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This is what some experts think is essential for Blockchain in 2019

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The Blockchain Center of Economic Development in New York City is illuminated at night in New York, in the United States, on Thursday 10 January 2019. The 4,000-square-foot center, located in the center of the city's Silicon Alley, will offer everything from programming lessons to lunch conferences for software developers to the general public. (Photographer: Victor J. Blue / Bloomberg&copy; 2019 Bloomberg Finance LP

An article by McKinsey of January 2019, & nbsp;Occam problem of Blockchain, I notice that this blockchain has the potential to be a turning point, but it has yet to be proven. The report indicates that markets from financial services to health care and the arts have identified more than 100 cases of blockchain use with the most impressive results in which blockchains are used to store information, cut intermediaries and allow greater coordination between companies. But the report found that, in general, the blockchain is a "relatively unstable child technology".

Risk capital financing for blockchain startups continues to grow and was around $ 3.9 billion in the first three quarters of 2018. IBM has invested more than $ 200 million in a blockchain-based data sharing solution for the Internet of Things (IoT) and Google he worked with blockchain since 2016 when he offered developers a test to test blockchain services in his cloud. The financial sector spends alone $ 1.7 billion on blockchain.

In 2018, the European Union (EU) has increased blockchain financing& Nbsp; from 83 million a 340 million by 2020.

Eitan Jankelewitz, Partner, Sheridans, says he expects traditional VC funding to continue to be available for the best projects.

"In 2018, the market for the initial coin offer (ICO) in the EU was not as strong as 2017, and I expect this trend to persist in 2019," said Jankelewitz. "From a regulatory point of view, we are in a clearer position in 2019 due to the UK publication of December 2018 Taskforce Cryptoassets of the Financial Conduct Authority: final report, as well as the publication of the report with a council for the European Commission from the European Banking Authority. "

"Both are significant, as well as being clearer regulatory declarations on the use of cryptographic resources in the EU, both distinguishing between payment tokens, security tokens and utility tokens," added Jankelewitz. "This should help start-ups seeking to raise funds from ICO to find a satisfactory way through the process, and make it clear that, unlike many other jurisdictions, the EU does not believe that ICOs are necessarily problematic. "

So what will be important in 2019? Shone Antsy is the executive president and co-founder of the Blockchain Intelligence Group& nbsp; and Ed Handschuh, co-founder and CEO, & nbsp;1Konto break down some blockchain trends for 2019.

Safety and usability

Antsy states that the new generation of portfolios is the showcase of cryptocurrencies.

"Determine the verdict of people on the security and usability of cryptocurrencies.To obtain a cryptographic portfolio to offer the level of protection and usability that people are used to obtain from fiat currency, a solid management of private keys, a process Untrusted and untrusted transactional transactions and a user-friendly interface are key requirements, "Antsy said. "Desktop portfolios like Jaxx, Atomic and Exodus seem to have a good combination of security and usability.The development of atomic swaps can bring the secure transaction environment of a decentralized exchange to the type of wallet that is simple to use for people."

But Handschuhs says he believes that encryption is already safer in many cases than traditional fiat currencies.

"The problem with cryptographic security is not in the currency, but the provider that maintains encryption and the vulnerability of being hacked," said Handschuhs. "Users have the ability to keep their currency, but this reduces its usability and increases the friction in the system that also reduces the take-up.Thanks to these limitations, many choose a portfolio provider."

"In a sense, this security has effectively reduced its usability and caused it to be necessary& Nbsp;third& Nbsp;applications to make the use of cryptocurrency easier and more accessible, "added Handschuh." The key to usability is access to / added places to purchase items with currency. & Nbsp; Companies like BitPay are making great strides in this area and allow encrypted purchases to be similar to a PayPal purchase, very intuitive and& Nbsp;easy to use. "

Regulation and investment

Antsy says that by 2019, the laws and regulations we can expect will probably be further developments reforms made in 2018.

"For the United States, federal and state laws will evolve to accommodate cryptocurrencies between their current virtual currency decisions in general, but some states define cryptocurrency as money to make them compliant with their money transmission laws," Antsy said. . "Meanwhile, at the federal level, the SEC continues to push for cryptocurrencies to be defined as securities so that they can treat ICOs and now security token offerings using the same channels they apply for their regulation of financial markets in their complex."

"The New York State Department of Financial Services has gone so far as to require cryptocurrency traders to buy a license called BitLicense to manage an exchange or portfolio service, "Antsy said." We're not sure how much traction licenses will have in 2019 when consumption was low and some wallets and portfolio services preferred to exclude US customers to avoid to be involved in US regulations. "

Jankelewitz says that when it comes to investments and if there is an appetite in the market it's all about another matter.

"Some ICO investors are coming to realize that some of their previous decisions may have been overshadowed by a rush of blood to the head, which applies to both individuals and institutions such as ICO-focused VCs, whose investments are large part below 2018., "said Jankelewitz. & nbsp; "Similarly, start-ups whose target customers are larger companies have told me that in some cases, having completed an ICO can close more doors than it opens in. This is partly due to previous regulatory uncertainty, but more 39; effect of fueling reputational risk in a cost-benefit analysis of large companies. "

"I expect a combination of more conservative investors and clearer regulation will see a more judicious use of ICOs to raise funds in 2019. I do not think the days of ICO fundraising in the EU are over – ICO fundraising it can be an excellent way to raise money, but ICOs are really just an option for a handful of companies, and always and only if done correctly, "said Jankelewitz.

"ICOs are complex corporate transactions and should be dealt with by issuers and investors as such: The clearer regulation in the EU should make this more feasible in 2019," adds Jankelewitz.

Antsy states that the incongruity between national and local (in the United States) threatens to feed continuous inconsistencies on how to define cryptocurrency in 2019.

"However, this can also create momentum for regional regulation similar to the Asian countries that have designed their rules to balance consumer protection with a light hand that allows innovation to thrive," added Antsy .

Handschuh & nbsp; He says that the industry would like to see the regulatory environment surrounding cryptocurrency and capital increase to become more apparent and ideally have a congress to create industry guidelines to follow.

"My faith is that& Nbsp;Congress& Nbsp;it will bring together and provide clarity to this new industry, "said Handschuh." I am more confident that the SEC will have clear and written guidelines for Initial Coin Offerings (ICO), Security Token Offerings (STO) and cryptocurrencies by the end of 2019 and clarity legislation can only help& Nbsp;space& Nbsp;grow, but I do not think it is necessary because I see that adoption occurs regardless. "

Both Antsy and Handschuh do not believe that blockchain success or failure depends on regulation.

"Success or failure lies in the reactivity of the blockchain community to act in the interest of its users," Antsy said. "This can involve driving regulators, [..] but it reduces the user's experience of being served properly and feeling safe in a world that is still very new and still under attack by hackers and scammers. "

Handschuh is more adamant. He says that success depends on adoption.

"The greater the adoption, the more clarity we will receive in regulation and stimulate growth more," said Handschuh. "Blockchain technology must work on a user story basis, not simply because it is based on this new and extraordinary technology."

"For me, the success is as follows: when my grandma can download an app on her phone and not even realize it is on blockchain. & Nbsp; Downloaded it for what it does, not how it does it or how it is set , "Handschuh joked.

Environmental

"An interesting result of the decline in the fiat values ​​of cryptocurrencies up to 2018 is that it has had a much greater impact on large mining structures that have gone too far in order to be expensive." They bought large facilities in remote locations that have proven to be too expensive to handle, "said Antsy.

"On the other hand, the smaller mines that had pooled their resources or adapted their existing plant had less of an environmental impact and are still in business," Antsy said. "Mining operations are attracted by efficient conditions every time they decide to locate their plants: low energy costs, a favorable climate, a stable political environment.The smallest mines have been successfully assimilated with the places they have adopted and therefore have had a minor impact on the natural environment. "

Antsy says calculations on how much mine costs 1 BTC still remains problematic.

"The variables are too different in the mining ecosystem because of different hardware, different mining settings, etc. And many mines do not reveal details about their energy consumption," Antsy said. "If the Paris climate change agreement can establish specific hardware for the extraction of cryptocurrencies and require miners to declare their expenses, we could obtain more solid bases to calculate the impact of cryptocurrency on changes climate change, but until then, demand will continue to be mired in presumptive estimates. "

Joseph Pallant, Founder, & nbsp;Blockchain for Climate Foundation& nbsp; participated in COP 24 at & nbsp; Katowice, Poland in December 2018 & nbsp; and said that one of the great failures of another good COP24 makes the blockchain more crucial than ever.

The leaders and negotiators of nearly 200 nations around the world speak during the official opening of the key climate conference of UN COP 24 which agrees on ways to combat global warming in Katowice, in Poland, Monday 3 December 2018. (AP Photo / Czarek Sokolowski) Photo credit: RELEASE

"Article 6 it's the key to fighting climate because it's part of the Paris agreement that allows international collaboration for emission reduction investments, "said Pallant." Without it, the investing nations can not access the credit of carbon that deserves from the impact of its investments. And in many cases, this credit is a key aspect of the value chain and business plan. "

Pallant says without consent on Article 6 to COP 24, the international community has not been able to move forward with this key collaboration mechanism.

"They had to bet on it COP25& Nbsp; in January 2020, "& nbsp; added Pallant." As a result, a whole range of institutional and private investments in climate action have been put aside for another 13 months. Consider & nbsp; indications that & nbsp; 2021 was the first start date for international carbon negotiations under Article 6 before this stop line, this is clearly a big deal. "

Handschuh says we need to look at what functions miners do for energy use.

"They act like an international banking system, a system of payments and an immutable database," said Handschuh. "When we look at the functions and not simply the" cost to extract 1 BTC ", we see that their data usage is lower than the traditional companies in those spaces.With the passage of time, I expect that the use of energy decrease to more efficient processes and a growing preference for geothermal sources and other renewable energy sources and the reason for this [..] it can be economically advantageous and [..]beneficial for the environment. "

"We could have a 100% green renewable financial system that employs fewer people and costs a fraction of what the system costs today are about energy, infrastructure and human capital," said Handschuh.

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The Blockchain Center of Economic Development in New York City is illuminated at night in New York, in the United States, on Thursday 10 January 2019. The 4,000-square-foot center, located in the center of the city's Silicon Alley, will offer everything from programming lessons to lunch conferences for software developers to the general public. (Photographer: Victor J. Blue / Bloomberg© 2019 Bloomberg Finance LP

An article by McKinsey of January 2019, Blockchain's Occam problem, he noted that blockchain has the potential to be a turning point, but it has yet to be proven. The report indicates that markets from financial services to health care and the arts have identified more than 100 cases of blockchain use with the most impressive results where blockchains are used to store information, cut intermediaries and allow greater coordination between companies. But the report found that, in general, the blockchain is a "relatively unstable child technology".

Venture capital loans for blockchain startups continue to grow and were around $ 3.9 billion in the first three quarters of 2018. IBM invested over $ 200 million in a blockchain-based data sharing solution for the Internet of Things (IoT), and Google has worked with blockchain since 2016 when it offered developers a test to test blockchain services in its cloud. The financial sector alone spends about $ 1.7 billion on blockchain.

In 2018, the European Union (EU) increased blockchain funding from 83 million a 340 million by 2020.

Eitan Jankelewitz, Partner, Sheridans, says he expects traditional VC funding to continue to be available for the best projects.

"In 2018, the market for the initial supply of coins (ICO) in the EU was not as strong as 2017, and I expect this trend to persist in 2019," said Jankelewitz. "From a regulatory point of view, we are in a clearer position in 2019 due to the publication, in December 2018, of the Cryptoassets task force of the UK Financial Conduct Authority: final report, as well as the publication of the report with the advice of the European Commission by of the European Authority Bank. "

"Both are significant: in addition to being clearer regulatory statements on the use of cryptographic resources in the EU, they both distinguish between payment tokens, security tokens and utility tokens," added Jankelewitz. "This should help start-ups seeking to raise funds from ICO to find a compliant solution in the process and also clarify that, unlike many other jurisdictions, the EU does not see ICOs as necessarily problematic" .

So what will be important in 2019? Shone Antsy is the executive president and co-founder of the Blockchain Intelligence Group and Ed Handschuh, co-founder and CEO, 1Konto break down some blockchain trends for 2019.

Safety and usability

Antsy states that the new generation of portfolios is the showcase of cryptocurrencies.

"Determine the verdict of people on the security and usability of cryptocurrencies, to obtain an encrypted portfolio to offer the level of protection and usability that people are used to obtain from fiat currency, a sound private key management, a process Untrusted and trustworthy transaction transactions, and a user-friendly interface are the key requirements, "Antsy said. "Desktop portfolios like Jaxx, Atomic and Exodus seem to have a good combination of security and usability: the development of atomic swaps can bring the secure transaction environment of a decentralized exchange to the type of wallet that is simple to use for people ".

But Handschuhs says he believes the crypt is already safer in many cases than traditional legal currencies.

"The problem with cryptographic security is not in the currency, but the vendor who maintains the encryption and the vulnerability of being hacked," said Handschuhs. "Users have the ability to keep their currency, but this reduces its usability and increases the friction in the system that also reduces the adoption. Because of these limitations, many choose a portfolio supplier."

"In a sense, this security has effectively reduced its usability and caused it to be necessary third the applications to make the use of cryptocurrency easier and more accessible, "added Handschuhs." The key to usability is access to / added places to purchase items with currency. Companies like BitPay are making great strides in this area and allow encrypted purchases to be similar to a PayPal purchase, very intuitive and easy to use. "

Regulation and investment

Antsy says that by 2019, the laws and regulations we can expect are more likely to develop further on the reforms made in 2018.

"For the United States, federal and state laws will evolve to accommodate cryptocurrencies between their current virtual currency decisions in general, but some states define cryptocurrency as a currency to make them compliant with their money transmission laws," Antsy said. . "Meanwhile, at the federal level, the SEC continues to push for cryptocurrencies to be defined as securities so that they can treat ICOs and now security token offerings using the same channels they apply for their regulation of financial markets in their complex."

"The New York State Department of Financial Services has gone so far as to require cryptocurrency traders to purchase a license called BitLicense to manage an exchange or portfolio service," Antsy said. "We are not sure how much the traction licenses will have in 2019 when the consumption has been low and some wallets and portfolio services have preferred to exclude US customers to avoid being involved in US regulations".

Jankelewitz says that when it comes to investments and if there is an appetite in the market it's all about another matter.

"Some ICO investors are coming to realize that some of their previous decisions may have been overshadowed by a rush of blood to the head, this applies to both people and institutions like ICO focused VCs, whose investments are largely lower than 2018., "said Jankelewitz. "Similarly, start-ups whose target customers are larger companies have told me that in some cases, having completed an ICO can close multiple open doors, partly due to previous regulatory uncertainty, but more due to effect of nurturing reputational risk in a cost-benefit analysis of large companies ".

"I expect a combination of more conservative investors and clearer regulation will see a more judicious use of ICOs to raise funds in 2019. I do not think the days of ICO fundraising in the EU are over – ICO fundraising It can be an excellent way to raise funds, but ICOs are really just an option for a handful of companies, and always and only if done correctly, "said Jankelewitz.

"ICOs are complex corporate transactions and should be addressed by issuers and investors as such. The clearer regulation in the EU should make this more feasible in 2019," adds Jankelewitz.

Antsy states that the incongruity between national and local (in the United States) threatens to feed continuous inconsistencies on how to define cryptocurrency in 2019.

"However, this can also create momentum for regional regulation similar to that of Asian countries that have designed their regulations to balance consumer protection with a light hand that allows innovation to thrive," Antsy added. .

Handschuh says that the industry would like to see the regulatory environment surrounding cryptocurrency and capital increase to become more apparent and ideally have a congress to create industry guidelines to follow.

"My faith is that Congress will bring together and provide clarity to this new sector, "said Handschuh." I am more confident that the SEC will have clear and written guidelines for Initial Coin Offerings (ICO), Security Token Offerings (STO) and cryptocurrencies by the end of 2019 and regulatory clarity can only help space grow, but I do not think it is necessary since I see that adoption occurs regardless. "

Both Antsy and Handschuh do not believe that blockchain success or failure depends on regulation.

"Success or failure lies in the reactivity of the blockchain community to act in the interest of its users," Antsy said. "This can involve driving regulators, [..] but it reduces the user's experience of being served properly and feeling safe in a world that is still very new and still under attack by hackers and scammers. "

Handschuh is more adamant. He says that success depends on adoption.

"The greater the adoption, the more clarity we will receive in regulation and this will stimulate more growth," said Handschuh. "Blockchain technology must work on a user story basis, not simply because it is based on this new and surprising technology."

"For me, the success is this: when my grandma can download an app on her phone and not even realize it's on blockchain, she downloaded it for what it does, not how it works or how it's set" , Handschuh joked.

Environmental

"An interesting result of the decline in the fiat values ​​of cryptocurrencies up to 2018 is that it has had a much greater impact on large mining structures that have gone too far to be expensive and have purchased large structures in remote locations that have since proven to be become too expensive for the service, "said Antsy.

"In contrast, the smaller mines that had either pooled their resources or modernized their existing plant had less of an environmental impact and are still in business," said Antsy. "Mining operations are attracted to efficient conditions every time they decide to locate their plants: low energy costs, a favorable climate, a stable political environment, the smaller mines have successfully assimilated to the places they have adopted and therefore have had an impact less on the natural environment. "

Antsy says calculations on how much mine costs 1 BTC still remains problematic.

"The variables are too different in the mining ecosystem because of different hardware, different mining settings, etc. And many mines do not reveal details about their energy consumption," Antsy said. "If the Paris Climate Change Agreement can establish specific hardware for the extraction of cryptocurrencies and require miners to declare their expenses, we could obtain more solid bases to calculate the impact of cryptocurrency on changes climate change, but until then the issue will continue to be mired in presumptive estimates. "

Joseph Pallant, founder of the Blockchain for Climate Foundation, participated in COP 24 in Katowice, Poland, in December 2018 and said that one of the great failures of an otherwise good COP24 makes the blockchain more crucial than ever.

The leaders and negotiators of nearly 200 nations around the world speak during the official opening of the key climate conference of UN COP 24 which agrees on ways to combat global warming in Katowice, in Poland, Monday 3 December 2018. (AP Photo / Czarek Sokolowski) Photo credit: RELEASE

"Article 6 is crucial for combating climate because it is the part of the Paris agreement that allows international collaboration for investment in reducing emissions," said Pallant. "Without it, the investing nations can not access the carbon credit they deserve from the impact of their investments and, in many cases, this credit is a key aspect of the value chain and the business plan."

Pallant says without consent on Article 6 to COP 24, the international community has not been able to carry out this key collaboration mechanism.

"They had to claim it at COP25 in January 2020," added Pallant. "As a result, a whole range of institutional and private investments in climate action have been set aside for another 13 months, considering that 2021 was the first starting date for international carbon trade within the of article 6 before this stop line, this is clearly a big deal ".

Handschuh says we need to look at what functions miners do for energy use.

"They act like an international banking system, a payment system and an immutable database," said Handschuh. "When we look at the features and not simply the cost to extract 1 BTC, we see that their data usage is lower than the traditional companies in those spaces." Over time, I expect the 39. using energy decreases to more efficient processes and a growing preference for geothermal and other renewable energy sources and the reason for this [..] it can be economically advantageous and [..]beneficial for the environment. "

"We could have a 100% renewable green financial system that employs fewer people and costs a fraction of what the system costs today are about energy, infrastructure and human capital," said Handschuh.

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