2020 is likely the year when blockchain technologies will witness higher adoption rates and usage across industry niches. As announced in 2019, China may lead the way to substantial investment in blockchain research and applications. The largest cryptocurrency exchanges are in China, and this year may see some dramatic deployment shifts from the multi-cloud blockchains of 2019. The reality is that elusive technology has a lot to prove in actual applications before it achieves higher adoption rate among industry users.
At the beginning of 2019, George Spasov, blockchain architect and LimeChain co-founder, commented, “2019 has continued what 2018 started — enterprises experimenting.” According to the Deloitte 2019 Global Blockchain Survey, about half of the survey respondents had stated that “an average of $5 million or more” would be spent on blockchain projects in that year. However, the survey respondents also noted that deployment issues, security threats, and regulatory hassles would be serious barriers to technology adoption.
Where have all those trends brought us in 2020? The Future of Blockchain claims that the future of the technology lies in providing a “tamper-proof, asset-tracking system backed by clear records,” which broadly hints at blockchain’s immense potentials for revolutionizing three core industry sectors: banking, financial services, and insurance sectors.
Established Blockchain Trends and Expected Enhancements in 2020
- Some of the most successful cloud service providers have offered started offering blockchain-as-a-service. This year users expect to run their blockchain operations across different cloud networks, Forbes suggests.
- Cloud deployments and blockchain adoption are closely interlinked, in the sense that higher blockchain adoption will lead to more cloud adoption and vice versa. The cloud and blockchain vendors have mutual gains in strategic partnerships. The Future of Cloud Computing: Blockchain Will Have Its Day offers a thought-provoking discussion of blockchain in a hybrid cloud environment.
- With many ambitious solutions from Azure, AWS, and Oracle, blockchain still has technology maturity and public skepticism to deal with before it can achieve mainstream status. Unfortunately, in spite of ambitious investments, very few finial businesses have yet to reap the rewards of a “decentralized ledger.”
- The most visible change in business processes due to blockchain may be observable in the insurance sector in 2020. Blockchain Technology in Insurance describes how this technology can impact core insurance practices such as pricing and underwriting, claims, collections, and back-office work.
- According to a Price Water Cooper (PWC) report, 77 percent of financial institutions are likely to integrate blockchain with their “in-production system or process by 2020.”
- With the global social-media population at 2.77 billion in 2019, the emergence of blockchain in social media in 2020 will provide solutions for problems related to privacy violations, data control, and content.
- With blockchain exposed to other emerging IT technologies such as AI and IoT, it will be interesting to see how the blockchain experts tackle interoperability issues in 2020.
Blockchain’s Occam Problem
A year ago, Blockchain’s Occam Problem commented that after nine long years of huge investments, research efforts, and brainstorming, the blockchain technologists, finance industry, and the regulators are yet to present that “game-changing” solution for the financial businesses that they initially claimed.
The above article provides a summary of the top funds provided for blockchain R &D, which includes VC funding of $1 billion for blockchain startups in 2017, IBM’s investment of over $200 million in a blockchain-powered IoT solution, and the financial industry’s annual expenditure of about 1.7 billion. McKinsey’s recent study of financial services leads the market watcher to believe that in spite of these billion-dollar investments, “hardly any use cases made technological, commercial, and strategic sense or could be delivered at scale.”
So what is the current global perception of blockchain as a revolutionary technology? Major businesses have scaled down their investments and research efforts and are approaching blockchain R & D with a more targeted focus. Tens of use cases have been narrowed down to one or two — with more focus on compliance, data standards, and network adoption.
The theory that suggested blockchain would revolutionize major business processes across industry niches from “banking and insurance to shipping and healthcare,” is lagging behind on the application side. Proof-of-concepts are not yet visible, so much so that industry leaders and blockchain vendors alike have diluted their expectations, and are now ready for a more pragmatic market-view. The vendors have to be more honest about the challenges and limitations of this wonder-technology and suitably re-adjust their commercial strategy.
Hopes for Blockchain in 2020
Gartner has listed blockchain as one of the top ten strategic technologies for 2020. According to Ledgerinsights, Gartner has predicted that in the next three years, “public blockchains” will integrate with “permissioned blockchains.”
In 2020, blockchain must move beyond its POC stigma and show actual market applicability. So here are more blockchain trends to watch out for in 2020:
- Blockchain vendors will aggressively pursue industry sectors with better services and tools.
- Companies will continue to explore “tokenization” of all types of physical and digital assets.
- The Digital Asset Model Language (DAML) is likely to overthrow existing frameworks.
- As scalability and interoperability are nagging issues for blockchain deployments, in 2020, businesses will demand more scalability and “interconnectivity between networks.”
Predictions 2020: Distributed Ledger Technology Moves Beyond Proof Of Concept gives a deeper understanding of the current barriers to commercialization of blockchain. The success of another blockchain application can be found in How Blockchain Can Be Used to Secure Sensitive Data Storage. Storj.io and Sia.tech are two blockchain storage products currently poised for market success.
Major Blockchain Trends Triggered by Technology Barriers in 2019
- The previous year’s trend of cloud providers offering blockchain as a service may be an uptrend this year with more services and tools.
- The rise of “federated blockchain” with customizable blockchain networks.
- The rise of demand for blockchain experts as market applications continue to struggle through trials and experimentations.
- Businesses will have to innovate and re-skill their staff with more blockchain-oriented expertise, so that they can maximize their ROI from a blockchain deployment.
Ten Trends of Blockchain in 2020 gives a detailed explanation of the above trends.
Blockchain in 2020: Wrapping Up
In 2018, most blockchain vendors were not sure of the market feedback as most industry leaders simply tinkered with the idea of blockchain without actively pursuing blockchain applications. In 2019, blockchain technology got a facelift as cloud service providers started offering blockchain as a service. This trend, if appropriately leveraged, can enhance both cloud and blockchain adoption rates at the same time.
Blockchain in 2020: 5 Trends to Watch quotes Chris Brodersen, Deloitte Americas Blockchain Lab lead, as saying:
“From an enterprise perspective, the ‘blockchain tourism’ phase has passed and companies are beyond [simply] feeling the need to understand the underlying technology details.”
Blockchain Use Cases gives a more convincing picture of blockchain as a market success.
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