'Connell is the founder of financial technology focused Justin organized the launch of the largest Bitcoin ATM hardware and software provider in the world at the historical Hotel del Coronado in southern California. His works appear in the U.S.'s third largest weekly, the San Diego Reader, VICE and elsewhere.

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Solve.Care Has Potential to Transform the Field of Healthcare Administration



The last few years have been a crazy ride in the crypto markets.  We’ve seen both the buying frenzy and the panic selling.  Although the industry has a lot of potential, it is undoubtedly true that many projects will fizzle out during the next 12-24 months.  Traders need to carefully analyze projects that have the best chance for real world adoption.  Part of the analysis certainly needs to center around projected industry growth.  One of the areas in desperate need of transformation is healthcare administration and Solve.Care may have just the solution.

Problems with Traditional Healthcare

Healthcare administration around the world has become plagued by inefficiencies and soaring costs.  Global spending on health exceeds $8 trillion annually and is expected to increase to $18 trillion worldwide by 2040.  In the U.S. alone, up to $1 trillion is wasted through administrative costs, over-utilization, and fraud.  Much of this waste is due to an obsolete and cumbersome healthcare system.  These issues have placed a massive strain on patients, doctors, and system administrators for far too long.

For doctors, one of their major complaints is the amount of time spent completing paperwork and dealing with insurance companies.  For patients, one of the major complaints is lack of face time with their primary care physicians.

Change is definitely needed and that’s where Solve.Care comes into the picture.

What is Solve.Care

Solve.Care is a transformative healthcare administrative platform designed for use by patients, employers, doctors, healthcare groups, and insurance businesses.  This platform is the first to use blockchain technology as the underlying distributed ledger for all care events between patient, doctor, pharmacy, laboratory, insurer, and other parties.

Patients are encouraged to manage their healthcare decisions.  Employers can use the platform to administer benefits, reduce costs, and reward their employees.  Doctors and hospitals can issue prescriptions, manage appointments, and coordinate with a specialist.

The platform has the potential to save billions of dollars in annual costs by better coordinating all the normal healthcare administrative operations and thereby eliminating all the inefficiencies.

Prior Accomplishments

Solve.Care completed it’s token sale in May 2018 and has since had its token, SOLVE, listed on Bittrex and KuCoin.  The company sold 350 million tokens with a 100% subscription rate.  That certainly speaks to the demand of both the token to use Care.Wallet and the platform’s potential for real world adoption.

The company had made it a priority to hire some of the best talent in the world.  More than 100 people are currently working in the company with approximately 70 of them being engineers.  The engineers are making rapid progress as the platform is being continually expanded and improved.

Whenever new technology attempts to disrupt an industry hanging on to outdated software and practices, it is imperative that startup companies have the right leadership.  Fortunately, Solve.Care appears to have someone very capable at the top.  The company is led by Pradeep Goel, who has been in the CEO, COO, CIO and CTO roles at various technology companies over the past 26 years.  Pradeep has a wealth of knowledge from both the private and public sectors, most notably from his time designing and building solutions for public programs such as Medicaid, Medicare, and SNAP.  Pradeep has also been named in the Goldman Sachs list of the top 100 entrepreneurs in the world.

The company has a growing pipeline with more than 25 clients and partnerships.  Perhaps the most impressive of which was the recent deal struck with Arizona Care Network.

Arizona Care Network Partnership

Solve.Care has a proven track record of developing blockchain-based healthcare solutions and introducing them to the U.S. healthcare market.

In February 2018, Solve.Care announced a multi-year contract for its decentralized healthcare administration platform with Arizona Care Network (ACN), one of the largest accountable care organizations in the United States.  ACN manages value-based care contracts for its network of more than 5,500 physicians covering more than 250,000 members.

David Hanekom, CEO of Arizona Care Network, had this to say about the partnership:

“ACN is focused on innovation in the healthcare industry and seeks to be the leading technology-enabled ACO in the U.S.  This is why we chose to partner with Solve.Care, a true innovator in the healthcare administration and payments sector.  Solve.Care brings a lot to the table in terms of their ability to simplify and decentralize complex processes related to value-based care delivery and payments.  We couldn’t be more excited as a result of this partnership and look forward to launching the platform with our providers and members.”

Since that announcement, Solve.Care has continued to innovate with the launch of Care.Wallet for Physician and Care.Wallet for Family.

Care.Wallet for Physician Development

Care.Wallet for Physician, launched in October 2018, allows the providers of the Network to track the successes and overall score, while receiving corresponding rewards according to the Provider Rewards Program.  These value-based payments inside the network of 5,500 physicians are happening with the healthcare digital currency, Care.Coin.  It is important to note that Solve.Care is the first company to implement digital currency and blockchain technology for value-based payments in the U.S. healthcare industry.


Of all the industries, I can’t think of any that needs a complete overhaul more than health administration and care coordination.  With soaring costs and an aging population that will need quick and easy access to care in the coming years, this is an area that could see a lot of innovation in the near future.  Solve.Care is already doing its part to transform the industry, and will no doubt reap the rewards for its innovative spirit.



Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 Things Cryptocurrency and Blockchain Investors Should Beware of in 2019



Just over ten years on from its inception, the cryptocurrency and blockchain space is still in the nascent stages of its development.

However, that should not be taken as a sign of slow progress. On the contrary, the blockchain space is evolving fast – so fast, in fact, that already we’re starting to see a departure from old standards, methods and practices, even those that were born very recently.

Here are five imminent trends to look out for in 2019.

Bullshit Artists Will Evolve

If you dig through cryptocurrency websites and whitepapers for long enough you start to notice certain trends. There was a time when all that accompanied the launch of a cryptocurrency was a Bitcointalk forum announcement and some Github links.

By 2017 the paradigm had evolved to where if you didn’t have a snazzy website, replete with edgy-looking space-age graphics, accompanied by appropriate links to thirty-page whitepapers and the LinkedIn profiles of various unknown Asian tech-geniuses – then you probably didn’t have much in the eyes of the average ICO investor.

Yet by 2019 that trend appears to be evolving already. More and more new projects are moving away from the standard model in an attempt to stand out from the crowd. Now, instead of dev groups competing to have the longest whitepaper, they’re competing to have the shortest.

One-pagers are becoming increasingly common, as is the use of video. Animations and graphics are evolving to attract and inform investors without the use of text, and one new project even launched with two issues of a manga comic which explained its use-case.

This might sound quite nice at first glance, but I suspect it will only serve to obfuscate, and make it more difficult to differentiate between genuine projects and shitcoins in the near future. ICO investments sunk like a stone towards the end of 2018, but the potential payoff for greedy team members is still enough that stumping up thousands of dollars for an extensive branding/PR campaign is a cost I’m sure most would be happy to pay.

Coins Will Die

The cryptocurrency landscape is in constant flux, and a glance at the front page of CoinMarketCap from 2013 reveals the fickle nature of the altcoin market. Only three coins from 2013’s top-fifty are still in the top-hundred today – Bitcoin (BTC), Litecoin (LTC) and XRP (XRP).

This past year alone saw numerous coins lose their mainstay status in the top hundred, such as Syscoin (SYS), CyberMiles (CMT), Iconomi (ICN) – and RChain (RHOC), which fell over 99% since January 2018.

In 2019 we may be surprised to see some major players fall by the wayside, and the reasons could be many-fold. If the market continues to sink as it has been of late, then the incentive structures of many major altcoins could find themselves being forced to endure severe stress-tests.

EOS (EOS), for example, is already perilously close to becoming an unprofitable venture for block producers. Meanwhile, mining rewards for such major coins as Ethereum (ETH) and Bitcoin have already fallen to such lows that all but the largest mining pools have perished.

Falling market prices could spell doom for many major players, but to put a positive spin on things: we should consider the bear market a factor of natural selection – it will allow us to see in real-time what works, what doesn’t, and what to look out for in the coming years.

The SEC Will Lop Heads

When SEC chairman Jim Clayton brought up the topic of cryptocurrency last November, he was crystal clear about Bitcoin’s legal status, namely that BTC does not fall under the category of a security.

However, that can’t be said for all the coins and tokens out there, and based on Clayton’s comments, the chances are that the typical holder is in possession of at least one security issuance:

“Many of the ICOs that you see and you talk about, they are securities. And if you’re going to offer or sell securities, you have to do so in compliance with our laws. We’ve been clear about that, the recent actions further emphasized that our securities laws to apply to the ICO space…”

To say that we’re still in the wild west of the crypto space is an understatement, and the SEC will have plenty of potential targets when they eventually decide to make their move.

Blockchain Will Thrive

Blockchain and cryptocurrency are proving to be two very different things. One is shrouded in mystery, taboo and FUD, while the other is shaping up to be at the core of digital, financial infrastructure.

Andreas Antonopoulos warned of the financial elite’s growing interest in blockchain (without crypto) back in 2014. And on January 29th, 2019, the chair of global research for JPMorgan Chase, Joyce Chang, called for blockchain to be further separated from cryptocurrency, which she regards as an apparent failure due to lack of merchant adoption, and falling trade volumes. She told Bloomberg:

“It’s been difficult to get through the regulatory issues (citing lack of ETF approval). We need to separate out blockchain from crypto. There’s been progress made on blockchain – there are successful use cases.”

Beware the Hybrids

The final six months of 2018 were dominated by XRP’s rise through the market cap rankings, fuelled by numerous partnerships with major banking institutions.

But it’s worth bearing in mind that much of the XRP hype train was founded on adoption of xCurrent – a semi-centralized blockchain payment service completely separate from XRP.

Likewise, one of the biggest pieces of news of 2019 so far – enough to gain coverage on CNBC with Ran Neu-Ner – was the launch of the BitTorrent Token (BTT). But as Tron founder Justin Sun eventually revealed, BTT payments will also make use of ‘hybrid payment channels’ outwith the Tron blockchain.

Furthermore, Over $3 billion in profit was reportedly made by the creator of online-gaming juggernaut Fortnite in 2018 alone. All of those in-game V-Bucks transactions were executed without a decentralized, distributed ledger, and are a possible sign that the booming digital payments industry could continue to push ahead, maybe even without blockchain.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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4.5 stars on average, based on 147 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.

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