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Investors should be prepared to see red, warns one investment bank.

That crypto sell-off earlier this year will seem like a minor tremor compared to the shaker headed this way, according a new report released Wednesday.

Investment bank GP Bullhound predicts a “heavy correction” will obliterate cryptos by some 90% within a year, leaving few survivors.

Clearly, there’s some fat to be trimmed, considering there’s more than 1,000 coins on the market.

Read: Have bitcoin investors become irrationally bullish again?


“While this correction will be critical to cutting through the hype, its lack of impact on financial institutions will create new phenomena that we have never seen in any previous bubble burst,” wrote Sebastian Markowsky, the lead author of the report.

“Nonetheless, once this ‘crypto winter’ passes, the growth dynamics for the precious few survivors will be unprecedented.

”And therein lies the good news for the Ethereum faithful, according to this section of the 45-page report:

“People will become more cautious towards second generation protocols. Aspirational upstarts such as Dfinity, RChain, Cardano and Tezos will have to do much more than simply technically outperform to win market share.

They will, however, keep the pressure on Ethereum to implement long overdue changes. Ethereum will keep its position as the clear leader and become the most valuable cryptocurrency by market cap.

”Ethereum has a long way to go if it wants to catch bitcoin. At last check, bitcoin BTCUSD, +0.75%  was trading at $9,141.61, which puts it at $155.5 billion in market cap. Ethereum ETHUSD, +3.19%  is in second place a $67.4 billion.Bullhound, however, isn’t the only one bullish on Ethereum.

DeVere Group founder and CEO Nigel Green sees a potential fourfold rally. “The price of Ethereum... could hit $2,500 by the end of 2018 with a further increase by 2019 and 2020,” he told MarketWatch in an email.

https://www.marketwatch.com/story/bitcoin-will-lose-its-crown-amid-90-crash-in-cryptos-investment-ba...

Russia has loudly announced its intention to control "the blockchain". How it plans to do so is less clear.

Last year Tokyo hosted delegates from 25 different countries, for the International Standards Organisation (ISO) meeting to work on international standards for blockchain technology. These meetings are usually dense, dry and heavily technical affairs, so the heavy Russian delegation of four might have raised some eyebrows.

Even more surprising, two of those four were from the FSB, Russia's Federal Security Service and successor to the KGB. When asked why Russia was devoting so much attention to blockchain technology, Grigory Marshall, the head of Russia's delegation and FSB, was quite forthcoming.

"Look, the internet belongs to the Americans, but blockchain will belong to us," he said according to one anonymous delegate, the New York Times reports.

"The internet belonged to America. The blockchain will belong to the Russians," another delegate recalled hearing.

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    This level of candour is pretty typical. In a previous presentation, Russian delegate Maxim Schevchenko bullet pointed "possibility to influence the technology" and "implementation Russian standards and solutions worldwide" as reasons to attend the ISO conference.

Meanwhile, another Russian delegate Alexey Urivskiy, reportedly told the Russian newspaper Vedomosti that the ISO committee was aiming to get Russian cryptographic algorithms into the standard.

Since then the Kremlin has also clearly declared its interest in cryptocurrency as an economic weapon, and used Venezuela as a guinea pig for testing a national digital currency.Its heavy focus on the blockchain standards at the ISO meeting might be a separate concern though.

Control the blockchain, control the world?

"It really does create the foundation for the future that is coming," said Gilbert Verdian, the head of the British ISO delegation and founder of the Quant Network. "To get behind it and back it now is going to put people at an advantage, either politically or economically.

"Opinions are split over whether or not potential Russian government interference in blockchain standards is anything to worry about.Craig Dunn, ISO blockchain committee chairman and head of the Australian delegation, reckons not. He points out that member countries need to reach agreement before moving forwards, over the course of many different rounds of voting.

"There has to be agreement and consensus across the member countries to take a standard forward," he said.Others are concerned that it's not enough."In the context of software it is the perfect trojan," said Emma Channing, co-founder of the Satis Group ICO advisory firm.

"If something gets buried in it, these things will get adopted wholesale and won't be questioned on the way in."

Should the world be worried?

OPINION: No. There's probably important work going on in ISO/TC 307, but it's not happening very fast relative to other developments in distributed ledger technology. The ISO blockchain standards project began in 2016 and is still in early days.


The standards showing the most development are focused on the less-technical, but no less interesting, elements like what exactly a smart contract needs before it's legally binding, and the privacy implications of DLT.The most optimistic timeline for finalisation would probably be 2019.


Trying to plant sneaky tech backdoors into distributed ledger technology standards is like trying to throw a dart at a bullseye on a car that's speeding past. Trying to do it through ISO meetings is like trying to do it with broken arms.


Channing's concerns are likely unfounded, and despite the unusually heavy FSB presence at the meetings they're probably more interested in representing Russian oligarch business interests by pushing their investments as standards, and enjoying a Tokyo vacation on the taxpayer ruble, rather than doing more glamorous spy stuff.


If there's any security flaw to be had, it's that ISO/TC 307-compliant physical products will have backdoors built into them, while programmers working on that standard may also be able to install backdoors.


This certainly isn't specific to Russia and is the same security problem that already exists on everything else. It's a compelling reason for institutions to use permissioned public ledgers rather than completely private ones.


Either way, the actual technological standards of distributed ledger technology are still very much in flux, and the eventual formal ISO standards are more likely to follow today's leading projects which get adopted as de-facto standards, rather than re-inventing the wheel.


The odds of closed source or flawed open source cryptography, centralised networks or other deliberately-planted security problems making their way into formal DLT standards is close to 0%. But the Kremlin can dream.Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, XRB


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Most people love gold. It is simply an emotional commodity where there is a deep-seated allure and lust. Gold used to be money and it was great money for its times. It was one of the few resistant, standardizable, rare things that was any good for storing value.

In a primitive world gold is great as currency; its only drawback being its high value. That was where silver and copper stepped in and filled the gap.

However, it wasn’t long before paper and credit took over from metals and a promise even when it hasn’t been as good as gold has ruled money as the main source of wealth and transaction far back into history.

That doesn’t stop gold’s modern fan base believing that gold should once again be the basis of our monetary system. It makes sense for them as they own some and remonetization would shoot gold to the moon faster than any crazy cryptocurrency.

Yet back in the 19th and early 20th century, industry and society was crucified on a cross of gold, as the anti-gold standard people would have it and it took the First World War to kill gold as money for much of the world, and the great depression in the U.S. to see it out of people’s pockets and into government reserves for good.

Gold is terrible money in these times; it’s insecure, volatile and can’t be easily digitized. Making more gold puts mining Bitcoin to shame when it comes to environmental damage. Not only does it use five times as much energy to mine one single year’s more supply, it rips up huge swathes of the environment to do so.

Yet tearing up the globe for gold is nothing new, with the disastrous destruction of North California by gold rushers and the consequent silting up of the Sacramento river, one of the initial impulses for the environmental movement as we know it.

However, there is no shaking gold’s investment audience. It’s the same old types since when I was a small child, grisly old guys awaiting Armageddon and a global comeuppance. Like stock market crashes it has to happen, history is littered with such moments, but I believe if one was to come about these days, gold would not zoom to the skies.

Gold is caught in a very narrow range and has been going nowhere for years now. Having a basement of gold bars has not been a great investment even with interest rates near zero, a good environment for gold, at least in theory.

The stock market has trounced gold, pretty much most assets have in this era of QE.

Will gold have its day when this merry-go-round shudders to a halt?I believe that one of gold’s most powerful use cases is gone and as such gold is now only any use outside of its industrial and commercial uses as the currency of war.

Governments keep gold in reserve because in war gold is what you pay with. It’s no good having soldiers if you can’t trade with gold, because pretty soon if the stakes get high, your paper won’t be accepted and only bullion will buy you what you need in trade.

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That use case is still in place, but what has gone away is the use of gold as flight capital.When Little Rocket Man was wrestling Big Rocket Man, gold didn’t react, but Bitcoin went off the dial every night. You can’t head for the airport with gold bars these days, and opening a foreign bank account is a thankless task that can take months or never get done.

A normal person sweating a war isn’t a billionaire with a private office, but in the old days they might have stashed a few thousand or even hundreds of thousands in gold if they thought the balloon was going up.

Today you’d stash it in Bitcoin and be safe in the knowledge that you could fly away on holiday somewhere safe for a few months and your stash would be as safe as the place your hid you private keys.

This is a blow to gold so that for now when a war breaks out or a conflict starts to brew, don’t expect gold to spike like the old days. Now Etherium, Bitcoin, Ripple, Litecoin and a myriad of crypto will get the attention that gold once enjoyed.

Its bad news for grumpy old men but good news for crypto-believers and a new trading opportunity for us.---Clem Chambers is the CEO of leading private investors Web site ADVFN.com and author of Be Rich, The Game in Wall Street and Trading Cryptocurrencies: A Beginner’s Guide.

Intelligent Investing is a contributor page dedicated to the insights and ideas of Forbes Investor Team. Forbes Investor Team is comprised of thought leaders in the areas of money, investing and markets.

MIT Technology Review is prepared to take down the world’s most popular cryptocurrency!Technology writer Morgan Peck has published a plan stating three different ways that could help to get rid of Bitcoin.

Option One: Government Takeover

No, Morgan is not suggesting that Bitcoin be taken over by the government. Instead, the plan is that governments create their own digital currencies – called fedcoins – with improved features over those offered by Bitcoin and controlled by the likes of trusted institutions like the Federal Reserve Bank.

The network nodes could operate like the institutional banks - akin to JP Morgan and Bank of America – who will be responsible for a select group of addresses on the blockchain and for all the transactions and activities occurring for those. The Fed would act as the final arbiter.

Fedcoin and its network would help with tasks including automatic collection and filing of taxes, facilitating transactions for the purchase of groceries, trading and investments, and all regular transactions. Citing success in a simulation run in 2016 by the Bank of Canada on an Ethereum-based platform, launching such a currency in regulatory purview can be a game changer.

(See also, How The US Government Handles Its Massive Stash Of Bitcoins?)

Option Two: Facebook Sneak Attack

This option banks on the massive popularity of world’s largest social media platform, which can be used to topple bitcoin. Facebook would adopt Bitcoin and join the Bitcoin network as one of the network operators and then launch its own Facebook-hosted bitcoin wallet.

All its 2.2 billion users could be integrated with the Facebook wallet. Promotional activities, like paying token amounts for like, share, post, and watch ads, can let users start earning bitcoins through the Facebook Bitcoin system, and Facebook can launch a mining operation in the background to gain control of the majority.

Once they have a sufficient number of coins, then similar to a Bitcoin fork, (like the birth of Bitcoin Cash) fork out to a new, better currency on the Facebook platform, which would lead to doomsday for Bitcoin.

(See also, Will There Be a Facebook Cryptocurrency In 2018?)

Option Three: Go Forth and Multiply

Create an enormous variety of tokens, thousands if not millions, that can represent anything and everything.Imagine having a simple digital wallet in your mobile, which has a variety of tokens – like FacebookCash, GoogleCash, WalmartCash and more. Even if you are taking a bus ride on city’s public transport, you can pay the fare with any of the tokens (or their fractions).

 Shopping on Amazon.com allows you an option to pay in fractions of GoogleCash tokens that may represent your Google stock holdings, and you can pay for repairs of your Toyota using WalmartCash tokens that could represent your Walmart shopping reward points.

Since everything will be tokenized with seamless interchangeability, including the goods, services and money, one will soon become indifferent to a particular token, including the present-day popular Bitcoin.

Bitcoin will eventually die, as people will be able to transact through any forms of tokens.While the three different plans look interesting, implementing them will be a challenge considering the involvement of diversified stakeholders and the vast scale of operations.

Such interesting reads indicate the growing popularity of cryptocurrencies, and how different stakeholders, institutions, and large organizations are pondering over tackling them or building something better.

Read more: MIT Tech Review Reveals Plan to ‘Destroy’ Bitcoin | Investopedia https://www.investopedia.com/news/mit-tech-review-reveals-plan-destroy-bitcoin/#ixzz5DsTQQoRm 

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This year, industries across all sectors are looking into how blockchain can benefit their businesses. Despite growing global hype, systematic inequalities remain across the blockchain landscape.

As the underlying technology matures, some of these inequalities will be addressed and eventually overcome, while other inequalities are a product of market forces and are deeper and more complex. These inequalities require unprecedented solutions.

Although blockchain undoubtedly offers a dramatic and provocative future, businesses and technology stakeholders alike must understand the risks they might encounter and what a successful pivot could require. 

From an investment perspective, the most exciting aspect of the ongoing blockchain revolution is undoubtedly the initial coin offering (ICO), which has captured the attention of alternative investors and technologist across the globe. Even though this new capital raising mechanism has yet to be fully defined by government regulators, increased capital continues to flow into new projects.

In a seemingly clear rebuke to the modern venture capital based funding model, new companies are motivated to raise greater capital sums without exchanging any formal ownership or obligation to coin or token investors. Likewise, coin or token investors are attracted to the opportunity to invest in blockchain ventures sooner than previously available without having to prove that they are accredited.

ICOs enjoy global market access to investors, enabling them to raise unprecedented amounts of capital -- in some cases raising several hundred million dollars in hours or days. Yet, this unregulated market has demonstrated it has the potential to harm investors whose participation has resulted in proprietors of ICOs with vast capital and no obligation.

Some ventures have dissolved before any product delivery with no fiduciary duty to investors to continue on. While ICOs provide a unique way of raising needed capital, market participants and regulators alike have called for intelligent and tempered regulation. This inequality clearly privileges proprietors of ICOs over their investors.

Ventures that voluntarily abide by the rails of securities issues established by their governments, produce a valid business plan and whitepaper and raise a targeted offer in line with their capital requirements will empower their beneficiaries greatly and reduce this inequality. 

In this nascent environment, investors and market participants have demonstrated an eagerness to prioritize their investments. Blockchains and blockchain platforms have dominated the cryptocurrency conversation, building hype around the benefits of decentralization, privacy, innovation and immutability.

The mechanism on which adoption depends is an ecosystem of applications fully reliant on blockchains and blockchain platforms. To the blockchain industry, these applications are known as decentralized applications (or “dapps”). 

An inequality of potential exists between the promised benefits of blockchains and the current applications built on them. Even in their infancy, dapps have proven to demonstrate significant potential over web technology at its advent.

ICOs have two major purposes: to release utility tokens to the public for use with a dapp or to generate funding for a project by purchase of tokens outright. Commonly, dapps are either directly funded by ICOs and may use tokens to power the functionality of the application itself.

Traditionally, projects are funded through venture capital, whereas ICOs offer new avenues of funding for projects to create decentralized applications without exchanging formal fiduciary obligation. 

Dapps address a diverse array of enterprise solutions, many at a lower cost than current systems. Some of the more popular use cases include payment platforms, data storage, user verification and digital asset rights management.Inevitably, blockchain platforms will begin to pivot to emphasizing their offered dapps over themselves.

One such example is Mist, the first ever dapp store run on the Ethereum blockchain which will provide consumers with easy access store, unlocking the new frontier of blockchain.At the heart of blockchains is their consensus algorithm. Currently, the most widely used model is proof of work (PoW) with proof of stake (PoS) a distant second -- the majority of the top 10 cryptocurrencies by market cap are proof of work. 

Much like conventional markets, there are unavoidable inequalities inherent in each version which grant greater rewards to those with more capital. As PoW consensus relies heavily on upfront equipment purchases (often thousands of dollars for a single mining rig) and high continuing electricity costs, this archetype is particularly capital intensive. 

Miners and mining pools with higher expandable capital have the ability to purchase more equipment, which translates to more frequent block rewards compared to smaller market participants. Similarly, PoS relies on staked pools of coin to create consensus with all transaction fees generated from the new block rewarded to selected stakes.

Larger stakes have a mathematically higher chance of being chosen, which creates a bias toward participants with deeper pockets. Despite this inequality, the blockchain consensus model is a vast improvement to traditional market systems.

This is derived from the foundation that within a given blockchain, all participants are subject to the rules set by the blockchain algorithm. The only way to amend the rules is through a blockchain mechanism known as forking.

However, there is no guarantee that the market will follow the forked chain if the new rules do not provide a benefit to all participants. In existing and traditional markets, the biggest players increase their market share until only a few control the system, skewing the rules to their advantage. 

These inequalities should invite stakeholders to consider their strategies and reevaluate existing beliefs given the accelerating innovation of blockchain technology.

With smart regulations like fiduciary duties to investors, requiring peer-reviewed whitepapers or prospectuses or basic know your customer (KYC) regulations, investors can be assured that their investments are being appropriately used.  

As dapps continue to grow in complexity and influence relative to their blockchains, governance will play a critical role in ensuring equality for all participants. Finally, as innovation progresses, blockchains will continue to find ways to balance the network effect, allowing both new participants and legacy participants to benefit cohesively.

With the proper planning, strategy and sensible legal frameworks, these inequalities can be overcome.

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