bitcoin blockchain future trends 2019

There’s no other way to say it: 2018 was a true rollercoaster for the blockchain world.

While it started with a historic surge to an unbelievable crypto market capitalization of $900 billion at its peak, the market disastrously retraced by nearly 90% since those glory days.

Despite countless financial analysts and crypto experts predicting heights of up to $60,000 per bitcoin in 2018, the year, unfortunately, turned out to be one of the worst for the crypto market.

However, now it’s time to focus on the future. In order to effectively prepare yourself for the following year, you definitely want to take a look at the following sectors of the blockchain world.

1. Bitcoin Exchange-Traded Funds (ETFs)

bitcoin etf approval date

Date to Watch: 27th of February, 2019 – VanEck and Solid X Bitcoin ETF Decision Date

Bitcoin ETFs have undoubtedly been one of the hottest topics during the past 12 months, especially since they are regarded as a potential catalyst for rapid price increases of bitcoin and other cryptocurrencies. 

One ETF application, in particular, has been declared as a possible game-changer. The collaboration between investment firm VanEck, the blockchain company SolidX and the Chicago Board Options Exchange (CBOE). It is one of the few physical ETF proposals that is actually seen as promising by several financial experts. 

If a trading vehicle of this kind was approved, the ETF issuer would need to actually buy real bitcoins from an exchange or, more likely, the over the counter (OTC). A potential ETF of this size requires tens of thousands of bitcoins, and the ensemble would need to acquire them, which could lead to a rapid increase in price. 

Furthermore, an ETF would enable investors and traders to eventually trade bitcoin on a traditional stock exchange, which would also help the digital currency to gain popularity and availability. 

Unfortunately, the US Securities and Exchange Commission (SEC) has not yet decided on the ETF submitted by VanEck and SolidX. The final decision has been postponed several times, however, the SEC announced an ultimatum on December 7, 2018. The Commission chose the 27th of February, 2019, as the day for either the approval or disapproval of the proposal. 

Although dozens of established cryptocurrency specialists, like CNBC expert Bill Barhydt, believe that we will see an ETF approval in the following months, it remains to be seen if the SEC is convinced that the time is right to unleash the first physical Exchange-Traded Fund for Bitcoin.

Further reading: What is a Bitcoin ETF (And Will it Trigger a Bitcoin Price Surge?)

2. Tokenized Securities

security token map - the block
Mapping the Security Token ecosystem, by The Block

“Security tokens, not utility coins, will attract significant amounts of Wall Street money next year.”

Security tokens or tokenized securities were definitely buzzwords that grew in the past 12 months in crypto. This is, of course, because tokenized assets are one of the most promising innovations in the blockchain sector, as they could disrupt the corporate and financial world.

Rohit Kulkarni, the managing director of SharesPost, one of the leading marketplaces for private securities, firmly believes that 2019 is going to be the year of tokenized securities. In a recent article on Nasdaq, Kulkarni stated that “security tokens, not utility coins, will attract significant amounts of Wall Street money next year.” 

Despite missing regulations often being seen as a major stumbling block for the industry to grow, Kulkarni is confident that the space will mature in the near future. “We ultimately expect a more stable regulatory environment over the next six to twelve months,” he said.

In 2018, many companies already started engaging in the security token industry. Overstock, for example, became the first billion dollar company to start building their very own security token exchange, which is expected to open up trading during this year. 

Moreover, Open Finance became the first U.S. based security token exchange that went live on December 13, 2018. With traditional stock exchanges, such as Switzerland’s and Malta’s main stock exchanges, forming partnerships to build security token exchanges, the industry is without a doubt worth to keep an eye on in 2019.

Further reading:

Nasdaq Stocks on the Blockchain: You Can Now Buy Tokenized Shares in Apple, Tesla, and Facebook

Real Estate on the Blockchain: Is Tokenized Property a Reality in 2019?

3. Nasdaq and New York Stock Exchange Get Involved in Crypto

Nasdaq bitcoin futures

Date to Watch: Late January – The expected launch of Bakkt.

The two biggest stock exchanges in the world will step into the crypto ring in 2019: the New York Stock Exchange and the Nasdaq. 

Bakkt, a cryptocurrency exchange built by ICE, which is the parent company of the NYSE, planned to launch the first physical-backed bitcoin futures on January 24. Although the start has already been postponed several times, crypto enthusiasts still see the exchange as a potential game-changer for involving institutional investors into the market, due to the reputation and experience that is connected with its operator.

Meanwhile, Nasdaq is following Bakkt on its mission and recently announced it was working on Bitcoin future trading for 2019 as well. Further news from Nasdaq include the exploration of security tokens and a potential exchange for such assets in the following time.

While it is not yet certain what kind of future security token trading Nasdaq will be providing, it still shows that some of the biggest financial enterprises in the world are not scared of the overall bearish market sentiment of 2018. “The concept of having a digital currency that does allow for transfer of money across borders, that really transcends the banking system, and allows for a seamless transfer, is really really fascinating and one that we have to assume will become a part of the ecosystem of the internet,” Nasdaq CEO Adena Friedman commented on digital currencies such as bitcoin.

Further reading: “We’re Doing This No Matter What”; Nasdaq Confirms Bitcoin Futures Launch

4. Custody and Storage Solutions

fidelity-investments-crypto-blockchain-bitcoin-760x400

Fidelity: We’ll “make digitally native assets, such as bitcoin, more accessible to investors”

$1 billion in cryptocurrency was stolen in 2018 with high-profile crypto exchange hacks hitting the headlines. Keeping cryptocurrency on an exchange is risky. And, while holding bitcoin yourself in a personal wallet is safe, you risk losing the wallet.

That’s why custody and storage solutions will be a huge talking point in 2019.

As for institutional investors, bitcoin or storage solutions are seen as major hurdles for attracting the big fish to the crypto market. Most institutional investors are prohibited from investing in assets unless they are held in secure custody provided by highly specialized firms, 

Coinbase and other blockchain companies already gave birth to novel crypto asset custodial solutions in 2018. Fidelity, an established asset management firm that administers its clients’ assets with a combined worth of about $7 trillion, also decided to “make digitally native assets, such as bitcoin, more accessible to investors,” and founded a new subsidiary that focuses on storing digital assets for its clients. According to CNBC, the company is already in the process of onboarding clients and is expected to launch its platform in early 2019.

Some say that we should even expect major banks to join Fidelity and Co. in providing services for storing bitcoin and other cryptocurrencies. As stated in several reports, Ripple CEO Brad Garlinghouse, at the Singapore FinTech festival in 2018, mentioned that banking institutions are about to offer blockchain asset custody solutions to their clients during the next year.

5. Over-the-Counter (OTC) Trading

Circle OTC bitcoin trading

The Circle Trade OTC desk

Circle reported $24 billion in OTC crypto trading last year

OTC or over-the-counter trading is another keyword that pops up here and there when scanning the blockchain related stories of 2018. OTC trading is the private buying and selling of cryptocurrencies, often in huge amounts, off the major exchanges.

Bitcoin OTC coverage has increased in the media and social networks, but the trading activity itself seems to have increased in 2018 as well.

With Goldman Sachs-backed Circle’s OTC trading platform recording $24 billion in OTC trading last year, it is regarded as a true money-making machine. “We have seen triple-digit growth enrolling in our OTC business. That’s a big growth area,” mentioned Jeremy Allaire, the CEO of Circle, in an interview with Bloomberg in October.

Consequently, some of the biggest cryptocurrency exchanges are now working on their own OTC trading desks or, in regard to Coinbase, quietly launched one in the matter of a few months. 

Binance, on the other hand, decided to act in a different way, as its newly founded investment wing Binance Labs recently invested $3 million into a U.S. based OTC desk called Koi Trading. 

With major exchanges moving into the OTC business, the field is likely to play a key role in the blockchain world during 2019.

Further reading: What is Bitcoin OTC Trading? Inside the Mysterious World of the Rich and Nebulous

6. Banking and Blockchain

Creating a “seamless experience for storing and managing digital assets”

Banking institutions around the globe are already experimenting with blockchain technology in order to improve cross-border trading and daily operations. In 2018, several achievements were made and they might give us an outlook of how the following 12 months could look like for banks.

The first real customer transactions between several big international banking institutions were conducted on the blockchain platform We.Trade on July 3, 2018. This event is considered a major milestone for blockchain adoption, as institutions across all industries were previously not interested in leaving their sandbox test environments.

While established banks are continuously pushing forward adoption of distributed ledger technologies, new players are also eyeing the creation of banks that are focused on blockchain assets. 

Smaller offshore destinations in the Caribbean, e.g. Bermuda, recently announced an update of their banking legislation in favor of blockchain technology and assets. Additionally, a young enterprise called EQIBank, founded by previous bankers from HSBC, UBS and Credit Suisse, just opened their first customer accounts in December 2018.

EQIBank aims to provide a seamless experience for storing and managing both traditional and digital assets, as stated in a recent press release. This can definitely be considered as an upcoming trend since crypto startups around the world are currently applying for banking licenses in their countries.

7. The Cryptocurrency Insurance Industry

Gemini insurance
The Gemini exchange and custody service is now fully insured

“The evolution is dramatic”

Insurance giants, such as MetLife and Allianz, are often regarded as notable blockchain researchers and adopters. Fair enough, considering that transparent ledgers and smart contracts seem to be the perfect enhancements for the daily business of an insurance company. The most promising use-cases include, but are not limited to, automating payments once the terms of a claim are met, increasing the transparency of transactions, storing information and enabling blockchain powered IoT processes.

Ryan Rugg, the global head of insurance at R3, believes the current evolution of insurance companies is a huge leap for the industry. “These developments would be innovative in any sector, but when you consider the processes underpinning the insurance industry have remained largely unchanged for hundreds of years, the evolution is even more dramatic,” Rugg explained in an article on BlockTribune. When talking about the future, Rugg further stated that “2019 will undoubtedly see the insurance industry enter the next stage of its digital transformation.”

Further reading: Cryptocurrency Insurance: What is It?

8. Regulation Developments

“We need appropriate regulations to be put in place and enforced to safeguard the interest of investors”

2018 has definitely seen some considerable developments in terms of global blockchain regulations. With Malta officially becoming a blockchain island, smaller jurisdictions opening up to security tokens and the SEC finally cracking down on a majority of all the controversial ICOs, the blockchain space clearly advanced and is on its way towards becoming a matured industry. Still, there are countless regulatory issues left that hamper the global adoption of blockchain technology and services.

With 2018 as a foundation, we most probably will see exponential progress in the following year in the most important jurisdictions, such as the US and the EU. In fact, there are already several signs that validate this assumption. On October 18, the SEC announced the launch of a new FinHub, where regulatory approaches to novel financial technologies, like blockchain, are researched and evaluated.

After Singapore, Malaysia is another Asian country that wants to introduce new legislation for blockchain in the following year. “While some parties might still be skeptical of this space, there can be no doubt that we need appropriate regulations to be put in place and enforced to safeguard the interest of investors,” said Lim Guan Eng, Finance Minister of Malaysia. In Liechtenstein, the government is currently working on the Liechtenstein Blockchain Act, which should pave the way for institutional investors in 2019.

Further countries that are expected to unveil updated laws for blockchain include the United Arabian Emirates, Israel, Russia, Thailand and seven major states within the EU. The ball is finally rolling and global regulations in various areas of distributed ledger technology seem to be closer than ever before. We definitely have an exciting year ahead of us and might even be looking towards one of the most productive years for the blockchain industry ever.

Crypto Curious? Subscribe to the Block Explorer newsletter to get exclusive crypto insights before they appear on the site.

For $21,000, you can now buy a fraction of a student residence building, The Hub, in South Carolina. In exchange for your investment, you’ll receive a digital token that represents your share of the building’s ownership fund.

It’s part of a joint effort from Convexity Properties, a Chicago-based real estate investment firm and Harbor, the all-in-one tokenization platform.

This tokenization of real estate opens up the market to investors that might not be able to afford a full property or even the high minimums of traditional real estate investment trusts (REITs).

In 2018, an asset management company, Elevated Returns, sold tokenized shares in a luxury hotel in Aspen, Colorado. Investors received “Aspen coins” to denote their partial ownership in the project. The crowdfunding campaign, via Indiegogo, started on the 8th of August 2018 and ended on October the 1st, 2018, raising $18 million.

Aspen tokenized real estate
Investors received “Aspen Coins” to denote ownership in the luxury Aspen Hotel

However, only accredited U.S. investors were allowed to participate in the sale with a minimum investment of $10,000. “Accredited investors” are individuals with “earned income that exceeded $200,000 in each of the prior two years” or has a net worth of over $1 million.

These experimental projects point to a possible new future in real estate investment and blockchain technology. But how close are we to the realization of tokenized real estate? Block Explorer dives deeper into the various projects in their space, tracks their progress, and outlines the opportunities available.

Why Put Real Estate on the Blockchain?

The real estate industry experiences some massive problems.

Here are some of the biggest, according to a new report, Top Ten Issues Affecting Real Estate 2018-2019 from The Counselors of Real Estate (CRE):

1. The increasing interest rate on housing mortgages and overall political uncertainties make purchasing a house less and less attractive. 

2. The new immigration laws and consequences of urban infrastructure are most likely to contribute to the further price increase of newly-built real estate objects. 

3. The boom of e-commerce makes it unviable for many retailers to run a brick-and-mortar business, so the demand for commercial real estate objects is going down. 

Moreover, disruptive technologies are reshaping the industry altogether. As another research paper called Emerging Trends in Real Estate (for the U.S. and Canada in 2019) by PricewaterhouseCoopers points out, investing in real estate related technologies will accelerate drastically. 

It could reach $5.2 billion in 2018, which is significantly higher than $1.3 billion poured into the field in 2014. And blockchain technologies are named amongst the 13 real estate industry disruptors. 

And it’s not surprising. Distributed ledger technologies can potentially patch a lot of holes in the industry. Firstly, it could help create a fully-transparent real estate registry. Secondly, it can create buying opportunities for financially-limited investors, through fractional ownership. 

Real Estate blockchain

The Biggest Real Estate Blockchain Projects Right Now

Numerous blockchain startups have flocked to the space, promising easy access to real estate investment to anyone curious to get in. And not only to accredited investors. Among the most noticeable are:

Atlant

Atlant offers Ethereum-based peer-to-peer rentals and tokenized real estate ownership. However, even though the prototype has existed since September 2017, and the public beta of the product was launched in October 2018, there’s still a lot of work to do. The company is still struggling to acquire all the necessary licenses and there’s not much clarity on the timeframe. 

Blockimmo

Blockimmo is striving to facilitate “an accessible, streamlined real-estate market” through tokenized real estate shares. Their recent big news is the company’s business model approval by the Swiss Financial Market Supervisory Authority (FINMA). It also launched a testnet with two property listings samples. 

Real properties supposedly will be available on the platform in 2019. It’s all sounds very promising. Yet, when digging more in-depth to the current company’s website, it appears to be clear that the team has a long way to go.

Some worrying discrepancies can be found in the “frequently asked question” section. It claims that “submitted real estate properties are carefully curated by our team of experts”, but the current number of employees is four, and three of them are developers. So, those are probably not a great fit when it comes to real estate evaluation. But let’s give it some time. 

Jointer.io

jointer.io is another startup in the field. With an attractive motto “using blockchain & AI to democratize commercial real estate,” they want to go one step further and offer tokenized real estate not as a form of investment in one property but as an index, combining several properties. 

Sounds great, but so far the website itself doesn’t articulate much about the progress and it hasn’t launched yet. A popup announcement saying “50 investors viewed this offer” when someone is trying to check out what the company has to offer is also quite sketchy. 

Meridio

Meridio also promises to “democratize real estate,” boasting lower investment minimums, reduced transaction costs, and increased liquidity. It invites you to “browse the properties,” but to do so you have to register on the platform. We’ve requested the access, though at the moment of writing there was no feedback from the team (see below). And the project’s progress, judging by its corporate blog, hasn’t been very obvious recently.  

Meridio

Brickblock

Brickblock is one of the earliest players in the tokenized real estate field and seems like they are on the right track with legal, partnerships and overall progress. It’s yet not clear if the project truly meant to expose any investor to the possibilities of owning a fraction of a real estate. While writing this piece we tried to register on the platform and there were some roadblocks on the way (despite the claims that it will only take 15 minutes to register). 

Brickblock real estate blockchain

The link to verification application didn’t arrive via text message as promised, the verification code to launch the identity confirmation chat wasn’t working (screenshot below). But overall it feels like an excellent start with an actual perspective of getting somewhere. 

Brickblock real estate blockchain

What’s Next For Tokenized Real Estate? 

Even though the true “democratization” of real estate and the ease of investing in tokenized assets might solve a lot of problems, there’s a long way to go in many regards.

Especially due to numerous regulatory issues related to tokenizing real estate, notably if we are talking about the global availability of such assets. 

For now, it will be difficult to usurp the traditional securitized real estate investment trusts (REITs).  Realty Income Corp., offers Retail Stores REIT investment and currently trades at around $62 per share with monthly dividends of about 0,3% – 0,4%. Simon Property Group also pays out quarterly dividends of 1%-1,3% and the price of approximately $164 per share at the moment of writing. 

I can purchase it with a couple of clicks using the mobile application of my bank with no legal complications and even my taxes are paid automatically from the profits received.  

There’s no doubt that tokenized assets are the future and it might be much more convenient and even possibly more profitable to the holders. However, there’s still a long way ahead for it. So let’s hope that an infinite number of passionate brainiacs invading the space will have enough energy and determination to figure it out. I keep my fingers crossed. 

And what do you think of tokenized real estate investment? How long will it take us to get there? Go ahead and share your thoughts in the comment section below.

Crypto Curious? Subscribe to the Block Explorer newsletter to get exclusive crypto insights before they appear on the site.

bitcoin genesis block

Bitcoin is officially ten years old. On this day ten years ago, Bitcoin’s elusive creator Satoshi Nakamoto mined the first Bitcoin block. Known as the “genesis block” or Block#0, it marks the very start of the Bitcoin blockchain.

A decade later, there are now more than half a million blocks on the Bitcoin blockchain. And the price of one bitcoin has soared from almost zero to $3,900.

Genesis Block

The very first block was mined by Satoshi on January 3rd, 2009. You can actually see it here on our Block Explorer.

The block contains just one transaction: the 50 BTC reward for mining it. 

The block also contains a pointed message about the existing banking system with a message written into the code:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

The message refers to the headline in The Times newspaper on that day. You could argue it’s a simple time stamp. However, it’s more likely a comment on the failing banking system. British Chancellor Alistair Darling was considering a bailout for the banks after the financial crisis in 2008.

It’s no coincidence that Satoshi included this message as he ushered in a radical new monetary system of his own.

Satoshi was rewarded with 50 bitcoins for mining the first block. However, due to the way the bitcoin blockchain is coded, the reward for the first block cannot be spent. Over time, people have donated additional BTC to the block.

Even today, the Genesis block received a gift from the following address:

1HappyTenthBirthdayBitcoinxvYeM9e

“Thanks Satoshi”

To celebrate the anniversary, crypto exchange BitMex took out an advert on the front page of The Times. It reads: “Thanks Satoshi. We owe you one. Happy 10th Birthday, Bitcoin.”

It’s a subtle nod to Satoshi’s hidden message on the genesis block which referenced The Times newspaper headline.

Happy birthday, Bitcoin!

Further reading: 24 Clues About Satoshi Nakamoto’s Identity (Bitcoin’s Mysterious Creator)

stocks on the blockchain

From January 9th, investors will be able to buy tokenized shares in leading tech companies. The initiative is powered by Estonian-based cryptocurrency exchange DX.Exchange and Nasdaq. 

Using the DX.Exchange platform, investors can purchase shares in Apple, Tesla, Facebook and others, represented by an ERC-20 token on the Ethereum blockchain.

Stocks on a blockchain: how does it work?

If you want to buy stock in Facebook, you’d purchase the relevant token on the DX.Exchange. The exchange’s partner MPS MarketPlace Securities will then buy the corresponding Facebook stock, and issue an ERC-20 token to you.

As explained in the accompanying press release: 

“Digital stocks are backed 1:1 to real-world stocks traded on conventional stock exchanges. You purchase tokens for leading assets that you choose to invest in, such as Google, Amazon, etc. Therefore, when you are a token holder, you own shares of the company.”

Token holders are also entitled to the same cash dividends as real shareholders.

The trading platform itself will also tap into Nasdaq’s SMART technology, which monitors suspicious trading activity and manipulation.

Why buy tokenized shares?

Firstly, it means you can buy fractions of a share. If you don’t want to buy one whole share of Amazon stock (at $1,500), you could purchase a third of a share via the tokenized platform.

It also means you can buy stocks with bitcoin. Since DX.Exchange is a cryptocurrency exchange, you can simply buy tokenized shares with BTC.

Lastly, you can purchase shares after-hours. Normal stock market trading is restricted to working hours. But with tokenized shares on DX.Exchange, you can buy stocks in the middle of the night.

Speaking to Bloomberg, DX.Exchange CEO Daniel Skowronski said “We saw a huge market opportunity in tokenizing existing securities. We believe that this is the beginning of the traditional market’s merge with blockchain technology. This is going to open a whole new world of trading securities old and new alike.”

Which stocks are available?

The platform will launch with ten leading stocks from the Nasdaq exchange:

  • AlphaBet (Google)
  • Apple
  • Amazon
  • Facebook
  • Microsoft Corporation
  • Tesla
  • Netflix
  • Baidu
  • Intel Corporation
  • Nvidia

More will be added as the platform expands. The tokenized shares will open in Europe on January 9th, and launch in US in mid-late 2019.

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proof of keys

Proof of Keys is a new movement that encourages all crypto users to withdraw their funds from centralized exchanges like Coinbase, Gemini, and others.

Initiated by investor Trace Mayer, the first ever Proof of Keys event will take place on 3rd January 2019 – the anniversary of the bitcoin genesis block – with a view to establishing an annual tradition.

To participate in the Proof of Keys movement, you simply need to withdraw any crypto you hold on an exchange and store it safely in a personal crypto wallet where you control the private keys instead.

Why Does Proof of Keys matter?

There are two main reasons for removing your crypto from exchanges on Proof of Keys day:

  1. To ensure cryptocurrency exchanges actually have the funds they claim. If everyone withdraws their crypto funds on the same day, crypto exchanges will be forced to pay out. If they fail to do so, it’s a huge red flag for exchanges that claim to store your money safely.
  1. To take control of your own crypto. As Andreas Antonopoulos said: not your keys, not your bitcoin. If all your bitcoin is stored on a crypto exchange, you don’t actually own the private keys; the exchange does. That means you’re not in control of your bitcoin or other cryptocurrencies.

Protect Against Hacks and Centralization

If you leave your funds on a cryptocurrency exchange, it’s much more vulnerable to hacks. $1 billion in crypto was stolen in 2018; the vast majority from crypto exchanges.

Exchanges are huge targets for hackers because they store vast amounts of crypto in one place. Instead, move your crypto to a personal wallet where it is much less vulnerable.

As Block Explorer previously reported, at least 25% of all litecoin in circulation is held by Coinbase. That’s a dangerously large amount of litecoin stored in one place. Not only that, but Coinbase technically owns all that litecoin; not you the depositor.

Proof of Keys is a, therefore, a practical and philosophical movement.

How to move your funds off an exchange

To withdraw funds, you’ll first need a wallet and a corresponding address.

The safest option is a hardware wallet from Ledger, Trezor or KeepKey. These are similar to external hard drives designed specifically for crypto storage. Since they’re offline most of the time, they’re difficult to hack (known as “cold storage”).

There are other wallet options that give you full control of your private keys including software desktop wallets and simple paper wallets.

Want more information? 12 best bitcoin wallets for safe and secure crypto storage

Once you have your wallet address, simply withdraw funds from the exchange to the wallet address.

Be aware that there may be high transaction volume on January 3rd which may cause congestion. You should also test the wallet address by sending small amounts of crypto to the wallet first.

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