We have experienced many ups and downs in the past year, mainly due to the global outbreak of the new crown virus, which has led to national paralysis and millions of deaths. But for people in the cryptocurrency and blockchain communities, 2020 finally shows the true potential of blockchain technology.
It can be said that compared with the development process of distributed ledger technology and Bitcoin (BTC), there will be more events that will have a lasting positive impact on the crypto industry in 2020. Therefore, the following are the five major developments in the field of decentralized technology in 2020, which will have a lasting and profound impact on the development of the encryption industry in the next few years.
Bitcoin price breaks through $20,000
In addition to breaking through the historical high of $20,000 during the bull market from 2017 to 2018, Bitcoin has more exciting performances. First, break the 20,000 USD mark. Before long, it broke through 30,000 US dollars. And now, even the $35,000 mark has been broken.
The seemingly crazy prediction that the price of Bitcoin will reach $45,000 by the end of 2021 may not be far away. More importantly, the well-known pricing model S2F (stock-to-flow) created by cryptocurrency analyst PlanB shows that the prediction that the price of Bitcoin will reach $100,000 is being realized.
The price of Bitcoin is rising, but it may also fall. This kind of thing has happened before, and it may happen again. However, in theory, many things have changed, especially people’s general perception of Bitcoin. The shift in demand from retail investors to institutional investors demonstrates this.
Bitcoin has attracted many well-known companies. These companies have entered the Bitcoin market for their own different needs. From companies that choose to hold Bitcoin as reserve assets, such as Microstrategy, to crypto investment funds, such as Bitwise and Grayscale, we I don’t know which individuals are investing through these funds. What we do know is that they are willing to invest billions of dollars in cryptocurrencies. At the end of October, there was real big news.
PayPal launches cryptocurrency payment service
The basic concept of PayPal at the beginning of its establishment was similar to that of Bitcoin itself. The company not only announced that it would enter the encryption field, but also entered this field in 2020, at least in the U.S. encryption field. In addition, it is reported that PayPal is now one of the largest buyers of Bitcoin because the company is increasing its reserves of Bitcoin to meet customer needs.
One word that summarizes this development is “adopt.” About 28 million merchants and more than 361 million users worldwide will now receive “primary services” for holding and using cryptocurrencies. PayPal claims that it is acting as a custodian, essentially just selling its bitcoin holdings. PayPal did not follow the traditional method of holding cryptocurrency, which is good.
For ordinary users, cryptocurrency is very difficult to understand, all cold wallets and hot wallets, passwords, 12-word recovery phrases, etc. PayPal provides an easy-to-use way to enter the encryption field. Once this method is implemented, some people may fully explore how to use this technology.
Bitcoin halving
Bitcoin halving is considered the key to the success or failure of the crypto industry. Bitcoin has indeed been halved, but not much has actually happened. Many commentators expect the price of BTC to rise sharply and then collapse, while others predict that the computing power of the Bitcoin network will decline. Although these things did happen to a certain extent, they were far less dramatic than expected. This is a very good thing.
Bitcoin mining reward halving occurs approximately every four years, which means that the Bitcoin reward obtained by miners for mining a block is halved. This is a hard rule of Bitcoin blockchain coding, which limits the supply of Bitcoin to 21 million, which mimics the nature of the limited supply of gold.
In the end, Bitcoin’s price and fundamentals were hardly affected. This fact has led some people to believe that Bitcoin has reached a certain degree of maturity. Perhaps it is this flexibility that has finally caused some of the largest companies, economists, and investors to reconsider their overall view of cryptocurrencies. As 2020 has passed, the fact that the supply of Bitcoin is drying up becomes more apparent.
Coinbase applies for listing
Public listings of companies are now prevailing, so it is great to see cryptocurrency native companies like Coinbase join in. When the market time is right, because the company has adopted a fully open regulatory approach to appease US regulators, half of the people expect Coinbase’s listing application to be approved soon.
Essentially, this means that traditional investors will be able to invest millions of dollars in Coinbase’s equity, which can actually be as high as 28 billion US dollars, according to Messari data. Coinbase also prudently submitted a listing draft when the price of top cryptocurrencies rose, which is likely to benefit Coinbase, because the exchange will undoubtedly face strict scrutiny by the US Securities and Exchange Commission (SEC).
Ultimately, Coinbase can lead investors and users in the widespread adoption of cryptocurrencies. Other so-called “unicorn” companies may follow the example of the exchange in 2021, so to some extent, Coinbase’s application for listing is risky. But if Coinbase obtains permission for an initial public offering and becomes the first truly large cryptocurrency company, this may bring it back.
Ethereum and DeFi
Bitcoin has investors, Ethereum has users, and Ethereum is accelerating its pace in 2020, making the prosperity of decentralized finance a reality, looking for use cases for all decentralized applications that have been considered to have changed for a while Game ecology.
Before July, everything was calm until the highly anticipated project Compound announced the launch of its own token COMP. Facts have proved that COMP quickly succeeded. It was listed on many well-known exchanges and created a new trend in DeFi.
The basic method behind Compound is simple: the platform acts as a decentralized lending protocol, paying interest to users who provide crypto assets for the liquidity pool. However, once the funds are added to the pool, the platform will issue the same amount of cToken, which can be used as loan collateral, which means that any type of token can be used twice.
As the price of COMP began to rise, other projects soon followed this trend and began to launch competitive agreements or projects that supported the decentralized ecosystem. More than a month later, the launch of Year.finance brought liquidity mining to a whole new level.
Then, the decentralized exchange Uniswap also joined this action, opening its liquidity pool, and due to its open currency listing policy, countless DeFi projects flooded into Uniswap and listed their tokens on the exchange. However, it has also had an impact through the use of automated market makers (AMM), and Bancor launched its first AMM in 2017. 2020 is the year when AMM really takes off. It promotes users to use tokens based on the Ethereum blockchain for transactions. This ultimately brought thousands of active users to the Ethereum network.
More importantly, after several long delays, the Ethereum 2.0 upgrade has finally started. The combination of ETH2.0, the recent renewed interest in alternative currencies and the DeFi boom has undoubtedly renewed interest in Ethereum and its token ETH itself, and has pushed the price of ETH to the highest level of US$1200 in the past two years. It is close to the highest level in history at around $1450. Now, 2021 has just begun, and some people have determined that ETH will soon rise to $2,000.
