NEW YORK (InsideBitcoins) — 2014 is done. And as far as bitcoin goes, in nearly all respects, it’s a good thing to see that year in our rearview mirror. It was a challenging time, to say the least. Now we’re off to a fresh start. What’s next for the cryptocurrency industry? Inside Bitcoins asked a wide-ranging group of bitcoin insiders to speculate — from venture capitalists to game show hosts — all with their own unique stake in the fortunes, and failures, of blockchain technology. Here is what they said:
“To the relief of many, the conversation in the industry has shifted from ‘the price of bitcoin’ to ‘applications for blockchain technology and digital assets.’ A critical mass of developer talent is trickling into the industry and when we hit the tipping point, assuming adequate funding is available, the pace of blockchain innovation will accelerate at an exponentially higher rate.
“Contributing to this acceleration will be the continued recognition by mainstream financial and payment players, and their willingness to assist in the development, of digital currencies and blockchain technology for specific purposes.
“States are often described as the ‘laboratories for democracy’ and I anticipate 2015 being the year of virtual currency-specific regulation on a state level. 2014 was spent largely getting up to speed. As companies look for clear rules, the imminent release of New York’s BitLicense Program and other virtual currency-specific guidance from key states should inspire other states to clarify their positions on certain business models and activities.
“The continued use of crowd sales by companies and the proliferation of new digital assets is likely to prompt other federal agencies that have remained relatively silent up to this point to speak up (SEC, CFPB).”
“Predicting what will happen to bitcoin is a lot like putting on my turban and doing my Johnny Carson “Carnac” impression. (If you’re under 45 yrs old, look it up on YouTube.)
“When we came up with the game show Take My Bitcoins, the price of bitcoin was around $1,000 and no one in my circles, myself included, knew our hashrate from our blockchain. We figured once we introduced celebrities and the masses to bitcoin by giving away $40,000 of the stuff, the world would catch on and the price would soar as everyone would be using it. The price of bitcoin is now over $600 lower. You’re welcome world!
“The problem I see with bitcoin now is the same I saw a year ago and why we came up with the show – it’s still really hard to use and really hard to understand how to use it. Ledgers, mining, paper wallet, cold storage; what sounds normal to bitcoin enthusiasts sounds like gibberish to everyone else. And once people do ‘kind of’ understand it, they still don’t know why they need to convert dollars to bitcoin to buy something on Overstock they could have bought for dollars in the first place. Or they take an even darker view, such as my mom who calls me after every show: ‘Very funny, and you’re going to need that sense of humor when they put you in jail for dealing with this scam bitcoin money.’
“So while semi-mainstream places like Newegg and Overstock are now taking bitcoin and there is even a Bitcoin Bowl to get the word out, there is still a long way to go and a huge language barrier between the Bitcoin experts who still can’t or don’t want to explain bitcoin in the most simple terms: ‘It’s money, save it, spend it, it costs less in transactions, and that’s all you need to know.’ After all, I have no idea how my credit card works, I just know it does.
“As long as it’s hard to get, hard to use, and not ‘dummied down for the mainstream,’ it’s not going to catch on.”
“So what’s my prediction? Pain. Wait, wrong movie. But yet, still growing pains for the coin. (The blockchain to me is the real technology here which will change many industries.) But for the coin itself, as long as it’s hard to get, hard to use, and not ‘dummied down for the mainstream,’ it’s not going to catch on.
“I predict the average price in 2015 will be $150 range unless someone finally gets through to the masses with simple language, a simple to use app, and all around a great viral marketing blitz.
“But until then, (Mike puts on his Carnac turban, puts envelope up to head and says:) ‘Hash Rate.’ (Mike blows into the envelope and opens it.) ‘How do you measure the average number of pot jokes in a Seth Rogan film? Hash Rate.”
Perianne Boring, founder and president of Chamber of Digital Commerce
“Bitcoin will prove to be resilient in 2015. The case for Bitcoin is becoming more and more obvious as we are seeing increased security hacks in even the most reputable and credible companies. I believe many Bitcoin skeptics, including some players on Wall Street, will begin to see Bitcoin as an opportunity, opposed to a threat. I also foresee several additional Members of Congress taking public stands of support for digital assets and even accepting digital currencies for campaign contributions.
“We can’t deny that Bitcoin is under scrutiny by government, which will likely heighten in 2015.”
“However, we can’t deny that Bitcoin is under scrutiny by government, which will likely heighten in 2015. We may see increased enforcement actions from the U.S. Department of Justice, Federal Bureau of Investigations, Homeland Security, Europol and INTERPOL. The Digital Chamber will be working with the industry to provide expert legal and educational resources to help companies understand their responsibilities under the law.
“There may also be additional rule makings out of the federal agencies, including the Consumer Financial Protection Bureau (CFPB), Commodities Future Trading Commission (CFTC), Securities and Exchange Commission (SEC), Internal Revenue Service (IRS), and the Treasury’s Financial Crimes Enforcement Network (FinCEN), among others, as well as from individual states. Some of these rules could open up new markets and avenues for investors, others could be very burdensome and onerous for businesses, which is why it is essential for the industry to be engaged in Washington.
“At the Digital Chamber, we will be focused on educating and facilitating dialogue between Washington and the industry to promote a pro-growth legal framework.”
Nicolas Cary, CEO of Blockchain.info
“Bitcoin will move beyond capturing the imagination of entrepreneurs to capturing the attention of board rooms. Companies will be asking themselves ‘what is our bitcoin strategy?’
“At Blockchain, we will continue to build innovative software that makes using Bitcoin safe, easy, and secure for all consumers and businesses anywhere in the world.”
“I predict it will be another year of drama and chaos; I expect there to be spectacular failures as Bitcoin startups do what startups mostly do — fail. I expect there to be more spectacular scams and more prosecutions of scammers as consumers and law enforcement both grapple with who to trust and who not to trust.
“But despite all of the inevitable chaos and drama, I also expect a background of steady growth and maturing. Bitcoin technology will become more robust, and bad companies failing and scammers going to jail will clear the way for strong companies and trustworthy people to continue building out the infrastructure, making the technology more secure and easier to use.
“I don’t speculate on exchange rates, I have no idea where the bitcoin/dollar exchange rate will go in 2015.”
“I expect to see continued growth of the Bitcoin protocol used as a currency, but I expect that growth to be outstripped in 2015 by Bitcoin 2.0 applications built on platforms like Counterparty.
“My practice tends to track this growth. As more businesses enter into higher-value transactions, I do more transactional work and contract negotiation.
“Likewise, as the stakes increase, we will likely see more litigation in the digital currency space. I defended a party in one of the first major Bitcoin mining litigations when Bitcoin mining was in the spotlight. In 2015, I expect to see the first Bitcoin 2.0 litigation.”
“The fact that we are instantly connected to people from all over the world through our phones, shows me how rapidly our world has changed in recent years and what an important role technology now plays in our lives. It also shows me how ready the world is for a new form of payment that is as international and as mobile and as easy as the rest of the technology in our lives. It shows me that it’s time to move forward with bitcoin and give the world a currency befitting of our current age.
“In my view, the first big steps to bringing bitcoin into the mainstream have been taken and we are at a juncture now where we must make wise choices to ensure its success. As we’ve read in many articles and as we have seen in the last year, regulation and tax law are not about to go away and are an unavoidable part of the world in which we want to bring bitcoin.
“I believe, as do many others, that we need to work with regulators and respect tax law for the currency to be trusted by governments, and in turn, to be accepted by the public. If we go it alone, and remain outside the system, others will step into the niche we have created. Which would be a great tragedy, because no other payment system will ever be as open-source and as community-orientated as bitcoin – two very unique traits in today’s world.”
“Multiple companies will raise more than $100m in Venture capital. Boost VC will have the largest Bitcoin company portfolio.”
“I continue to be fascinated by Bitcoin. I hold the belief that Bitcoin is a stupendous invention that has the potential to be truly transformative. The use case that excites me the most for crypto currencies is ecommerce. I think Bitcoin has the ability to dramatically transform ecommerce payments.
“I am confident that bitcoin will gain further acceptance in 2015. I expect Bitcoin 2.0 initiatives to deliver unique products and solutions using blockchain technology.
“About price predictions, I do not believe in speculation. Bitcoin is a superior currency system. However, I do not think a huge depreciation of government issued fiat currency in relation to BTC is critical for BTC success. I think stability and wider participation are more important for the long term.”
“To use an architectural analogy, 2015 will be the year when the concrete will be poured onto the industry’s foundations. Thirteen was a year of awareness and awakening to a new realm of possibility enabled by this brilliant invention that Bitcoin is. We saw a glimpse of the scaffolding necessary to build the industry in 2014, but clarity of regulatory expectation and infrastructural standards will emerge during the course of 2015.
“This means that companies, having become aware that building a digital exchange, bank or payment processor is not the same as building a smartphone app, will need to get properly capitalized to meet regulatory and infrastructural standards and upgrade their management.
“I have no idea and no method to estimate how much bitcoin will be worth at the end of 2015 other than wetting my index and putting it up in the air. My hope and wish for 2015 is for the industry to mature fast, and the serious issues to be addressed. This is a precondition to elicit trust and legitimacy, which in turn will attract serious investment. If that happens, I’ll venture to say bitcoin can easily double its value in 2015.”
“2015 will see important breakthroughs in the Bitcoin industry. Availability of state licensing will open in the United States, bringing further acceptance by domestic banks. Next, Bitcoin companies throughout the space are transitioning from their development stage to become fully operational.
“In 2015, companies in our industry will begin growing their businesses and will actually make money, which will in turn increase network usage, disrupt traditional payment methods, and fuel additional investment.
“Finally, this coming year will see the ‘tokenization’ of the dollar and other fiat currencies through blockchain technology, routing more and more money transfers into the cryptographic realm.”
Photo, Times Square NYC, December 31, 2014 by Anthony Quintano