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2019 Tech Predictions: "Stablecoins" Will Be Crypto's Next "ICO Boom"

It's going to be a big year for stability.

Stablecoins: you may not have heard of them, but they could become the hot new commodity in the cryptocurrency world. Unlike a more traditional cryptocurrency or altcoin — which tend to float freely with a fluctuating market value — these tokens are stabilized by, say, following the United States dollar. This is supposed to help people use and trade the token with a better understanding of how its value will change.

“The next wave of the crypto market will be driven by real-world value and real-world use cases,” Tory Reiss, co-founder and head of partnerships at stablecoin platform TrustToken, tells Inverse. “This is the true excitement that traders are feeling around stablecoins in 2018: the promise of trillions of dollars of value being easily accessed and traded by anyone with a smartphone, anywhere in the world.”

We’re reporting on 19 predictions for 2019. This is #3.

Where the 2017 cryptocurrency surge featured a drove of startups fueled by “initial coin offerings,” the stablecoin will define 2019 for crypto.

Stablecoins on the Move

Stablecoins are seeing big jumps. Tether, the largest such token by market cap despite a credible academic study which found the token was used to rig markets, has barely dipped from its January surge. The token itself is still worth around one dollar, as its designed, but the total market cap surged from $451 million in October 2017 to a peak of $2.8 billion last month, only recently dipping to $1.9 billion but still ending the year on a high note.

Tether's market cap in blue.

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This is not just constrained to Tether. CoinDesk found that while the cryptocurrency market crashed in November, 24-hour trading volumes for stablecoins remained strong with USD-C reaching $25 million, briefly pushing it into the list of 50 largest tokens. TUSD also surged 234 percent in the same 24-hour period. A report from Diar noted that USD-C, TUSD, GUSD and PAX saw a 1,032 percent increase in on-chain transactions in November when compared with September.

The market tends to fall into three types, according to Reiss. There’s algorithmic stablecoins, which try to shift supplies to maintain a price with the dollar. There’s crypto-backed stablecoins, which absorb the shock of price fluctuations in a more traditional cryptocurrency, and fiat-backed tokens where the value is based on a currency like the dollar or euro.

“While algorithmic and crypto-collateralized stabilizing methods were celebrated by some in the industry as approaches that fulfill the original promise of fiat-free cryptocurrencies, it was ultimately the fiat-backed approach that created the biggest impact and has since ushered in the next wave of the industry,” Reiss says. “Why is it that the regulated, fiat-backed stablecoin model has received so much attention in 2018? It’s not the fact that the alternatives have not produced great results: no algorithmic stablecoin has successfully launched and maintained a stable price. The real excitement comes from the bigger implications of connecting real-world assets like U.S. dollars to the blockchain, and the trillions of dollars of liquidity that this opens up to traders around the world.”

Another Dud?

Whether the market could repeat another version of the “initial coin offering” rush is unclear, in part because the experience of 2017 may have burned a number of investors. By February this year, 46 percent of the previous year’s ICOs had already failed, losing $233 million in value. There were 902 ICOs that year, and 142 of them failed in the funding stage.

Experts are also raising the alarm about fiat-backed stablecoins, which depend on the trust afforded by a central authority. Tether claims that every token is backed by a real dollar, but delays in professional audits have raised questions. Security researcher Tony Arcieri went one further in January, revealing that “I, and many others, suspect tether is being used to effectively counterfeit hundreds of millions of dollars of perceived value.” The issue taps into the question of expense surrounding stablecoins.

“To issue one dollar’s worth of Tether to you or me, the platform must attract one dollar of investment capital from you or me, and place it in a dollar bank account,” Barry Eichengreen, professor of economics at the University of California, Berkeley, wrote in The Guardian. “One of us then will have traded a perfectly liquid dollar, supported by the full faith and credit of the U.S. government, for a cryptocurrency with questionable backing that is awkward to use. This exchange may be attractive to money launderers and tax evaders, but not to others. In other words, it is not obvious that the model will scale, or that governments will let it.”

When Satoshi Nakamoto introduced bitcoin in 2008, it came with the promise of a decentralized cryptocurrency, free from central banks that could manipulate supply. It meant no middlemen, people exchanging value with lower barriers of entry. While stablecoins retain the “digital cash” benefits of bitcoin, fiat-backed assets seem to throw up the same issues that led to cryptocurrency’s creation in the first place.

19 Predictions for 2019: What Inverse Thinks

As the cryptocurrency market recovers from a serious crash over the course of the year, stablecoins show that developers are looking at the applications of the underlying technology beyond price speculation. Inverse predicts that, as the ICO defined 2018, stablecoins will define the next year in crypto, both in terms of trading volume and in the rise of new projects.

Related video: What is TrustToken?

Instagram Top Nine: how to access your best posts and photos of 2019

The Top Nine tool is back to provide users with a breakdown of their year.

One of Instagram’s biggest trends has returned: the top nine collage.

The service launched four years ago, and received a major boost when the inventor of the hashtag, Chris Messina, shared the Top Nine tool on Product Hunt. From there, people have been using this unique tool to show off the highlights of their year: the best brunches, the most brilliant beaches, the most captivating clips.

Tesla Cyberquad: specs, release date and details of all-electric ATV

The Cybertruck received a surprise addition after its unveiling.

Oh wait! We have uh…” Tesla CEO Elon Musk said toward the end of Tesla’s all-electric Cybertruck launch. “We made a, uh, we also made an ATV.”

Moments later, a Tesla representative rolled out perhaps one of the company’s most unexpected vehicles in its history. The ATV — later described as a “Cyberquad” on Tesla’s website — rolled out onto the stage, before rolling onto the back of the just-announced Cybertruck. Musk later confirmed on Twitter that the ATV would be a two-person vehicle available first as an option for the Cybertruck. Beyond those small initial details, little else is known about the company’s first foray into this type of vehicle.

You may hate Elon Musk, but the Cybertruck is good

Grimes' boyfriend just fucked up the auto industry again.

I don’t particularly like Elon Musk as a person, but in October, I bought (well, leased) one of his cars. I didn’t want to drive a gas-powered car anymore, both because fossil fuels are destroying the planet and because I am extremely lazy and tired of having to stop somewhere and put gas into my car. I ended up with a Tesla because there is literally no other car like it on the market — both in terms of how it performs in regards to range and drive, and how advanced its internal design and operation is. It is a once-in-a-lifetime, industry-defining vehicle. It really has no competition. My only problem with it, really, is that it looks too much like a regular car.

Tesla Cybertruck: 20 coolest photos and videos of the striking pickup truck

Tesla's latest electric vehicle comes with a surprising design.

Tesla’s Cybertruck is finally here. At a dazzling event at the Tesla Design Studio in Los Angeles on Thursday evening, CEO Elon Musk unveiled the vehicle he’d teased for several months prior as his personal passion project.

“You can order right now if you like,” Musk declared, before announcing a new order website.

Tesla Cybertruck pics, price: "Doesn't look like anything else," Elon Musk says

"Welcome to the cybertruck unveil!"

They hit its steel alloy body with a sledgehammer. They shot it with a 9-millimeter handgun gun. They showed off the toughness of its glass by dropping weights on it from a decent height. And they did it dressed as macho cybergoths.

This was the Tesla Cybertruck unveiling on Thursday night.