The Slow Death of Speculation, and the Rise of Real Utility

In the last handful of years, having a cash channel that fed into any of the major cryptocurrency exchanges presented traders with countless opportunities to literally “get rich quick”. Cryptocurrency, more so in its heyday, was one of the few ideas that delivered this possibility, and in many moments of intense FOMO made multiplying one’s fiat balance as easy as a single click. It might seem like only yesterday that the denizens of Reddit were riding high on Bitcoin’s shock-inducing five-figure price, but we are now more than a year deep into the dregs of a bear market with an equally taxing emotional impact.

Enthusiasm for cryptocurrency investments has waned significantly, and the current sentiment is more a product of other trends than it is the cause for speculation’s demise. Most notably, mature market elements have since been introduced and given time to wrap their tentacles around the nascent ecosystem. Futures, options, and enterprise-level investing products allow institutional money, high frequency traders, and short contracts into a market that was once defined by a small handful of coins and the simple choice between buy or sell. A dearth of ICOs and looming regulations also starve speculators of new assets to bet on while legacy coins lose volatility by the day.

However, perhaps the biggest reason that crypto seas are calmer is an awareness that past bubbles were supported by manipulation and unsustainable trends, not by the value of those blockchain businesses funded by token sales. Besides this, token economies themselves are distracting for companies which are serious about pushing the technology’s boundaries. It will take something truly tangible to catalyze the next wave of crypto enthusiasm. Businesses that use blockchain as a tool to improve their value proposition, compete in a classic and compliant manner, and bring new technology into the fold, finally have less noise to cut through.

Remittance the Realization of Old Goals

Though blockchain is moving in exciting new directions, it still hasn’t accomplished its oldest and loftiest goal: the optimization of online finance. Individuals excited to “be their own bank” have been failed time and again by Bitcoin, and there are few who still believe that its open-source, decentralized platform is the best way to go about things. Creating technology that actually works is now more important for blockchain’s sustainability, and many companies have sprouted up that deliver on exactly that mission.

Remittance has emerged as a focus for blockchain visionaries who wish to broaden the accessibility of finance and make it cost-effective enough for a huge swath of the population to effectively participate. The ability of an expat to send small payments back home to his or her family, for example, was impeded by the highly stratified costs of financial institutions until platforms like COTI were unveiled. While many blockchain firms seek to optimize the transaction speed of their on-chain cryptocurrencies as a means to better transfer value, trading fiat money for tokens with a variable exchange rate is counterintuitive and overly complicated.

Instead, COTI steps in as a protocol designed to facilitate the instant issuance of fiat-backed stable coins on the blockchain, which are pegged to the value of currencies used to create them. Individuals and companies which want to send easily retrievable payments can do so using one of the standard methods, including debit cards and crypto wallets. Issued stable coins are more quickly and inexpensively sent and can be withdrawn however the recipient prefers. The company recently released its testnet, and companies are already lining up to take advantage of its unique TrustChain algorithm, which deploys a direct acyclic graph-based (DAG) ledger to attain speeds of more than ten thousand transactions per second.

Other remittance ideas like Request Network take a different approach. While also incorporating functionality like invoicing, the idea enables users to send payment requests to others on traditional channels, and for them to be paid in any currency via settlement on the blockchain. The company plans to build Request buttons into eCommerce payment portals, making it easy to integrate traditional payment methods and use them to transfer money across borders without fees. While speculation can still run rampant in the cryptocurrencies supported by Request, it won’t matter because instant cross-chain settlement and the integration of fiat eliminates exposure to volatility.

New Directions Away from Speculation

With less news about massive price swings, it’s now the technology behind the tokens that has stepped into the limelight. Companies doing big things with blockchain prop up the industry’s potential, whereas previous periods of optimism were sparked by the most novel idea of all: making paper money with digital money. It has made room for useful tech to shine, such as the peer-to-peer blockchain networks like Golem which can more efficiently collect and distribute GPU and CPU power across the web.

This is one area where decentralized infrastructure has an advantage over its centralized counterpart because people can use blockchain to more easily feed the network’s power with their PC. The single use-case for Golem tokens (to pay for network power) means that speculating on them is difficult, because the equation to determine their value has only one variable: professional demand for processing power. If tokens get more expensive, it doesn’t impact the efficacy of the network, and just means that more power-hungry ideas like machine learning and artificial intelligence are thriving.

Even the traditional finance industry, which was once excited at the possibility of catering to retail traders’ desire to speculate on crypto, has almost entirely abandoned this notion. A Bitcoin ETF is not looking likely, contrary to expectations, and instead the industry is enraptured by blockchain’s ability to tokenize securities. Accordingly, though speculation was the typhoon that saw the public awash in blockchain mania, receding waters have revealed that the only blockchain ideas left standing are those that are built on a solid foundation of enhanced functionality.