It's been a while since I had written crypto focused article. There are many way how you can see crypto industry, this one is the one that matters the most - real usability and adoption. This is current view from someone watch crypto industry since 2013 (at that time it was rather Bitcoin industry).

Major focus of crypto industry:

1st phase - focus on nerds (2009-2013)
2nd phase - focus on fiat system (2013 - 2018)
3rd phase - focus on fiat-free communities (2019 - ?)

1st phase - nerds phase (2009-2012)

First phase was pretty successful. Bitcoin was focused on people who understand it and were able to use it and experiment with it. People who were in for its fundamental technical value knowing what they are dealing with. During that phase the world and fiat system didn't care about crypto at all - there were not KYC, AML, no regulations and almost no speculative capital. There was only Bitcoin and Litecoin at that time.

2nd phase - fiat phase (2013 - 2018)

I call this phase whore phase. It was quite obvious that fiat will not step aside to let crypto let in. So crypto decided to play "a whore" to fiat and to compromise its original mission.

This was the phase when big speculation money and most people who knew nothing more than speculative price evaluation in USD how to get rich scheme.

During this 2nd phase phase realists though they will make fast money on this artificial hype, optimist though crypto will take over fiat.

During this bear market unbelievers has fallen wining or loosing some fiat profit.

2nd phase shows us that crypto-currency doesn't work well under fiat framework. It's quite obvious why and lot of difficulties and wasted energy and human potential was wasted.

Here is what happened during this phase:

lot of wasted effort to make crypto products comply with fiat regulation frameworks
restriction in many countries, difficulties in other countries
ugly taxation in some countries
hacks, thefts, ICO scams
nations building restrictive digital currency

Crypto became just add-on to fiat world which no-one seriously wants in form in which it is now.

Practically 5 years were more or less wasted with this orientation to fiat world. Many projects started, new things were built but their focus was build this crypto-fiat abomination that actually every real crypto enthusiast despise.

Fortunately this is not the end of story.

Here we are. We know now that orientation to fiat only brings only slow death to crypto (higher regulations, higher taxes, restrictions, awful volatility and and having people on board who don't follow the mission). Not real usage, no killer apps that will change history for a better.

3nd phase - (fiat-free) crypto communities phase (2019 - ?)

Second phase shown us that orientation of crypto to work with fiat thinking that crypto will replace fiat (or partner with fiat) was blind and poisonous road. Fiat will collapse one way or another and best for crypto would be not to even be there. Worst thing would be fiat collapse and fake blame that crypto is the cause amplified by media. Crypto became quite unusable for average Joe because it's not Fiat+Crypto bundle what makes crypto interesting.

For real crypto revolution it's time to announce divorce with fiat financial system. Let's leave effort to be friend (or enemy) to fiat and let's start to build communities that will be self-sustainable using crypto as their primary or secondary currency. Crypto is powerful because it can implement powerful trust-less, open, fair and transparent mechanisms that goes far beyond fiat potential but only in case they are not bothered with fiat world and with its mess.

What is really needed?

small or large self-sustainable communities that will be able to avoid fiat (at least to some extent) in favor or crypto community token(s)
P2P only, no central points holding your keys
hardware wallets for everyone that will allow fast and safe operations
DAPS for needed use cases bringing simplicity and comfort that will make fiat world (and old system) absolutely ridiculous

P2P only

History shown us that central points controlled by sinful humans are very harmful to the society and that is valid also in crypto ecosystem. They not only harm people who are using it but all people who are are using the same digital asset they operate. When such a central point is compromised, it's quite often that asset is stolen and liquidated. This liquidation harms price of that asset and the loss is equal to the size of the theft. It's almost impossible to avoid it.

In terms of technology we are pretty good here. In terms of mentality we are not. We still tend to centralized solutions and are giving our rights (keys) away easily. We still have MtGox mentality - one big vulnerable centralized solution rather than doing thing decentralized way. I can see multiple blockchain, DAPs or various hybrids that brings the needed tech. Distributed marketplaces and exchanges. We are pretty good there although strong security should be supported. This is where hardware wallets and specialized devices comes to help.

Hardware wallets and specialized devices

Everyone needs to have their digital asset secured. If your keys are successfully, again, it doesn't harm only you but all the ecosystem. Computer is not safe, phone is not safe, hardware and even paper wallets are a MUST HAVE. What we need is hardware terminals and things like that for safe p2p commerce working seamlessly with hardware wallets also.

Today we have great hardware wallets like Trezor and others but they are not really usable for commerce and usage for high frequency transactions. We need to have some

Self-sustainable crypto-based communities

This is the key factor that is the main block that is missing and not much was done here in last decade. What is self-sustain community. It's community where all basic necessities are covered by the community so we have complete circle where digital asset can circulate without any need of fiat.

Minimal requirements of self-sustainable community:

basic agriculture
basic products
basic services

Community have not to be necessarily big because it will grow naturally if its ecosystem is healthy but it needs to form at least basic production-consumption circles. This community doesn't need to be 100% in crypto but must be willing to accept at least one selected crypto asset as a form of wealth trusted more than fiat avoiding temptation to cash it. That is possible when there is general belief in community that token is exchangeable anytime for any product or service that community provides. As the token can have zero or small inflation it should be quite easy to achieve in community that agree on using chosen crypto token as major local tool of exchange. Such a community could experience in time such a financial freedom it would never dream about.

Use case DAPS

DAPS (distributed applications) allows to build features that can leave fiat behind. Smart contract and other things that can simplify or automate operations that today we do with some non-trivial effort and cost. Smart DAPS can bring greater comfort and user experience than standard fiat system and this is the key factor that will bring more users.

Fiat word is poison for crypto

Fiat world is already so corrupted and dark and can bring only on thing to crypto and it's its corruption, darkness, volatility, crashes, etc. Crypto chance is in communities.

Dark-side of crypto

You may thing about anonymous cryto projects but that is not what I mean here. Real dark-side of crypto is using of crypto technologies by totalitarian governments and institutions to control every step of your life - financial and everything else. These are block-chains that are being formed under governments and international institutions. They will bring hell on freedom-desiring-man one once adopted and enforced. They will bring cash system to its end. They will have (unlike free crypto like Bitcoin) strong mechanisms to block and censor anyone who is against the system. It will be like China score system squared. But we are not yet there and we still can experience something positive coming from Satoshi invention.

Communities are life for crypto

Communities who will accept crypto as their primary (or even secondary) economical framework can form new healthy crypto ecosystems that will be free from fiat plague.

Is it happening? I had this idea for years now (since 2013 when crypto was introduced to me) but only recently I noticed there are new projects starting with this idea. Will they be successful? I don't know. It is not easy way because you need plenty of various people willing to participate on this experiment and so far not many people don't understand its benefits.

For me there are two sure things for crypto:

Fiat world system is poison for free crypto projects. Fiat world will use technology only to introduce totalitarian censorship-ready kinds of blockchain projects. Everything else it will be repressed.
Without forming small but sustainable communities operating on crypto framework there is nothing much else to do that would show real strengths of crypto potential. Of course other strong applications are possible but most need approval of government and ruling elites.

Other approaches

Beyond these things there will be some crypto projects that might be potentially successful if they aim to secondary tasks like evidence or others letting fiat financial system be.

Why I am so skeptical about freedom based crypto replacing fiat? It's easy. Fiat people owns practically all asset of the world, they have (most) politicians in their pockets, they have (most) media in their pockets, they have (most) judges in their pockets, they have (most) regulators in their pockets. All these people can bring hell - restrictions, taxation, regulation and FUD (and they already doing it to some extent) on any crypto project that tries to compete with fiat established system in any way. Only projects that complements but not compete the old banking system have a chance (like Ripple, etc.).

Only way to freedom based crypto is to say: "We don't need your fiat world anymore, live your own life". But for that we need bold people from various industries and people with some significant capital who are sick of current fiat society and seeking change and not only short-term profit.

One such an example of "new brave men" can be Blockchains LCC startup that is trying to build blockchain community in Nevada. There is a great risk of failure but if we have hundreds of similar projects few can find the right mix and be successful and show the way to others to the brighter freedom-based crypto industry future and what is even more interesting to all society.

Some basic question?

Will crypto replace fiat?

No. Crypto cannot fight fiat, crypto cannot defeat fiat. At least not directly. Fiat financial system is way too corrupted and if crypto industry wants to have anything with it it will only poison itself with all the fiat system issues. That is something no-one should be really interested in long-term. And blockchain usage from the elites perspective is even darker and more totalitarian system than the current fiat system form.

Will the current crypto bear market continue?

Probably yes even though market is already down a lot it still holds on relatively big speculative capital. We can go up or down. Based on what was written above for most crypto projects I can only see further decline except those with intense real world-usage (and not threatening fiat system) when there will be natural demand either to hold or frequent usage.

Many people lost their faith in crypto, is it good?

Surprisingly YES. Those who panicked and left, they actually never understood crypto fundamentals and its possibilities. So it's good these people are gone. They may return later but it doesn't matter. These are not people who would bring the needed change anyway.

Were these last 5 years wasted for crypto?

To large extent, YES. But lesson was learned and it has its own value. Huge effort that was put to crypto-fiat compliance, regulations, settlements, KYC, AML and centralized (sure-to-fail) institutions and this was great waste of human and financial capital. I don't deny that lot of work was done in terms of scalability, hardware wallets and some other areas but not much was done for greater crypto adoption and building real fiat-free economical structures with few examples like crypto debit cards, etc. but these are not real game changers but rather fiat system complements. Some projects are trying to trigger acceptance (SmartCash and others) but they don't build complete self-sustainable ecosystem (at least not yet). And smart-contract platforms has plenty of their own issues.

Will we see healthy crypto-market it in 2019?

As I can see that most crypto-product are still on its poisonous way to be friends (or even whores) to fiat. Only few projects are trying to establish crypto communities with real crypto-usage ecosystem that only can IMHO give crypto long-term value and natural growth. Some other crypto (like Bitcon) can be good store of value but current global economical situation indicates that years of wild inflation for major fiat currencies are over (at least for some time ahead) and so there probably will not be high demand for crypto stores of value but nothing is sure in this area.

Conclusion

My hope for coming years is to see forming strong self-sustainable crypto communities and really closed ecosystems that could fully work outside or parallel to fiat system. That is in my opinion what crypto industry needs and I hope that investments and people will flow that way understanding that cooperation with fiat system will never be fair game and nothing good waits there for financial-freedom-seeking crypto industry. You might think my view is bit strict but after last 5 years I cannot see how free internet money can effectively coexist and comply with current highly restrictive but yet totally corrupted and unfair fiat system. To comply means to kill most interesting crypto-features and not to comply means it will be criminalized. I might be wrong but to completely avoid fiat system and create parallel ecosystems seems to be only correct way for free internet money.

Crypto industry needs to build independent crypto communities and ecosystems. Self-sustainable and self-regulated. And to avoid any contact with rotten fiat system at all cost because once you touch fiat you are automatically under its power, tyrany and infection.

DISCLAIMER: No investment advice given in this article. Regardless if crypto industry succeeds or not its only Jesus Christ who can save you in the end. Make sure you're right with God.

Flirt with fiat system brought no good to crypto revolution, it's time to move on...