Jad Mubaslat is the founder and CEO of BitQuick.co, the Ohio State Bitcoin Group, a former graduate of Boost VC and a bitcoin user since 2011. BitQuick.co is a P2P marketplace that allows individuals to buy and sell bitcoins in the US via cash deposit.
Nearing the end of 2015, many are questioning the future of bitcoin. 2016, it’s safe to say, will be a crucial 12-month period.
For one, the technology’s open-source community will need to resolve some outstanding questions, most notably whether it will increase the size of blocks on the blockchain. Meanwhile it must combat the effects of “private blockchains” seeking to court market share.
Ultimately, I am a firm believer in the future of bitcoin. While its progress throughout 2015 may not have captured the media’s attention as it did in 2013, the industry has created a solid foundation for the continued success and growth of the bitcoin network.
With the variety of applications now being built, it is difficult to imagine it simply fading away anytime soon. I truly believe we are only a few years away from bitcoin crossing ‘the chasm’ and becoming a ubiquitously acknowledged technology.
But the big question remains: Which use case will first bring about bitcoin’s wider acknowledgement?
With this in the background, here are the five companies that I believe will have a considerable impact on the industry this coming year.
One of the more well-funded startups, Blockstream is nonetheless a self-described ‘stealth bitcoin company’ working on accelerating the development of cryptocurrency, open asset and smart contact technology.
The company has been busy in the background, launching a beta of its banner sidechains project and announcing its first commercial product, Liquid, which is aimed at speeding up transfer times between bitcoin exchanges, in 2015.
One of the projects that Blockstream has decided to explore further is the Lightning Network – a proposal that would move smaller bitcoin transactions off the blockchain so they could occur more quickly with reduced fees. It nonetheless recreates the trustless nature of the current network design.
The Lightning Network has the ability to reduce the total number of transactions that need to be settled on the bitcoin blockchain, and thus removes their affect on the necessary total size of blocks.
The network faces technical challenges before it can go live, though, such as the integration of various changes to Bitcoin Core. I believe we will see most of these issues resolved and that Blockstream, or perhaps even a different party, will launch its version of Lightning during 2016.
This will greatly relieve the current buildup of pressure surrounding the block size discussion, and add to the robustness of the bitcoin network.
tØ is a blockchain-based trading platform created by online retail giant Overstock, first announced in August. Part of the firm’s larger Medici arm, tØ aims to revolutionise securities by making trade and settlement occur simultaneously using blockchain technology.
While the SEC did recently approve Overstock’s plan to issue stock via blockchain technology, Overstock CEO Patrick Byrne said in a recent article by Motherboard that it might not use the bitcoin blockchain as part of its efforts.
“Maybe we’re not going to use the bitcoin blockchain … Maybe there’s another blockchain we want to integrate with, with higher throughput,” he told the news source.
This comment is in reference to the bitcoin block size, as a limited number of transactions also results in a limited number of instant settlements the company can offer.
Continuing with my belief that the block size issue will be addressed during 2016 in some way, I also believe tØ will utilise the bitcoin blockchain as opposed to a private blockchain due to bitcoin’s decentralised, secure and relatively trustless nature.
If this comes about, this would be the first major security settlement product released that utilises bitcoin, and a key milestone in bitcoin’s history.
OpenBazaar is currently working on one of the most compelling consumer applications for bitcoin out there with the development of a decentralised marketplace.
If successful, OpenBazaar would essentially serve as an open-source competitor to eBay that has reduced fees for all parties due to its decentralised nature.
OpenBazaar faces what I believe to be relatively trivial challenges in launching, including the development of a robust reputation system and the classic chicken-and-egg problem of acquiring volume in a new marketplace.
However, with its recent venture capital fundraise of $1m in June 2015, I believe we will see the highly anticipated launch and expansion of OpenBazaar during 2016.
Zapchain is a social media platform powered by bitcoin and is one of my personal favourite companies.
The startup’s integration of on-chain bitcoin micropayments for tipping is a truly revolutionary idea that fosters high-quality user engagement and content creation amongst various self-created communities.
Zapchain’s biggest hurdle lies in its ability to continue its growth, while avoiding spam users.
From what I have seen of Zapchain, though, its ability to curb spammers has proved effective and the platform is currently more popular than ever.
During 2016, I predict Zapchain will continue its growth in non-bitcoin related communities and also become recognised as a top bitcoin news platform. Zapchain embodies the spirit of bitcoin, and also provides a key alternative to some controversially moderated bitcoin communities.
The best-funded bitcoin mining company with over $60m raised so far, BitFury announced on 16th December that it will bring a new ASIC chip to market in Q1 2016.
The launch of its new data centre in Georgia could double the total bitcoin network hashing rate, leading some to worry about the integrity of bitcoin’s mining decentralisation.
I believe this risk is perhaps overstated and that the major net effect of BitFury’s innovations will be increased (and possibly almost doubled) security for the network.
Furthermore, affecting the integrity of bitcoin’s decentralised nature would act against BitFury’s best interests as a bitcoin company.
BitFury CEO, Valery Vavilov, has also reflected this sentiment, suggesting his company intends to act in the interests of the network as a whole.
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Disclaimer: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, CoinDesk.