2020 is setting up to be a great year for blockchain. From wide adoption of its technology by governments and large financial institutions, to newfound applications in social media, entertainment and other industries, here are blockchain trends we can anticipate, ahead of 2020.
Short for Blockchain As A Service is a cloud-based service that enables users to develop their own digital products by working with blockchain. These digital products may be smart contracts, decentralized applications (Dapps), or even other services that can work without any setup requirements of the complete blockchain infrastructure.
Interoperability between Blockchains
The ability to share data and other information across multiple blockchain systems and networks. This function makes it simple for the public to see and access the data across different blockchain networks. Interoperability could be a challenge but with vast benefits.
Ricardian Contracts as a new agreement
It is a cryptographically signed and verified agreement between two parties on the terms and conditions for an interaction between the agreed parties.
What makes it unique is, it is a unique legal agreement or document that is readable for computer programs as well as humans at the same time.
Ricardian Contracts merge legal contracts with blockchain technology. They bind the parties into a legal agreement before the execution of the actions on the blockchain network.
In this type of blockchain, instead of one organization, multiple authorities can control the pre-selected nodes of blockchain. These groups will come together in this federated blockchain system and make necessary changes to keep and make the network work more efficiently. This will allow all of the participants to have an equal authority to make improvements in the blockchain, which will remove the sole organization influence in the network. This way any consumer will be able to fast forward any kind of work that requires multiple companies.
Internet of Things (IoT)
A story goes that back in 1982, a Pittsburgh University had a vending machine which could tell in advance if cans of soda were cold enough, after students rigged the machine so that it sent this information to a nearby computer. These were early IoT devices, like ATM machines before them. And as smarter everyday objects which connect to the internet are created (like fridges and heaters), relaying data back and forth, the blockchain applications to improve this relay is increasingly more relevant.
Additionally, with data more valuable than oil, it makes sense that a network of smart devices collectively analyzing data and performing actions automatically, would be ever more valuable. Any search for the next big thing in tech will likely involve the IoT. And blockchain is poised to improve it substantially, since IoT devices are easily hackable, leaving data at risk of being stolen. As more IoT devices store their data on digital distributed ledgers, it makes them more secure, and less hackable overall.
Rise of the Stablecoins
Maybe you bought bitcoin in early 2013 and a few months later, you had made more than 8 times your money back! That’s fantastic as an investment, speculative device. Your bitcoin was worth way more. But similarly, it also went down 83% by May 2013. These swings create excellent money-making opportunities, but are less than ideal for daily transactions, since it’s not rare to see 10% – 20% swings within a single day. How to fix that problem, without losing the benefits of blockchain? Enter stablecoins.
A stablecoin is a cryptocurrency pegged to a more stable asset, like gold, oil or a basket of currencies. They’re global, decentralized and have low-volatility, and like other blockchain-based currencies, is also transparent, secure and private. 2019 saw an “invasion” of stablecoins, with more than 60 of them going live, and many more in development. With flawed, USD-backed Tether the most widely used crypto (above Bitcoin), 2020 will see an even bigger influx of stablecoins, from all around the world.
Social media behemoth Facebook officially announced their blockchain project Libra in 2019 with an eye towards a 2020 launch. However, the past few months Facebook had near constant scrutiny from regulators in the US, as well as internationally, for a number of reasons. These ranged from data-privacy leaks and political advertising shenanigans not being a good sign for the tech giant to have its own currency, to existential threats to the global financial system, thanks to its 2 billion+ consumers.
Despite that, Facebook still intends to launch Libra next year, backed by a basket of currencies, although no strategy or roadmap has been set in place. Many of their initial 28 partners (like Visa, Stripe and PayPal) have left, and their whitepaper has also been revised. Initially, interest received from reserve assets was meant to pay dividends to its founding partners, however, they’ll instead be used to cover various system costs, such as low transaction fees, encouraging user growth and adoption.
There are various benefits for governments to start leveraging blockchain to create their own national currencies – security and transparency being two of the main ones. The traditional central banking system has plenty of risks for individuals, such as criminals and hackers being able to easily steal personal and credit card information, cash being used for crime and money laundering, as well as the potential for hyperinflation whenever a central bank prints too much money, during a recession.
To help solve this problem, digital currencies, using online distributed ledgers, can bring more security to a national currency, as well as oversight. Despite several governments making a case against their use (most notably the US), plenty of other ones are launching their own blockchain-based alternatives, for their national currencies. With Iceland, China, the UAE and others already primed to showcase their coins, 2020 will see even more governments trialing their own cryptocurrencies,
Practical Use Cases
One of the biggest stories of 2019 was the widespread use of fake news. Social media giants were seen as facilitating the diffusion of false, heavily biased stories to manipulate elections, while news media reaped the benefits of fake news content, which usually attracts more views than fact-based news. Blockchain has the capability to limit their spread. Some analysts believe that within the next year or two, much of online content and videos could be authenticated via distributed ledgers.
Similarly, there is a huge potential for the use of blockchain in the $150 billion videogame industry, by combining the transparency, security and fungibility of cryptocurrencies, with the already-established use cases of videogame tokens, opening up a huge market within online gaming, e-sports and even gambling. Other industries using the technology are large food companies, which have partnered up with IBM to make the food supply chains safer, more traceable and highly efficient.
Such blockchain-enhanced supply chain projects are a healthy sign for the growing technology in 2020, as this is one of its most relevant applications. Aside from helping record and monitor real-time transactions, distributed ledgers can provide more safety, transparency and efficiency to any industry’s data management. Many more blockchain applications will become available in the market within the next 12 months; you can join our community or check out our blog, to find out more.