Edwin Handschuh, CoFounder/CEO, 1Konto
Bitcoin (BTC) and cryptocurrencies are functional assets, meaning their value is derived from the usability within an ecosystem for either payments (peer to peer) or access (payment to use a service). While price volatility was rampant in 2018, transactions remained relatively stable and rebounded nicely from their April lows. This bodes well for increasing adoption rates as users transact in Bitcoin regardless of the nominal value of the asset and seem to be using it more frequently as the price declines. I see 2019 continuing this increased transaction trend in bitcoin and cryptocurrencies in general allowing for greater distribution and adoption as the currencies are utilized in transactions across the globe. Cross-border payments should lead the way as they solve real problems; lower transaction fees, quicker settlement and greater transparency.
While much of the public focus is on Bitcoin, we must remember there are various cryptocurrencies that are expanding and at various stages of development at this time. For instance; Ethereum is releasing iterative updates to increase the efficiency and security of their network, Cardano is working on enterprise grade smart contracts and improving transaction speeds, TRON has overtaken Ethereum in dApp usage and is seeing a continuing growth of since the launch of their main-net in 2018, Hyperledger has seen massive adoption and development from corporations and startups alike due to their corporate backing from IBM, Intel and Linux.
The stable coin space has seen massive gains with well-respected companies (Gemini, Coinbase, Circle) deploying their own fiat backed coins. It is widely expected that Facebook is gearing up to release a stablecoin for Whatsapp to assist with Indian remittances in 2019. These positive movements will not only increase awareness and positive attention, but functionality. In America, we often forget about the rest of the world and the real problems these digital assets can solve. Facebook’s experiment of introducing a digital stablecoin through Whatsapp would immediately have massive reach and simplicity built in for large volumes of transactions.
These networks are continuing to develop and grow even though cryptocurrency asset values are down vastly from their peak. This growth in development mimics that growth seen as the tech industry came out of the dotcom bust which formed the sturdy foundation that produced our current tech sector. 2019’s development will produce the first widely accessed and adopted application of blockchain. This application could be consumer or business focused, but I do believe that this is the year we see the ‘killer app’.
While the dramatic price movement in 2017 was great for increasing awareness of digital assets, history has shown the markets got ahead of themselves. 2018 proved to be a gut-wrenching bear market for those that were new to the space and old-hat for those in the space since 2013. Bitcoin has shown a steady pattern of massive run ups, dramatic falls and prolonged periods of consolidation. It seems we are currently in this consolidation phase and I would expect it to last through the end of the year.
On the surface, lower prices for longer doesn’t sound like a great situation, but when you’re dealing with a currency it helps with perception, adoption and usage. Stable prices encourage utility as people are reluctant to pay with an asset that is doubling month over month. This price stability provides a positive feedback loop for increasing transactions and increasing development which I believe will be the two main themes of cryptocurrency in 2019. The markets will move from monitoring the prices (both up and down) to the progress of development and transactions. Both of which are more applicable to the health and usefulness of the technology.
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About the Author: Edwin Handschuh, Co-founder and CEO of 1Konto, is responsible for managing overall operations and resources of 1Konto. Prior to starting 1Konto with his brothers, Ed was in wealth management at Wells Fargo Advisors where he worked primarily with high net worth individuals on growing, managing and protecting their assets. He achieved great success in this role by understanding what clients required to make sound investment decisions, and identified their problems and solutions in advance.
Ed’s primary interests for the last 15 years has been within the financial markets and technology space. The inner workings of markets, psychology, politics and the role tech plays in all of the above, has always fascinated him. His knowledge of these topics assisted him in his prior job, but are more important today and moving forward. It’s allowed him to identify the cryptocurrency markets need for a broker-dealer in the space and the comfort of navigating the broker-dealer regulations to make it happen. The management and responsibility aspect of his financial advisory role made him confident in his abilities of setting a vision, communicating that vision and putting the team together to make it a reality. Realizing that he enjoyed assisting people and making their lives better by securing their retirement, Ed felt he could impact more people in a bigger way through 1Konto.
Ed graduated from Drexel University with a Bachelor of Science and finance