If you look at recent headlines, you might come to a common conclusion. Given the ups and downs of the market, it is too early to take cryptocurrencies seriously.
And despite the best efforts of even the industry's most prominent developers, the world's largest cryptocurrency remains not only unstable but also difficult to use, at least not in the way its creators intended ( It is also true that there are risks).
Still, enthusiasts around the world are hard at work improving it for 2018.
As such, optimistic progress may begin to become more complex, creating a user experience that finally begins to overcome the high fees and long wait times that most blockchain users are accustomed to.
Indeed, over the next year, blockchain users are likely to see exciting new features and scientific firsts that could move the industry closer to that vision.
1. Off-chain channel
What if blockchain-based transactions could avoid using blockchain at all?
This is the big idea behind off-blockchain payment channels. It reminds me of 2015, but maybe that time has finally come this year.The most relevant is Bitcoin's Lightning Network, this idea is actually more general than this particular instance.
Essentially, off-blockchain payment channels allow two people to send and receive small payments using either one cryptocurrency, only settling on the blockchain when absolutely necessary (and avoiding its high fees and costs). (cope with slow trading times).
The idea is gaining attention because of its potential impact. Ethereum developers don't often see eye-to-eye with Bitcoin developers, but they are working on the same types of solutions.
But there's also reason to think 2018 may be different, not just in terms of competition, but in the potential for a flood of actual live transactions.
The developers of Bitcoin's Lightning Network have declared the technology nearly complete based on successful tests. Meanwhile, Ethereum developers also announced a successful test of a version of the concept. Raiden Network and a more ambitious version, Plasma, could be coming soon.
2. Real Live Staking
With the increase in popularity, Electricity required to maintain virtual currency.
Although the relevant data is difficult to identify, proof of work, the consensus protocol underlying Bitcoin mining, is best defined as: An energy-intensive process. As a result, there are concerns that their electricity use could have large-scale environmental impacts.
This leads to new research on ideas in 2011. This idea, called proof of stake, or “voting consensus,” was not implemented at the scale Ethereum intended.
As such, the long-awaited Casper project will be under considerable scrutiny over the next year, and early versions are starting to come into light.
A testnet released on New Year's Eve claimed that one of the Casper variants worked. Karl Frosh, the technology's lead developer, told CoinDesk at the time that the code was working “just fine.”
Although there is still work to adapt this early version of Casper to various Ethereum clients, Ethereum creator Vitalik Buterin hopes that the technology will be tested in parallel with proof of work in the future. I said that.
3. Advances in privacy
Privacy is a promise that has been somewhat underplayed by most blockchains, but it's still an issue that could be improved this year.
It is a type of encryption that hides information without compromising its effectiveness and is already in use. This could lead to a wave of startups experimenting with private smart contracts in novel and unexpected ways.
Additionally, a white paper published earlier this month released a system for achieving zero knowledge without compromising trust (which was a point of contention in earlier versions of the technology). This update could have exciting consequences.
And as existing technology matures, privacy-focused cryptocurrencies like monero and zcash will also improve.
In preparation for the upgrade, zcash is steadily increasing its security, while monero is hardening its implementation of “bulletproof features” that could potentially reduce fees by 80%.
4. Decentralized exchange
No, this is not just a new version of Coinbase or Kraken.
As the industry's biggest exchanges struggle to cope with the influx of new adopters, a growing number of projects are developing what are called decentralized exchanges. The term refers to a type of software that users can use to exchange one cryptocurrency for another without a central entity, rather than just a new browser-based exchange.
2017 saw the birth of a slew of new decentralized exchange projects, including ShapeShift's Prism, 0x, OmiseGo, and Kyber Network.
It is expected that these efforts will accelerate this year.
So far, the hardware wallet Ledger is already integrated with the decentralized exchange Radar Relay, allowing users to exchange reliable tokens based on Ethereum.
Although it has limited functionality (only supported by a single wallet and can only send Ethereum-based tokens), many in the industry see this as the future of not just crypto exchanges, but the technology itself. I see it as a glimpse.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which owns Coinbase, Kraken, and Lightning Labs.
