As we round out 2018, one thing is for sure: it has been a hard year for long-term cryptocurrency investors who bought in at the tail end of 2017. However, that doesn’t mean that there hasn’t been meaningful partnerships in the sector, and that corporations don’t see the value in blockchain technology. Over the past week (December 21-28, 2018), here are some of the most meaningful events in the cryptocurrency sector.
Bitmain is one of the most important companies in the cryptocurrency space, considering it’s the largest cryptocurrency mining hardware company in the world, and one of the reasons that China has so much leverage with regards to Bitcoin. In fact, it wasn’t too long ago that the company was responsible for adding 5 individuals to the Hurun List, a list of the richest individuals in China.
While there is no doubt that Bitmain is one of the world’s most famous cryptocurrency success stories, and has made various individuals wealthy, that doesn’t mean that they have taken all of the right steps, especially as of recent. First, it was reported for months that Bitmain had sold massive amounts of Bitcoin and decided to purchase Bitcoin Cash, which led to more losses than many anticipated.
It is important to note that before this, it was almost as if Bitmain could do no wrong. The company was growing at an incredible pace. Not too long ago, many believed that the crypto mining giant was on its way to generate a staggering $10 billion in revenue, and Jihan Wu, the CEO of Bitmain, pointed out that the company going public would be a “landmark” for the entire sector.
Since then, a lot has changed. In fact, Bitmain was expected to lose a significant amount of its staff, with many speculating that as many as half of the workforce would be laid off. On Christmas Day, December 25, Samson Mow, a respected figure in the cryptocurrency space, and the Chief Strategy Officer of Blockstream, tweeted that the number might be much higher:
As of right now, it appears that all of the uncertainty means that Bitmain’s initial public offering (IPO) is now in question, as well.
Of course, this does not mean that Bitmain isn’t still one of the most important companies in the sector. Regardless, the Chinese Bitcoin mining giant is still generating billions, and the fact that it was able to whether the bearish markets is a good sign. It certainly isn’t the only company to have to layoff a significant percentage of its workforce, as the same has happened at well-known blockchain startups such as Consensys and Steemit, as well.
One of the few signs that truly seemed to be indicative of the future is that Bitmain was forced to close its Israeli Blockchain development center due to “market conditions”. This was announced earlier this month.
Facebook And Crypto
There is little doubt that one of the biggest stories in the cryptocurrency news sector is the fact that Facebook is apparently actively developing a stablecoin, although it is apparently taking its time with the project. The news came after several hints that the company might be interested in the cryptocurrency sector.
First and foremost, Mark Zuckerberg, the founder and CEO of Facebook, mentioned “decentralization” as a concept in a Facebook post, leading many to believe that the company was developing a cryptocurrency. When referring to cryptocurrency and blockchain, Zuckerberg stated, in the very beginning of this year: “I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our service.”
Secondly, it was revealed that Facebook had discussed blockchain with Stellar. A Stellar insider pointed out that the company could be a major force in the financial sector, telling Business Insider: “They'd be taking the rug out from under the banks," the person said. "They can add a bank more quickly than a bank could build a social network."
The most obvious hints came more recently, when Facebook began aggressively hiring for a blockchain division. The job description led many to assume that Facebook was clearly going to utilize blockchain somehow and someway. The description was as follows: “The blockchain team is a startup within Facebook, with a vision to make blockchain technology work at Facebook scale. We’re exploring areas of interest across all facets of blockchain technology. Our ultimate goal is to help billions of people with access to things they don’t have now – that could be things like equitable financial services, new ways to save, or new ways to share information.”
The reason why this is massive is because Facebook is much more than a social media platform at this point. For some context - a significant percentage of the world population uses the platform, that boasts over 2 billion monthly active users. As a result, many believe that Facebook creating its own cryptocurrency could potentially be the next large catalyst for mass adoption.
It was revealed that Facebook is developing a stablecoin for Whatsapp, which it acquired years ago for $19 billion. There are many that point to the fact that this could mean that Facebook is stepping into the remittance payment sector. For some context, a remittance is when a foreign worker sends money back to their home country, and many believe that it is essential to the economic health of many developing countries. India is the number one country in terms of remittance, which is an industry that is worth hundreds of billions of dollars.
It’s important to note that Whatsapp is a behemoth in terms of social impact on its own, as it hit 1.5 billion monthly active users a year ago. Crypto News Review also reports that there is a reason why Facebook is focusing specifically on Whatsapp and India: “The attraction of India is that WhatsApp enjoys a very heavy userbase in the country. Furthermore, it’s also a nation that attracts a lot of digital financial transactions. It’s estimated, as per a report at Bloomberg, that people sent nearly $70bn to friends and relatives living in India, from elsewhere in the world. WhatsApp – and Facebook – want a piece of that.”
Bank of America Patent
It’s no secret that the financial sector is interested in blockchain technology, and this week also came with the realization that Bank of America is looking into utilizing blockchain with regards to “cash handling” services. Many believe that this means that the Big Four bank wants to use blockchain to improve efficiency with regards to ATMs to get an edge over the competition.
The patent would increase the efficiency of ATMs in a very specific way - it would utilize blockchain to track cash to disperse cash to ATMs that might need it at a specific time, so that ATMs always have enough cash for customers. The patent refers to “ATM as a service”, which means that the financial sector might be looking more to blockchain to optimize its services. It’s important to note that there are various banks that have embraced blockchain. For example, in China, 12 of its state-owned banks are already implementing blockchain for various purposes - including loan issuance and identity verification - since last year.
The news is significant considering that Bank of America is the second-largest banks in the United States, and one of the largest U.S. corporations in terms of revenue, as well. The corporation has also been steadily accumulating various blockchain patents, as well, leading many to wonder exactly how it plans to utilize the technology. In fact, Bank of America has been interested in blockchain for years now. In January 2016, Catherine Bessant, a chief operations and technology officer at Bank of America, told CNBC: “As a technologist, the technology is fascinating. We have tried to stay on the forefront. I think we have somewhere around 15 patents, most people would be surprised at Bank of America with patents in the blockchain or cryptocurrency space.”
While it is clear that the cryptocurrency markets have been tough during 2018, many believe that important steps have been made regarding mass adoption. Of course, the fact that Bitmain is undergoing massive layoffs isn’t great news for the sector, but that certainly doesn’t mean that the company cannot survive long-term.
In terms of mass adoption, the fact that Facebook is developing a stablecoin means that many users around the world might be utilizing crypto to send payments globally. Given the fact that billions of people around the world use both Facebook and Whatsapp - this could potentially be massive for not only Facebook, but the sector in general.
Lastly, Bank of America is one of the most well-known banks in the world, and the fact that they are gathering blockchain patents certainly is good news for those who believe that cryptocurrency will forever disrupt the financial sector - even if it is still unclear how those patents will be used.