The State of Blockchain Part 1 : Recap of 2018 predictions

The objective of this short article is to settle the accounts with my last year predictions on blockchain technology and the market. In the second part, I also intend to share my insights for the things to come in 2019. This time, again, it’s about fun and a creative usage of a virtual crystal ball which — in retrospect — allows for a critical analysis of one’s prediction capabilities. Without further ado, let’s go back in time!

Prediction #1 for 2018: “Blockchain hype will eventually end (at last!)”

That was easy to predict to anyone who was actively involved in the blockchain market but the real extent of hype deflation could only be perceived by those who were placed in a remote distance from the peak of the crypto frenzy. There was indeed a need for adjustment of inflated expectations of both the supply and demand sides towards the search for the real market value. As a result, many projects, products and platforms stagnated and died out. In my opinion, this process is still in progress and we are somewhere in the middle of the road. However, those who managed to successfully battle-test their products and services are now sitting firm on the ground, with a focus narrowed down to the unique value brought by blockchain that could not otherwise be achieved through other means.

Prediction #2 for 2018: “The value of blockchain will shift towards the edge”

I tend to agree that this prediction was a miss. Although in 2018 we have seen a strategic shift of focus from financial use cases of blockchain towards the supply chain (in automotive, shipping and retail in particular), we are simply not there yet in terms of practical deployments. This may be related to the complexity of networks in the edge and the fact that some basic issues such as security and manageability of endpoints have not been effectively solved yet. I still see a great potential for blockchain and smart contracts in this area but we may have to wait a little bit longer for that to materialize.

Prediction #3 for 2018: “Blockchain will have to leave its comfort zone and integrate”

This prediction is proved to be correct. With a proliferation of blockchain solutions implemented in production to address some serious business challenges, such as IBM Food Trust and Tradelens, or the use of blockchain as a building brick for consortia (ex: we.trade), it is clear that the integration capabilities had to be taken into account, analyzed and put in practice. I actually have an impression that with enterprise platforms such as those from Hyperledger greenhouse, blockchain becomes just a part of an existing infrastructure stack, sitting somewhere between Systems-of-Records and Systems-of-Integration share in the ecosystem of participants.

Prediction #4 for 2018: “A first private blockchain network will be compromised”

I was completely wrong about this prediction or such a hack has not been reported yet :-) My experience from past and current projects tells me that the implementation of an enterprise blockchain should not be considered as an exception to traditional rules set up by each organization to protect its assets, business intelligence, clients and own workforce. Blockchain architects should be really careful during the design of measures to protect cryptographic key lifecycle (creation, transmission, use), to restrict direct access to the ledger and its content, to monitor used APIs and to validate the stability of smart contracts. Without such measures it is just a question of time before someone exploits the extended attack surface by compromising the most vulnerable of all consortium participants.

Prediction #5 for 2018: “Off-chain settlement networks will become mainstream”

I have mixed feelings about the correctness of this prediction. One one hand, it is clear that Layer 2 solutions such as State Channels, Sidechains and Sharding are now considered as a generally acceptable approach to overcome the scalability deadlock on many public blockchain networks. On the other hand, the actual implementation into mainnet networks is limited (with a notable exception of Lightning Network). Of course, Polkadot and OmiseGo are scheduled for release in 2019 but this is not a given promise. In worst case scenarios, some seemingly well-backed projects such as Plasma may be halted in order to redirect the focus on other approaches to solve the scalability problem.

In the end, I have impression that my predictions did not go that bad. Let’s see if the next year will hold truth to that statement. Feel free to leave your comment below or join a discussion!