In my 2019 tech predictions column for Newsroom, I had this to say about crypto and blockchain:
This time last year, I was predicting continued growth for crypto and blockchain. How wrong I was on that. So I’m naturally more circumspect now about the chances of cryptocurrencies and blockchain making an impact in 2019.
What is needed is small wins. First of all, how about some practical use cases that aren’t silly games (like Cryptokitties) or tools for financial speculation (like all crypto exchanges). Am I confident this will happen? No. But I’d love to see, for example, a useful crypto retail app or a micropayments app.
One fairly easy prediction in this sector is that many of the so-called “altcoins” will disappear next year. Bitcoin and Ethereum will likely struggle to re-gain momentum, in both price and development. But they’ll survive.
Overall, 2019 will be about resetting expectations for this market and continuing to build up the technical infrastructure.
I just posted my annual top 5 technology trends post on my personal blog. One of my key trends was the crypto crash of 2019 and the stalling of blockchain innovation. As you all know, it’s been stormy weather these past few months.
What I wrote sums up my feelings about cryptocurrencies and blockchain as 2018 draws to a close. Frankly, I’m disillusioned. But as I note in the last paragraph, I am still hopeful – if the crypto community ever shows it is interested in products over price. Here’s what I wrote on ricmac.org:
In January I started a new blog, called Blocksplain. My goal was to profile new blockchain and cryptocurrency startups, and explain how they fit into the emerging blockchain ecosystem.
Despite the promise I saw (1, 2, 3), the crypto ecosystem failed to emerge during 2018. It remains difficult to use cryptocurrencies, regulation has been messy, and decentralized apps (Dapps) have for the most part been a dud – except perhaps for Cryptokitties(!). In addition, my blog Blocksplain struggled to gain traction because, as it turned out, crypto fans weren’t interested in blockchain products. They were only interested in price and market speculation.
However by the end of 2018, coin prices had turned to custard too. Bitcoin was over $17,000 in January, only to fall back to less than $3,500 in December. Ethereum’s fall was even worse: over $1,300 in January, less than $100 now. Let’s not even mention the altcoins.
Is there any hope left in crypto and blockchain? Perhaps the technology will yet prove useful, but the crypto community has a lot of work to do before that happens – not the least in re-focusing on product, rather than price.
I’m currently following a bunch of cryptocurrency startups hoping to disrupt the media business. I’ve already written about a few of them: Civil, Narrative and Po.et. There are also a number of social media products built on blockchain, such as Steemit (a crypto Reddit) and Peepeth (a crypto Twitter). Finally, there are as-yet unlaunched crypto media projects of various stripes that I’m looking forward to seeing soon: Julien Genestoux’s Unlock and Mike Dudas’ The Block are a couple of examples.
All these companies are trying different things in the media / “content” ecosystem, but here are five aspects I’m particularly tracking right now:
Civil aims to use blockchain and “cryptoeconomics” to provide a sustainable business model for journalism. But its grand plan reminds me a bit too much of the politicking in the Star Wars prequels. Do we need a written constitution, voted on by cryptocurrency holders, to decide what’s ethical in journalism? Does freedom of the press really mean you have to sign a social contract?
To explain, I need to set the context – fairly and ethically of course. Don’t worry, I got permission from the Blocksplain Council of Elders before writing this post.
Dapps, a.k.a. decentralized apps, have up till now been hard to find on the Web. But the blockchain browser company Blockstack aims to change that with its new directory, Universal Dapp Store. This could be a turning point for dapps, because Blockstack has the heavyweight backing to popularise the use of distributed apps. The company counts Fred Wilson’s Union Square Ventures and self-styled crypto guru Naval Ravikant as investors.
One thing the Universal Dapp Store doesn’t have at the present time is breadth. At time of writing, it lists just 205 dapps. That pales into comparison to Ethereum’s own unofficial directory, State of the Dapps, which bills itself as “The curated list of 1,577 decentralized apps.”
However, there are a couple of key differences between Blockstack’s directory and Ethereum’s. Firstly, Blockstack includes dapps that don’t use Ethereum’s platform (indeed, as I’ll note below, some of the listed dapps don’t even use blockchain). The other key difference is user friendliness. Ethereum’s list is useful if you want to try out the latest developer experiments, but it’s not designed for the casual user. The 205 dapps listed by Blockstack appear to be relatively mature, or at least able to be trialled without a visit to GitHub.
Love or hate blockchain and cryptocurrencies, you can’t deny they’ve made a big impact on the Web’s evolution over the past several years. I don’t necessarily believe there are “versions” of the Web, but I’m going to appropriate the term Web 3.0 anyway. Mainly because it helps try and identify what’s changed on the Web; especially compared to the Web 2.0 era. Bear with me, and I welcome your feedback.
Web 3.0 is a term that has been bandied about for years now; most notably by Semantic Web proponents in the middle of Web 2.0. The moniker failed to gain traction back then, much like the Semantic Web itself. But lately some blockchain and cryptocurrency people have tried to define Web 3.0 in their context. Most notably, co-creator of Ethereum Gavin Wood, who deployed the term in 2014. His post is overly complicated, in the best traditions of the still young crypto community. But he hit on some key concepts, some of which are just now becoming reality.
As for my own sense of what blockchain and cryptocurrencies bring to the Web, in the process of writing Blocksplain this year I’ve come to realise they’re useful tools that are helping take the Web to the next level. In particular, to address some of the societal problems that Web 2.0 brought us. With that said, Web 3.0 does not equal The Blockchain Web. I’ve also learnt there are some things blockchain isn’t ideal for (more on that below).
Ultimately, if Web 3.0 has any meaning at all, then it’s in trying to define what the latest wave of Web developers and entrepreneurs are building – and why. So let’s firstly identify what’s important in the post-Web 2.0 era.
I’ve been thinking about some of the problems of blockchain startups and what (if anything) can be done to address them. The fact is, this “Web 3” revolution has been very slow to get going. I had expected it to ramp up faster, but instead the industry is still overly focused on cryptocurrency speculation and promoting new protocols (such as the various Ethereum killers). The speculation won’t stop until there’s a market crash, but it’s the lack of progress on the product side that most concerns me. It’s not protocols we need now, it’s products! Where are the betas of the Web 3 products that consumers will eventually use?
This concern has led me to identify three key challenges with the blockchain startup ecosystem. If we can make progress on each one before the year is out, I think the industry will be in a much better place.
It’s currently a barren landscape for DApps, with CryptoKitties still the most high profile decentralized app to have been built on a blockchain. As Chris McCann from the VC firm Greylock Partners put it, “we are orders of magnitudes away from consumer adoption of DApps.” He went on to say that “no killer app (outside of tokens and trading) have been created.”
All that is true, but there are interesting experiments happening. One of my regular lazy web requests from the blockchain developer community is a DApp version of Twitter. As I’ve pointed out before, Twitter is the quintessential Web 2.0 company – in that at first Twitter welcomed third party developers, then royally screwed them. A decentralized version of Twitter would prevent a centralized company, like Twitter Corp, from treating developers and users with such disdain again.
Enter Peepeth, which went live at the end of last month as a “decentralized microblogging site.” I signed up and became user #833. Here’s what I’ve discovered so far…
In my post yesterday bemoaning the slow progress of Ethereum’s scaling solution, Pete Abilla tweeted this response at me:
Sharding is a way to divide up a large database – such as a public blockchain – into smaller chunks, a.k.a. “shards.” The reason it’s important is that (provided the technology works) it’ll enable a blockchain project to process thousands of transactions per second; similar to Visa’s centralized databases.
Curious about Pete’s claim, I clicked through to check out Singapore-based Zilliqa.
It’s been an ongoing bear market for cryptocurrencies in 2018, including for the top two coins: Bitcoin and Ethereum. The main causes of bear sentiment seem to be worldwide regulation issues and other concerns around legitimisation (for example the blanket ban on crypto ads by Facebook, Google and Twitter). But another factor is the continuing uncertainty over the technical foundation of the main cryptocurrency platforms. In particular: can they scale as development platforms? This issue is especially important for Ethereum, because its grand plan to be a “world computer” relies on its DApp platform successfully scaling. Which, so far, it has conspicuously failed to do.
Even Ethereum’s creator and most influential spokesperson, Vitalik Buterin, has now expressed frustration over Ethereum’s scalability problems. “If you want to build a decentralized Uber and Lyft on top of an unscalable ethereum, you are screwed,” he told attendees of a Seoul conference this week.