As the year draws to a close, many will look back at 2019 as being rather eventful in the crypto space.
One of the main moves for crypto was that the outgoing year would witness a rise in platforms that are faster and more scalable than their predecessors, particularly platforms used by enterprises, financial institutions, and governments.
JPMorgan and Swift were among the many corporations that announced blockchain-based platforms that could be used at the enterprise level, indicating a growing trend for more scalable (although not necessarily decentralized) blockchain tech.
Moreover, Crypto enthusiasts also witnessed central banks across the globe, engaging in their own internal research to create their own central bank-backed digital currencies (CBDCs).
Other advances are happening in the crypto space, and some remarkable trends that will likely dominate the outlook for the coming year are beginning to reveal themselves. Here is a look at four trends to watch out for in 2020.
1. Ripple to revamp its payment processor
XRP is set to see a significant amount of traction as it accelerates the adoption of blockchain technology. Brad Garlinghouse, CEO at Ripple, believes that in the coming year, his company will define how cross-border payments are enabled in the world using blockchain.
RippleNet, a cross-border payment processor unveiled earlier this year, recently surpassed 300 customers. The project has seen 10x year-over-year growth in transactions, according to a blog post by Ripple.
Some of the companies currently committed to using RippleNet include MoneyGram, Viamericas, FlashFX, and Interbank Peru.
“We are in a strong financial position to execute against our vision. As others in the blockchain space have slowed their growth or even shut down, we have accelerated our momentum and industry leadership throughout 2019,”
– Ripple CEO Brad Garlinghouse.
As Ripple continues to expand its cross-border payment solutions, XRP is consolidating to become a game-changer, enabling businesses to improve their capabilities and expand their presence in different markets around the globe.
More so, Ripple customers will now be able to seamlessly interact with each other with the help of RippleNet Home. RippleNet Home is a product unveiled late this year that will be fully implemented in 2020.
Ripple’s investment arm Xpring has also launched a new platform for integrating XRP payments. As we head into 2020, the new platform aims to allow crypto and non-crypto developers to integrate payments into any mobile application.
Looking forward, Ripple’s revolutionary developments in money transfer services is definitely a trend to watch out for, especially with how the platforms intend to make it easier to integrate XRP payments into any mobile app.
Another massive product launching next year is the CoinField exchange’s “Sologenic”, a sophisticated ecosystem that facilitates trading of on-demand tokenized assets, including stocks and ETFs from more than 25 global stock exchanges, all built right on top of the XRP ledger (XRPL).
Ripple CEO Brad Garlinghouse made some bold predictions for 2020:
“CEO Brad Garlinghouse is even bolder, predicting that half of the top 20 biggest banks in the world will actively hold and trade digital assets in 2020. He is also one of many on the team that believes fiat currencies will go digital in the next year.”
– from Ripple.com
“The world doesn’t need 2000+ digital assets. While I don’t think there will be one coin to rule them all, it’s clear that if an asset doesn’t have a proven use case beyond speculation, it is not going to survive.”
– Brad Garlinghouse
2. The Imminent BTC Halving
The most publicised event that will take place in 2020 is the Bitcoin halving in May, which will reduce the number of BTC rewarded for successfully mining a block from 12.5 BTC to 6.25 BTC. Bitcoin Maximalists use the halving event to try and raise the price in a pump and dump fashion.
Even though it sounds dramatic, it’s happened twice before, and each event saw some interesting price action. In the months surrounding the 2012 halving, bitcoin price went from less than $10 to more than $100, while in 2016, the currency surged from $400 before the halving to more than twice that by the end of the year.
The imminent halving introduces new scarcity to the market, and BTC traders are already anticipating similar supply-side price growth as the past two halvings. However, traders shouldn’t forget that demand is also necessary for driving prices. As bitcoin mining becomes less lucrative, the number of miners competing for a block will fall as will the hash rate necessary for mining until an equilibrium is reached.
The halving is aimed at stabilizing the supply of bitcoins as it approaches full saturation, and there are no more bitcoins to be mined. After that, bitcoins may become rarer and more valuable, or Satoshi Nakamoto could create more BTC to be mined, so the coin’s value can be moderated.
On the other hand, the coin could progressively lose value to more plentiful cryptos such as Bitcoin Cash (BCH), which forked off from the original BTC in 2017 for just that purpose.
Ultimately, the world’s first cryptocurrency still needs to decide whether its scarcity alone defines its value.
3. Continued Focus on Scaling for Real-World Use
Scalability has been a thorn in the side of blockchains ever since the last massive wave of crypto adoption in 2017.
In 2020, there will likely be continued work from all the major blockchain projects to ensure their networks can scale for a larger amount of users.
A lot of attention will be on the Ethereum (ETH) network as it approaches Serenity (ETH 2.0), which aims to boost overall scalability and sustainability. Moreover, the upgrade should produce a very scalable blockchain that uses a new consensus algorithm and Sharding to boost efficiency and transaction speeds. Ethereum has received quite some criticism however for turning into a virtually fully centralised cryptocurrency.
Bitcoin SV is also expected to launch its Genesis hard fork in February next year as a significant step in the coin’s journey to restore the original Bitcoin protocol. The entire SV project is at risk however due to the legal battles facing Craig Wright.
The coming year will also see the full implementation of the lightning network to solve Bitcoin’s scalability issues. Built as a second layer over the BTC network, the lightning network will enable users to transfer Bitcoin between one another instantly and without any fees.
The Lightning Network also has a fraud protection mechanism built-in, which will likely reduce incidents of hacking and induce user confidence while trading cryptocurrencies.
The Lightning Network however has received a lot of bad press for being centralised, user unfriendly and for not working properly. Even within the Bitcoin community most appear to be sceptical of the LN, particularly as the XRP Ledger can – and has been proven to – scale Bitcoin payments faster and cheaper than any Bitcoin built product so far!
4. The wave of Consumer Crypto Platforms
The overarching theme of all of the trends discussed above is that cryptocurrency is growing up, becoming mainstream, and finally finding actual use cases, rather than just hypothetical ones.
For 2020, many are predicting an increase in consumer crypto platforms that harness advances in scalable technology.
Crypto platforms and apps in the works that are expected to launch in the New Year include NEO 3.0 and the Lynx (LYNX) fork of EOS (EOS).
However, emerging platforms will need a healthy advanced decentralized app to arrive with them, so it is expected that most of 2020 will focus on building these dAPPs. The need for innovation has been an obvious trend across major fields in the market.
For instance, Fintech companies like Visa and Goldman Sachs Group are highly curious about digital assets but terrified of the uncertainty that surrounds them.
This could change in 2020 as we see the crypto ecosystem adopt platforms that can be an investor’s backend system, with ample tracking, management, and taxes to make them more adoptable by Fintech entities.
5. Facebook Coin Impact
Libra, the Facebook’s stable coin announced earlier this year, was expected to launch in the summer of 2020 if it clears the necessary regulatory hurdles (altough this is looking less likely now).
In any event, a lot of uncertainties remain about the new stable coin that has backing from the likes of Uber, Vodafone, Coinbase, and many other major players in the business world. Unfortunately, uncertainties surrounding the project have prompted other interested parties like Mastercard, eBay, and Paypal Holdings, to pull out of the cryptocurrency altogether.
However, the one certainty around Libra is that it will have a potential user base of nearly 170 million in the U.S alone. Thanks to Facebook’s omnipresence, their adoption of Libra and its associated Calibra wallet will mean that users of the social network, many of whom don’t understand crypto, might suddenly be exposed to the crypto space in 2020.
Indeed, Libra has been viewed by many as potentially bringing an air of legitimacy to cryptocurrencies and promote crypto adoption. The discussion around Libra in 2019 just got people thinking about cryptocurrencies in a way never seen before, which could be an indicator of things to come.
Depending on how well this project is adopted — and pending the already massive scrutiny from government regulators — Libra’s probable launch in 2020 could mark the crucial point at which crypto goes mainstream.
Thoughts About Crypto in 2020
Crypto is ten years old now, and significant changes to its underlying technology have emerged to tackle issues ranging from scalability to malicious hacks.
In 2019, tweaks have been made to the original Bitcoin protocol, new cryptocurrencies with new features have been developed, and new second-layer technologies and platforms are being designed to sit on top of existing coins.
2020 will be no different in this regard, bringing technical advancements that help push crypto closer to widespread adoption. And regardless of whether it will be interoperability standards, layer-2 scaling solutions, or entirely new digital currencies, these will all play their role in making the overall crypto ecosystem more attractive to potential users.