At the beginning of 2018, tokens and cryptocurrencies were taking up a significant portion of the news cycle. Many digital assets were seeing unparalleled growth and tens of ICOs were happening on a daily basis.
Much of this newfound stability has come from the weeding out of scams, enhanced regulations, and stronger ICOs and token sales.
Here’s a look at some of the biggest contributors to the advancement in crypto-assets in 2018, as well as a few of the biggest hurdles.
Crypto Regulations: Striking a Balance for Innovation
Less Regulation from the Commodity Futures Trading Commission
In other words, they want to minimally regulate and mainly enforce a ‘do no harm’ policy.
The idea behind this is that it is difficult to differentiate between malicious crypto-assets and innovative ones at this stage. Additionally, the U.S. government wants to encourage experimentation and innovation. At this stage, it seems as though regulators will be flexible with incentive structures and crowdfunding, while also coming down hard on those who commit fraud.
Requests for More Regulatory Clarity
During the latter half of 2018, cryptocurrency industry members in the U.S. have become worried about losing out to industry members in the rest of the world. The main reason for this concern is that many other countries have instated explicit and straightforward cryptocurrency regulations. This regulatory clarity is allowing innovators in these regions to pursue cryptocurrency advancements, while those in the U.S. have been more hesitant to due to fear of how unstable regulations could nullify their progress. Because of this, members of the crypto industry, such as Fidelity and Nasdaq, met with members of Congress to request greater regulatory clarity.
Regulators around the world are attempting to move forward with cryptocurrency regulations, but some of the biggest regions are taking their time. EU regulators want to hold off on creating regulations until European authorities complete a thorough analysis of the industry. French regulators are currently developing a legal framework for ICOs and have already dramatically reduced cryptocurrency gains taxes. Japan is relying on an industry self-regulation group to guide the industry, but they are also conducting examinations of the cryptocurrency exchanges that they license.
Hacks & Scams in Crypto
This malware was sent out by a hacker’s program, EternalBlue. It infected more than 500,000 computers around the world, making them mine Monero tokens. Individuals only caught onto the infection either when they saw their electricity bill or noticed that their computer was working on overdrive. In the end, the hacker got away with $3 million in mined Monero tokens.
This ICO came to a positive end due to the fact that all $32 million of investor’s funds was returned to contributors, as well as the fact that the founders were both sent to prison and banned from ever being directors or officers of a future security offering. Initially, though, the ICO had a promising start. It said it was going to be the first token to partner with MasterCard and Visa debit cards, enabling it to be used as a fiat fund. This never happened. Instead, the founders made up biographies for their entire team, hired celebrity endorsers (Floyd Mayweather and DJ Khaled) to create false validity, and concealed important information from investors.
As investors begin to better understand navigating the world of crypto-assets, fewer and fewer cases like Pincoin will unravel. Unfortunately enough, for the more than 30,000 individuals who invested $660 million in Pincoin their money has disappeared with the founders. Initially, the ICO provided cash returns and rewards to investors, which encouraged further investment. However, once the ICO’s token was used to compensate investors, the fiat disappeared and all that was left was a website with fake information about the founders and team, which investors had failed to confirm prior to investing.
2018’s Most Popular Cryptocurrencies
Bitcoin-16.8 million in circulation
There are some downsides to the original and widest spread cryptocurrency. It tends to have higher transaction fees than other tokens and it has a history of being volatile with slow speeds. But when it comes down to it, Bitcoin is the most popular digital currency—and it hasn’t even reach its 21 million capped limit.
Litecoin-52 million in circulation
While there may be more Litecoins in circulation that Bitcoins, this is because the digital currency has a capped limit of 84 million (4 times more than Bitcoin). Additionally, a Bitcoin is currently valued at roughly $6,000, while a Litecoin is valued at $52. However, Litecoin is catching up. While the two are similar due to the fact that they are both peer-to-peer digital currencies, Litecoin has a much faster transaction speed. The main downside, besides the fact that its market cap is 5% of Bitcoin’s, is that it requires more memory to mine.
Dogecoin-113 billion in circulation
This digital currency started out as a joke, but quickly exploded with popularity. Its market capitalization reached $2 billion at the beginning of 2018 and one of the aspects of the coin that makes it stand out from other crypto-assets is the fact that there is no limit on how many tokens can be in existence.
2018’s Most Successful ICOs
ICO Conclusion: March 2018
Funds Raised: $150 million
ICO Conclusion: January 2018
Funds Raised: $95 million
ICO Conclusion: January 2018
Funds Raised: $62 million
ICO Conclusion: January 2018
Funds Raised: $60 million
2018 has been a big year for crypto-assets. There has been both increased stability and a wider spread of usage.
The main questions revolve around regulations and creating a balance between flexibility that allows for innovation and regulatory clarity that reduces risk for investors. There’s no doubt that we’ll see the crypto-economy continue to advance going into 2019 and it’s likely that we’ll see third-party accreditation services play an important role moving forward.