5 reasons to be optimistic about crypto in 2019

The price of cryptos took a beating in 2018.

After hitting an all-time high in January, it’s been nothing but red ever since, with market caps shrinking to roughly 15-20% of their peaks.

The masses jumped on the crypto bandwagon, and then very promptly got back off once the hype bubble burst.

And now with the price down, plenty of people are saying that crypto and Bitcoin are finished, and they’re not coming back.

But is that the only story we can tell about crypto in 2018?

The hype has mostly disappeared, but we’ve had 12 months to build out the infrastructure, applications and networks.

Has anything changed?

Let’s take a look at 5 trends that show us that crypto is anything but dead.

#1 - More developers doing more things

Arguably the most important metric for any growing tech industry is how many developers it has collectively building all of its products.

Although we can’t know exactly how many software engineers and coders are currently working on blockchain tech around the world, we can look at a few other metrics and make some deductions.

First, downloads of Ethereum’s programming language, Solidity, from GitHub are up almost 9x from the start of 2018, suggesting that more people are becoming interested in building decentralised applications (Dapps) on top of Ethereum.

Solidity downloads

Solidity downloads

Speaking of Dapps, the number of published projects is also up from 2017, increasing by 3x in the last 12 months

Dapp creation

Dapp creation graph

Downloads of OpenZeppelin, a smart contract development library, has also increased dramatically.

OpenZeppelin downloads

Open Zeppelin downloads

#2 - More jobs

The number of people being employed in crypto/blockchain related jobs has steadily increased over the year, despite the drop in price and hype from the general public.

Crypto job openings

Crypto jobs growth

#3 - Venture capital

Some of the biggest names in venture capital (VC) in Silicon Valley and beyond are beginning to see the value of cryptos, and are pouring more money into the industry than ever before. VC funds that are investing significant amounts include Sequoia Capital, Digital Currency Group, Pantera Capital, Andreessen Horowitz, Draper Associates and Google Ventures.

Heavy VC investment indicates that these firms see a significant amount of value in the industry, and expect their investment in blockchain companies to yield a large return in the future.

VC growth graph 1 VC growth graph 2

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#4 - Wallets

The total number of wallet addresses for both Bitcoin and Ethereum are up significantly. Both have increased around 3x over the last 12 months, suggesting more people are utilising these cryptos, driving more demand.

Number of Bitcoin wallets

Bitcoin wallets

Number of Ethereum addresses

Ethereum wallets

#5 - Lightning Network

Hailed as a potential solution to Bitcoin’s scaling problems, Lightning will allow orders of magnitude more transactions to be processed on the Bitcoin blockchain.

Having been only theoretical for so long, the technology is now live, and we’ve seen a huge uptake in nodes running Lightning software over the course of 2018.

It is hoped that sustained growth of this network will lead to mass adoption of Bitcoin as a daily-use currency, vastly increasing its utility and value.

Lightning network nodes

Lightning nodes

Lightning network capacity

lightning capacity

Bonus - Hashrate

The hashrate is the cumulative amount of computer power being used to validate transactions in a blockchain. Having a high hashrate is important as it secures the network against attacks. It is also a good indicator of the economics of a network - if people are willing to invest their time and resources into building expensive infrastructure, then they must invision a long term future for the crypto.

Despite prices tanking up to 80% in 2018, the hashrate for both Bitcoin and Ethereum has increased substantially over that time, indicating that miners believe in the long term value of these networks and aren’t affected by short term price fluctuations.

Bitcoin hashrate

Bitcoin hashrate graph

Ethereum hashrate

Ethereum hashrate graph

Over the past 12 months, if you listened to mainstream media - or your friend’s wife’s uncle who invested at the peak and lost all his money - you’d only hear that the bubble burst and that it’s all downhill from here - you’re stupid for being interested in crypto and it’s never coming back.

To these people, the price is the only important thing because to them Bitcoin and every other crypto is just speculation. They don’t see the underlying value and potential for this technology to disrupt multiple industries and change the way people around the world live their lives.

But despite what these people might say, and despite prices being down, 2018 was a fantastic year for crypto, with some valuable human, technological and psychological infrastructure being laid down.

With these trends set to continue in 2019, there are surely some very exciting times on the horizon.

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