What Will The Next Decade Of The Blockchain Look Like?
By Dr Vin Menon on The Capital
Blockchain tech has come a long way in the last decade. With the popularity of cryptocurrencies, smart contracts, and general institutional interest, it’s safe to say we’re past the early adoption stage. The safety and autonomy that blockchains promise to offer is unprecedented and will reinvent the way governments, banks, and industries function by the end of this decade. Yes, the road for Hyperledger has not always been smooth, but that will change in the upcoming decade as major governments and tech giants continue to have their eyes on improving the concept. The result? A viable option for various businesses to adopt, and improved potential for businesses to perform more efficiently and effectively, with little hassle, and more security.
If we were to envision the future of the blockchain over the next decade though, I’d say there are 4 key areas crucial to driving its success:
While enthusiasts often oppose the idea of regulating cryptocurrencies, I find myself on the other side. We’ve all witnessed numerous ICO scams, exchange hacks, and plenty of other issues that, quite honestly, are a large impediment to true mass adoption. It’s a situation that calls for regulation, even if the regulation must be loose and not too restrictive. As Julian-Andre Winter (Head, asset management, The Naga Group), says — “regulation is the first key for establishing blockchain technology at it will provide the lacking level of trust.”
Once regulations are rolled in, governments should begin to hop on the blockchain express soon. The advantages are simply too large for countries across the globe to ignore. The current iteration of blockchain tech is somewhat complex for the masses when it comes to widespread usability. While future iterations should address this issue, the reality is that the masses don’t need to understand blockchains in-depth to use them. Do most online users today truly know how the internet works? As long as the masses are offered a usable, easy solution, it’s honestly all that the technology needs. Eventually, we’ll have governments keen to use this tech as well, which offers more than just a financial setup that is more efficient and offers traceability.
Of course, it is safe to assume that there will be a lot of testing and trial and error to be done in the upcoming years before governments across the world would be convinced of blockchain’s widescale usability.
The cryptocurrency markets, which are ultimately based on the blockchain, are… volatile, to say the least. Reasons include the ambiguity of regulations in various countries and the early stages in the life of the technology. At the current iteration, it is not without its faults. Though blockchains offer extreme potential in terms of cryptography and cybersecurity, they remain some time away from perfection. Stability should show signs as adoption increases, and institutional support strengthens. This is already occurring, with major names such as Facebook and Wells Fargo entering the cryptocurrency industry.
Stablecoins, cryptocurrencies which are tethered to real-world, non-virtual assets, have started to surface in large numbers, and more importantly, grow in popularity. Because of stablecoins being valued to real assets, like the US Dollar, Gold, etc. (like most currencies), the market is exposed to at least some non-volatile applications of the concept. This should culminate in making cryptocurrencies a much more reliable, and usable asset.
With the evolving nature of the blockchain, countries, industries, and banks have already begun to appreciate the utility of smart contracts. For any technology to be viable, constant adaptation and developments are crucial. We’re set to cross these hurdles, enabling the rise of smart contracts. This should enable a whole host of other applications — from truly digital identities to asset trades, land recordkeeping, and so much more. And this isn’t fantasy. Major cities — such as Dubai, are already well on their way to adopting blockchain across industries, already targeting being a blockchain-powered city by the end of 2020.
On that note, it’s also important to glance at the multiple industries ripe for disruption with the blockchain. As I’ve often talked in length in the past, the blockchain will be ground zero for entrepreneurs of the future. From the education sector and the automobile industry to food retail chains, cybersecurity, and real estate — the potential is beyond exciting. Personally, I remain enthusiastic about the convergence of the insurance sector with this technology. Today’s insurance industry is still almost as archaic and complex in its functioning as it was several years ago in the pre-internet era:
- Policies are still marketed by sales representatives through calls,
- Claims settlement is still complex and time-consuming, and
- The verification process often still depends on a paper trail which is not digital.
Take a closer look, and it’s easy to spot the source of all these issues — there is no comprehensive database of all records of the claimants. The blockchain comes to our rescue again here. By virtue of it being a decentralised encrypted database, we can store all records and all related transactions in a single place, making the entire process much simpler. Though the usage has not been completely optimised and up to its full potential, the coming years will see that other industries also use blockchain fully to help better the user experience.
In short, blockchain tech, assisted by regulation, adoption, and its own natural evolution, are the future. I’d go to the extent of calling it the next internet.