Well, it was surreal while it lasted, by which I mean the 2017-18 cryptocurrency bubble. For a while there, Coinbase was #1 in the App Store, Bitcoin was above $10K, and there were more notional crypto zillionaires out there than you could shake a Merkle tree at.

Those were the crazy days. Now, though, a rude awakening has come. Now Bitcoin is down to $3200 and counting, other cryptocurrencies are down well over 90%, and worst of all, none of the billions of dollars which poured into cryptocurrencies during the bubble have led to anything even remotely like a killer app. Instead the crypto space remains a giant casino of penny stocks, with little to no utility outside of financial speculation. Don’t kid yourself — this is nothing like the dot-com crash.

Yes, this cryptocurrency downturn is totally like the dot-com crash — if half the dot-com bubble had consisted of shares in companies with no web site; Internet growth had been flat in 2000; and no ordinary people had ever used Amazon, eBay, or Hotmail. — Jon Evans (@rezendi) November 21, 2018

What comes next? Not much, at least not soon. I am sorry to report that we have entered the crypto winter, as the estimable Michael Casey puts it, and, like that in Game of Thrones, it’s likely to be a long one. Herein please find your guide to the icy landscape ahead, and some predictions of what we’ll find there:

The Business Side

We’re going to see sizable numbers of both cryptocurrencies, and the businesses built on them, simply collapse. In fact we’re seeing that already: Steemit has laid off 70% of its staff, and even mighty Consensys has cut 13%. Of the more than 2000 cryptocurrencies tracked by CoinMarketCap, hundreds upon hundreds will wither into disuse until their liquidity turns to ice and their price to zero. Meanwhile, many who run their own blockchains will find themselves increasingly vulnerable to 51% attacks. In the winter, only the strong survive; the weak are culled.

We’ll also see more infighting. The schism within a schism which has marked Bitcoin Cash of late is only the beginning. A rising tide has room for many ships, but they’ll have to fight to survive this ebb. Which blockchain will become the default for smart contracts — Ethereum, EOS, or Tezos? It’s hard to see all three remaining relevant. (My money’s on the first and last.) Which will be the privacy-preserving cryptocurrency: Monero, ZCash, or an upgraded Bitcoin? Here it’s easier to see room for all three, but it’s by no means guaranteed.

Meanwhile, as the winter leads to widespread losses, regulators will grow ever more intrusive, trying to minimize or stop future losses due to fraud or negligence. We’ll see more regulatory tightening, more fines, more bans, and, I predict, at least one case of serious criminal fraud by a major player in the cryptocurrency world. Will it be Tether? Will it be an exchange? Who can say? But I’d be extremely surprised if that didn’t happen.

Let’s look to the brighter side. I predict we’ll also see two welcome new interesting developments; at least one interesting and unexpected use case for cryptocurrencies in the developing world, and at least one more from a major tech player. (Facebook would be a pretty good bet, but it’s not the only one.) These will not lead to a massive upswing in the whole space though. Which is good, because the way all cryptocurrencies trade in lockstep is one of the most compelling proofs that they’re not currently not even close to a real market.

That said, trading will continue to thrive, because traders love volatility — but exchanges will shrink their short-term aspirations as their fees plateau and/or decrease. What’s more, trading will increasingly focus on a smaller number of cryptocurrencies with real tech/biz differentiation, eg ZCash, Monero, Tezos, and Binance Coin. (Say what you like about Binance — I don’t like them much either — but their token, unlike almost all tokens, has an actual business model.)

While this all happens we’ll see increasing Bitcoin dominance, as a “flight to quality” continues; clearly, if only one cryptocurrency were to survive, it would be that one. Meanwhile, its hashrate will continue to decrease, which is good for the world, as that means less electricity consumption.

Businesses will not adopt private blockchains en masse, or really at all, because if you want replicated write-once-read-many databases whose contents are cryptographically signed, it’s easier to just … use replicated write-once-read-many databases whose contents are cryptographically signed, rather than a spectacularly inefficient blockchain. What makes blockchains interesting is their permissionlessness.

Conversely, ether will continue to shrink in value until/unless a dapp actually takes off, which seems unlikely in the near future. I know this sounds harsh, and technically I’m a fan of Ethereum — my own pet crypto projects are built on it — but its value proposition is built around dapps, and no dapp hits means no value. Unlikely, but not impossible; we’re seeing green shoots of on-chain security tokens, the most likely near-term prospect for actual meaningful usage of Ethereum smart contracts. I predict that at some point during the crypto winter some bright startup will make its own equity, and its own cap table, into an on-chain Ethereum security token.

The Technical Side

Technically, the crypto winter will consist of a lot of grotty, important work being done underneath the snowbanks: infrastructure, scaling, privacy, usability, identity, etcetera. I predict that Ethereum’s transition to Proof-of-Stake will be slow and hesitant: it’s essentially a whole new consensus algorithm, and one which substantially more complex (and therefore with a broader attack surface) than Proof-of-Work. I also predict that even the most interesting and useful dapps (eg FOAM, Grid+, and Augur) will see slow if any growth until their fundamental usability issues are solved.

I do think that will sort of happen — that a de facto, painful, hard-to-use but viable “crypto suite” of tools for true believers, especially digital nomads, will arise. This will include a “sovereign identity” protocol, a social network, a decentralized exchange which includes peer-to-peer fiat-to-crypto, data storage, maybe even email — all decentralized, all relatively hard to use, but adopted by a tiny hardcore minority. I furthermore predict that this suite will be roughly evenly split between “built on Ethereum” and “built on Blockstack.”

I also believe there’ll be a great deal of technically fascinating cross-chain (eg Cosmos, Polkadot) and second-layer or off-chain (eg Lightning, Plasma, Celer) work done, laying the groundwork for future connectivity and scalability. This will happen along with decentralized work which is not actually crypto-related, eg Scuttlebutt and IPFS, and that which is only tangentially related, eg Blockstack. In general there will be a great and welcome increase in projects’ code-to-prose ratio now that empty prose is no longer rewarded by lucrative ICOs.

And, my final prediction: cryptocurrencies will become seen as a weird alternative space for the 1% of hardcore traders, believers and techies, like Linux desktop users … until we finally emerge from the crypto winter. When will that happen? Not next year, and probably not the year after that. What will cause that emergence to happen? Here’s my most outré prediction of all: something entirely new, something so weird and unexpected that we can hardly even imagine it right now.