Looking Back and Moving Forward: Blockchain in 2019 and 2020 has been added to Bookmarks.
Looking Back and Moving Forward: Blockchain in 2019 and 2020
Patience is what blockchain technology needs
Now that the hype surrounding blockchain has disappeared — together with the false expectations — it is time for more in-depth blockchain development. Organizations that still invest in the technology are not looking for a quick win, but for long-term research in order to find out what blockchain has to offer. This patience is exactly what blockchain technology needs.
- Blockchain as part of other systems and technologies
- Doing responsible business with blockchain
- Decentralized finance
As 2019 made clear, the blockchain hype of 2017 and early 2018 is definitely over. According to the Gartner Hype Cycle, blockchain is now even in the “trough of disillusionment” phase. “Blockchain technologies have not yet lived up to the hype, and most enterprise blockchain projects are stuck in experimentation mode," said Avivah Litan, vice president at Gartner. The research and advisory company doesn’t expect blockchain to become fully scalable both technically and operationally until 2028.
But just because the hype is over doesn’t mean that last year wasn’t a good year for blockchain technology. Organizations that are serious about blockchain have stopped asking for quick blockchain demos; rather, they’re looking at its strategic potential and are building long-term programs around blockchain technology—programs that have much more depth than we’ve ever seen before. In them, blockchain is not an aim in itself, but rather a means for a (digital) transformation.
Blockchain as part of other systems and technologies
We see organizations investing more in the interoperability of blockchain with other systems and technologies. For example, they’re combining blockchain technology with technologies such as AI and the Internet of things to strengthen their current business or to invent new business models. Another thing we see is that our clients are investigating how they can integrate blockchain technology in their systems.
The newfound depth in recent blockchain projects is reinforced by its comprehensive approach. Last year, we saw the emergence of more and more consortia around blockchain projects. The number of consortia continues to grow behind the scenes: Organizations that take blockchain seriously know they should not operate independently if they want their blockchain application to succeed. They must think about the minimum required ecosystem and get other stakeholders on board.
Doing responsible business with blockchain
Among other benefits, blockchain can help organizations create new markets for things that previously weren’t marketable. For example, all industries are facing a growing demand for more transparent and sustainable ways of doing business. Blockchain can be an enabler in speeding up this process. Incentivizing different parties in a supply chain—from production to customer—can lead to more responsible behaviour. VeChain, who created "a carbon reduction platform", which utilizes economic incentives to encourage both individuals and enterprises to participate in the reduction of carbon emissions."
Our prediction for 2020 is that more organizations will invest in blockchain projects regarding responsible business practices. The technology can help organizations rally with other stakeholders in order to become more transparent about how their supply chain operates. VeChain’s distributed ledger for carbon credits – as mentioned before – is already a good exampleway to step up in this area. Another is using blockchain technology for creating transparency within the global food chain. Blockchain applications combined with the Internet of things can make the global food chain safer and more transparent, as we see with FairChain.
Another development from which I expect a lot this year is decentralized finance, also known as ‘DeFi’. These blockchain-based financial instruments are accessible to anyone with a browser, and they’re taking on traditional finance and conventional business. DeFi allows anyone to get exposure to crypto assets, access automated trading (bots) strategies and easily open leveraged positions, insured interest rates and insurance against smart contract risk. These are just some of the things decentralized finance can do.
Liquidity and total value locked (TVL) in DeFi — the aggregate value of all assets currently ‘locked’ in DeFi financial instruments — is growing exponentially. An exciting 2020 awaits as startups will begin to compete with traditional financial institutions and offer compelling value propositions to persuade customers to switch. As soon as fiat-to-crypto stablecoin on-ramps (i.e. crypto exchanges allowing for the deposit of fiat into the system and converting the funds to cryptocurrency) are feeless, or have near zero fees, we will start to see aggressive marketing of lending and borrowing platforms, offering customers 5-8% interest on their savings.
The general public
Electronic mail was an application of internet technology that caused the definite breakthrough of the internet in the 1990s. Blockchain is waiting for an application like e-mail: An application that is utilized by the general public, one that will make blockchain indispensable for good. Based on what we see from our clients, we expect this kind of application to be developed in the next few years. We are curiously looking forward to the blockchain years ahead of us.
For more information about Blockchain, please contact Tommie van der Bosch via the contact details below.