Public interest and knowledge of Bitcoin and other crypto assets saw huge increases throughout the year and currently about 100,000 users per day are entering these markets. Just looking at the increase of the total market capitalisation of all crypto currencies last year points to an amazing year for investors of these assets.

The graph above represents about a 30 fold increase in the value of all crypto assets.

Bitcoin

Bitcoin has had a stellar year regardless of the many controversies and disunity in the  community it rose above it all to once again prove it is king of the cryptos. Futures trading has provided a vehicle for institutional investors wanting to play these markets and combined with the fork of Bitcoin Cash and increasing popularity Bitcoin achieved around a 13x gain for the year. For more information regarding the Bitcoin Fork and what it means for Bitcoin holders refer to our previous blog post Crypto Wars Bitcoin vs Bitcoin Cash

Starting the year at just under $1000  it hit a high around $20,000 USD before ending the year around $13500.

Bitcoin Cash

Created from a Bitcoin fork on August 1^st 2017 it has soared from early pricing around $300 to $2500 USD. Bitcoin Cash has gained much traction and has a growing army of fans as the high fees and long confirmation times saw Bitcoin become virtually unusable when peaks in activity occur.

It remains possible that Bitcoin Cash may become the more popular chain in the future and would be able to claim the name ‘Bitcoin’ so anyone looking at getting into Bitcoin now should consider getting some Bitcoin Cash as well.

Bitcoin Cash price chart from Aug 1 to December 31 2017

Ethereum

Ethereum is a platform designed for the creation of blockchain based applications. As the year saw a large increase in ICO’s or blockchain startups with many built on the Ethereum platform the demand for the tokens has led to staggering growth throughout the year. It has not been all plain sailing as some bugs and vulnerabilities in products built on the platform have led to loss of investor funds however it seems the crypto community is increasingly desensitised to these occurrences as they have almost become common place.

Ethereum started the year at less than $10 USD and saw it out at around the $800USD mark.

Litecoin

Litecoin has benefited significantly from the issues with Bitcoin. As merchants, ATM providers and other crypto businesses are scrambling to integrate other options apart from Bitcoin it is well poised to take up much of the slack. It too has seen large growth throughout the year with many suggesting there are bigger things to come.

Litecoin rose from under $4 to over $200 USD after hitting a high above $350 throughout 2017

Ripple

Amazing growth for the banksters favourite coin which has defied all criticism and returned excellent results for investors. It delivers ultra-fast low cost transactions and has likely also benefited from Bitcoin’s failings. It is much derided by the wider crypto community as it lacks the decentralised nature of most other options. Many banks are looking at utilising Ripple to facilitate more efficient bank to bank transfers and settlements. It can also provide a gateway between traditional finance and crypto based assets.

Ripple rose over 35,000% starting the year at just .6 of a cent to finish at over $2

Top performers 2017

This chart lists some of the incredible growth that took place in Crypto markets last year.

One issue to note  with the above list is that it using Bitcoin’s start of year for Bitcoin Cash price which only came into existence in August 2017 and was around $300 so its increase has been closer to 8x.

2018 – What to expect

Adoption rates for crypto currencies are still relatively low and we are only now in the early phase of this technology cycle. 2017 set the stage for what is likely to be an even bigger and better year ahead. 2018 may see blockchain technology enter the mainstream as it progresses to become so ubiquitous that many people will not even realise they are utilising it. An example might be sending $50 in value to a Facebook friend facilitated by crypto currency  in the back end.

This graph highlights just how early in the adoption rates we are for this technology cycle.

Many of last year’s blockchain startups will have working products released this year and are expected to disrupt many of today’s traditional business models. Tokens distributed by these businesses primarily for fund raising are often created to be the keys to the software platform they are building. It is envisaged that this will create demand for these tokens and some also offer other utility value enabling passive income opportunities from owning these tokens.

Bitcoin’s dominance in the crypto markets came under severe attack late in 2017. Much of this was due to the scaling issues that crippled the network. This resulted in issues for many providers of bitcoin related services and merchants that accept bitcoin payment.

Other alternatives such as Bitcoin Cash, Litecoin, Ripple and Monero should continue to grow as providers look to integrate alternatives to Bitcoin. Enabling virtually instant low cost transactions will ensure the ability to directly trade crypto currency for a range of goods and services will continue to increase.

As has always been the case the year is bound to have its share of FUD, hacks, scam, government control and all other forms of misadventure but this movement now feels like a serious concern that is here to stay. We expect to see even larger growth this year as main stream adoption of this technology looms closer.

Our list of Cryptos to follow in 2018

There are now literally thousands of crypto currencies. Many will disappear, some are scams or Ponzi schemes but  others will likely be leaders in this space and grow to be as big or bigger than some of the world’s largest companies such as Amazon. As we have been following them for some time and spend extensive time researching many of the offerings available we have compiled this list of currencies, platforms and projects that we believe stand a good chance of sustained growth over the next few years

Currencies

Bitcoin (BTC) -King of crypto, store of value, the gold standard.

Bitcoin Cash (BCH or BCC) -Wants to be the new king

Litecoin (LTC) – Silver standard faster and cheaper transactions than Bitcoin

Ripple – (XRP) -Bank Investment and lightning fast

DASH – (DSH) -Good governance systems and has privacy options

Dogecoin (DOGE) -Bronze standard and popular with the Koreans cause of cute dog meme.

Vericoin (VRC) -Dual chain that pairs currency with a reserve

Privacy Coins

Monero (XMR) First mover advantage

PIVX – Another popular privacy coin that offers some technology benefits over Monero.

Verge (XVG) – Once known as DogeCoin Dark the rebrand has helped its image and price.

Blockchain Platforms (current and emerging)

Ethereum (ETH) – Large network effect delivering a platform for smart contracts

Ethereum Classic (ETH) – Original Ethereum chain continued after Hard Fork.

Expanse (EXP) – Copy of Ethereum that has taken development in other directions

EOS – Labelled by many as the ‘Ethereum Killer’ headed by Dan Larimer from Bitshares and Steem

NEO – Chinese version of Ethereum

QTUM – Hybrid of Bitcoin and Ethereum

Cardano (ADA) – New and improved version from one of the founders of Ethereum

IOTA – New twist on blockchain to enable machine to machine economies

Tokenised Platforms (businesses on the blockchain)

Populous  (PPT) – Invoice factoring on the blockchain

SALT – Crypto backed lending system

Omisego (OMG) – Asian cross country digital payment network.

Veritaseum (VERI) – Peer to peer capital markets

Pillar (PLR) – Digital asset management applications

TENX Pay (PAY) – Multicurrency wallet linked to Visa debit card

KICKCoin(KICK) – ICO / Crowdfund platform for blockchain based projects

PowerLedger(POWR) – Australian based power sharing system.

Steem – Blogging platform that rewards users with crypto.

There are many more of course and many more will maifest throughout the year but this is a good list to get started with. If you want our opinion on any others hit us up on our Facebook page and we will let you know what we think.

We would advise anyone to be very wary of certain money generating coins such as USI-Tech and Bitconnect they have many of  the trademarks of traditional Madoff like ponzi schemes and while they have made returns for people they are likely to to collapse at some stage and are also attracting plenty of attention from regulators and authorities.

How to get started

For anyone considering getting into crypto currencies we would advise that you take the time to understand wallets and exchanges and start off with some small amounts to get confident in how to use the currencies. Australian based exchanges such as Coinjar and Cointree are good starting places that will enable you to exchange dollars for Crypto assets.

Never invest more than what you are prepared to lose as while we would hope the growth continues they could also potentially go to zero. There are many other traps for new players that could see you lose your money. As most third parties are removed through this system the responsibility rests firmly on the owner to protect their assets.

FNQ Computers are the region’s leading blockchain and crypto currency advisors so if you need help to navigate the  hurdles to entry then one of our personalised one to one training sessions may be a great way to start. Contact us to today to start your journey into what has been life changing for many involved today.

*** Disclaimer – This post should not be construed as investment advice. We are technologists who trust in cryptography and not investment advisors. ****

What is Bitcoin Cash?

Bitcoin Cash was formed from a hard fork in the Bitcoin blockchain that occurred on the 1^st of August this year. A hard fork essentially is a split in the chain and as long as each side gets support from miners and users then they can continue as crypto assets in their own right.

The support for Bitcoin Cash came from a powerful group of Bitcoin supporters and miners that had run out of patience with the lack of consensus from miners, developers and other stakeholders to implement measures to enable Bitcoin to scale to meet the increasing demands being placed on the network.

If you were a holder of Bitcoin on August 1^st then as long as you control your private keys then you will also have the same amount of Bitcoin Cash. Most online wallets and exchanges have also decided to support Bitcoin Cash and deliver proceeds to the owners of the Bitcoin.

Why is scalability important?

The last week has been a great example of how the current state of Bitcoin is far from meeting the expectations of its design as originally outlined in the now infamous Satoshi Nakamoto white paper published in 2008.

A simplified version can be found here:

https://www.bitcoin.com/guides/bitcoin-white-paper-beginner-guide

Or the original paper can be downloaded here:

https://bitcoin.org/bitcoin.pdf

Bitcoin was supposed to be an electronic cash system that was virtually instant and free to use however as is currently the case currently when the network becomes overloaded delays and fees for sending transactions on the Bitcoin network rise substantially.

Transactions in the past week or so have taken days to be confirmed and incurred fees as high as around $100 USD. The unconfirmed transaction list or mempool has been as high as 220K while the network is really only processing about 3-4 transactions per second.

State of Bitcoin fees on 8/12/2017

Two main schools of thought have become divided over this issue while some maintain the answer is as simple as removing what was a temporary blocksize limit of 1mb others say this is unsustainable and we need to add other layers to Bitcoin and solve most of the issues off-chain.

What is the best way forward?

Never has an issue divided the crypto community as deeply as this fork of Bitcoin Cash. There are so many misguided opinions, lies, disinformation and personality attacks coming from both sides that it is very hard to get to the facts of the matter however we have conducted what I would consider a high level of forensic technical research to hopefully be able to provide some guidance.

Our research is from a technical standpoint and this can be completely at odds with investment research. In a nutshell we find it very hard to make the case that Bitcoin with the addition of Segwit and other off-chain scaling solutions can be considered to be the real Bitcoin.

Bitcoin Cash is more in line with the original design of Bitcoin and is proving itself capable of living up to the expectation of the system. Lifting the limitation enables the blocks to scale to larger sizes when required to facilitate the increased volume of transactions. This is very simple to implement without adding unnecessary complexity to the Bitcoin network that will increase the attack surface potentially introducing vulnerabilities to the original design which has proven its effectiveness over the last 8 years.

Scaling is an issue that needs to be resolved yesterday waiting another 18 months for solutions that may potentially fall short of expectations is far from adequate. Advances in computational power, storage and network bandwidth have increased significantly since the 1MB limit was imposed to counter network spamming. Demands of scaling should be far outstripped by technology advances for some time to come and by then other measures could be implemented but in the meantime there is no good reason we can find not to follow the KISS principle.

Bitcoin today as much as pains us to say it has next to zero utility value. It is way to slow and expensive to use as a currency and has seen a decrease in merchants acceptance over the last couple years. Without the utility value that made Bitcoin great it really only serves as a ‘store of value’. It is no longer capable of helping lift people out of poverty as the fees make small purchases unviable and it seems to be fast becoming another rich man’s (or woman’s) asset.

Our team here at FNQ Computers have decided as a result of our findings that we will support Bitcoin Cash moving forward in all ways we can and I know many other merchants that want to be part of the crypto currency revolution are doing the same.

In conclusion we would certainly not advise anyone to go sell all their Bitcoin for Bitcoin Cash but I would  advise any new Bitcoin investors to also consider buying Bitcoin Cash as it is quite possible that one day if it receives enough support from users and miners then it may just simply become known as Bitcoin.

As the region’s leading crypto and blockchain experts we are always happy to assist people with any aspects of owning, storing and trading crypto assets and if you need help to extract your Bitcoin Cash from your Bitcoin wallet then get in touch with us today.

Disclaimer: Our opinions expressed here should not be construed as investment advice. We are technologists that trust in cryptography.