Over the past years, tons of predictions have been made on Blockchain and Distributed Ledger Technology (DLT). They continue to force us to question orthodoxies and conventions that are the foundation of today’s business execution.
It is clear the technology and adoption still suffers from an incomplete understanding of all of its capabilities and some of the more negative elements created by mishaps in the public cryptocurrency sphere. However, the capabilities and platforms (both public and private) are rapidly evolving; which makes it actually one of the key pitfalls to complete successful projects. The aforementioned incomplete understanding, the lack of resiliency and the absence of a more firm belief by enterprises, government and society in the solutions tends to hinder business critical enterprise implementations and large-scale acceptance.
For myself and many others, it is still one of the most anticipated and promising technology evolutions of the last decades for both society and enterprises.
I have compiled a set of predictions on how I belief things are likely to pan out over the next calendar year.
Enterprises will significantly step up adoption of Blockchain and Distributed Ledger Technology
Despite the widespread perception that blockchain is over-hyped, we can expect more businesses and governments to implement the technology over the course of the next year. And, as both businesses and their technology suppliers gain valuable experience, the success rate for deployments will also significantly increase. We’re likely to see the technology applied by enterprises as part of a wider-reaching optimization of processes rather than in more radical ways. These enterprise deployments will be supported by the emerging blockchain as a service platforms and proof of business rapid prototyping frameworks.
Different ledgers and existing systems will play more nicely together
As more data and transactions are stored on both permissioned (private) and permissionless (public) blockchains, it is clear there is growing need for seamless interoperability between them. There are some initial solutions available today (e.g. blocknet, Fusion) however we expect to see the emergence of more decentralized applications and the easier integration with existing enterprise systems.
APIs will play a key role in this evolution; however, the success of this interoperability requires it to be tackled holistically and backed by industry standards, rather than as an isolated element purely related to blockchain and distributed ledger technology.
AI will start to make smart contracts smarter
Today’s ‘smart contracts’ are unfortunately neither smart nor can they be legally considered to be contracts. They also tend to be very inflexible, unable to adapt to changing circumstances, for example to changes in the economy. They are essentially pieces of code that trigger a specific action if certain conditions are met or a defined event takes place. We anticipate that AI will start to bring enhanced value to this process by enabling a new kind of self-adjusting contract and workflow. We are also going to see AI starting to be applied to prepare, manage and automatically enforce elements of smart contracts. However, there’s still a long way to go – AI won’t yet be able to create and manage smart contract code updates and releases to apply principles such as intention, fairness, efficiency and growth, however the next 12 months will set us on the right path.
Regulators and Governments will come under increasing pressure to adapt the regulatory environment
Clearly blockchain, distributed ledgers and smart contracts raise significant legal questions, and to date, there are no laws or regulations to govern them. Consequently, we anticipate that in 2019 will see some change in the legal and regulatory implications for deploying blockchain and distributed ledger technologies.
There will continue to be some players within cryptocurrency communities who claim that their models are self-regulating and therefore governments should not intervene. However, I (and many others) am yet to be convinced of this self-regulation. Additionally, the increased attention from regulators and governments is not necessarily a bad thing. It will take into account the wider interest while forcing enterprises and society at large to think of Blockchain and Distributed Ledger Technology in terms of corporate social responsibility (CSR), compliance and ethical behavior.
Convergence of public and private ledgers will drive broader business transformations
We are going to see the further convergence of public and private blockchains, culminating in a move towards hybrid models whose existing systems are exposed via APIs. This will become more important than ever in 2019 with the rapid evolution of various blockchain frameworks and the increased drive towards standardization.
Blockchain as a Service and Distributed Storage in Blockchain will gain momentum
The ultimate impact of Distributed Ledger Technology may be greater than any of us anticipate however, so far adoption has been slow. We expect the emergence of blockchain as a service platform to start to change this in 2019 as these cloud native platforms remove some of the complexity of the underlying ledger platform, removing risk and making implementation easier. The solutions will range from sandbox development environments to fully managed solutions.
Identity Concepts and Zero Knowledge Proof will become a vital part of Blockchain applications
2019 will see blockchain platforms acquire more of the features that are essential for adoption by enterprises – for example features that make it possible to share and manage data and identity in a much more controlled way whilst complying with laws and regulations such as GDPR.
One key capability involves demonstrating zero-knowledge proof- that is, the ability to prove that you possess key knowledge without actually revealing in the information itself. Having more stable mechanisms and standards to manage digital identity, the flow of information or the proof of existence of information are critical enablers for extending applications to new areas. This, along with other emerging capabilities, has the ability to enhance the benefits of the underlying technology.
Resiliency and hardening of blockchain and ledger technology is on the horizon
In the past years, we have seen the emergence of a lot of platforms and startup companies. This overheated desire to be part of this market may cause both platforms and companies to either fail, give up or be absorbed in 2019.
As mentioned, large-scale Enterprise are somewhat slower in the adoption of new technology as they require more transformation regardless of the fact most of them understand up to a certain level what Blockchain and Distributed Ledger Technology could mean for them.
The increased attention from enterprise and government customers, although still very gradual and prudent, is causing certainly in the enterprise private blockchain and in some of the more public driven blockchains an acceleration in the development of the platform. This is making the resiliency and enterprise-readiness of the platforms significantly better than it was in early 2018. Managing trust also means being able to trust the platform it is running on regardless whether it is partially or fully decentralized, private or public.