2017 was the year of bitcoin. 2018 will be the year of blockchain and smart contracts
There is a phenomenon known in psychology as projection, and it is exactly what happens with blockchain when it is perceived as a synonym of bitcoin. Bitcoin divided humans into anxious owners and envious outsiders – but now, after it experienced a freefall correction from about 20,000 to less than 11,000, this projection proved harmful for the underlying blockchain technology.
In Ukraine, a record number of events took place to discuss bitcoin and blockchain. UkraineIS, a partner of the Swiss Payment Forum, took part in many of them, including the last event of the year — Bitcoin Meetup Kyiv, which focused on the relationship between the state and the cryptocurrencies, as well as other blockchain applications.
Ukrainian government has not yet made a final decision regarding the regulation of this market. In other countries, regulators often take completely opposite decisions. Some countries (e.g. Japan, Korea, Belarus) gave full green light to cryptocurrencies, and in the United States a number of stock exchanges launched bitcoin futures. Countries like China and Israel, on the contrary, prioritized protection of their markets from volatility and decided to ban bitcoin trading.
A month ago, upon discussions with top blockchain and banking experts at the Swiss Payment Forum, Sergiy Vakarin published his conclusion that, in particular, bitcoin and other currencies based on blockchain should not become a new religion and there are other promising blockchain applications like smart contracts. This warning, published in Switzerland and Ukraine in November, can be recalled now after the freefall correction of bitcoin. But even though experts warned about the imminent correction well in advance, it became too much of a stress for many investors. As a result, Michael Novogratz, one of bitcoin’s most prominent champions, decided to postpone his plan to launch a cryptocurrency-focused hedge fund.
Participants of Swiss Payment Forum expressed differing views about cryptocurrencies. For instance, the view of the largest Swiss bank UBS is that in absence of any fundamental economic backing, bitcoin is almost certainly a bubble. Other participants pointed at bitcoin’s security to prove that it may be a valuable asset.
Interestingly, Emil Oldenburg, chief technology officer of Bitcoin.com, one of the world’s largest bitcoin websites, sold all of his bitcoin just before the correction. Yet many experts are bullish in their 2018 forecasts for bitcoin and other cryptocurrencies.So it is time to emphasize again: bitcoin and blockchain are not synonyms. Moreover, investors should pay more attention to other useful blockchain applications, including smart contracts (Sergiy Vakarin mentioned them in the previous article too).