2019 has been a year full of many exciting things in the global cryptocurrency space. While there have been some challenges, the market has grown significantly. Many new players have stepped into this space, new blockchain protocols have been emerging and maturing, while existing players are improving their offerings. In addition, the year has witnessed a better understanding and more acceptance by the global regulatory bodies for cryptocurrencies. This year, we even saw China step into the space more aggressively, taking up blockchain, and driving innovation, which will be a big advantage to the market in the future.
As we approach 2020, here are some of the trends that are expected to make a difference and are worth watching out for.
Ethereum 2.0
In January 2020, the first stage of the Ethereum network’s transition to Ethereum 2.0 is expected to take place. Phase zero is the name of the first transition stage of the Ethereum network from a proof-of-work (PoW)to a proof-of-stake (PoS) consensus algorithm. As a result of this change, the block validation function will then pass from miners to special network validators. Currently, thePhase zero project is already in its final stages, and testing has already begun. The team has taken in the feedback from the community and are makingthe necessary changes, while also constantly giving updates about their developments.
Decentralized Finance
Decentralized finance, also referred to as DeFi, refers to the ecosystem which is made up of financial apps that are being developed on top of blockchain systems. DeFi is expected to expand drastically in 2020. To date, the value of DeFi projects crossed $650 million in 2019, which is evident of its growth. With DeFi, new lending and margin trading facilities have been introduced, which have enabled traders to easily switch between different debt positions. In addition, the likes of Babel Finance, which is a market operator, are assisting large miners to avail large capital. This is done by keeping crypto as collateral. DeFi is evidently going to help so many investors to easily manage their finances in the near future.
Crypto Derivatives
Crypto derivatives are a development that is going to make trading competitive in 2020. They have grown extensively in 2019 in terms of accessibility and size. Now, more exchanges are taking up the trend and are enabling investors to trade in futures and large-cap crypto options. 2020 expects to see more exchanges jumping into this growing trend.
Transaction Privacy
For some time, there has been a lot of concern about transaction privacy. However, this is going to change for the better in 2020. Already several companies have started working on more advanced tools for privacy enhancement. Ernst and Young, for example, have already created Nightfall, which is very useful for private transactions within the Ethereum ecosystem. As a result, many other companies are following the trend, and we are expecting to see many more tools developed to boost traders’ transaction privacy.
Lightning Network
The Lightning Network is becoming a big deal for many traders. It is a layer-2 payment protocol that is implemented on any blockchain-based cryptocurrency and as a result, it allows for the instant settlement of Bitcoin transactions. Since off-chain data is used by the protocol to catalyze the transaction speed, the associated charges are also decreased. We expect that in the year 2020, so much more will be added and improved on the system. With more channels, applications, and nodes, market efficiency will be boosted.
Source: PixabayCryptocurrency-friendly Regulations
Some statesin the US, have changed their laws revolving around cryptocurrency. A good example is Wyoming which has now become a hotbed for global crypto companies. As a result, we are expecting many more states to follow the trend and to change their laws to allow cryptocurrency use in the coming year.Other than the US states, countries such as China have also stated that they will be introducing their own public digital currency in 2020.
Analysts around the world believe that in 2020, the crypt market will experience a bull run. To date, it is clearly evident that digital assets are a force to reckon with and 2020 will clearly bring a lot of exciting changes to this space.