While most see Bitcoin and most of crypto-currencies future very bright and take it for granted like an unstoppable train, I try to maintain myself on the ground by nourishing my pessimism.
My heart deeply believes that this is a new era, a game changer for the long run. However these blockchains and ideas are still young and have to survive skepticism, attacks and effect of time to grow older and steadily.
This is a quite fun mental gymnastics to look at any technology or news and seek for its weaknesses. Every kids love to break things. It’s in our human DNA I guess. And mind fitness can only be healthy.

In short, what could possibly go wrong in the crypto space?

Disclaimer: the below ideas are food for thought and may not encompass the reality of the market or how things really work. I am not a specialist in all the fields mentioned and I am only looking to grow as such, so please let me know if you think I’m wrong in the comment section.

2018 on my mind:

The hard fork market
Some famous podcasters/influencers calls 2018 for a wild hard fork year. Since December, many developers (and some non-technical people too) see versioning Bitcoin as printing free money. Stepping back on the impact of such practice, I see it having a negative impact in the crypto space. While many of us are criticizing central governments for manipulating the creation of fiat, this new forking trend is actually producing the same nasty effect. It’s like giving the ink, paper and printers to the public.
We can’t create value from nothing. A new piece of code must serve a purpose and differentiate itself from the ones already available. Else, it will be just another clone answering to an existing need and therefore should only dilute the market. Sadly, I don’t observe it working that way for the moment. Because of the crave for crypto-currency and the FOMO (fear of… having missed… out), market participants want to see any opportunity to make money and entertain the idea that everything with the brand name “Bitcoin” and labelled as “Blockchain” worth money. This is the market bubble I am expecting for 2018. When the volatility of such coins will skyrocket and technical issues will arise due to poor designing, money will be lost and the crypto space will be tarnished.

The ICO market
Booming in 2017, I don’t expect it to totally crash in 2018 but a market clean-up will happen thanks to increasing regulation/hunting from governments. Very similarly to hard forks, I don’t see such practice being sustainable. It has to evolve in order to better frame expectations in such type of investments. ICO aren’t store of values or currencies. They are investment in people/companies and should be treated as such. Anyone seeing it differently is fooling himself. Lawyers will always find a way to define them differently but governments always have the final words within their borders. People/companies happen to live in these very same borders even if their ideas and applications are decentralized.

The crypto-ban
In 2017, we have seen China and South Korea, among other countries, temporarily banning the usage of crypto-currencies. While Europe and US central banks pretend this is not part of their priorities, there is clearly some concerns showed in terms of tax evasion, KYC (Know Your Client) and AML (Anti Money Laundering). If we see it, they definitely know it too and are looking at their options. Markets will play a big role there as they are the centralized points of failure of the ecosystem. Going outside of these markets could be claimed as illegal in the future.
But there is hope: look at Japan thinking strategically by embracing the change and enabling the dialogue with their local actors. I still want to be cautious on how it’s happening. Licensing markets means also less entry points, selected by a government, to abide for its interest. Soon or later, you may still be able purchase but not withdraw! If we can’t own your coins, we’re back to the old banking system. Time will tell.
On a similar note, I don’t think that all coins will have the same scrutiny from our politicians. While Bitcoin, Bcash, Ethereum and many others are traceable and therefore auditable for tax/KYC/AML reasons, anonymizing coins (Monero, Zcash, etc.) are the real danger and they are being demonized as the cartels and terrorist playground by the mainstream media.

Mining localization
As mining the major crypto-currencies became a real job in 2017, companies were created and a “natural” selection was made with its lot of bankruptcy, drama and scams (“beware of cloud mining!”). Nowadays, you can’t be profitable if you don’t go for big investment (ASIC solvers), with a favorable environment: access to cheap electricity and a cool climate. The number of actors is then decreasing and tend to concentrate in specific part of the world such as China, Russia and Island. We haven’t reached yet a point where the network is at risk however as human nature wants to take full controls of power, everyone should keep an eye on how this evolves.

The role of influencers and social medias
We are all living in a world informed by Tweeter, Facebook and Youtube (not Reddit please!). News are broadcasted instantly across the world and any piece of information, regardless to its source or level of verification, is taken for granted by many. I agree that the spectrum is far broader than the crypto space. Still, I want to insist that the “Bitcoin” generation is technology savvy and consume primarily this type of communication channel.
Therefore anyone with more than X thousands of followers considers himself and is considered as a guru and his ideas are embraced and spread. I agree that everyone can have their opinion and state them freely on internet. There shouldn’t be censorship. However influencers have the important responsibility to educate people to take their own decision. The principle of freedom is the major pillar of what we are building here.
Next time you think about a crypto-currency, if you associate it to a name, be careful. You may have hit a central point of failure.

On a different timeline:

The memory dilemma
In the case of Bitcoin (core), a full node stores the whole ledger, sized at about 140Gb as of early 2018. The chain grows by up to 1Mo (current block size) every 10min, so about 50Go/year if the protocol doesn’t change. With the increasing adoption and the block-size war, we will see for sure more stress put on developers to agree on long term solutions… however for how long?

Mining rewards aren’t forever
The Bitcoin chain lives thanks the contribution of several actors, including minors. They get paid for their labor by mining rewards (fixed by the Bitcoin protocol) and transaction fees. The halving mining reward of Bitcoin will give its last coin by about 2140… seems it’s giving us time for a million hard forks J However, we may want to consider the change of block returns over time. In 2012, 50 BTC were giving to miners per block, in 2016 we had 25, in 2020 we will have 12.5, in 2024: 6.25… and about 1.5 in 2032. Given that miners expenses are today paid in fiat, as long as BTC at least doubles its price, it should cover their cost. However this is a too simplistic view: mining difficulty changes every 2 weeks (2016 blocks, and tends to increase with growing interest), electricity cost varies, logistic and functional costs (hardware replacement, maintenance, staffing, etc.) are also important variables. So what if miners only works for fees sooner than expected? The end of low fees? or less miners (meaning hash rate manipulation, more centralization)?