Crypto Roundup 16

Welcome to the first HEAT roundup of 2017! We were off in January, but are back to discuss all things happening in Crypto. If you haven't already, check out our 2016 roundup. Also, we will resume our biweekly (or fortnightly for people on the other side of the Atlantic) roundups for now. So keep an eye out.

The Wild Rides of Bitcoin and Crypto: China Can Only Do So Much

2016 saw the price of Bitcoin rise sharply towards the end of the year. In fact, we touched $1000 per Bitcoin on the 1st of January 2017 - one day too late for the $1000 price prediction for 2016. But alas, that wasn't to last, yet again.

With news out of China that the government is looking into the exchanges again, the price dropped sharply, several times by double digit percentages. Of course, this is nothing compared to the wild swings during the MtGox days, but still something to keep in mind. Bitcoin is still new, and can still be volatile.

But, this volatility caused by the Chinese again, wasn't as bad, and Bitcoin quickly recovered. This caused much rejoining in the community - that maybe the crazy stuff out of China doesn't really matter so much for the price. This Southpark meme became a staple on 'China Bans Bitcoin' theme.

China Ban Bitcoin Meme

With this, China seems to have loosened its grip on the price of Bitcoin. This has finally caused the price of Bitcoin to reach its all time high on most exchanges, including Bitstamp. The Bitstamp price is important because it was around during the 2013 mania phase caused by MtGox. The all time high price on MtGox is still higher, but many don't consider that legitimate. Here's bitcoinity celebrating Bitstamp all time high price

Bitcoinity ATH

Crypto vs. Bitcoin

The theme towards the later part of 2016 has been that cryptocurrencies in general were anti-correlated to Bitcoin's price, so as Bitcoin rose in value, altcoins fell. Even the most prominent ones, like Ethereum, dropped more than 50% from their peak, although to be fair, Ethereum was still up 700% year to date.

However, this is something that traders and investors should keep an eye out on. This trend can reverse in a split-second. It is not a general rule that as Bitcoin rises, altcoins fall. In fact, during much of 2014-2015 period, altcoins rose much faster than Bitcoin, and fell faster as well. They were strongly positively correlated with sharper moves in the altcoin space. Don't rely on these 'trends' to make your investment or trading decisions - these trends don't last, especially in the fickle crypto world. This warning is especially important to heed as we approach Bitcoin's all time highs, and the crypto markets across the board are usually down. However, no one knows if this trend will last.

New ICO Models? Gnosis as a Guinea Pig

Gnosis is a well developed team of Ethereum developers building a prediction market with third-party APIs and feeds into the blockchain. The idea is simple - the external feeds act as the oracle that will resolve the contract. Will the average temperature of London be above or below 7 degrees in December? The blockchain doesn't know it, but a weather API does, and the blockchain can be used to settle that 'bet'. It is less decentralized than Augur, but arguably easier and more efficient.

However, the big innovation may not even be in prediction market, but its ICO structure - going for a Dutch Auction. I think it's a bold but also risky move. A Dutch auction will mean people might go crazy with the price bidding, and make bets like others not seeing enough value, and thus bidding the price higher. There are all sorts of game-theoretic considerations. We'll definitely be watching closely. It could be an innovation in its own right, or another disaster waiting to happen.

The ICO Craze Hasn't Gone Away

So we saw two big ICOs on Ethereum in February, and they both easily reached their goal. The first was Dfinity, which raised 3.9 million CHF. Then, it was Melonport raised almost $3 million, in record 10 minutes. Both of these ICOs show that investors are still willing to pour millions of dollars into promising projects. On a much smaller scale, Santiment raised 12,000 ETH as its cap in a few hours as well. Notably, ICONOMI made its second investment into Santiment (after Golem).

Dfinity also experimented with an interesting ICO cap - a 'soft cap' instead of a 'hard cap'. Dfinity had a soft cap goal, of 1 million CHF. Then the ICO was kept open for 24 hours after this soft cap was hit. This allowed others to get in. Contrast this with Melon ICO where it started at 4am PST (for those in California) and ended in 10 minutes.

Caps are usually a good idea to stop things from getting too crazy (like The DAO). But they also seem unfair to some investors. May be some of the newer ICO structures might make sense going forward. More experimentation is required - we don't have a silver bullet for this problem.

Things to Look Forward to

HEAT launched in 2017, but it wasn't a smooth as the team intended. I'd classify HEAT as one of those much longer-term projects (think MaidSafe more than Auroracoin). The team makes steady progress every day, and the launch will only mean supporters have great things to look forward to in the future.

Akasha is a highly watched Ethereum project aiming to build a social network. It released its alpha to some very favorable reviews. We don't know whether projects like this will last or not - it is a tough space to be in, but we love these experiments.

Consensys continues its efforts towards the enterprise push for Ethereum. It is going to be an uphill battle, and Ethereum will have to scale really well (may be half as well as HEAT!) for this to succeed, but there is potential for sure. There's also an enterprise Ethereum event being talked about.

Colony is another Ethereum-based project that presented in Devcon2 last year, and is working on a decentralized work/organizational model (like decentralized Upwork/Elance). There are interesting product updates from this project too.

There's also a new 'media production' type company built on the blockchain called The Rudimental. Worth keeping an eye out on.

Dedicated Crypto Blogger (DCB)

Read more posts by this author.

Subscribe to HEAT Crypto roundup

Get the latest posts delivered right to your inbox.

or subscribe via RSS with Feedly!