Drop In Cryptocurrency Prices Hasn’t Delayed The Progress Of Blockchain Technology

Throughout 2018, the price of cryptocurrencies fell dramatically against the USD. This was shortly after the price of cryptocurrencies reached their all-time-highs in the December 2017 to January 2018 bull rally. The fall in price cryptocurrencies led to a collapse of the ICO market that flooded the blockchain space. Many projects that were launched during the hype met their ends in no time. Scam ICOs also used the opportunity to scam investors of their hard earned money.

While the cryptocurrency bear market took over front pages of news outlets last year, blockchain technology was making progress in other aspects. While some of the advancements are still in their infant stages, they are certainly going to lay the groundwork for a come back in the future.
Only few ICOs benefited from the money raised in 2017 and there was a problem of centralization and consolidation. Given the fact that the core principle of blockchain technology is decentralization, this was counterintuitive.

A study examining the progress of ICOs that was conducted by EY, showed that more than 95% of funds for initial coin offerings were raised on the Ethereum blockchain. Developers and social media recorded high activity on the Ethereum platform. At the same time, the exchange market consolidated rapidly. Only the top 10 exchanges recorded 73% of the daily trading volume.

Big exchanges were able to consolidate their positions by following up with the demands for regulatory compliance and beefing up security. This is why the number of large scale theft dropped in 2018 when compared to 2017. The increase in the interest people have in stablecoins also increased the popularity of public blockchains. However, stablecoins don’t appear to be fulfilling their purpose at the moment.

Private blockchains have also been consolidating their hold on the market. These blockchains deliver real value to enterprises. EY reported that many systems entered production status.

Moving forward, blockchain companies will need to improve their services by keeping certain things in mind. For starters, there is no need to fix anything that isn’t broken. Some companies that tried to implement blockchain technology changed their minds when they discovered that there were other already existing solutions to the project. The projects need to solve real time problems. Companies will need to do more than proof of concepts and focus on productizing and providing solutions to real time problems.
Also, blockchain companies need to prioritize operations over finance. While tracking assets and products through the supply chain is important, there are still many financial services that will be more valuable. Whether it will be applied in simple things like payment on delivery to complex things like trade finance and factoring receivables.

However, in many instances, companies are looking forward to achieving confidence in operational systems before they will close the loop with financial and payment services. This is something they will have to tackle in the beginning of the year for the progress of the industry. This year is going to be marked by major advancements in the blockchain industry as long as these issues are addressed.