At the end of June 2018, Steve Wozniak, known to the world as the co-founder of Apple, said that the idea of ​​blockchain now resembles an inflated bubble that may not work, and the potential of Bitcoin, despite the fall in the coin’s exchange rate, is amazing. With this statement, Wozniak once again opened up a discussion about which cryptocurrency is the most promising. Let’s try to understand this issue, and at the same time we’ll dwell on whether there is a future for cryptocurrency as such.

What does a promising cryptocurrency mean: selection criteria

The prospects for the development of cryptocurrencies in general and each specific coin in particular, in a global sense, directly depend on two main factors:

1. the demand for cryptosystems in real socio-economic spheres (of course, with the obligatory possibility of technological implementation);
2. development in society of clear rules for the functioning of virtual money and the possibility of including them in financial and economic circulation.

The freer the market, the higher, other things being equal, the dependence of the second factor on the first. A technology that has managed to prove its progressiveness and has begun to be implemented in practice in various private and public projects, if successfully scaled, begins to very quickly gain the trust of consumers. And when the majority begins to use the technology (sometimes without even realizing the mechanisms of the useful service), then a natural social and managerial need arises to establish uniform rules for what everyone already uses, but without legislative confirmation - in a limited mode.

In this sense, cryptocurrencies are no different from other technologies. If the use of technologies is enshrined in the legal framework, then their integration proceeds much more rapidly and covers wider sections of society. Including those layers that traditionally shun everything illegal and are prejudiced against the emergence of a new type of transmission of information and means.

The reputation of cryptonetworks, which were used as a medium for uncontrolled transactions related to illegal activities, was greatly shaken at a time when no one was yet talking about the introduction of technology into everyday life with its completely legal spheres. Recently, the situation with reputation has changed noticeably. Cryptocurrency is no longer associated only with “mafia money.” And Bitcoin’s long-term retention of its high value (even with enormous volatility, which is poorly taken into account by public opinion) made it possible to shake the confidence of the masses that the idea of ​​​​cryptocurrencies is one big financial bubble.

So the forecast for the future of cryptocurrencies for today (that is, for 2018) is much more optimistic than the forecasts of 2014-2016, and not so much because virtual money periodically “loudly” rises in price and attracts the public as a speculative asset, albeit with high risks, but also with wide opportunities for earning money. First of all, the cryptocurrency forecast has become more optimistic because the idea of ​​blockchain (and partly smart contracts) has gone beyond the boundaries of a purely virtual financial application area and has become part of progressive business endeavors.

Thus, the issue of legislative regulation has become especially relevant, and the expected appearance of a corresponding law in the Russian Federation in 2018 will make the prospects for cryptocurrency in Russia more certain:

1. On the one hand, with the introduction of rules, the “territory of freedom” of decentralized money will begin to narrow. This will happen not so much at the level of the form of internal functioning, but at the level of the idea of ​​a financial environment free from control. External rules restrict freedom more roughly than the internal natural regulations of systems.
2. On the other hand, the law will allow virtual money on the blockchain to be included in the general system of financial institutions, and this improves the forecast for the future of cryptocurrency in Russia, since without connection with the real economy, any development will begin to “slip.”

As a result, in today’s world, the two most important factors in the development of the industry “work”, rather, for a positive outlook. And the opinions of a number of crypto investors, who promise Bitcoin and Ethereum to overcome their historical price highs by the end of the year, are in line with the general trend towards the acceptance of coins by society, large businesses and government agencies. The only question is whether the optimistic cryptocurrency forecasts concern only two mega-giants of the industry or apply to all coins.

Fight for first place

Whatever new coins appear on the cryptocurrency market, if they talk about industry-wide prospects, then, first of all, they mention two key crypts: Bitcoin and Ethereum. In a sense, the future of cryptocurrency as a whole depends on how well these two projects do.

1. By mid-2018, Bitcoin had a market capitalization of $107-108 billion and, according to a study by AIER (American Institute of Economic Research), was the least volatile crypto asset, inferior in this parameter, of course, to reserve currencies (dollar, euro, pound, yen or gold), but showing a smaller amplitude of fluctuations compared to other crypts.

1. In terms of market capitalization, Ethereum was 2.5 times inferior to its main competitor ($44-45 billion), but it was noticeably superior to it in terms of the degree of integration into socio-economic life.

Ethereum is called the cryptocurrency of the future for a reason. This is not the first network that has implemented the idea of ​​“self-sufficient” smart contracts (Ethereum Classic, at least formally, is ahead of its “daughter”), but this is the first platform that was able to so widely interest the public outside the cryptocurrency market and demonstrate its technological potential . It is not surprising that forecasts for the growth of cryptocurrencies are primarily associated with Ethereum and its ecosystem, and that this coin is called the most promising in terms of its demand today.

The list of new projects based on the Ethereum blockchain at the beginning of 2018 alone exceeds in number and weight the sum of the projects of other cryptosystems from the top ten. In this list:

• creation of an automatic system for issuing receipts for oil and gas products, which changes the rules of the game in the energy sector;
• cooperation with NASA, which plans to use the platform’s capabilities both in deep space exploration and in developing a program to protect against space debris in Earth’s orbit;
• interaction with the Chilean energy sector in creating a statistical base.

In 2017 alone, more than 1,000 decentralized applications were deployed on the Ethereum platform and more than 700 tokens were created.

In addition to the global usefulness of the platform, the Ethereum cryptosystem also partially captures progressive trends at the level of ideas, and partially, as a flagship, dictates them itself. But the flagship of no less size and weight is Bitcoin, therefore, if we are talking about investments in cryptocurrencies, then risk diversification can be done by dividing the amount of deposit between these two market leaders, which is what most large crypto investors do, despite the fact that these are the most expensive coins , for now.

Of the top ten rankings, Tron is the cheapest cryptocurrency. It costs only 0.03-0.04 US dollars, but this does not make it the most promising. However, if you focus not on price, but again on the factor of socio-economic utility, which is subsequently more likely to be converted into the high cost of an altcoin, then, in addition to Ethereum and Bitcoin, there are a number of other promising coins.

Contenders for the title of the most promising coin

In addition to the large-scale implementation of blockchain technologies, the prospects for cryptocurrencies are influenced by the platform’s ability to solve specific “narrow” problems. Based on this criterion, optimistic predictions are made for altcoins like Golem (GNT).

Golem is a P2P platform on the basis of which a global decentralized market for any computing could soon be created, the infrastructure of which includes all the computing power of network participants. Users can make money from their idle capacity by renting it out to other participants and making their computer or video card part of a single global computing device.

However, in the spring of 2018, the Chinese government, as one of the largest players in the cryptocurrency market, began to make its own adjustments to the list of leaders. The ranking of cryptocurrencies published by the Ministry of Industry and Information Technology in assessing the prospects of various coins in its first, May version, put Ethereum in first place, giving Bitcoin only 13th place.

The first cryptocurrency lost to its competitors due to the low assessment of applications deployed on its basis, but it was ahead of other coins in the “Innovation” section. Ethereum won the May ranking mainly due to high scores in the “Technology” section. And the second place in the ranking was taken by the Steem currency, which, for example, in the Coingecko ranking, at the time of writing, occupied only the 44th position.

Steem is a blockchain version of a social network that provides the opportunity to earn money from various types of content created - from texts to videos. Double benefits for participants (earnings + use of a new social environment) become a good basis for rosy forecasts.

But since the “Chinese” rating is published every month, the June version once again produced a “revolution.” This time, the EOS altcoin took first place due to the advantages of the protocol in the transaction confirmation process, low costs and high throughput. Ethereum moved to second position, and Bitcoin to 17th.

EOS as a platform entered the market not so much as a new competing idea, but rather improved the basic idea of ​​the same Ethereum. But the accelerated and cheaper version of the service was liked by investors and experts from the Chinese Ministry of Industry. In addition, experts liked the following cryptocurrencies included in the top 10:

1. NEO. Another “Chinese Ethereum” with a capitalization of $2 billion.
2. Stellar (with a cryptocurrency now called lumen). A real-time platform for conducting any multi-directional currency transactions in a decentralized format without intermediaries.
3. Lisk. It also competes with Ethereum for its market share, using the Java Script programming language as a competitive advantage. The results can be judged by the collaboration with Microsoft Corporation.
4. Steem. Over the course of a month, this altcoin lost ground, but did not roll back very far. The trend regarding Steem will be clear soon with the release of the rating list update.
5. BitShares. Another project from the fourth ten of the Coingecko rating with a capitalization of about only 300-350 million.
6. Ripple. The main functional competitor of Stellar. The platform is designed for multi-directional currency exchange operations without chargebacks.
7. Qtum. It is believed that this business-oriented project managed to combine all the best that the Ethereum and Bitcoin systems had with replacing smart contracts with their own master contracts, which instantly record in the blockchain any changes made by the parties in real time.

In each subsequent month, after the 30 update, the forecast for these altcoins may change. But in general, the guidelines of the expert commission are already clear.

Cryptocurrencies have forever changed the landscape of personal finance and running a business. Over the years, they have caused controversy, been criticized, given rise to crime, accompanied by failures and... provide an opportunity to make good money.

Despite its many advantages, digital money has a number of disadvantages. Naturally, they are characteristic of all financial markets, but in the case risks of using cryptocurrencies double due to their specific features. What threatens those who choose Bitcoin or other crypto coins as an investment tool?

Malware

The first of them were created back in the days of the emergence of electronic payment systems (WebMoney, QIWI, etc.). Now their analogues are adapted to the cryptocurrency market and can be activated wherever such an opportunity arises. The most common methods of stealing crypto coins are:

• ransomware;
• viruses;
• fake links (spoofing);
• phishing (unauthorized access to personal information).

Owners of digital money must be extremely vigilant and try to stay one step ahead of malware - use reliable anti-virus protection, check all addresses and do not click on suspicious links.

Hacker attacks

Cyber ​​attacks are the second largest problem and a frequent occurrence in the world of emerging cryptocurrencies. Cases of hacker attacks are becoming more common, and methods of fraud are becoming more sophisticated. Bitcoin wallets and large sums of money that are traded on trading platforms have become especially attractive to thieves. Cryptocurrency exchanges have been repeatedly hacked, causing many to close due to bankruptcy.

The International Securities and Currency Exchange Commission has confirmed that more than half of the platforms have faced cyber attacks. For example, in 2016, due to an error in the code, hackers gained unauthorized access to the digital wallets of members of the DAO hedge fund and stole more than $150 million. Another well-known case: when hackers bypassed the security system and changed the methods of verifying users on the famous Bitfinex exchange - then they stole $70 million.

According to experts, problem security in the world cryptocurrencies will “hang over the heads” of investors for a long time.

"I'm skeptical of any idea that claims to solve the security problem. In my opinion, no technology or mechanism can protect cryptocurrency from hacker attacks and fraud," says Tyler Moore, an assistant professor of cybersecurity at the University of Tulsa, who plans to publish soon new research into the vulnerability of cryptocurrency exchanges.

Lack of legislative framework and legal risks

The situation is aggravated by the lack of an insurance system for investors. They cannot claim compensation for losses, despite the fact that some exchanges position themselves and act as virtual banks.

Bitcoins are intangible digital codes that have no proprietary rights. If they are stolen from a virtual wallet, the owner can neither identify the thief (due to anonymity and decentralization) nor verify his ownership of the coins (due to the lack of personal property laws). The situation is similar in the case when transactions are carried out in the name of an unscrupulous party. And if bitcoins are invested in a company that has gone bankrupt, the owner will also not have the opportunity to return them, since the agreement was concluded “on word of honor and a handshake.”

However, investors currently have no choice but to do business with exchanges, which do not have their own capital to insure against losses, like regular banks whose activities are regulated by law.

“When a bank customer’s checking account is hacked, there is always a third party ready to step in to deal with the problem. But this does not apply to cryptocurrency exchanges. Most likely, due to the “virtual” features of digital coins, they will never be completely secure,” – says Deryn Steinfeld, executive director of KeepKey.

No one offers cryptocurrency insurance, although there are many projects in development.

Bankruptcy and closure of exchanges

Over the previous 5 years, about 48% of cryptocurrency exchanges have closed, including quite promising ones.

“Of course, the closure of 48% of exchanges is unacceptable, but given that Bitcoin is a relatively new technology, it is not surprising,” said Richard Johnson, vice president of Greenwich Associates.

At the time the sites were closed, users did not have time to withdraw money from their accounts, which led to multimillion-dollar losses. And the reason for this was not always hacker attacks.

Profitability

This is the main reason for the collapse and the pressing problem for most cryptocurrency exchanges. Many simply cannot provide sufficient turnover of funds to “stay afloat” for a long time. According to Eric Voorhies, founder of the ShapeShift exchange:

“Currency exchanges of between $100,000 and $1 million must be made daily. Certain commissions must be charged on trading transactions to ensure that the equity capital is at least $25 million.”

And this is only a small part of what is required for the full functioning of the service.

Technical problems

Technical failures in the operation of sites where Bitcoin wallets are stored are a fairly common occurrence. Investors who suffer losses cannot claim a refund, regardless of whether the problem was caused by malicious actions of hackers or operator negligence in software development.

No guarantees for damages

When carrying out transactions through an exchange, the user does not actually own the funds that are stored in his account - the assets are owned and controlled by the exchange. The site just provides access to them when you log in to the system. Thus, the owner completely entrusts his Bitcoin wallet to a third party, relying on the security measures that it takes to protect the money.

Bitfinex exchange users lost 36% of their assets due to a cyber attack. Later, the site was launched again, and in order to retain customers, it compensated the victims with BFX tokens (the value was relevant to Bitcoin at the time of the hack), and then bought them back.

The MtGox exchange (Tokyo) went bankrupt after being hacked in 2014, and also promised to compensate investors for funds, but the situation has not yet been fully resolved.

Alas, such cases are rare. Most investors who lost crypto assets on other exchanges never saw them again.

The collapse of the virtual money market

No one can guarantee the success and longevity of cryptocurrencies. On the one hand, they are accepted on a par with fiat money, and on the other hand, they are not subject to any control. They are not tangible, like the dollar or the euro, but there is a prospect that they will soon be able to be withdrawn from an ATM and put in your pocket, like regular money. However, so far they exist only in virtual form and are used much less frequently than fiat currencies.

The value of digital coins naturally changes over time, but there is no guarantee that rapid growth will not turn into an equally rapid decline (rollback) at some point. Therefore, there is a possibility of a return to "zero" in both the short and long term. Prices are changeable (as evidenced by high volatility) and a depreciation can be triggered by almost any political or economic factor. And such events are usually very difficult to predict.

Volatility = instability

This point should be highlighted separately. When there is this kind of volatility, everyone starts giving advice on when to buy and sell. Of course, the ideas may be good, but it is better for inexperienced market participants to step aside and wait it out so as not to lose everything at once. Digital coins can be a tool for high returns, but only in the hands of experienced investors.

Unpredictable price fluctuations are partly due to the limited release of the “king of cryptocurrencies” – 21 million bitcoins. Each of them increases in price daily, increasing demand. This could ultimately lead to deflation. As more merchants begin to accept Bitcoin as payment, its value will decrease.

Another point is decentralization. This is both an advantage and a disadvantage. Since there is no governing body, no one can maintain a minimum value for the digital currency. If the majority of investors decide to abandon bitcoin and will “throw” a lot of coins onto the market, that is risk that the course will collapse.

The cryptocurrency market is unstable, as it is at the formation stage. It requires specialized knowledge and skills that are often incomprehensible to beginners. And while high volatility may seem like an attractive investment, there are numerous gaps in this brand new field.

Initial coin offering (ICO)

Representatives of the British Financial Conduct Authority said that anyone who invests in ICOs should be prepared to lose their money, as some of these schemes are directly linked to fraud. They use the Initial Public Offering (IPO) method to raise money for Internet startups. But that's where the similarities with IPOs end. The FCA has advised participants in this "speculative frenzy" to withdraw their investments if possible.

In Beijing and Shanghai, such projects were the most popular - 65 ICOs were created, through which about $300 million was raised from 105 thousand investors. However, in September 2017, fundraising through ICOs was declared illegal in China and eventually banned.

ICOs are dangerous projects that do not guarantee a return on investment, so each participant must understand the level of risk and be prepared to lose the invested amount. There are practically no successful projects, but the number of people willing to invest foreign currency is not decreasing. It is believed that it was precisely because of the massive infusion into the ICO that the Bitcoin rate dropped significantly.

Lost secret code

This is the access key to the Bitcoin wallet. Losing the code means losing all assets stored in the wallet. This can happen if the PC hard drive malfunctions or the flash drive on which the code is written is damaged. According to statistics, this happens to 25% of crypto wallet owners who have lost about $18 billion. It is impossible to restore the code and return the money.

Invalid user transaction

An error when entering a code with just one digit or sending it to the wrong address also leads to losses. The transaction cannot be reversed, so the amount sent cannot be returned.

conclusions

Let's summarize this long list. Cryptocurrency is unstable, unregulated, does not guarantee investor protection, is subject to extreme volatility and is extremely attractive to scammers. The prospects for virtual earnings can be as ethereal as the currency itself. Therefore, anyone who invests in Bitcoin or transacts with cryptocurrencies, must first take into account risks to take the necessary measures. Only an integrated approach will help to effectively protect funds.

Precautions for Cryptocurrency Owners

The year 2017 will be remembered by cryptocurrency users primarily for its growth to $20,000, the capitalization of the cryptocurrency market at $570 billion, and record fundraising in the framework of large ICO projects. According to CoinSchedule, in 2017, 235 ICO projects raised a total of $3.7 billion. During the same period, the amount of funds raised by the ten largest public companies amounted to $1.360 billion.

The prospects for cryptocurrencies still raise a number of questions. There is no clear opinion yet about the fate of the most popular cryptocurrency, Bitcoin. A variety of opinions continue to spread among experts, which often contradict each other. Thus, Jeffrey Sachs, an American economist, calls Bitcoin a “bubble”, and Pavel Matveev, co-founder of the Wirechain Wirex payment service, believes that the coin will repeat its price record of $20,000 and even reach $50,000,000 by the end of 2018.

So what should we expect from the situation in the cryptocurrency sector in the near future?

Legalization and regulation of ICOs and cryptocurrencies

In a number of countries that have decided to follow the example of Japan, possible measures are already being considered to take control of the sphere of cryptocurrencies and related projects.

For example, in Russia, at the end of the first - beginning of the second quarter, a draft law on cryptocurrencies should be submitted to the State Duma for consideration. The document is being developed by the Ministry of Finance of the Russian Federation, which intends to discuss this issue with the Central Bank of the Russian Federation.

The latter opposes the legalization of digital money in the country. At the same time, he emphasizes the danger of uncontrolled growth of this market and sees it as a threat to the global economy. In this regard, the ministry is looking for another trading platform that will agree to act as an intermediary in monitoring financial activities in this area.

The Russian government is also considering introducing measures to regulate ICOs. The concept of the draft law of the Ministry of Finance of the Russian Federation provides for fundraising campaigns as a kind of investment activity. In this case, all digital assets are proposed to be considered as a separate type of property.

Among the CIS countries, the most positive attitude towards cryptocurrencies has developed in the Republic of Belarus.

President Alexander Lukashenko officially authorized the storage, sale and purchase of coins. The corresponding decree has already been signed and stipulates that any activity related to cryptocurrencies is not considered entrepreneurial. Mining, trading and other operations with digital coins are exempt from income tax, VAT and other applicable taxes.

EU member states also decided to regulate the cryptocurrency market by banning anonymous transfers. To do this, trading platforms require their clients to undergo a verification procedure (identity confirmation). In the next 1.5-2 years, the EU authorities intend to develop a legislative framework to regulate this area.

Some representatives of European financial institutions oppose this move. For example, Karl-Ludwig Thiele, a member of the Board of Directors of the Bundesbank, completely ruled out the possibility of legalizing cryptocurrencies in the EU.

Some countries insist on a complete ban on cryptocurrencies, as they are often used for fraudulent and criminal purposes. However, cash on the “black market” is also prohibited in many countries, but no country in the world has yet been able to cope with it. How the ban on the use of cryptocurrencies will be implemented is not yet entirely clear. However, the authorities of most countries in the world are no longer able to ignore the ever-expanding cryptocurrency market. In any case, they will have to meet its users halfway and look for ways of regulation that will suit all participants.

State cryptocurrencies

In some countries, ideas have arisen to create national digital money. In Russia, they are actively discussing the possibility of introducing a crypto-ruble, but so far this idea remains only at the concept stage, which the Russian authorities are in no hurry to give the green light.

On October 10, 2017, during a government meeting, Russian President Vladimir Putin noted the need to control the proposal to introduce a crypto-ruble. At the same time, he warned against creating unnecessary, artificial barriers to the implementation of this idea, which was met with hostility at the Central Bank.

Russia is not the only country where they are talking about a national digital coin. In January 2018, Venezuelan President Nicolae Maduro announced the release of 100,000,000 El Petro cryptocurrency coins. It is provided by Venezuelan oil, and its starting price will be equal to the price of one barrel of oil.

Mining of this coin is impossible, and control over it will be in the hands of the government of the country. However, so far the Venezuelan parliament has not supported the idea of ​​its president and will oppose the national cryptocurrency.

The Bank of England also announced plans to create its own cryptocurrency. The English digital coin will most likely be pegged to the pound sterling. Its exact name is still unknown. At the current stage it is proposed to call it RSCoin.

In 2018, we can expect similar statements about the development of state-owned cryptocurrencies in other countries. But their release is still unlikely. The authorities are unlikely to advance beyond discussions and drafting legislation.

Introduction of cryptocurrency into everyday life

One of the limiting factors in the development of cryptocurrency is the complexity of its everyday use. Mark Zuckerberg previously announced the possibility of using coins on Facebook. The founder of the social network mentioned that he was impressed by the capabilities of this area and the level of protection thanks to encryption technologies.

In Japan, the possibility of introducing cryptocurrency into the popular local instant messaging system, which currently uses the Line Pay payment service, is being considered. The number of its users is more than 168,000,000 people.

Fast food chain KFC launched a hamburger sale to promote Bitcoin in Canada. Participants were required to transfer the equivalent of 20 Canadian dollars in cryptocurrency through the BitPay platform to receive their order delivered to their home.

Attempts to introduce cryptocurrency into everyday life are associated not only with new projects and opportunities, but also with prohibitions. Thus, at the beginning of January 2018, Visa blocked debit cards of the WaveCrest project, which allowed making purchases with digital money. Representatives of the payment system claim that WaveCrest violated the terms of the agreement.

The number of new startups aimed at removing barriers to the adoption of digital coins in everyday life will grow exponentially. In the coming months, we can expect the emergence of new products, such as bank cards and applications that will allow cryptocurrency payments. The list of companies that will offer goods and services for other coins will also expand. However, one should not expect a complete transition of the global financial system to cryptocurrency even in the medium term.

Development of cryptocurrency mining

The business sector is actively discussing the current market need for the development of cryptocurrency mining infrastructure. Companies specializing in the sale of mining equipment have already appeared in many countries, including Russia. Recently, the ex-head of the Committee of Natural Resources of Tatarstan, Alexey Kolesnik, said that he bought such a device from the T-Plus company.

In Novosibirsk, landlords began offering premises for miners to save themselves and their neighbors from exposure to high temperatures and noise. Alexey Noskov, head of the Xelent Mining data center project, believes that the time has come for the development of mining hotels, where private miners can place their equipment.

The development of payment infrastructure also continues. For example, the Monaco project is going to issue Visa cards that support payments in cryptocurrency. Digital money can be bought, sold and exchanged through a mobile application. In addition, the project has its own token provided to clients for financial transactions.

Profitable business niches will continue to be open to entrepreneurs in the coming years. The main demand will concern the development of platforms for mining and payment services with cryptocurrency support.

Changes in the ICO market

Investors are gradually becoming more and more disillusioned with ICOs. Recently in the United States, the founders of the startup PlexCoin were accused of fraud, and the funds they raised were blocked. Investors in the Confido project lost $375,000 after its founder deleted all data and went into hiding. The founder of the Fantasy Market project also disappeared, having collected more than $4.4 million.

However, major players have begun to show interest in ICOs. For example, Kodak, a manufacturer of photographic equipment and consumables, announced the creation of the KODAKOne blockchain platform. Its purpose is to protect copyrights to photographic materials.

Telegram has also shown interest in this fundraising method. Its founders announced the development of the Telegram Open Network (TON) platform, a next-generation blockchain project. It is planned that TON will become a platform for the development and launch of applications and smart contracts, as well as the infrastructure of a blockchain-based payment system.

Mikhail Brusov, co-founder of Cindicator, believes that despite the ever-increasing growth, new ICOs will have to fight for investors. As supply exceeds demand, projects will be forced to adhere to transparent rules of the game.

Dmitry Matsuk, founder of Blockchain.ru Group, in turn, believes that ICO participants will strive to publish their income and expenses, supported by detailed data about the company, road maps and step-by-step reports on the progress of the project, in order to increase their transparency.

In the near future, the ICO market will remain a popular place for new projects, allowing them to attract investors. But there will be much fewer record ICOs, and investors themselves will be more careful in choosing startups. Moreover, the popularity of ICOs will decrease with the development of infrastructure for using cryptocurrency for everyday purposes. Investors are now investing in ICOs because the everyday use of digital money is still limited.

Conclusion

Current trends suggest that cryptocurrencies are already recognized by the world community, no matter what financiers and politicians say. If earlier the authorities simply ignored this market, now they either ban digital money or are trying to find a way to legalize it.

Many users have already gained sufficient experience and are being more careful and smart with their investments. In 2018, we should expect dramatic changes. 2018 will likely be a defining year for the future of cryptocurrencies. If they are proven to be safe and easy to use, they will be supported not only by fans and venture capitalists, but also by some governments, commercial organizations and ordinary consumers. But one should not expect that they will take a place next to fiat money or displace the current established financial system.

Such acceptance of digital currencies will be limited by certain laws, regulations and regulations.

When it comes to the technology behind them, they have a brighter future ahead of them. They attracted much more attention and aroused interest from specialists in various fields of activity: finance, banking, logistics, medicine and many others.

Despite the fact that many experts have a negative view of Bitcoin, they admire it. The capabilities of block technology have long gone beyond its use as the basis for cryptocurrency. They are constantly expanding and will continue to expand in the future.

Get acquainted with the latest trends in the field of cryptocurrencies, as well as the opinions of reputable analysts regarding their future.

Many experts call 2017 the year of cryptocurrencies. By the last month of last year, the capitalization of the virtual coin market exceeded $500 billion, of which $3.8 billion came from crowdsales (ICOs). Many projects and startups related to blockchain technology have been created. The rate of the most popular token () has increased 13 times in just 12 months. The rate of less popular products increased by about 50%.

Recently, large institutional players have become interested in Bitcoin, which promises even greater prospects for it. 2018 is also likely to be a very good year for investors investing in virtual tokens. Since traditional analytical models for forecasting are not applicable in this area, it is very difficult to make accurate predictions. Only the most experienced analysts can predict the future course of events with some degree of probability.

The virtual money market will continue to grow, since the price ceiling is far from being broken. According to experts, the total volume of the Forex market is approximately 5 trillion. dollars. The virtual currency market indicators are more modest – $500 billion. At the moment, there are no visible reasons that could prevent the further rapid development of the cryptocurrency space.

The growth of the stock and cryptocurrency markets has varied since the beginning of last year. At the moment, experts have the following data regarding stock indices:

• MICEX (RF) – 2262-2003;
• Dow Jones (USA) – 19800-21805;
• RTS (USA) – 1175-1103;
• FTSE (UK) – 7202-7355.

Cryptocurrency market:

• Bitcoin – 906-4298;
• Ethereum – 8.18-335;
• Litecoin – 4.82-81.

These are impressive numbers. Some experts believe that the rate of cryptocurrency No. 1 by the end of this year could reach $30 thousand. But these are only assumptions; no one can give accurate data.

One of the conditions for the further development of cryptocurrency exchanges is the use of high-quality software solutions. Unlike the stock market, most of whose trading platforms are operated by leading vendors (about 10-20 companies), cryptocurrency exchanges use various platforms. There is no single standard, so there are no leading vendors working in this area.

After acquiring a trading platform, intermediaries connect it to their own liquidity providers. They then open up the activity for investors and traders. The broker is a licensed service provider to clients. He builds relationships with banking organizations and other market participants. Vendor companies specialize only in developing software solutions to improve the efficiency of trading platforms.

Trading virtual tokens in Russia depends on the adoption of cryptocurrencies at the legislative level. The Ministry of Finance of the Russian Federation and other departments are still extremely unfriendly towards virtual money. However, many experts believe that with the introduction of government regulation in the field of cryptocurrency prospects, the economic situation within the state can significantly improve. This will also help attract foreign capital.

Since at the moment there is no unified system for regulating the cryptocurrency space, and virtual tokens themselves have not received legal status, many market participants expose themselves to significant risks in the course of financial activities. However, many organizations within the country have already begun to successfully use cryptocurrencies, as well as use ICO mechanisms to attract investment funds.

There is no consensus on the further development of the cryptocurrency space. But some general directions can still be identified:

Director of the “Economic Policy” program of the MCC, A. Movchan. According to Movchan, investors who are willing to invest a considerable amount of money in cryptocurrencies should spend money on purchasing Bitcoin futures at the time of its fall. In this case, you should hedge with a short position on other tokens. If the demand for virtual money continues to grow, the Bitcoin rate will also increase at a gigantic pace (despite the volatility).

However, other less popular tokens will not support these growth rates. But if people come to their senses, a sharp collapse of small cryptocurrencies is possible. At the same time, Bitcoin will act as a stronger coin; there will be no forced depreciation. This means that closing a Bitcoin position is much easier. But even if this assumption proves true, such an investment is a very risky undertaking. It is better not to take a big risk and cash out the funds earned due to the growth of the exchange rate on time.

Managing Director of BCS Ultima O. Safonov. Oleg Safonov once again recalled the lack of legal regulation of the cryptocurrency sector in the Russian Federation. Therefore, even those who believe in the further development of Bitcoin must take into account the possible risks. Before starting investment activities in this area, it is necessary to familiarize yourself with the possible risks, study the principles of the functioning of virtual money, and determine the best ways to store them.

The possibility of trading futures on Russian stock exchanges seems unlikely due to the rather cautious assessment of virtual coins by government authorities. This position of the Russian financial authorities is explained by the fact that, according to most experts, a huge bubble is forming in the cryptocurrency market. And at the moment it is unknown what process can lead to the bursting of this bubble.

The whole world has been gripped by the so-called Bitcoin fever, which many compare to the infamous “dot-coms”. As you know, the value of shares was too overvalued, and therefore as much as 4 trillion was spent on their purchase. dollars of speculative funds. The size of the cryptocurrency bubble, according to experts, has not reached such proportions, but at the moment a scenario similar to the “dot-com” is observed. If a potential bubble bursts, the consequences for the financial market could be quite dire. And the scale of the consequences directly depends on the strength of the integration of virtual funds into the global financial market. The introduction of futures for the most popular token can satisfy the existing huge demand, but will subsequently have an adverse effect on the state of financial markets.

Analyst of the eToro social network M. Mashchenko. A well-known analyst predicts high growth rates for virtual coins this year. At the same time, market infrastructure will also develop. Perhaps in the near future Bitcoin will be able to defeat fiat currencies and traditional payment systems.

Some enthusiasts predict a Bitcoin rate of 100 thousand dollars per 1 BTC by the end of 2018. This is exactly what the value of the coin should be if its development continues at the same pace as it did in the previous year. This scenario does not seem plausible, but the cryptocurrency market is so unpredictable that any development of events can be expected.

If the price of Bitcoin is so high, the demand for it may decrease. The only prospect is to attract institutional capital. This financial instrument is practically impossible to predict. However, if we use the regression method, at the end of spring the token price could be $32 thousand, and by the end of 2018 it could increase to $70 thousand.

Virtual coins have a lot of problems, such as lack of regulation, poor scalability. But at the moment, an ordinary user is no longer able to abandon fiat currency and switch to using Bitcoin. This is one of the main new problems with digital tokens.

Most likely, this year the demand for other virtual currencies will increase significantly due to the high price of Bitcoin. The financial “bubble” is growing, the token is becoming extremely popular. For example, US residents download an application for Apple devices – Coinbase. And it supports not only Bitcoin, but also Litecoin and Ethereum. These are promising cryptocurrencies that ordinary users may well take a closer look at.

The situation with cryptocurrency exchanges does not change. As you know, the main idea of ​​virtual funds is decentralization. But crypto exchanges have been and remain centralized platforms for trading, and the demand for them is not decreasing.

2017 was notable for the launch of atomic transactions - the transfer of funds between different blockchains in the absence of intermediaries. In the near future, we can expect revolutionary changes in the cryptocurrency space.

President of SCFO E. Muratov. Bitcoin is currently the most stable token, time-tested, says Muratov. However, the demand for this cryptocurrency still outstrips its value. Many people hope that the BTC rate will rise to $30,000 in 2018 and reach $70,000 by 2020. Such forecasts may well come true, but we must not forget about the potential risks. Nowadays, there is a strong outflow of traditional funds into virtual assets. In this regard, fiat currencies are gradually losing their value. It is quite possible that blockchain will replace most of the existing banking system in the near future, while remaining a critically uncontrolled infrastructure.

Most governments will try to regain control of financial markets. Some individual tokens could potentially be affected. To reduce the volume of mining (extraction of virtual coins), backdoors can be used. In this case, transaction throughput will be reduced.

Analyst of the organization "Analytics Online" G. Zadoya. According to the specialist, the concepts of “virtual currencies” and “blockchain” should be clearly distinguished. The new technology has enormous potential. Humanity invented computers and the global network. Blockchain can be considered the third stage in the development of computing systems.

The situation with virtual coins is as follows: most experts report the existence of a huge financial bubble that could burst at any moment. There is no doubt that this bubble exists, but the main problem is that no one knows when it might burst. Can the current rate be considered the maximum price for Bitcoin, or will it continue to grow? It can increase to 50 thousand and even 100 thousand dollars, and even then the process will not stop. Answers to questions will only be obtained in the future after some time.

Let's sum it up

What digital money should you take a closer look at this year? Bitcoin, due to the fact that it is Bitcoin, and it is the name that is represented first of all when people start talking about electronic currency. Interest in it from the general public will only grow.

The next one worth noting is Ethereum. Moreover, the creators of the platform have planned a huge number of updates for this year. Ether has every chance of overtaking the No. 1 cryptocurrency. Ripple is performing well. However, given its recent jump in value, the second wave of growth will have to wait. The specialist also recommends paying attention to NEM. Japan, where these digital coins are in extraordinary demand, is a fairly developed and progressive country. It can assess the speed and level of security of electronic platforms before other states.

According to Zadoy, those virtual platforms that are somehow related to banking operations have the greatest prospects in terms of their widespread use and implementation. Therefore, they should be looked at first.

More and more people are getting involved in the field of electronic money every day, which is why today the topic of the prospects of cryptocurrencies is becoming especially relevant. Fortune magazine gathered at one table the most famous specialists in the field of tokens to discuss the future of cryptocurrency, as well as discuss possible options for the development of the situation.

Opinions on some issues differed, but in most situations, experts gave clear and reasonable forecasts for cryptocurrencies for today. They have an equally positive view of the development trends of the electronic money system, appreciating all the benefits from them. The prospects for cryptocurrency were discussed by 3 headliners:

In particular, the future of cryptocurrency in Russia and the world was not discussed, but the forecasts here apply to all countries with equal success.

Is there a future for cryptocurrencies?

The modern spread of cryptocurrencies around the world and the constant involvement of more and more people in them allows us to give confident forecasts about the future of the electronic money system. The prospects for the development of cryptocurrencies look definitely rosy, because they obey the natural laws of supply and demand, and with an increase in the number of people willing to buy, the emission does not increase. The future of cryptocurrencies can be expressed in the following theses:

• there will be a gradual introduction of electronic money into the lives of ordinary people;
• decentralized systems will not replace banks, but will complement each other;
• to improve security, certain benefits will have to be sacrificed;
• We can’t expect a stable situation in the next 5 years.

In most cases, it is pointless to consider online cryptocurrency forecasts, because they can at most point to the most unpromising projects. Even the best experts from around the world cannot predict the exact ups and downs, which is why it is better to focus on available charts and your own knowledge of the global economy.

Will Bitcoin and Ethereum retain their leadership?

The use of the current leaders of cryptocurrencies in the future looks quite promising. The reason for this is simple: Ethereum and Bitcoin are used not only to pay for goods and services, but are often the only tokens for conducting ICOs, developing certain projects, and the basis for converting many coins on large exchanges. Experts assess the possibility of expanding the influence of crypto in the world, and the following consequences are likely to result:

• strong competition between leaders;
• expansion of service and infrastructure capabilities;
• increasing the speed and security of transactions;
• reduction of tariffs for transfers.

The prospects for cryptocurrency in Russia look particularly attractive, as the government and leading banks agree on its usefulness for the economy. In addition, clear instructions were given to support the development of this industry through the investment of resources.

Development and formation of newcomers

It is almost impossible to clearly indicate which cryptocurrency is the most promising, since there is a possibility that several more leaders will emerge in the coming years. It is impossible to name the total number of popular tokens, because each platform offers its own capabilities and unique advantages.

Smith points to the likelihood of the growth of 1-2 more projects that will meet the needs of people and provide the necessary opportunities for the further development of the global economy. Breitman evaluates his Tezos project as one of the candidates for the title of “cryptocurrency of the future,” pointing to design advantages over projects based on the current blockchain. But even with the wildest guesses, it is still impossible to identify potential contenders for the dominant list.

Riches and ruins

For most people, cryptocurrency markets seem like a thing of the future. Due to the lack of knowledge in the area, many people invest money here, which leads to various consequences. People have won and lost entire fortunes based on the difference in the value of tokens, and large organizations often remain only as investors.

Garlinghouse (formerly Yahoo CEO) points out that traditional markets are completely controlled for a reason. Total control allows you to respond to swindlers in a timely manner, giving the latter a prison sentence. Smith points out maximum caution when considering the short-term prospects of certain projects. Restraint is paramount.

The era of inclusive investing

Srinivasan notes that the old methods of obtaining investment in your project are rapidly becoming a thing of the past. New methods allow investors to receive the money they are owed if the project is successful, and the developers of the idea will no longer be forced to allow investors to manage the business.

In the near future, you will no longer have to go to Silicon Valley or Wall Street to get the necessary money to implement your idea. The search procedure used to be very tedious, and sometimes even the most promising projects were not missed due to the conservatism of financiers.

Today, it is enough to get Kickstarter approval, after which you can develop the project idea, prepare documents and submit the idea to trackers. The most interesting projects receive even more money from ICOs than they can expect, while potentially failed ideas or those containing significant flaws can be corrected through direct communication with financial analysts on the appropriate forums.

There will be regulators!

Even the most promising cryptocurrency should be controlled by government agencies and traditional banks in various countries, says Elena Kvochko (representative of Barclays Bank). This will eliminate threats to the security of the country and the financial situation of citizens, because the possibility of theft of funds by hackers or any other scammers is eliminated. In fact, representatives of states and banks have not yet presented any constructive theses in their favor, but are actively engaged in developments.

Now some countries have accepted tokens as an alternative official currency on their territory. Other active participants in the cryptocurrency business are developing restrictive measures. The latter include the USA, Switzerland, Singapore and Estonia, which makes it impossible not to take this trend into account.

Thus, it is unknown what awaits Bitcoin in reality, but Breitman recommends “remaining transparent” with each other until the situation is fully resolved.

Ripple or R.I.P.

After May 2017, banking systems shuddered significantly due to the development of decentralized systems. For a long time, it was the large banking houses that set the operating conditions for currencies, interest rates and other forms of activity, but now they cannot influence the process. To prevent total destruction or even minor disruptions in the functioning of the current fiat money system, the Ripple system was developed. She made a number of positive adjustments:

• increasing transaction speed;
• reduction of commissions;
• increased safety.

This approach slightly reduced bank profits, but made their work much easier and more convenient not only for ordinary people, but also for the organizations themselves. So banks now have a future. But the constant development of decentralized systems requires their centralized counterparts to take appropriate actions that keep up with the times.

Speculators as the engine and brake of progress

Regardless of what legal framework cryptocurrency finds itself in, speculators in the near future will no longer be able to earn as much as they do now. It will no longer be possible to work according to the old scheme of traders from the Russian Federation and CIS countries of the 90s: buy cheap and sell at a higher price tomorrow. Three significant opinions were expressed on this topic at once:

1. Smith. Cryptocurrency must become stable so that its use can be comfortable for all people.
2. Srinivasan. The time of the “Matrix” is coming, in which “the need for transactions without borders will exceed the current one.”
3. Roberts (meeting moderator). New opportunities are needed that provide tangible advantages over fiat money. “Ideally there would be more to it than anonymous drug dealing.”

At the same time, experts pay tribute to speculators, thanks to whom a considerable part of the excitement was created. Despite their desire for easy money and attempts to get it by any means, including outright fraudulent ones, they managed to popularize tokens to such a level that leading economists and politicians of the world became interested in the coins.

Impact on the cost of living and convenience of payments

Even the biggest skeptics of investing in Bitcoin point to a number of design features. Modern international payment systems greatly inflate prices for services, and these financial organizations operate rather slowly and inconveniently. Bitcoin and Ethereum may not be able to replace the current giants in payment systems, but they will definitely give them the opportunity to create new advantages for users:

• reduction in the cost of translations towards the real price of the service;
• speed increase;
• providing new opportunities to users;
• additional increase in security.

Smith was more blunt in this case, noting that banking communities may not have the necessary capabilities to make adjustments to their pricing models. This could be a triumph for blockchain technology and a downfall for a number of large organizations.

Expert forecasts

Blockchain communities are actively developing today and are regularly updated with new projects. Experts have spent a lot of time assessing the situation around cryptocurrencies, so they most likely highlight the following opportunities for development:

• increased demand among all categories of citizens;
• blurring the boundaries between users from different countries;
• improving the global economy through the possibility of universal investment;
• attempts to control transactions on the part of individual banks and states;
• partial replacement of fiat money and destruction of a number of financial organizations;
• minimizing the number of speculators.

Soon it will be possible to use all kinds of coins as an official means of payment. This prospect for the development of cryptocurrencies is becoming more and more real every day, and the increasing interest from political and banking systems around the world favors this.

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