The year 2017 has already been a milestone for the cryptocurrency concept and the market. It has started to appear in various financial and other applications worldwide, as a decentralized, secure virtual currency class. Once dominated majorly by only Bitcoin and Ethereum, 2017 has seen the rise in popularity of several other cryptocurrencies which were previously considered only minor players.
Some Key Facts and Figures from Last Year
According to a recent study conducted in late November by Coingecko.com, the market caps of several other cryptocurrency providers have increased substantially. As of November, the figures are very encouraging for cryptocurrency connoisseurs and big traders alike. Bitcoin still ranks Number 1, followed closely by Ethereum, Bitcoin Cash, Ripple, and Dash and so on. A Top 15 list is compiled below to properly assess the major impact these cryptocurrencies have had on the international market.
*The list reflects Data Collected till 26/12/2017. The percentage growth is over a period of 7 days preceding 26/12/2017
Some Key Highlights of the Last Cryptocurrency Year
- An estimated 2.9 million to 5.8 million active users have cryptocurrency wallets as of November 2017.
- The cryptocurrency industry is employing an estimated 1876 individuals worldwide. These are conservative estimates.
- The range of currently active crypto-wallets is 5.8 million to 11.5 million.
2018: The Cryptocurrency Landscape
When we talk about the increasing influence of cryptocurrency markets worldwide, the first name that comes to mind is still Bitcoin. Developed back in January 2009, it held the title of the world’s first decentralized cryptocurrency, with other players not arriving on the scene till late 2011. However, in 2017, the cryptocurrency market has grown exponentially, with over a thousand active cryptocurrencies being traded around the world.
When discussing the importance of cryptocurrencies as we move forward, the most common element related to all these currency systems is the famed “Blockchain” technology, a sort of public ledger system. This decentralized ledger is shared among network participants, with no governing central body. As a result, to compromise for this absence, the network participants are incentivized with the use of tokens.
The majority of cryptocurrencies in existence today have been developed with Bitcoin-like features. They are largely clones when it comes to their systems, and simply feature different parameter values like different blocktime, issuance schemes, currency supply and volume etc. In the above figure, the term Altcoins collectively refers to such cryptocurrencies, which show little to no innovation in their systems. Examples include Ripple, Ethereum Classic, and Bitcoin Cash etc.
Cryptocurrencies: The Future Fiat Currency?
The situation where cryptocurrencies can be the perfect and most reliable alternative for fiat money has been discussed in various financial circles around the globe. Advocates for cryptocurrency dominance, cite the decentralized ledger system which cryptocurrencies use which makes them more secure. The arguments for the use of cryptocurrencies in place of fiat money can be summarised below as follows:
- An excess of 86 trillion is estimated to be the total sum of all the money put together, which are spread across 180 currencies. However, most of the majority of this volume resides in bigger economies like the U.S. China and Europe.
- The rest of the volume of money falls under some very remote, unregulated and unstable economies like Venezuela, Nigeria and Sudan. About 30 economies worldwide have been classified as “problematic” when it comes to currency distribution.
- In cases where the total amount of money is in direct control of an authoritarian government or corrupt leadership, economies can experience a wide degree of inflation each year, not helped further by the abhorrent monetary policies in place.
Proper block-chain implementation by major enterprises can result in vast improvement in several industries. Listed below are just a few examples:
- Cloud Computing and Storage: Enterprises with significant financial backing like Storj, Sia, Gamma and several others are developing new ways to disrupt the global cloud computing and storage industries. Cloud services are forecasted to expand to $256 billion by 2022 and proper Blockchain implementation is expected to drive customer expansion and growth of business services.
- Legal Sector: Simple legal services like escrow, purchase agreements, leases and stock purchases still largely use an age-old system for verifying compliance. The introduction of blockchain powered legal platforms can use smart contracts where the associated ledger can easily verify compliance on both sides. It is estimated that about 25% of all legal procedures can be effectively completed using blockchain contracts. Cardano and Neo are among several enterprises interested in such a prospect.
- Insurance: The insurance industry is the perfect candidate for blockchain integration, as most forms of insurance today are standardised and involve automated procedures. The policies involved are fairly simple, with calculations involving simple math. Blockchain systems can aid life, flood, auto, home/ renters insurance policies efficiently, by accessing public records using a fool-proof procedure. This eliminates human error as well as human staffing costs to a great extent.
2018 looks to be an encouraging year for the crypto-market, as evidenced by the increasing degree of adaptation and acceptability, especially in North America, Europe and parts of South East Asia. An increasing number of activities and users can be observed in many emerging economies in Asia, Latin America and Western Asia. Because the prospects of cryptocurrency usage are so high, a growing number of merchants, exchanges as well as traders and investors are opening their arms towards blockchain integration.