The way forward for Blockchain in 2020

Blockchain is certainly more common than it used to be. As it underpins more and more products and services in the global economy, can it be said to have gone mainstream?

Source: Cylynx. Lin.

Industry observers have generally been positive. "2019 marks the maturity of Blockchain technology as companies move from exploration to developing actual use cases. Blockchain-as-a-service has blossomed with players like AWS, Azure and IBM offering enterprise grade Blockchain infrastructure, reducing the barriers to entry for such technology," said Timothy Lin, CEO of Cylynx, which specialises in Blockchain analytics and forensics.

"Libra showed the potential and challenges of future Blockchain payments. It brought together industry giants around a single Blockchain system but set off alarm bells across regulators and central banks worldwide. Regulations around virtual assets are coming into effect and it would be interesting to see which companies can satisfy the increasing complex compliance and security requirements in the year ahead."

Source: ShuttleOne.
Zhuang.

Zhuang Hong L, CEO of fintech company ShuttleOne said that 2019 had mostly been on Blockchain technology, but that Blockchain "is slowly but surely realising the promises that it has set", such as reducing costs through efficient transactions.

"We are seeing companies utilising both permissioned and permission-less Blockchains to achieve organisational consensus, thereby increasing efficiency to business value chains. 

"2019 has also been a turning year for the tokenisation of real-world assets with several key Blockchain initiatives having early successes in supply chain financing, property and even shares and equities. I believe this is the start of a longtail (effect where) Blockchain (is) a key technology in the Internet of finance."

Permission-less Blockchain networks are public. They allow any user to begin interacting with them in various ways. Permissioned Blockchain networks are private, and have more controls. User access as well as what authorised users may do is restricted.

Source: dClinic. Dr Satur.

Dr Richard Satur, CEO and Founder of dClinic, said that there are currently a lot of experiments with Blockchain. "Most companies see Blockchain as a, 'not sure how it will help us, but we need to have one so let’s build one and then see how we use it'. Blockchain for some reason seems to have an almost mythical aura about its place in the digital transformative process for many organisations," he said.

"This loose justification for 'must have' Blockchain continues but as more companies define logical use-cases for Blockchain, such as dClinic in Blockchain healthcare, more organisations will be able to create purpose-built Blockchain implementations.

"More importantly organisations will be able to integrate into Blockchain-enabled ecosystems to help drive their businesses to be more efficient and targeted. Integration in numbers within developed or developing ecosystems is strength."

Hagen Rooke, Counsel, Reed Smith said, "While Blockchain has not yet achieved widespread adoption, the strength of its use case is becoming increasingly apparent in transactional areas such as trade finance, supply chain traceability, and the issuance and trading of digital securities. In addition, Blockchain technology continues to underpin many cryptocurrencies, which are attracting increasing interest from both consumers and institutional players.

"In 2020, the development of distributed ledger technology will likely continue to be concentrated in these particular areas."

Source: WOLOT Foundation.
Chan.

Ben Chan, Chairman, WOLOT Foundation, predicts that Blockchain is only about to take off, calling it a Blockchain race between East and West. “Blockchain technology will start to enter mainstream applications with the help of governmental regulations and support, as evident from recent announcements in China and Singapore,” he said.

NetApp, on the other hand believes that mainstream Blockchain is near. “Going into 2020, we’ll see a tipping point for larger implementations as the enterprise goes a step further to adopt indelible ledgers or 'hyperledgers', which represent the maturation of Blockchain for wider use cases. Indeed, we’ll start to see Blockchain go mainstream as it enables industries such as healthcare to create universal patient records, improve chain-of-custody pharmaceutical processes and more,” said Atish Gude, NetApp Chief Strategy Officer.

Source: NetApp.
Gude.

“With use cases such as the above validating Blockchain and hyperledgers, additional widespread adoption of the technology will drive transformation across society on a larger scale, building on the disruption cryptocurrency has brought to finance to touch nearly every industry. As a result, new data management and compute capabilities will encourage companies to invest in indelible ledgers to build differentiated applications and collaborate on critical, sensitive data sets.”

Cryptocurrencies to boom 

Chan of WOLOT says that initiatives like Libra “will still face uphill struggles against regulations”, whereas “central bank-backed stable coins like the Chinese Digital Currency Electronic Payment (DCEP) will start to gain traction, at least in China and its trading partners”.

Source: QFPay. Ngan.

Patrick Ngan, co-founder and CEO of QFPay International, a payment specialist also thinks that central bank digital currencies (CBDCs) are something to watch in the Blockchain world. CBDCs are essentially traditional money in digital form that are issued and governed by a country's central bank and are underpinned by Blockchain technology, he explained.

“Over 2.5 billion people in the world remain unbanked and are deprived of the benefits of a formal financial institution. For instance, remittances fees are expensive due to labour cost, travel distance and paperwork involved. The introduction of CBDCs is expected to mitigate these fees and expedite cross-border transactions,” he said.

“We project that CBDCs will swiftly penetrate the payments industry in the coming future. To facilitate this transition, QFPay has teamed up with Alchemy Global Payment Solutions to develop an all-in-one hybrid payment system to help businesses accept both fiat and cryptocurrencies/CBDCs in a simple, straightforward manner.”

Look at Bitcoin, not Blockchain 

Juntao Zhu, Co-Founder, HODLNAUT*, a Singapore-based Bitcoin startup, says that there is no killer app for Blockchain for now. He said that many projects and developers are trying to force-fit Blockchain technology to solve real-world problems.

“This also applies the top project, Ethereum - the leading smart contract platform. As of today, Ethereum has about 200,000 active developers but only 17,000 daily active users,” he said. “Hence, unless someone can find a proper use case for Blockchain technology, Bitcoin not Blockchain will be one of the key developments in the space for the next few years.”

Chan agrees. “Mainstream cryptocurrencies will enjoy a boom as they ride this wave, but their real test will still be the ability to solve real-world problems instead of price speculation,” he said.

Dr Satur advised Blockchain companies to define use cases clearly. "Once you have identified a need, it is essential to engage with governments, who ultimately will drive adoption and change through legislation," he said.

"Then, as you build your platform and deploy, create ecosystems where partners can integrate and enrich your use cases."

Source: Reed Smith. Rooke.

Rooke from Reed Smith agreed. "In order for the technology to become viable in the long term, its supporting ecosystems will need to be developed concurrently, coupled with the ability of the platforms to interact with applications used by other key industry participants. For example, the success of Blockchain-based trade finance and supply chain traceability platforms will depend heavily on their ability to gather reliable data from the real world (e.g. through the Internet of Things) and to interoperate with other platforms," he said.

Evolve the infrastructure

Dr Satur emphasised that data centres are "active participants and need to share the load" in a Blockchain world. "Data centres need to cater for the emergence of Blockchain. They need to evaluate their readiness and understand their role in the greater Blockchain world. This also means a preparedness for integrations, sandbox environments, and their regulatory (security) role for hosting transactions and possibly the sensitive data too," he said.

DClinic is currently working with Batam data centres in Indonesia to undergo the transformation together with Deloitte Southeast Asia, Dr Satur said.

*To 'hodl', a mis-spelling of 'hold', is to hold on to a cyptocurrency for investment purposes instead of selling it.