If predicting the future is challenging, then predicting the future implications of general purpose technology is nearly impossible.
We’re going to try anyways.
However, getting all the details right is not the goal. Instead, the exercise of trying to predict the future opens your mind to new and potentially interesting ideas.
Personally, I agree with Naval Ravikant’s sentiment on the Unchained Podcast: predicting the long-term outcome is easier than the short-term.
I can see a long-term future that looks something like this…
We’re heading towards a more decentralized world. Blockchain (or the future evolution) and cryptocurrencies will be used by most businesses, most people, and, eventually, most governments.
This technology (decentralized consensus) will underlie many of our future systems as we’ve created a fundamentally new way to establish trust globally, leading to great leaps in our social scalability.
Technology by its nature is morally neutral, which means blockchain has the tremendous power to both help and hurt our future society. Hopefully when the dust settles, this revolution leads to a less violent, more free, open world.
Predicting on a shorter timescale (let’s say by 2020) presents unique challenges. The shorter we make our timescale, the harder it becomes to predict the future state. Short term, we’re exposed to temporary risks that will not necessarily matter in the inevitable long term, such as temporary technology setbacks, geo-political events, risks of individual leaders, etc.
In this article we’re going to examine the future on a short-term basis, and predict which projects will be in the top 10 by market cap in 2020.
I’m going to stack rank the top 10, but don’t get hung up with the order. Let’s not waste time debating the relative position of any project on this list.
Without future ado, here are my predictions for the top 10 projects by market cap in 2020:
Bitcoin will have the largest market cap by 2020 but will continue to lose market dominance. Historically, Bitcoin has slowly lost market dominance since 2013 as shown above in the chart from Coinmarketcap.
What will drive BTC’s value? Institutional money, increased adoption driven by Lightning Network, its position as the global crypto reserve currency, and a potential global financial crisis.
The CBOE is pushing the SEC to re-evaluate the Bitcoin ETF proposal. Big-name traditional investors such as George Soros have started investing in crypto.
On April 12, $250 million of BTC was purchased over a 1-hour period. Institutional investors are smart and would almost certainly wait for a pull back before purchasing. With BTC reaching at a 70% discount from ATH, could this be the start of the flood?
It’s growing steadily but nowhere near ready for mainstream adoption. However, after another 2 years of development, Lightning Network will add immense value to the Bitcoin ecosystem. We could see mainstream applications (lApps) being launched on Lightning, major online retailers accepting Lightning payments, and a variety of micro-payment solutions being realized.
The ratio of debt to GDP has increased in all advanced economies since 2007. You would hope we’d learn our lesson from the 2008 financial crisis, but in fact the opposite is true.
Are we headed for another global financial crisis? All signs point to yes, although predicting the timing is notoriously difficult. Global financial troubles will accelerate the transition to a crypto future and Bitcoin will absorb the highest percentage of capital.
Even if we don’t see a global financial crisis by 2020, we will see continued capital flight from countries with unstable fiat currencies into a more sound money (bitcoin). We’ve already seen this play out with Argentina, Venezuela, and Cyprus. China is concerned with capital flight risks leading to heavy-handed regulations on the crypto economy.
In a Darwinian sense, I support alternative currencies competing for dominance. Bitcoin and Bitcoin Cash are pursuing different strategies in regards to scaling. Over time we will see which solution (maybe both?) has merit.
BCH has potential to win the merchant payment space, however over time I believe Lightning Network will dominate. Long-term, the Bitcoin Cash “big block” strategy is not the best solution to maintain decentralized and censorship resistant.
For these reasons, I foresee Bitcoin Cash continuing to lose relative market cap and sliding out of the top 10.
Revolutionary technology takes a long time to build and we’re largely still in the infrastructure phase. This means 95% of current applications will fail. We first need to build the foundational infrastructure in order for future applications to succeed.
Platforms will continue to gobble up the majority of the value for years to come which is why investing in platforms is one of the most obvious crypto trends for 2018.
This sentiment is loud and clear with my top 10 list. No “dapps” here, folks. Instead, everything on the list could be considered as infrastructure (Bitcoin and Litecoin included).
There are many reasons to like NEO. They have a devoted community, A layer-2 scaling solution (Trinity) is being built, many upcoming ICOs will add to the already robust ecosystem, and NEO is cozy with the Chinese government.
NEO is unapologetically staying centralized (and censorable) for the near future until the ecosystem is mature enough to release into the wild. While I (and many others) disagree with NEO’s stance, it is the China way, and it’s undeniable that centralization is more efficient in some instances.
We could see geopolitical tensions between the US and China heat up which may incent China to go all in on crypto. What does a state-sponsored crypto future look like in China? No one really knows, but the NEO ecosystem is prepared to be the major public infrastructure. Sure, we might see a “CrypoYuan” being created, but I that will only add value to NEO.
EOS will become the #1 operating system for enterprise applications in the west.
If we’re going to see a decentralized Uber, Facebook, or Twitter—they’re going to be built on EOS.
Outside of China, EOS will handle the lion’s share of the enterprise scale applications in the west leading to a massive increase in value. EOS is a high performance blockchain capable of scaling to handle enterprise-level volume. This scalability is achieved both through the consensus algorithm Delegated Proof of Stake (DPoS) and by utilizing theoretically infinite parallel chains.
EOS also offers developers on Ethereum the ability to copy and paste their projects onto the EOS network. This will make it very easy for Ethereum projects to switch EOS.
The future is bright for EOS. By mid-2018, their mainnet will launch with a massive scalability advantage, a well-funded rockstar team, and the ability to port projects from ETH onto EOS.
Not to mention, EOS owns over a billion dollars’ worth of ETH tokens. They can dump these on the market whenever they choose, dropping the price of ETH and hurting confidence in this fickle market.
ETH will maintain relevance but will lose market share to EOS.
Ethereum is in a very challenging position. ICOs are being cracked down, the future of scaling is unknown, and “blockchain 3.0” projects like EOS are nipping at their heels.
Ethereum still has a massive lead over all other platforms in terms of network effect. But alliances can change quickly as the Ethereum network is not capable of handling the transaction load needed to run dapps. If you’re a developer, you can either wait for Ethereum to (hopefully) improve on scalability or you can jump to EOS where your application can perform as needed.
I’ll be watching the race unfold: Can Ethereum improve on scalability before EOS and other platforms take too much market share?
Wherever Bitcoin goes, little brother Litecoin follows.
I’m confident Litecoin will maintain market dominance due to inherit synergies (shared code) with Bitcoin, the network effect, and the compelling story of Litecoin being the silver to Bitcoin’s gold.
It’s generally agreed that Bitcoin alone cannot serve as a the global payment network. This makes an easy case for Litecoin to share the network load. Litecoin will be completely interchangeable with Bitcoin via atomic swaps on the Lightning Network.
XLM will become the top platform for enterprise-level payment infrastructure.
Payments and banking infrastructure are an obvious use case for cryptocurrency. In this space, there are currently 2 main players: Ripple (XRP) and Stellar Lumens (XLM). At the time of writing, XRP has over 5x the market cap of XLM.
By 2020, I predict this to be the inverse. XRP will maintain its dominance in the big bank settlement space, but everything else will go to XLM.
Here are some areas where I see XLM winning market share:
The use case for a payment network platform like Stellar is crystal clear. If Stellar can continue to innovate and build out its ecosystem, it will slowly but surely exceed Ripple in market cap by 2020.
WTC will become the go-to platform for enterprise-level IoT.
One of the most obvious use cases for blockchain is supply chain management. VeChain is currently leading this space in terms of market share, but WaltonChain will dominate the space in the long run.
WaltonChain is much more ambitious than “another supply chain coin.” They are striving to create an all-inclusive, decentralized, enterprise-level IoT solution.
WaltonChain solves the problem of how to incorporate physical assets onto the blockchain automatically with tiny chips. Through patented RFID technology, WTC can manufacture and insert their chips into pretty much anything. Combining hardware and software makes WTC more durable than other blockchain projects.
WaltonChain is starting with a few specific “no-brainer” industries as a proof of concept before going into full-on production mode. However, they’ve already shown massive efficiency gains in the retail space. So far, WTC has announced “child chain” projects to manage shipping and logistics for a port in China, smart agriculture in China, power a smart city in Korea, among others.
I won’t be surprised if WTC partners with Samsung, Alibaba, or another titan of industry.
WTC has one of the longest roadmaps you will find and won’t be fully operational for mainstream applications until 2020, just in time for this arbitrary deadline we created for this article. Coincidence? I think not.
tZERO will become the NYSE of digital assets.
The case for tokenizing all financial securities (stocks, bonds) and many real-world assets (real estate, art) is becoming quite clear. Tokenized securities provide several benefits over traditional financial products such as efficiency gains leading to decreased fees, reduced risk of financial manipulation, and increased access to investors since anyone with an internet connection can participate.
You thought the ICO boom of 2017 was big? Just wait until traditional companies start tokenizing their assets.
tZERO will become the New York Stock Exchange of Crypto making for a very valuable token by 2020.
The tZERO token will pay 10% of adjusted gross revenue to token holders on a quarterly basis, subject to board approval and the conditions precedent (or substitute requirements) outlined in the offering memorandum. This promotes price stability by encouraging token holders to temporarily lock up tokens in order to receive.
The tZERO platform is directly targeting Wall Street profits which is very ambitious. Luckily they have the team to pull it off.
A few notable team members include:
Given the enormous potential market size and the obvious benefits for both issuers and investors, if tZERO wins the tokenized securities space, they will be massive.
XRP will dominate the institutional banking infrastructure.
Much of the crypto community dislikes the ethos of Ripple (myself included) — however, just because the purists hate something, doesn’t mean it will go away. In fact, the opposite is true as Ripple might partner with Western Union and they may even replace the SWIFT network.
I believe XLM will win the remittance market in the long run; however both Western Union and Moneygram are currently considering using XRP.
QASH will be the leading platform for both retail and institutional investors trading crypto.
While we have seen a meteoric rise of the centralized exchanges such as Binance, the exchange landscape will change dramatically by 2020.
Right in the middle of this transition is a massively undervalued project, QASH.
By 2020, QASH’s LIQUID platform could be the leading platform for both retail and institutional investors looking to trade crypto. This is an ambitious goal, but they’re positioned well and they have the team to pull it off. Let’s take a look under the hood.
Their main offering is the LIQUID platform which aggregates all major exchanges into a single trading platform, combined with financial services such as prime brokerage.
A key feature of the LIQUID exchange is The World Book which will aggregate all major exchanges in the world into a unified trading platform. If this is done right, LIQUID will provide a single massive order book where users can trade the entire crypto market and get in and out of local fiat currencies.
This includes emerging fiat currencies from African and SE Asian nations which currently do not have fiat-crypto gateways. By allowing these new markets to easily acquire cryptocurrencies, we’ll see an increase in global liquidity.
Imagine a world where no one will have to send BTC/ETH from exchange to exchange in order to trade alts.
Institutional money will never use decentralized exchanges. I’m certainly in favor of using decentralized exchanges to mitigate the custodial risks of centralized exchanges. But do you really think Goldman Sachs traders are going to be fiddling around with EtherDelta?
Banks are under regulatory pressure which forces them to work exclusively with licensed businesses that follow all AML/KYC requirements. The QASH team has a deep history in the fintech space and will have the necessary banking licenses.
Lastly, the LIQUID platform is suited to handle banking-level order management and matching systems by processing millions of orders per second.
QASH is more than just an exchange.They are creating their own blockchain allowing developers to create applications leveraging the QASH token. The team also mentioned there will be some element of PoS paying dividends to holders.
To continue learning about QASH, here’s a detailed analysis.
If the team at QASH can pull it off, there is no doubt that they will be a top 10 project by 2020.
By 2020, BTC and LTC will dominate the pure currency market with the help of the Lightning Network. NEO and EOS will surpass ETH in the platform space, billion-dollar enterprises will trust their supply chain data on the blockchain, and institutional money will flow into crypto via trading both digital assets and tokenized securities.
That being said, anytime you’re dealing with the future there’s a distinct possibility of being completely wrong. I wouldn’t be surprised if one or more of these projects fails or a new player emerges that changes the landscape entirely.
In other words, this is not financial advice and you shouldn’t bet the farm based on some internet guy’s ideas about the future.
Do you agree? Disagree? When you close your eyes and squint into the future, what do you see? Let us know in the comments below.
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