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After a captivating growth in 2017, cryptocurrency markets have spent most of this year in turmoil as values alternated between collapse and collapse. Around this time last year, Bitcoin reached a record value of $ 19,783.21 after several months of turbulence on the market. Now it is worth about $ 3,700. Other cryptocurrencies have had similar trajectories: Litecoin dropped from $ 366 last December to $ 30 an hour. Ethereum dropped from $ 1,400 to $ 130.
This was also the year when regulators such as the Securities and Exchange Commission intervened to thwart the huge number of cryptocurrency scams. Research indicates that up to 85% of initial token offers are scams, and the SEC in 2018 has aggressively fined companies for not registering their ICOs. In addition, cases have been reported in which the Justice Department is investigating Bitfinex and Tether Ltd., the main cryptographic actors, for a washing scheme that could have inflated bitcoin values in 2017. Boxer Floyd Mayweather and music producer too DJ Khaled have had to pay penalties for cryptocurrency advertising inappropriately
Critics have pointed to the poor performance of the cryptocurrency market and the preponderance of scams as evidence that technology is condemned. But how would you look at 2018 if you were someone who preaches the power of cryptocurrency? To find out, Slate spoke with the famous bitcoin evangelist Andreas M. Antonopoulos. A teaching colleague for the digital currency program of the University of Nicosia and a series of Let's talk about Bitcoin Podcast, Antonopoulos began to immerse himself in the bitcoin community in 2012. Since then he has become one of the most vocal advocates of cryptocurrency, encouraging the laity to participate in space through numerous books and speeches. Before the interview, Antonopoulos emphasized that his experience is in information technology rather than investment.
Below is a transcript of Slate's conversation with Antonopoulos, which was synthesized and slightly modified for clarity.
Slate: looking at 2018, do you think we saw the crypto bubble burst?
Antonopoulos: We have seen a bubble burst. This was the sixth or seventh bubble, depending on how you count it, in the cryptocurrency space, which is actually closely related to how the cryptocurrency markets work: causing the cryptocurrency to grow into this type of explosives which results in sudden bursts followed by sudden contractions.
"Cryptocurrency is neutral from a political point of view, it does not make geopolitics, it does not embargo and sanctions and currency controls of the traditional currencies ".
– Andreas M. Antonopoulos
How would you define the state of cryptocurrency this year, beyond the crash?
It was a year of consolidation. We have seen many very interesting developments in a couple of different areas. 2018 was the year of the rapid growth of a system called Lightning Network, a network of micropayments built on bitcoins.
We also witnessed a consolidation of crowdfunding activities in 2017, when there was a lot of exuberance in crowdfunding, and many of them died. We have a more rational market for this.
So you see the developments towards the cryptocurrency in the most usable currency, rather than a resource for speculative trading?
Yes, technology continues to mature and the amount of work that is happening in terms of technical developments has continued to grow at a very, very rapid pace throughout the cryptocurrency space.
One of the other important things we saw in 2018 was the impact that cryptocurrency has had on some of the emerging markets where they have had capital controls and currency crises, particularly Venezuela, Argentina, Brazil and Turkey. Therefore, even if the overall cryptocurrency market has reduced volumes, volumes in those countries have more than quadrupled up to 2018.
You will often hear people ask what is the case with these cryptocurrencies. And what we are seeing the market respond to is that, at this stage of its development, one of the main cryptocurrency applications and applications is capital protection during currency collapse, which is very useful in emerging markets.
What about countries that do not face a currency collapse situation? Why is it useful as a currency?
Well, it's not at the moment. We are not at the level of technological maturity where it is particularly useful for developed nations. But then again, if you look at the number of countries that have currency crises, historically most of the developing world has faced the currency crisis after the currency crisis every 15 or 20 years. So even if it's mainly for emerging markets, it's a huge application for [the crypto] market right there.
Would you say that the success of cryptocurrencies will depend on an increasing number of currency crises?
No, not necessarily. I think it is one of the applications that has emerged at the moment because of how efficiently the cryptocurrency can be transmitted across borders and how quickly liquidity can be moved to areas where it is needed, which is one of the main differentiating factors of cryptocurrency. Cryptocurrency is politically neutral. It does not make geopolitics. It does not embargo and sanctions and currency controls of traditional currencies. Mathematically neutral and without boundaries means that it has found a niche in which it is flourishing.
I think that in the long run, however, really interesting applications emerge when the cryptocurrency can do things that can not be done with the current payment system. This means being able to settle payments across borders in milliseconds and make extremely small payments at a very low cost. The possibility of making payments not only under one dollar, but less than one cent, in less than a millisecond, and that has been resolved beyond the borders, I think it is here that we will see some truly new applications emerge in the future. The average American who uses Visa will not see a case of immediate use [crypto] in addition to speculation.
So you want to get to a point where you're not looking at the purely speculative value of bitcoin.
[Speculative trading] it is useful for generating excitement, but this is not the point at which the interesting aspects of this technology are found. Interesting aspects of this technology [appear] when you open completely new application domains that never existed before.
C & # 39; was it something in the decline of 2018 that worried you about the potential use of cryptocurrency as a real currency? For example, it seems that the volatility we have seen this year would be a major obstacle to the implementation of a micropayment system.
No, not exactly because he is looking at it with a kind of circular logic: [Cryptocurrency is] too small to be large Volatility is a rather limited adoption factor, rather limited use of applications and such applications are not very influenced by volatility.
If and when the system grows in terms of available liquidity and adoption, volatility will naturally decrease. The more people use it, the more they use it for everyday applications, the less volatility we see because speculation is not the main driver.
I use cryptocurrency almost daily in my company. And from my point of view, volatility is irrelevant because I earn directly in cryptocurrency. When I earn in cryptocurrency for $ 300 and then spend cryptocurrency at a price of $ 300 in the same week, it makes no difference. If instead of $ 300, it's $ 3,000, it makes no difference to me because, again, I earned that week. So, when the price goes down, it costs me more from the expense side, but I'm earning more from the earnings side, so it does not really matter. It's a wash.
What do you think of the attempts by the SEC and other regulators to combat cryptographic scams? It seems that scams are still an important part of the cryptocurrency space in 2018.
My personal opinion is that education is more effective in fighting scams. I am not convinced that the attempt to regulate on a global basis on a technology that moves quickly and is judiciously very agile will be effective. I think it would be much more effective to look at providing clear guidelines for those who want to do it the right way and build more education.
What do you watch for 2019 after the outbreak of 2018?
I do not want to be irreverent, because I know that many people have made poor investment decisions, which may have been quite painful. And I advise people to invest in education and skills technology, not to treat this as a speculative tool, because it is dangerous and volatile.
Ironically, these are good times for those of us who were focused on technology, focused on development, focused on building new applications and new features. This is the time when we do the most productive work, because all the distractions and the noise go away for a while. I had that experience in 2014 and 2015, I was part of my best job that year. And in reality it has been a year of great innovations in space because all the high-volume speculative voices have disappeared. The people who stay are obviously inside for not just the price.
So would you say that your 2018 was more productive than 2017?
No doubt. I published my fourth book, Mastering Ethereumin 2018 because I had the opportunity to breathe and calm down and not answer hundreds of e-mails and say no to people who wanted me to be a consultant to their ICO. Stupidity has stopped. Now we can go on with serious work. People who look at this from the outside see the noise going off and they are like, "OK, cryptocurrency is dead." Well, guess what? " We've already heard it before.
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