2020: Prognosticating Blockchain

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2019 and the decade is winding down. As we look back to 2019, by all standards it was a remarkable year for blockchain, Bitcoin, and crypto in general. Bitcoin survived the bear market, governments have embraced blockchain, the U.S. Congress and central banks across the globe are looking closely at the benefits of blockchain and digital assets—and the IMF has called for central banks to develop their own cryptocurrency.

According to Biser Dimitrov  (Forbes), “the largest financial companies in the world are building on blockchain and this trend is not slowing down.”

Blockchain Predictions for 2020

Forbes took a look at the proverbial crystal ball of what’s to come for blockchain.  The following is a list of some of the predictions for 2020.

Facebook’s Libra will have a limited launch. In the face of resistance from U.S. and European regulators—Facebook’s payment network initiative has developed slowly. It is expected that Libra will launch with limited scope, number partners, and functionality—and that it will launch in only one jurisdiction.

Bitcoin ETF still won’t be approved in 2020. While there was a lot of anticipation, in the Bitcoin space, that the U.S. Securities and Exchange Commission (SEC) will approve any of the Bitcoin ETF filings—it has not happened. And it may not in 2020. Thus far, the SEC has rejected all of the filings “on the same grounds of not enough financial surveillance and manipulation in underlying markets.”

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Another reason why we may not see approval for Bitcoin ETF—is the appointment of Brad Sherman as chair of the Subcommittee on Investor Protection, Entrepreneurship and Capital Markets. It’s no mystery here—he is not a friend of Bitcoin and cryptocurrencies.

Growth of stable coins. Look for an increase in the adoption of fiat backed stablecoins, driven from trading on exchanges. Fnality and J.P. Morgan’s stablecoin will go live.

Growth of DeFi (Decentralized Finance).  Presently—over $290 million are  locked up in various applications on the DeFi ecosystem, which is primarily due to the growth of Maker DAO and Dai stablecoin. However—we can look to an expansion of “decentralized exchanges, prediction markets, and lending/borrowing applications”.

Lightning network adoption will grow. The lightning network, a layer 2 implementation on top of the bitcoin network, provides instant bitcoin transactions and payments—significantly improving the current bitcoin transaction speed. Look for an increase in the number of applications, nodes and channels that will be created on this layer 2 network in 2020.

Expansion of privacy tools. Companies like Ernst & Young are investing in the development of tools for privacy for the public Ethereum ecosystem. We will see more zero-knowledge (ZK) and multi-party computations (MPC) projects entering and maturing in the blockchain space.

More interoperability between blockchains protocols. A conversation among many industries, such as healthcare, has been interoperability. They are looking for blockchain to be able help them manage data from multiple databases.

Look for an increase in interoperability between blockchain protocols. With the move of Hyperledger Besu, (Ethereum client) to Linux Foundation’s Hyperledger initiative—we witnessed a significant indication that the permissioned blockchains will continue to converge. Don’t be surprised to see successful cross-blockchain pilots in 2020.

Regulators will follow Wyoming’s example. With respect to regulation, Wyoming serves as an example of the groundwork laid for “digital assets and a digital-banking-friendly regulatory regime”. Wyoming has taken the lead to explain the differences between virtual currencies and digital securities—deemed intangible personal property. Wyoming’s blockchain work hasn’t been missed: Arizona, Colorado, and New Mexico are looking into similar legislative work.

Conclusion

There are many use case applications in place and 2019 has seen its share of use case applications explode in the blockchain space. For 2020, these will be solidified.

The use case applications presented here will be sure to solidify the technology, and provide more confidence for regulation and mass adoption of blockchain by industry.

 

Samuel H. is an author, writer and speaker with over twenty years in the educational technology sector.

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