A year ago, Alex Tapscott (my co-author of Blockchain Revolution) and I made some predictions for 2017. At the end of the year we compared those predictions to what had actually occurred. Overall they stood up well.

Notably we said: “Bitcoin will hit $2,000 (that’s right: one bitcoin will be worth $2,000). Ethereum will not collapse, post-DAO, but will become a dominant platform for new apps and new business models.”

We were ridiculed by some for forecasting that bitcoin would nearly triple in value. “You guys are nuts,” was a popular tweet. Of course, only in the wild world of cryptocurrencies can you set a one-year price target implying a near 200% return, and miss the mark by a factor of nearly 10! As for ethereum, the fork happened and ethereum kept on chugging away, became the de-facto platform for the ICO (initial coin offering) boom that launched a thousand Dapps (distributed applications), from distributed file storage and prediction markets to collectible kittens.

2017 was a year when cryptocurrency markets dominated the public imagination. While some of us grew excited by the explosion of new applications, platforms and technologies being launched, many others were simply happy to ride the wave of higher prices. Indeed, the value of these assets grew from $15 billion to $500 billion, one of the great bull markets of our time.

Is this justified? Valuations today reflect tomorrow’s value—and tomorrow’s value could be significant and revolutionary. So, taking the market as a whole as the best representation for the future value of blockchain technology, today’s value could be argued to be conservative. However, it’s hard to look at the dizzying price escalation of virtually every cryptoasset, and the euphoria driving the market ever higher, and not feel some vertigo-inducing skepticism.

Consider that at the outset of 2016, only one cryptoasset (bitcoin) had a value of more than $1 billion. Today, the number stands at 36. The number of newly minted crypto-unicorns ought to make even the biggest bull blush. And it goes without saying that in all likelihood, many, if not most, of these new currencies, protocols and applications will fail. But emerging from this Cambrian explosion of innovation will be the foundational technologies for the new internet of value.

Still, what truly has been achieved?

As Vitalik Buterin, creator of ethereum, eloquently asked:

“How many unbanked people have we banked? How much censorship-resistant commerce for the common people have we enabled? How many Dapps [distributed applications] have we created that have substantial usage? How much value is stored in smart contracts that actually do anything interesting? How many Venezuelans have actually been protected by us from hyperinflation? How much actual usage of micropayment channels is there actually in reality?”

Buterin pointed out that the level of activity is positive, but not significant enough to warrant the $0.5 trillion figure (Now more than $650 billion). “The answer to all of these questions is definitely not zero, and in some cases, it’s quite significant. But not enough to say it’s $0.5T levels of significant. Not enough.”

On the one hand, ICOs have changed the world of venture capital. On the other hand, few if any recently financed distributed applications are running commercially and at scale (i.e. they don’t work…yet). On the one hand, bitcoin has seen massive adoption and a huge run-up in prices, leading to institutional buy-in, mass-market appeal and a futures market. On the other hand, vexing questions around scaling and governance remain fully or partially unanswered.

Regulatory uncertainty surrounds bitcoin as it moves from fringe curiosity to a legitimate threat to central-bank-issued fiat currencies (as a store of value, if not yet as a medium of exchange).

Ethereum has emerged as the first general-purpose platform for building distributed applications. Yet, a glut in ICO activity or even a spike in the trading of crypto-kitties can slow down or stall the network, as it did in December.

So, despite the awesome potential, blockchain is a long way off from changing the world.

2018 will be the year where the tremendous innovation and promise of blockchain must become real. Otherwise, the market is in for a rude awakening. And maybe that’s not the worst thing in the world. As Chris Burniske, a partner at crypto-fund Placeholder Ventures, said “A strong #crypto bear market in 2018 would sharpen all of us.” In the spirit of staying sharp (and sharpening our pencils) Here are some predictions:

1. The value of cryptocurrencies continues to grow

We still remain positive on the market as a whole. Forget about a massive and permanent crash. Cryptoassets will be volatile, and there will be melt-downs, but expect an overall increase in value, as long as innovation in functionality continues.

We are still in the early stage. Oddly, bitcoin’s meteoric price rise makes it easier and not harder for new investors to justify stepping in as it is now a large asset class too big to ignore. 2018 will see widespread institutional buying of bitcoin and other cryptocurrencies but buyers beware—for bitcoin to sustain its rally, scaling solutions must work in the real world, and critical governance challenges must be resolved.

We will see a flood of institutional, retail and family office money entering the market. Many people and organizations have not invested because of custodial reasons—they’re either unable or unwilling to hold private keys. They should probably learn to do that, but nonetheless this problem is being addressed. Coinbase has vaults where they store crypto assets. There are new onramps being created, such as funds and futures trading offered by traditional financial services companies.

But over the next years, most of the cryptocurrencies on the top 10 will be superseded by platforms that have more powerful functionality just as many of the hot tech stocks of the dotcom era were superseded by new and powerful companies like, Amazon, Google, and Facebook.

2. The cryptocurrency craze broadens to embrace blockchain business transformations

At the Blockchain Research Institute, we’re investigating the ways blockchain promises to transform 10 major industries: financial services, retail and consumer goods, government and democracy, energy, higher education, transportation, manufacturing, media and telecommunications, technology, healthcare, and resources. In all these industries we already see striking innovations piloted by massive organizations. Supply chains are a $60 trillion industry containing juggernauts like Foxconn and Walmart—both who are digging into blockchain for transformative implementations. As Tom Serres and Bettina Warburg point out in one of our projects, supply chains are poised to become cognitive machines with a “network state,” enriched with knowledge, and imbued with “machine trust.”

Meanwhile, many of the best new startups are architected on decentralized models. This is the equivalent of the dotcom rush of mid- to late-1990s. Many dotcoms failed, as is typical of a wave of technological innovation. But today many are dominant players in the modern digital economy. As with the dotcoms, expect many “Blockcoms” to fail.

3. The new platform for value creation emerges

Bitcoin is still just a currency and a store of value. Think of it as the first big app of the Internet of Value, like email was the first big app of its predecessor, the Internet of Information. But what will be the equivalent of the World Wide Web—the general-purpose platform for application development?

Watch for ethereum to continue to grow, not just in value but in the number of game-changing Dapps built on it. In 2018, it will move from proof of work to proof of stake. But will ethereum be the platform for the next generation of distributed applications? Will it be one of the core protocols of the new Internet of Value, or will something else take its place? It’s currently the best candidate for a “Flippening,” and there is massive work underway to expand its capability, including Casper and Sharding upgrades and a shift to proof of stake.

New platforms to watch in 2018 include Cosmos, Aion, ICON, and Polkadot—all of which could help address critical issues of scalability, interoperability and governance. These new platforms are different than their predecessors as they have been designed from the outset to overcome many of the existing bottlenecks. These so-called “third generation blockchains” are unique in that they aim to achieve all of the following: smart-contract functionality, interoperability, scalability, customization, and the ability to be both multi-asset and multi-industry. Whether they succeed is a big question we seek to see answered in 2018.

4. The $10 billion ICO, as ICOs shift towards equity tokens

In 2017, ICOs raised funds for utility tokens. But by the end of the year, fatigue had set in. Most token acquisitions were driven by the prospect of short-term speculative gain. But the promise of ICOs is not to enable speculation but to enable the funding of innovation.

In 2018, there will be plenty of opportunities for new ICOs—high-function currencies that build on pioneering work in anonymity, scale and fungibility, product tokens, loyalty tokens, or social tokens like carbon credits—where the tokens represent something of value other than a stake of ownership in a company. Still nascent, but likely to explode in value, are security tokens—cryptoassets that represent financial assets, such as stocks, bonds, and futures contracts.

Consider the possibility of a $10 billion ICO from Tesla. Here’s a thought experiment: There are at least 10 million Tesla fans in the world who can’t buy a Tesla (because they live in places like Nigeria, Pakistan where one can’t purchase a Tesla or else they don’t have enough money). But they’d love to be part of the community and have a stake in the future of the company, and could easily put up $1,000 for a Model-3 Coin, or TeslaToken of some kind. So, using an ICO, Tesla could raise $10 mil x 1,000 = $10 billion—more than they could ever raise on the stock exchange or in the bond markets. This smart security could simply represent simple ownership in a new product, or in the company itself, or it could be programmed to include other functionality, for example a carbon offset to entice individuals to reduce their footprint.

5. Cracks in the walls of digital feudalism

Under the feudal system, landlords owned vast amounts of land. Serfs worked the land to create value but had most of the value confiscated by the landlord. Today the new asset class is data—created by us but captured by our digital landlords (social media companies, search engines, governments, banks, etc.). We need to recover this data—our “digital identity”—and manage it responsibly in our own interests.

With blockchain, people (along with physical and digital objects) can possess unique, immutable identities in a “digital black box.” It will capture data that we can each monetize, use to plan our lives and protect our privacy. Such blockchain identities are underway from multiple sources. In 2018 keep an eye on technology companies like uPort from ConsenSys, Civic, or Sovrin, to provide individuals with authority and autonomy over their identity. Some or the best innovations will be bottom-up, as institutions from hospitals and universities build blockchain identities for their constituents. We will also see the emergence of a new class of “data aggregators.” They will negotiate with individuals and organizations to acquire access to their data.

6. The digital conglomerates wade in

Over a decade ago my company coined the term “Digital Conglomerates” to refer to a new species of business. Companies like Facebook, Amazon, Apple, and Alphabet have based their enormous success on centralized models and the capture of data.

This is a repeat of 1994. Despite the dotcom crash of 2001 the internet is more talked about today—positively and critically—than an any previous time.

There’s no doubt that blockchain technology poses an existential threat to the world’s largest digital conglomerates. But in the coming year, we will see these companies embrace crypto-currencies, and even many of the other applications of blockchain technology. Get ready for the Empire to Strike Back.

On Dec. 12, 2017, it was announced that David Marcus, the head of Messenger at Facebook, would join Coinbase’s board. I have no doubt Facebook is exploring cryptocurrency payments within the Facebook Messenger platform or some other token-related initiative. We may even see an acquisition attempt by Facebook.

That would surely not be the only acquisition of a blockchain company by a major digital conglomerate. Google is already this year’s second-largest investor in blockchain technologies, and we can expect that to continue as public interest in blockchain explodes.

Meanwhile, in Dec. 2017, Amazon announced a partnership with R3 to allow its platform Corda to become one of the first-ever distributed ledger technologies on Amazon Web Services. Is this a sign of things to come for Amazon, who stand to lose tremendously to blockchain-based retailers? Absolutely.

7. The implementation of fiat cryptocurrencies (finally)

Dating back to Bank of England Mark Carney’s famous 2016 Mansion House speech, governments everywhere have been exploring the use of blockchain to supercharge their fiat currencies. Not to be hyperbolic, but I think this decision may prove as consequential as the Bretton Woods consensus to move to a US dollar reserve currency. It could profoundly shape the next 100 years of human prosperity.

2017 brought some interesting developments with China, Russia, Dubai, and Venezuela (and some other countries that are not exactly pillars of democracy) leading the way. Many so-called fiat cryptocurrencies are nothing of the kind, but rather attempts by governments to appear innovative and undermine independent cryptocurrencies. In 2018 expect real initiatives to move forward with countries such as Switzerland, Singapore, Canada, India, Estonia, South Korea, Japan, and the UK.

Meanwhile, expect that bitcoin and other actual cryptocurrencies to deepen their utility as a real medium of exchange. There are thousands of large- or medium-sized companies that accept bitcoin for payment of goods and services. There are marquis organizations like Overstock.com, Newegg, Shopify.com, Dish Network, and even Microsoft and Paypal. For many, 2017 was a good year. They didn’t convert their bitcoins to fiat currencies and benefited from the bitcoin value explosion.

Evidence suggests that in 2018 that a growing number of larger retailers and service providers will accept bitcoin (and cryptocurrency in general) as payment. This could include previously mentioned Facebook and Amazon.

8. Regulation fever—the good, the bad, and the ugly

In 2017, blockchain and cryptocurrencies became too big to ignore. In 2018, they will become too big to fail. Many regulators will be more assertive. This is not necessarily a bad thing. Some short-sighted governments, namely China, have curtailed or banned digital currencies, and risk relegating their economies to the backwater of innovation and growth.

This new Internet of Value raises a public interest, and changes many industries and institutions. Sensible regulation can be helpful. In many areas, such as the highly speculative world of ICOs, where entrepreneurs have raised more than $3 billion by issuing digital tokens, regulation is urgently needed. In the United States, the Securities and Exchange Commission (SEC) is on the right track. Since July and in a number of separate communiques, it has struck a balanced tone, arguing that some, but not all, cryptoassets, are securities. Underpinning this red-hot market is a profound technological innovation. While SEC Chairman Jay Clayton urged “extreme caution” for investors, he also said, “I believe that initial coin offerings—whether they represent offerings of securities or not—can be effective ways for entrepreneurs and others to raise funding, including for innovative projects.”

While there is still much to do, I applaud the SEC’s efforts to understand and address this new market. Securities regulation is one of a dozen areas from tax policy to intellectual property where there is a public interest and regulators need to be cautious but open-minded.

9. The social impact—breakthroughs on energy and climate change

There are many use-cases poised for big growth in 2018. However, the killer app for blockchain may be saving the planet, literally. It’s time for deployment of distributed energy and peer-to-peer trading of energy tokens generated from sustainable sources—including off the grid. In November, I gave the opening speech at global electrical energy conference BIXPO 2017 in Gwangju, Korea and was amazed at blockchain initiatives by Korean power utility Kepko. Companies such as Spectral Energy in the Netherlands and LO3 Energy and Grid+ in the US are leading the way.

Blockchain and smart contracts will enable new enterprises to engage everyone in living more sustainably. Tokenized carbon credits will be transacted through smart contracts at marketplaces like Veridium. I see companies like CarbonX Personal Carbon Trading and Zerofootprint Software enabling and rewarding individuals to manage their personal carbon footprint. And I see enterprises balancing excess carbon emissions throughout their supply chains to create carbon neutrality in the manufacturing of products and services.

10. A year of growing crypto resilience

There will be hacks—in exchanges, wallets and applications—but overall blockchain and crypto robustness will grow. Call them “resilience technologies.” They have an anti-fragility model, increasing capability and robustness as a convex response to attacks, shocks, stressors, or failures. The more cryptocurrencies are attacked, the stronger they become. China bans ICOs and hints at hurting bitcoin exchanges, and the value of bitcoin goes up. The ethereum DAO gets attacked, and ethereum takes hundreds of steps to make itself more robust and secure. It’s not Whack-a-mole, its Block-a-mole!

As for hype and criticism? Both will grow—for the next couple of decades. This is a repeat of 1994. Despite the dotcom crash of 2001, the internet is more talked about today—positively and critically—than an any previous time.