Disappointment isn’t always a bad thing. It can be a spur, motivating one to work harder to meet expectations and goals. It is in this spirit that Cointelegraph informally surveyed members of the crypto community about this past year’s unfulfilled industry promises. Here are some of 2019’s biggest disappointments:
Where are the giant blockchain or crypto projects — enterprises that seize the imagination, rivet the public’s attention, and quiet the crypto skeptics? As Nouriel Roubini noted last year, “[Blockchain] still has only one application: cryptocurrencies.” Many in the industry are still waiting. As Lanre Sarumi, CEO of crypto derivative exchange Level Trading Field, told Cointelegraph:
“The lack of a groundbreaking project that would have opened the eyes of skeptics is most disappointing. Libra came the closest with a lot of promise, but nothing else [in 2019] really popped.”
Not much comfort can be drawn, either, from Forbes’ list of the top 50 financial technology firms. Only five crypto and blockchain firms made the 2019 “Fintech 50” list: Coinbase, Ripple, Bitfury, Gemini and Circle — compared to 11 in 2018.
The industry is still looking for a flagship application. “People need a simple use case that makes the benefits of blockchain technology clear and straightforward, like email,” said Chris Hart of Civic Technologies in a recent report published by the Zage marketing platform.
Institutions are still scarce
Killer DApps, scalability and institutional adoption are often cited as three missing ingredients required for blockchain to reach the tipping point in public acceptance. With regard to institutions, some progress was made in 2019 with the entry of Fidelity and ICE’s Bakkt, among others. But is it enough?
“Failure to attract institutional investors was certainly a disappointment,” Sarumi told Cointelegraph. “The Bakkt futures contract was specifically designed to attract both institutional and retail and it got a lukewarm response. Ditto for the recently launched Eris [credit and interest rate] futures.”
Consumer adoption lags
Many experts agree that usability must improve before the wider public adopts crypto and blockchain networks. In Zage’s survey of 102 blockchain technology project leaders, 41% of respondents agreed that a seamless user experience was key to mass adoption. The blockchain DApp experience needs to be more like the web and mobile phone user experience. “Right now to use most blockchain and cryptocurrency products, you have to essentially be an expert,” said Kory Hoang, co-founder and CEO of the stablecoin platform, Stably.
Stephen Pair, CEO of Bitpay, would have liked to see more rapid progress in the consumer adoption of cryptocurrencies in 2019, “and more adoption because it got easier to use,” he told Cointelegraph, continuing:
“Like not having to deal with Bitcoin addresses directly. If we could just solve some simple problems like that, ideally in an industry standard way, that could make a difference.”
Pair was also disappointed in the mix of products being purchased with crypto at present: “I would like to see a healthier mix of everyday consumer items and services being sold, such as consumers paying their cell phone bill, or DirecTV bills [with cryptocurrency].”
Pair also believes that people tend to spend BTC when prices are high, he added, often purchasing expensive items, like Lamborghinis. Nothing wrong with that — but he’d like to see more everyday items too.
Regulatory compliance remains an afterthought in parts of the crypto/blockchain world.
In late November, security firm CipherTrace reported that roughly 65% of the top 120 crypto exchanges lacked strong Know Your Customer policies.
Moreover, compliance at 24% of the exchanges was “weak,” meaning those exchanges allowed CipherTrace researchers to withdraw at least 0.25 BTC daily with virtually no questions asked — the researchers didn’t even have to show ID verification.
PwC Global Crypto Leader Hong Kong Henri Arslanian told Cointelegraph that, “Anyone who is launching a crypto exchange in 2019 with no regards to KYC or AML probably does not have the future of the crypto ecosystem at heart.” Regulatory noncompliance, especially around Anti-Money Laundering, remains a barrier on the road to mass acceptance of cryptocurrencies, continued Arslanian:
“A large AML or sanctions violation scandal today could erase years of hard work from the community which tried to show that crypto is much more than just the Silk Road or the dark web.”
The industry should not only comply with regulations, it should welcome them — at least if it wants to grow, as Lone Fønss Schrøder, CEO of the Concordium blockchain solution, told Cointelegraph: “I am certain that big companies will not go beyond the proof of concept stage on a chain that doesn’t enable the authorities to regulate.” Firms are going to need the…