2015 was a year of many unexpected twists, but if you watched 2014 as closely as we did, you saw a few things coming.
We anticipated the evolution of 'Bitcoin 2.0', but had no idea that 2015 will become the year of the blockchain as a majority of the world's largest banks announced their involvement. We were right about bitcoin prices in the beginning, but would have never anticipated the explosive fourth quarter.
Overall, we pat ourselves on the back and hope to do even better in 2016. Here's a look at each prediction and how we fared (predictions are italicized in grey, evaluation in regular text):
1. The Bitcoin Price
Naturally, the most exciting thing to predict, since it’s so easy to just throw out numbers and even easier to be way, way off. And, there’s a 0% chance of being right if you don’t make any prediction….So, bitcoin prices will gradually fall into the $200s. There is a reasonable chance that they’ll break through $200 as well.
This happened pretty much right away, though it wasn't gradual.
It would be too much to predict their extreme highs/lows, or where they will close the year at. But we can safely rule out rises to $5,000-$10,000. Even the most encouraging of news has failed to raise prices, and the era of speculative euphoria seems to have been exhausted.
We can also rule out doomsday scenarios of a crash to $1.
We didn't wager much, but give us credit.
Score: 9/10
2. Altcoins
With several hundred already in existence, people no longer notice if a few more are created or go missing. Followers have grown weary, and pumpers are getting bored and moving on to their next fad. Therefore, their pace of (noticeable) generation will slow down in 2015. The prices of most will trend downward. A select few will remain resilient or even appreciate in value.
Right on again.
The aforementioned does not include tokens created with Bitcoin 2.0 platforms, which will proliferate during the year.
What we thought would be the digitzation of assets on 'Bitcoin 2.0' ended up being the Blockchain
Blockchain
Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp
Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp
Read this Term's entry into the big leagues. There was a mass engagement of financial institutions and technology giants in their own blockchain initiatives. Not much happened on 'traditional' Bitcoin 2.0 platforms though, and whatever did materialize was likely overshadowed.
Score: 7/10
3. Bitcoin 2.0
2013 was the year when altcoin growth just started ramping up, with a maturing in the first half of 2014. Similarly for Bitcoin 2.0, 2014 was their breakout year and 2015 will likely witness several new additions, including clones of existing protocols.
Per above, it's hard to say that 2015 was a breakout year. If there were clones, they didn't make themselves known.
A select few will lead the pack as they emerge as realistic candidates for real world applications.
This is true (Ethereum, Ripple, etc.).
Score: 5/10
4. Venture Investment
With the hundreds of millions already invested in 2014, it is tempting to say that the market will take a step back and give the companies time to execute on their plans. There will be some more deals, but few of the $xx,000,000 variety.
This was correct. There were fewer deals in 2015 (~65) than in 2014 (~93), and fewer of the 8-figure variety (11 in 2015, 13 in 2014).
The total dollars invested will be lower.
While 2015 may have seen the peak in venture investment, which declined as the year progressed, it was by all accounts a record year. $497 million was invested, nearly half of the roughly $1 billion total industry investment to date, and $122 million more than the 2014 total.
A good chunk of 2015's total comes from two single record-setting funding rounds in Coinbase ($75 million) and 21 Inc. ($116 million).
Score: 6/10
We will however see an acceleration in….
5. Crypto Crowdfunding
Crypto and crowdfunding were made for each other, both when it comes to the investment process as well as the nature of the startups. We will see much more of this is 2015.
Crowdfunding in crypto companies did reasonably well in 2015, but it didn't accelerate. We did see the entry of Bitcoin-focused crowdfunding platforms like BnkToTheFuture.
We confess that our intention was also for crowdfunding platforms involving some sort of native token intended as a vehicle for investment (e.g. Swarm). These did not take off and became increasingly quiet as the year progressed.
Score: 4/10
But we should not forget about….
6. The SEC
Their crackdown on non-registered shares issuance has only scratched the surface, and we will likely see wider activity.
The SEC did investigate crypto-related frauds, but all was quiet when it came to unauthorized securities offerings (though CFTC did take action on bitcoin derivatives). However, Swarm did attempt to protect itself through its creation of "Distributed Collaborative Organizations" after legal experts advised that its crowdsale model could contravene securities laws.
Often, enforcement action is delayed by a couple of years.
Score: 1/10
7. GAW, Paycoin, Hashlets, etc.
The Paycoin game has evolved at an equally rapid pace as the Hashlet program, and will likely “transition” to the next round as quickly as it came- all while the crypto community remains distracted by the latest saga. Alternatively, (1) One day without warning, everything disappears without a trace, including its (very rich) tweet history, Hashtalk and other satellite proxies (this may be a trivial point since the extent of true business activity is unknown), and CEO not to be found, or (2) a sudden, Alex Green/Ryan Kennedy-like declaration of insolvency, accompanied with similar side effects as in (1).
We were bang on with the alternative scenario. More can be read here. We pat ourselves on the back for a brazen prediction during a time when it was hard to picture GAW's collapse. The fraud was not universally recognized and upbeat commentary on the operation was still relatively abundant. Many were looking forward to vindicating revelations in Garza's planned speech at the Miami Bitcoin Conference, but he eventually backed out.
Score: 10/10
8. Hacking, Theft, Invasive Mining
The game of cat and mouse will continue. However, a lack of awareness was to blame until now. As the industry learns from mistakes of the past, it is finding itself with the upper hand. Ironically, the “centralization” of the decentralized currency into large, bank-like entities like Coinbase will help as they make progress with features like multisig.
This is true, and 2015 saw multisig become the industry standard, especially for exchanges.
We won’t see another MtGox, but we will see more incidents at altcoin exchanges.
There were no newsworthy incidents at altcoin exchanges, though there is noise on forums about Cryptsy.
Hackers (and authorities) will continue to exploit flaws in Tor….
There were relevant arrests but it's hard to tell what happened here until the cases come to trial.
Score: 5/10
9. The Dark Net
….And so Silk Road 3.0’s and other dark net sites will be cracked by authorities, and the occasional hacker will get his fill of bitcoins.
We missed here.
Score: 0/10
10. Regulation
Regulation
Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (
Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (
Read this Term
Nothing earth-shattering will happen. Jurisdictions will issue varying money licensing requirements, and there will be some differences as to where to draw the line between currency/property for tax purposes.
This is mostly true. The exception is the BitLicense, which was finalized and enacted. We wondered out loud if this would actually happen, especially after Benjamin Lawsky's announced departure from NYDFS. Other initiatives for regulation, such as California's AB-1326, fell by the wayside.
Score: 6/10
Total score: 53/100
Final Thought
We were only marked for the predictions actually made. A more rigorous approach would be to examine which major developments we failed to predict, such as the blockchain's bursting onto Wall Street, the Bitcoin XT issue and the Q4 bitcoin rally.
We also had the privilege of marking our own tests, so feel free to comment if you disagree with the marking scheme.
2015 was a year of many unexpected twists, but if you watched 2014 as closely as we did, you saw a few things coming.
We anticipated the evolution of 'Bitcoin 2.0', but had no idea that 2015 will become the year of the blockchain as a majority of the world's largest banks announced their involvement. We were right about bitcoin prices in the beginning, but would have never anticipated the explosive fourth quarter.
Overall, we pat ourselves on the back and hope to do even better in 2016. Here's a look at each prediction and how we fared (predictions are italicized in grey, evaluation in regular text):
1. The Bitcoin Price
Naturally, the most exciting thing to predict, since it’s so easy to just throw out numbers and even easier to be way, way off. And, there’s a 0% chance of being right if you don’t make any prediction….So, bitcoin prices will gradually fall into the $200s. There is a reasonable chance that they’ll break through $200 as well.
This happened pretty much right away, though it wasn't gradual.
It would be too much to predict their extreme highs/lows, or where they will close the year at. But we can safely rule out rises to $5,000-$10,000. Even the most encouraging of news has failed to raise prices, and the era of speculative euphoria seems to have been exhausted.
We can also rule out doomsday scenarios of a crash to $1.
We didn't wager much, but give us credit.
Score: 9/10
2. Altcoins
With several hundred already in existence, people no longer notice if a few more are created or go missing. Followers have grown weary, and pumpers are getting bored and moving on to their next fad. Therefore, their pace of (noticeable) generation will slow down in 2015. The prices of most will trend downward. A select few will remain resilient or even appreciate in value.
Right on again.
The aforementioned does not include tokens created with Bitcoin 2.0 platforms, which will proliferate during the year.
What we thought would be the digitzation of assets on 'Bitcoin 2.0' ended up being the Blockchain
Blockchain
Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp
Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp
Read this Term's entry into the big leagues. There was a mass engagement of financial institutions and technology giants in their own blockchain initiatives. Not much happened on 'traditional' Bitcoin 2.0 platforms though, and whatever did materialize was likely overshadowed.
Score: 7/10
3. Bitcoin 2.0
2013 was the year when altcoin growth just started ramping up, with a maturing in the first half of 2014. Similarly for Bitcoin 2.0, 2014 was their breakout year and 2015 will likely witness several new additions, including clones of existing protocols.
Per above, it's hard to say that 2015 was a breakout year. If there were clones, they didn't make themselves known.
A select few will lead the pack as they emerge as realistic candidates for real world applications.
This is true (Ethereum, Ripple, etc.).
Score: 5/10
4. Venture Investment
With the hundreds of millions already invested in 2014, it is tempting to say that the market will take a step back and give the companies time to execute on their plans. There will be some more deals, but few of the $xx,000,000 variety.
This was correct. There were fewer deals in 2015 (~65) than in 2014 (~93), and fewer of the 8-figure variety (11 in 2015, 13 in 2014).
The total dollars invested will be lower.
While 2015 may have seen the peak in venture investment, which declined as the year progressed, it was by all accounts a record year. $497 million was invested, nearly half of the roughly $1 billion total industry investment to date, and $122 million more than the 2014 total.
A good chunk of 2015's total comes from two single record-setting funding rounds in Coinbase ($75 million) and 21 Inc. ($116 million).
Score: 6/10
We will however see an acceleration in….
5. Crypto Crowdfunding
Crypto and crowdfunding were made for each other, both when it comes to the investment process as well as the nature of the startups. We will see much more of this is 2015.
Crowdfunding in crypto companies did reasonably well in 2015, but it didn't accelerate. We did see the entry of Bitcoin-focused crowdfunding platforms like BnkToTheFuture.
We confess that our intention was also for crowdfunding platforms involving some sort of native token intended as a vehicle for investment (e.g. Swarm). These did not take off and became increasingly quiet as the year progressed.
Score: 4/10
But we should not forget about….
6. The SEC
Their crackdown on non-registered shares issuance has only scratched the surface, and we will likely see wider activity.
The SEC did investigate crypto-related frauds, but all was quiet when it came to unauthorized securities offerings (though CFTC did take action on bitcoin derivatives). However, Swarm did attempt to protect itself through its creation of "Distributed Collaborative Organizations" after legal experts advised that its crowdsale model could contravene securities laws.
Often, enforcement action is delayed by a couple of years.
Score: 1/10
7. GAW, Paycoin, Hashlets, etc.
The Paycoin game has evolved at an equally rapid pace as the Hashlet program, and will likely “transition” to the next round as quickly as it came- all while the crypto community remains distracted by the latest saga. Alternatively, (1) One day without warning, everything disappears without a trace, including its (very rich) tweet history, Hashtalk and other satellite proxies (this may be a trivial point since the extent of true business activity is unknown), and CEO not to be found, or (2) a sudden, Alex Green/Ryan Kennedy-like declaration of insolvency, accompanied with similar side effects as in (1).
We were bang on with the alternative scenario. More can be read here. We pat ourselves on the back for a brazen prediction during a time when it was hard to picture GAW's collapse. The fraud was not universally recognized and upbeat commentary on the operation was still relatively abundant. Many were looking forward to vindicating revelations in Garza's planned speech at the Miami Bitcoin Conference, but he eventually backed out.
Score: 10/10
8. Hacking, Theft, Invasive Mining
The game of cat and mouse will continue. However, a lack of awareness was to blame until now. As the industry learns from mistakes of the past, it is finding itself with the upper hand. Ironically, the “centralization” of the decentralized currency into large, bank-like entities like Coinbase will help as they make progress with features like multisig.
This is true, and 2015 saw multisig become the industry standard, especially for exchanges.
We won’t see another MtGox, but we will see more incidents at altcoin exchanges.
There were no newsworthy incidents at altcoin exchanges, though there is noise on forums about Cryptsy.
Hackers (and authorities) will continue to exploit flaws in Tor….
There were relevant arrests but it's hard to tell what happened here until the cases come to trial.
Score: 5/10
9. The Dark Net
….And so Silk Road 3.0’s and other dark net sites will be cracked by authorities, and the occasional hacker will get his fill of bitcoins.
We missed here.
Score: 0/10
10. Regulation
Regulation
Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (
Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (
Read this Term
Nothing earth-shattering will happen. Jurisdictions will issue varying money licensing requirements, and there will be some differences as to where to draw the line between currency/property for tax purposes.
This is mostly true. The exception is the BitLicense, which was finalized and enacted. We wondered out loud if this would actually happen, especially after Benjamin Lawsky's announced departure from NYDFS. Other initiatives for regulation, such as California's AB-1326, fell by the wayside.
Score: 6/10
Total score: 53/100
Final Thought
We were only marked for the predictions actually made. A more rigorous approach would be to examine which major developments we failed to predict, such as the blockchain's bursting onto Wall Street, the Bitcoin XT issue and the Q4 bitcoin rally.
We also had the privilege of marking our own tests, so feel free to comment if you disagree with the marking scheme.
