Blockchain in 2020 and beyond: what does the future hold?
As the end of the year is approaching, we see numerous articles with the top predictions for what 2020 will bring for blockchain technology. We think predictions in technology are a risky feat. You can be right, but equally terribly wrong and everything becomes way more obvious from hindsight. Nevertheless, we wanted to draw some insights into the potential of the technology by tapping into the expertise of thought leaders in the field.
This year we asked three entrepreneurs from the UK blockchain scene what they envisage for 2020 and the next decade. Simon Barnby, Helen Disney and Nick Williamson give you their prophecy-free take on what will happen next.
Simon Barnby — CMO at Archax
Blockchain came about ten years ago as the underlying infrastructure for implementing Bitcoin. Since then, however, it has morphed into something much broader with numerous flavours targeting different industry sectors and use cases — from a plethora of different cryptocurrencies to handling personal healthcare records, and everything in between.
One interesting area that has recently emerged is the use of blockchains in the capital markets world to tokenise real-world assets (both physical and financial) to facilitate fractional ownership. 2020 looks like being the year that the resulting security token offerings will really begin to take off, bringing global liquidity to illiquid and hard to trade assets, and helping democratise financial markets around the world.
Continuing the theme of blockchain in capital markets, at Archax we believe that as the technology evolves its use will become much more mainstream over the next decade. It will revolutionise traditional financial markets. The benefits blockchain brings to activities such as managing cap tables and handling corporate actions are clear. It will also bring huge benefits to post-trade, as it has the potential to streamline, remove friction and disintermediate parties from what is currently a comparatively slow, inefficient and cumbersome process.
Helen Disney — Founder of Unblocked Events
As we enter a new decade, it is worth reflecting that at the beginning of the last decade the bitcoin white paper was still in its infancy and very much still the preserve of cypherpunks and tech geeks.
At the time it would have been hard to imagine central bankers and the Managing Director of the International Monetary Fund (IMF) discussing central banks issuing their own digital currencies — or large enterprises such as IBM, Microsoft, Facebook and Twitter embracing the decentralised systems. So what does the year ahead hold? And what about the next decade?
Despite the enormous growth in mainstream awareness of bitcoin and cryptocurrencies and of the applications of blockchain more broadly, scepticism is still rife among the public, politicians and business people. It is still hard to get past bitcoin myths and fears about illicit activity and it is still difficult to get people to appreciate real-world use cases and applications of the technology are happening. With the death of initial coin offerings (ICOs), a period of retrenchment and quiet building has taken place for the industry which has made life hard for many blockchain startups and caused some investors to lose interest in cryptocurrencies altogether.
In 2020, it seems likely that the new UK government will take a stronger position on blockchain, not least because it offers potential for cost savings in the delivery of public services as well as new opportunities to create jobs and innovation in a post-Brexit economy. At the EU level, positive action and funding for blockchain-based initiatives are also on the cards. Worldwide, developing nations still represent perhaps the best opportunities for blockchain and cryptocurrency use to accelerate. They have the biggest incentive, a lack of legacy systems to overcome and the potential for opening up new markets and sources of capital is enormous.
In the next decade, if change follows the same trajectory as the last decade, the use of blockchain and distributed technologies in enterprise will become commonplace and we will see major production use cases in supply chain, data management, healthcare and of course financial services. The real question post-Libra is which of the big tech companies will be the first out of the blocks.
Nick Williamson — CEO and Founder at Qadre
First of all, let’s get the cryptocurrency side out of the way. Unless we want to risk being wildly wrong, there is no point in price predictions. Cryptocurrencies have no fundamentals, which leaves their rate to be solely dependent on swings and market sentiments.
One thing, however, that we can expect in 2020 is that regulators will catch up with deliberate cryptocurrency scams and decentralised pyramid schemes. We could already see traces of this in 2019, and we expect the law to catch up soon with the rest of the rather shady crypto businesses.
On the much more exciting enterprise blockchain side, we are hoping for 2020 to bring more fire and less smoke. Blockchain on its own is no longer able to make headlines, and big partner names are also becoming less exciting. We are not necessarily going to hear about every tender, project or back-office innovation. This does not mean that development has haltered. It just means that the industry is turning from creating pretty concepts to impressive results. The conversation will turn towards value propositions and delivering products which show how blockchain performs in practice.
This brings us to the next decade. When we show true value in our products, adoption will reach an inflection point and people will welcome the technology with open arms and budgets. At this point, it will not be lip service to innovation anymore — but driving efficiencies, delivering certainty and changing business models.
We expect this change to come more from grassroots movements, simply because they are more nimble and open to change. Large organisations find it hard to see the opportunity cost, especially as blockchain implementation could mean shrinking revenues for them. As the market becomes more efficient and streamlined, high charges will be harder to justify, and no organisation will sign up to make less money in the future. Larger entities have tons of advantages in terms of access to capital and close relationships with external stakeholders, such as partners and regulators. However, startups can see through the corporate constructs to a real total addressable market. They can identify opportunities in places where big organisations don’t dare to dabble for their own sake. Here, the collaboration between both will be key.
Where will blockchain stand in the future of technology? We expect blockchain to become less of an infrastructure-as-a-service and more of a part of the application stack. Like other layers in use today, such as DevOps or relational databases, it will be a component in the ecosystem to build better applications. It will provide a better module for security and efficiency by being able to store and process information sealed by cryptography. We expect this to be a game-changer in for example in transfer of ownership and identity handling.
Let’s summarise the key points by our experts.
The year 2020:
- Acceleration and growth of security token offerings
- UK and other EU governments taking a stronger position on blockchain to deliver benefits and enhanced adoption in developing nations
- Regulators will catch up with cryptocurrency scams and decentralised pyramid schemes
- Enterprise blockchain silently building products to demonstrate the real value of the technology
The next decade:
- Blockchain applications revolutionising financial markets, such as managing cap tables, and improving post-trade transactions
- Enterprise applications will become commonplace across more verticals in healthcare, supply chain, and data management
- We will be reaching an inflexion point where people will actively seek proven blockchain solutions
- The technology will become a common layer in the application stack for elevated security and efficiency
Our experts have long-standing experience in blockchain and their respective sectors. However, predictions are still risky. Regulations, people and corporations can take unseen turns, especially in emerging technology.
Here is one thing we know for sure: we will remain dedicated to making blockchain real for business and achieve widespread adoption, elevated trust, higher efficiency and transparency, here we come to 2020!