> Once the cryptocurrency price bubble pops and takes all the hype with it, will the community be able to recover the energy it needs to build real, innovative technology once again?
Yeah because most people are putting fun money into the alt-coins.
As long as people bought bitcoin and ethereum, they probably will end up positive.
The people that are riding on 3 month old coins like IOTA or TRON will lose. Those risking everything on the future of Ripple or BCH or 1-2 specific coins will lose.
Those that diversify impartially will come out major winners.
Speculation is worthless because unlike bitcoin it seems to be infinite supply. Tell me that you're able to predict what the cryptocurrency scene will look like 1 year from now and I'll call you a fool.
Your thought process to reach that conclusion might prove more insightful however. So far it seems that cryptocurrencies move alongside each other for the most part, when the big ones go up the smaller follow. If you diversify in crypto and everything crashes at the same time how do you win? How does one diversify "impartially"? What if it turns out that in the end only IOTA remains?
For all the talk about real use cases and replacing fiat cryptocurrencies are 99% speculation and get-rich-quick schemes nowadays. It seems we still have some wild times ahead of us before it settles one way or an other.
They rise and fall mostly with Bitcoin, Ethereum has shown recently to be more independent, but the biggest drops are usually spurred by panic about crypto regulation.
Regarding 2018, I'm your fool...here are my predictions:
Bitcoin will remain top market cap and crypto numeraire. Majority of the newest projects like IOTA, Tron, etc. will be down significantly.
Burned by vaporware projects, investors will become more cautious about "new" ICOs and enormous token issuances. None will rise as quickly as TRON, EOS, and others did.
Ethereum will remain #2 but at least once will have had a great run against Bitcoin, hitting 80% of bitcoins market cap.
Overall crypto market cap will rise 200%-300%.
Ethereum will continue to have most transactions, enterprise, and developer support. Could change in 2019 and beyond, but has a huge lead right now.
Ripple will crash further, but the platform will gain real world usage.
BAT will rise and support becoming common on enthusiast sites, like tipjar services.
Most of the smart contract chains in development will make no real progress, but I expect at least one "ethereum killer" to become a reasonable alternative.
Disclosure: I own Ethereum and Bitcoin, would buy some others but maxed out on my crypto exposure.
I want to play too! Here is my prediction for 2018:
Just as 2015 was the year of the altcoins, and 2017 was the year of the tokens (why mess with a software project when anyone can create an ERC-type token effortlessly, plus there's no mining so you can sell every last bit of it day one), 2018 will be the year of the forkcoins. Things like Ethereum Classic and Bitcoin Cash are just too lucrative to pass by.
Expect to see Ethereum Black, Bitcoin Plus and Litecoin Gold. Each with a subtle change from the parent in block times, hard caps or other parameters. More than one will also try to steal old unspent UTXOs (including Satoshi's) for the developers themselves.
Every improvement to the underlying protocol will see a lot of manufactured dissent to lay the groundwork for a fork, even regarding opt-in features (such as segwit and p2sh).
Ethereum and Monero continue to grow in market cap as they work and nail a niche very well.
Bitcoin core starts to decline in about 3 months as volumes on Bitcoin Cash grow. Lightning doesn't pan out because it has strong centralizing forces so it is no better than fiat, and it will still have higher fees than Bitcoin Cash because it adds use, rather than limits it, which further increases demand, and therefore fees.
Bitcoin Cash grows as it takes the mantle from Bitcoin Core.
The market hasn't noticed that real innovation and development is taking place on this chain yet. It has adoption coming in from business that depended on the cash use-case and built for bitcoin core. Bitcoin cash also has features coming that were planned for a low-fee environment, like colored coins.
The success of Bitcoin Cash over bitcoin is an inevitable consequence as the public will prefer a store of value they can transact to one that can't be moved. If you make 20 transactions with $400 in Bitcoin Core, because of fees, it is gone! There will be more forks, but none will gather critical mass.
One or two of the newer crypto speculations delivers and succeeds. The others do not. Most of the DAG cryptos are dependent on "goodwill among men", vs. relying on greed, so if they take the spotlight, they will fall to attacks.
This argument is also true of any equity that doesn't pay out dividends.
Most people wouldn't consider the stock market to be a zero-sum game. Maybe in the ultimate long-term, but not within a time frame that's meaningful for anyone.
You're forgetting book value and future earnings valuation.
If a company earns $X billion per year, even if they don't issue a dividend, if their market cap dropped to fifty bucks an acquirer could swoop in and pay themselves the company's earnings directly for as long as it keeps running, or shut it down and sell off the book value for a profit.
If there's no dividend, any earnings + book value still exists as a potential profit to someone who would own the company. So you just have to assume that in the future someone would be willing to buy $X for $X-1.
Isn't it obvious that buying shares in a public company gives you proxy, fractional ownership of a business that's generating cashflow? You don't get that with crypto. Crypto, on the other hand, literally requires someone else to take you out in order for you to profit.
This is the kind of dangerous thinking that fuels speculation bubbles. Bubbles go up and up and up until they plummet all at once. Everyone looks like they're winning all the way up until everyone suddenly loses together.
Maybe Bitcoin isn't a speculation bubble; maybe it's something new. But if you ignore the underlying tech and just look at the price chart it sure looks like an old fashioned speculation bubble, and those traditionally don't end well for the median investor.
The internet was something new, and it fueled a speculation bubble. I think we are seeing something similar with cryptocurrencies. Are they something innovative and potentially useful? Yes. Do their valuations make sense? No.
Well, a handful of tech companies are some of the most valuable companies in the world right now, a few of them thanks to what was then the untapped power of the internet(Amazon, Google, Facebook), Google and Facebook not only are huge companies but they can also influence elections and public opinion.
There is no question that there was a bubble, but the value of the internet as a platform for building businesses now far exceeds what people expected it to accomplish in the dotcom bubble.
I'm not saying cryptocurrencies will have the same fate, but it's not impossible.
I think their valuations will make sense, but no, not right now. I think this whole pile is breaking ground on new tech, tech that will redefine some of the things in our lives. Will Bitcoin / ETH be what holds on? No idea.
Sure, some cryptocurrencies (which may or may not include Bitcoin) will probably have some long-term stable valuation (which may or may not be above their current market value). That doesn't imply that what we're seeing now isn't a bubble, and it's not going to provide much comfort to someone who loses their savings investing in a "sure thing".
If you're smart enough to pull out profits and diversify then you're fine. It's those that go all in, "it can only go up", that are going to be in trouble. I fear a lot more people are in the latter group than the former.
> Once the cryptocurrency price bubble pops and takes all the hype with it, will the community be able to recover the energy it needs to build real, innovative technology once again?