Blockchain 2020: though many will deny it, 2019 was a year of relatively small progress for blockchain in the enterprise. Yes, progress occurred. But it was not of an earth-shattering form.
As a mild antidote as well as precursor to 2020 Enterprise Times offers up a selection of statements made about blockchain for next year. Take them as you will…
Blockchain 2020: enterprise adoption I
“In the past 12-18 months, we’ve seen somewhat of a dilution in enterprise enthusiasm for blockchain adoption. What do I mean? Certain (deliberately unnamed) firms over-promised what enterprise PoCs could provide to their clients and customers, and then there was disappointment when the PoCs did not work out as planned. Dissatisfaction has introduced a reluctance into the enterprise blockchain buying cycle, whether for private or public or hybrid blockchains. When Kadena talks to prospective partners, we make sure to be clear about what issues blockchain can or cannot help address so that expectations are aligned.”
“As we prepare to enter 2020, I see it as a year of revitalizing the enterprise blockchain outlook. This will occur as public blockchains with smart contracts become more readily available, providing verifiable trustless transactions that scale to satisfy enterprise-level security and throughput requirements. 2020 will be a transition year. In 2021 and onwards, we will see significant enterprise blockchain acceptance and deployment – including functioning hybrid (public and private) blockchain adoption in ways that positively impact bottom lines.” Will Martino, Co-Founder and CEO, Kadena
“The world is quickly moving beyond Bitcoin to adopt enterprise-distributed indelible ledgers, setting the stage for a transformation exponentially bigger than the impact cryptocurrency has had on blockchain in finance. Continued improvements in commodity hardware performamce, software-based virtualization, and micro-service software architectures will eliminate much of the performance advantage of proprietary hardware-based composable architectures, relegating them to niche datacenter roles in the near future.” Atish Gude, Chief Strategy Officer, NetApp
“Blockchain and distributed ledger technology is currently squarely in the ‘trough of disillusionment’, as defined by the tried and true Gartner Hype Cycle. This is actually the most exciting time and place to be in the industry, as we are on the cusp of the slope of enlightenment, when people and organizations really learn and begin to use the technology for practical, useful purposes that will change how companies, applications and users interact. We are so excited about the variety and reach of applications currently being built on top of Hedera and other parts of the DLT ecosystem, which go so far beyond what we’ve seen built on top of early generations of blockchain in the past.” Christian Hasker, Chief Marketing Officer of Hedera Hashgraph
Blockchain 2020: enterprise adoption II
“This time last year, the industry said goodbye to 2018 and hoped that would mark the end of the crypto winter. 2019 has revealed numerous use cases, enterprise adoption, and advancements in the field of distributed ledgers. The most memorable thing about 2019 for the blockchain space will be the speed and sustainability with which it has regained legitimacy in the eyes of governments, enterprises, and institutional players. Moving into 2020, I believe this trend will continue. We are highly likely to see huge expansion as blockchain technology moves to enterprise production. We will start to see measurements of the value derived from blockchain being in production environments.
“The positive results of enterprise blockchain adoption will begin to reveal themselves and will encourage much broader uptake. I firmly believe that regulatory clarity is necessary for the industry to progress. In order for blockchain to mature, enterprises and individuals need to feel completely comfortable leveraging this technology, secure in the knowledge that their government and legal systems support them. Countries with trusted and proven regulatory frameworks will set themselves apart and provide a notable example for nations newer to the fold to also regulate the technology. Significantly, I believe 2020 will be a milestone year for advances in sentiment and regulation in the world’s larger and more powerful nations, such as the U.S, which arguably can no longer turn a blind eye to distributed ledger technology.” Greg Forst, Director of Marketing at the Factom Protocol
“2019 was the year where the blockchain industry translated the hype of previous years into practical use cases, with a number of key players emerging to provide solutions for real business problems. In turn, this led to an overall improvement in the understanding and sentiment of blockchain, prompted in part by large-scale adoption by global enterprises, such as Facebook and JP Morgan. A Deloitte report revealed that 34% of companies have already initiated a blockchain deployment, while 86% of leaders are confident that its mainstream penetration is inevitable – results which are clearly indicative of the continued maturation of the market. Although governments around the world remain centralized, there is still an opportunity to incorporate decentralization into certain aspects. 2020 will certainly see further government integration of blockchain technology in order to process large quantities of data between agencies, services and administrative bodies. Distributed ledgers will be crucial to streamlining interaction and information sharing between these entities. Countries such as China and Estonia are already utilizing blockchain to manage citizens’ healthcare data and create digital identity systems respectively, and we’ll continue to see other governments pilot programs in welfare distribution, e-voting and fraud. Existing businesses and enterprises have ultimately recognized blockchain’s dominance beyond digital currency and identified it as a critical priority for the future.
Over the next 12 months, these companies will need to analyze their business models, and ask how, as opposed to whether, blockchain is going to disrupt their industries. Mindlessly integrating a new technology piecemeal brings its own specific risks, but those at the forefront of the revolution are creating solid strategies for holistic integration. More specifically, in the intersection of healthcare and blockchain, security balanced with accessibility should take precedent. Healthcare providers need to take advantage of blockchain technology to enrich care coordination, while empowering individuals to take control of their health journeys and personal data. Allowing only those with the requisite permissions access to medical records will improve data security, trust and transparency.” Pradeep Goel, CEO of Solve.Care
Blockchain 2020: market movements
“The digitization of national currencies will continue its momentum into 2020 as more central banks and governments warm to the idea. Benoît Cœuré, head of the Innovation Hub at the Bank for International Settlements recently asserted the benefits of digital currency and strong appetite among central banks and the European Central Banks (ECB) with regard to their role in financial intermediation. 2020 will see the People’s Bank of China launch its digital yuan, and the debate for digitizing the Euro will become more acute.
“Hype and contention around Libra will not abate but actually, help to strong arm governments into developing an alternative. The benefits of Libra certainly won’t be felt on a global level as purported but likely launch in some backwaters where the immediate impact will actually be felt. The G7 will continue to hold steadfast against Libra and the privatization of money throughout 2020 but eventually will cower to central bank digital currencies and stablecoins. Breaking its previous peak, Bitcoin will surpass $20,000 in the new year and growing concerns over the surveillance economy drive people to its anonymity and privacy.” Florian Glatz, Co-Founder of Fundament Securities
Blockchain 2020: next generation
“The next generation of blockchains will naturally be a system of independent yet cooperative entities. The ecosystem will be flexible — a multitude of interoperable systems able to fit the contours of the real world rather than the previous one chain to rule them all mentality. Multiple, sovereign blockchain with different applications, political philosophies, and validator sets will be able to interoperate. An open, sovereign, secure network of interconnected blockchains, or “Internet of Blockchains,” will emerge from interoperability protocols like Inter-Blockchain Communication. In the decade ahead, there exists not one monopoly or an oligopoly but a vast federation of networks speaking a common protocol for interoperability. Distributed ledgers will support a new global economy and decentralized finance will reach every corner of the globe. Tokenized derivatives, synthetic instruments, and as-yet unimagined financial instruments stemming from cross-chain collaboration will become realized.” Jae Kwon, CEO, and Co-Founder of Tendermint
“2019 was primarily a year of refocus for the industry, as we moved further away from the ICO craze and the opportunistic, quixotic use cases that dominated over the past couple of years. The announcement of Libra was the year’s watershed moment, creating a lot of noise and piquing the interest of the general public. But in the background, a lot of progress was made on important, foundational technologies such as zero knowledge proofs, and we also saw the rapid growth of the Ethereum DeFi ecosystem through the success of projects such as Maker and Compound. I predict that 2020 will see the launch of multiple ‘third generation’ blockchain projects, an exciting prospect even if only a fraction of these projects go live next year. The next 12 months will be about continuing to generate momentum with a focus on building essential infrastructure for consumer-facing apps that possibly won’t launch for another few years.
“Going forward, in order for blockchain platforms and the apps built on top of them to stand a chance of making their mark, improving usability and finding product-market fit must be prioritized far more than they have been to date. This can and, I believe, will engender a significant shift in how users perceive and interact with blockchain. Similarly, blockchain communities will recognize the importance of good governance and will increasingly prioritize it in order to stay competitive and stand out from an increasingly crowded field of competing platforms. As blockchain technology continues to become more prevalent and impacts more industries, I hope that, as a community, we don’t lose sight of the potential for this technology to have a profoundly positive impact on human society at large.” Lane Rettig, Developer Evangelist at Spacemesh
“A number of significant milestones emerged regarding the state of the blockchain industry in 2019.The launch of Ethereum 2.0 in 2020 will hopefully benefit from the lessons of version 1, in which we learned that developing strong technical foundations are essential to the success of a chain. The industry has also learned some tough lessons regarding the difficulties surrounding widespread adoption, finding a stronger echo in the daily lives of people will be key to solving this issue–something a corporate model might effectively achieve. Several notable trends stand out as ones to watch in 2020. The ecosystem of private blockchains will most likely concentrate around IBM.
“The shift towards decentralized finance (DeFi) projects will likely encounter their first roadblock in the need to show evidence of both resilience and scalability, while such networks provide significant potential to open access to financing, the practicalities require considerable development. I hope to see 2020 bring a renewed focus on the fundamentals of the industry. Education must be prioritized in every facet of the industry from cybersecurity to business management. On a broader level, I would like to see self-governance move beyond its theoretical roots in the blockchain industry to concrete application in a variety of use-cases and domains.” Nicolas Cantu, Co-Host of Paris Blockchain Week Summit and Co-Founder of Chain Accelerator
“(For 2020), firstly, progress will be made within infrastructure building with the move to Ethereum 2.0, that is moving away from a proof-of-work system of transaction validation to proof-of-stake. Proof-of-stake is expected to be more scalable and energy efficient than proof-of-work, so this will help address those scalability issues in the most popular smart contract ecosystem. Resource tokens will be an extension to the sharing economy but on the infrastructure/resource level. Why pay AWS if we can use each other’s resources?
“(There will be an) increasing popularity and adoption of DeFi products (decentralised finance) such as open financial tools. These include payments, credit and lending, decentralised exchanges and other DeFi products such as hedging, shorting, derivative trading and prediction markets. (Finally, we will see) blockchain based video games and digital collectibles. We’re yet to see the first successful gaming application in 2020. No major application of blockchain in gaming has been seen yet, but many projects are working on it following investment in 2019.” Luke Gniwecki, Head of Product, Cudo Ventures
Blockchain 2020: regulation
“In 2019, we have seen an increase in governments, regulators and central banks engaging with blockchain and crypto in general – sometimes positively and sometimes not so positively. Notably, the Financial Action Task Force (FATF) recommendations around Know Your Customer (KYC) continues to have an impact on how crypto exchanges operate; the Libra association continues to divide regulators, customers and the crypto industry, and the launch of the first Security Tokens by both major institutions (Societe Generale) and national markets, such as Germany (BitBond), is making waves. Altogether, these movements prove that the industry as a whole is evolving, and, with it, various parties are forced to ask some difficult questions as we gain more regulatory clarification.
Looking forward to 2020, there are many trends and movements to look out for. Previous Bitcoin halving events have grabbed the public’s attention and the technical analysis is lining up to make sure this one is no different. As well, multiple large chains will be releasing significant technology upgrades – Ethereum with ETH2.0 and NEM with Catapult – both in early 2020. I believe we will also witness continued innovation in the DeFi space which is accelerating every quarter now, coupled with increased security token issuance and maturation across the board, and, if the market returns to fundraising, it will be a more well-structured mechanism than last time. We are seeing the fruits of many projects’ labour coming to fruition – with a particular focus on using blockchain for climate-impacting solutions – improving efficiency while decreasing carbonisation and power consumption.” Dave Hodgson, Director and Co-Founder of NEM Ventures
“In 2020, auditable privacy will be a top focus for DeFi, and open finance more broadly. New breakthroughs in zero-knowledge proofs (ZKPs), such as Supersonic, will enable auditable privacy, allowing users and financial services to prove that they are compliant without revealing any further information. For instance, a fund manager operating an investment fund can prove to investors that it is only taking a 2% management fee, without revealing any information regarding its trades, investments, or investors’ identities. Further, blockchain-based financial services will take major steps forward, as an open, universal standard for digital identity and reputation/credit-worthiness begins to emerge. While adoption of DeFi increased in 2019, it is still mostly limited to speculators and crypto-enthusiasts.
“The primary reason for this is that most systems today fail to integrate user identity and reputation. By introducing financial passports, next-generation identity infrastructure will offer complete user data privacy via selective disclosure credentials. A solid foundation for identity will enable credit and reputation, expanding open finance and banking to real users worldwide. Finally, in 2020, we will witness the next stage of enterprise adoption of blockchain technology. With a renewed sense of enthusiasm around blockchain’s deployment at enterprise level, and with many high profile companies leveraging the technology, there will be a pivot towards ensuring transparency, consumer protection, and regulatory compliance as adoption increases.” Charles Lu, CEO of Findora
Enterprise Times: what does this mean
Each of the above statements requires reading in the light of each specific vendor’s priorities. That is to be expected.
Nevertheless, the breadth and scope of the comments suggests that 2020, and even more so 2021, will be important for enterprise adoption and acceptance of blockchain.