2019 was one of the best years for blockchain and crypto space. The followers of the technology that supports bitcoin, the largest and most popular cryptocurrency so far, was able to witness the birth of new alliances, products related to virtual assets, as well as protocols that extended the growth of this network to other areas of the sector financial.
It was in this year when the United States Congress and foreign central banks became interested in the benefits of blockchain and cryptocurrencies. Even China decided to bet on this technology billions of dollars.
Also, the world’s largest financial companies are building on the blockchain and the trend shows no signs of slowing down. Therefore, analysts and experts have said that 2020 will be a much more interesting year for the blockchain and here are some projections.
Central Bank of China will launch its cryptocurrency
China is one of the most active countries in blockchain technology, as well as in crypto space because that is where the largest cryptocurrency exchanges have been registered and also where mining is mostly carried out.
Huang Qifan, executive vice president of the China International Economic Exchange Center, confirmed that the People’s Bank of China (PBOC) will launch its digital currency called Electronic Payment in Digital Currency (DCEP).
Facebook Pound Launch
Facebook announced its plans to launch the digital currency in June 2020, but the attempt to popularize the cryptocurrency was obstructed by the skepticism of politicians and regulatory agencies worldwide.
The projection is that Libra will be launched next year in a jurisdiction and with limited scope, partners and functionality.
Stable coin paradises
The trend that has been observed in recent years of converting fiat, or fiat money; that is, assets that governments recognize as legal, in cryptocurrencies to operate exchanges in the virtual market will continue.
Therefore, we will see greater adoption of stable currencies, mostly backed by trust funds, and driven by stock market trading.
It is clear that blockchain adoption, despite the challenges it poses in terms of time and effort, will mean a real revolution in a multitude of operations and processes in a wide range of sectors, to trigger the demand for certain profiles and capabilities, and to force traditional companies to completely rethink their processes to take full advantage of the advantages offered by this promising technology.
Next, we analyze 10 trends that will dominate blockchain technology in 2020.
THE BLOCKCHAIN AS A SERVICE (BAAS) AND THE TECHNOLOGY GIANTS
The call, Blockchain as a Service or BaaS, will be one of the trends with the greatest projection 2020, especially for the interest that has aroused among various startups and, above all, large consolidated companies. BaaS is a cloud-based service that allows users to develop their digital products working with blockchain. These digital products can be smart contracts, decentralized applications (Dapps), or even services that do not require a blockchain-based infrastructure to function.
Microsoft and Amazon are just some of the companies that are already working on the development of a blockchain that allows them to start offering BaaS services and thus shape the future of blockchain applications.
THE FEDERATED BLOCKCHAIN RISES TO THE FORE
Blockchain networks can be classified as Private, public, federated or hybrid. The federated Blockchain term has been coined to designate one of the most promising trends that have emerged in the blockchain segment in recent times. It is an advanced form of the basic blockchain model, which makes it more suitable for many use cases.
In this type of blockchain, instead of a single organization, each preselected node in the blockchain can be managed by multiple authorities. In federated networks, it is this group of nodes that is responsible for validating the blocks so that transactions can continue to be processed. In 2020 it will increase the use of federated blockchain platforms thanks to the customization possibilities of blockchain networks that it enables.
INCREASED VISIBILITY OF STABLECOINS, OR STABLE CURRENCIES
Bitcoin is one of the most used examples to illustrate the volatility of cryptocurrencies. The concept of stable currencies, or stables, emerges from the need to guarantee some stability in the value associated with each currency. Today, stable coins are still in an incipient phase, they are expected to reach their historical highs throughout 2020.
The launch of Libra, the cryptocurrency of Facebook in 2020, will be a fundamental milestone for the adoption of stablecoins, despite the multitude of problems that the company is facing and the flight of partners that is occurring within of the organization created to manage this cryptocurrency.
BLOCKCHAIN SOLUTIONS TO TACKLE SOCIAL MEDIA PROBLEMS
In 2019, the number of social network users worldwide reached 2,770 million. The introduction of blockchain in social networks will allow curbing some of the problems that have raised the most controversy, including violations of privacy, data control, and relevance of the contents. Therefore, the incorporation of blockchain in the field of social networks will be another booming trend during 2020.
The implementation of blockchain ensures non-traceability and prevents duplication of all data published on social networks. Besides, it will allow its users to store data more securely, as well as guaranteeing their ownership.
Blockchain will also allow content creators to determine their relevance, rather than the owners of the platform. This way users can have more control over what they want to see. The difficult thing will be to convince social media platforms to voluntarily implement these solutions. If not, we will have to wait for future regulatory developments in this line, similar to what has happened with the GDPR at the European level.
INTEROPERABILITY AND BLOCKCHAIN NETWORKS
The interoperability concept referred to blockchain refers to the ability to share data and information between different systems and networks of blockchains. This function would allow visualizing and accessing the same data from different blockchain networks. Thus, for example, it would be possible to send data from an Ethereum blockchain to another specific blockchain network. Developing this interoperability poses many challenges, but it would offer great advantages.
ECONOMY AND FINANCE WILL DRIVE THE DEVELOPMENT OF BLOCKCHAIN APPLICATIONS
Contrary to what happens in other traditional businesses, in the banking and financial sectors the adoption of blockchain technology does not require major changes in terms of processes. After its successful application in the development of the cryptocurrency segment, numerous financial institutions have begun to seriously consider the possibility of implementing blockchain to improve their traditional operations.
According to a PWC report, 77% of financial institutions plan to adopt blockchain technology as part of some system or process in production throughout 2020.
Blockchain technology will allow banks to streamline bureaucratic processes, execute transactions faster at a lower cost and increase privacy levels. The consultant Gartner has estimated around $ 1 billion the value of the business that will be derived from the use of blockchain-based cryptocurrencies for banking.
Also, blockchain can be used to launch new cryptocurrencies regulated or influenced by monetary policies. In this way, banks intend to reduce the competitive advantage of independent cryptocurrencies and increase their level of control over their monetary policy.
INTEGRATION OF BLOCKCHAIN IN GOVERNMENT AGENCIES
The idea of distributed registration is also extremely attractive to government authorities that have to manage large volumes of data. Currently, each agency has its databases, which requires them to be constantly requesting information about their citizens. However, the implementation of blockchain technologies to increase efficiency in data management will improve the functioning of these agencies.
According to Gartner, more than 1 billion people will have some type of personal data stored on some platform or blockchain system, whether or not they are aware of them. Also, as governments have no choice but to recognize the advantages offered by blockchain-based currencies, national cryptocurrencies will begin to appear, digital money is the future and nothing can stop it.
IoT AND BLOCKCHAIN SHAKE HANDS
As new threats begin to emerge, security will become a priority in the IoT technology market. The complexity of the threats derives from the heterogeneous and distributed nature of the technology. There are already more than 26,000 million devices connected to the internet. Unauthorized access to the Internet of Things devices and networks will be much more frequent in 2020 and it will be the network operators who will have to start stopping the intruders.
The current centralized architecture of the Internet of Things is one of the main causes of the vulnerability of IoT networks. With billions of connected devices, and with millions more to come, the IoT is a perfect target for cybercrime. And that is why security will become an increasingly relevant factor.
The blockchain offers new hopes for IoT security, for different reasons. First, it is a public technology. Everyone who participates in the network of blockchain network nodes can view and validate all the blocks and transactions stored in it.
Also, it allows users to control their transactions using keys. Second, the blockchain network is decentralized, so there is no single authority that can approve transactions by eliminating the weakness of the Single Point of Failure (SPOF, or single point of failure). Third, perhaps the most important aspect: it is a secure technology – the database can only be expanded, previous records cannot be changed.
Many companies that work in IoT adopt blockchain technology for their business solutions. The International Data Corporation (IDC) estimates that 20% of IoT implementations are accompanied by some type of blockchain service.
BLOCKCHAIN WITH AI
The integration of artificial intelligence and blockchain technologies will allow for better developments. This integration will allow significant improvements in blockchain technology that will result in an adequate number of applications.
According to the International Data Corporation (IDC), global spending on AI will reach 57.6 billion dollars by 2020 and 51% of companies will embark on the transition to AI with blockchain integration.
Besides, blockchain can help make artificial intelligence more coherent and facilitate its understanding, as well as better understand the decision-making processes of machine learning algorithms, offering total traceability on these processes. Blockchain allows recording all the data and variables that influence the decisions made by machine learning algorithms.
On the other hand, artificial intelligence would increase the efficiency of blockchain processes far beyond what any conventional person or computer would be capable of. Just take a look at how blockchains are currently managed with current computers to understand the processing capacity that is needed even to perform the most basic tasks.
Examples of AI applications in Blockchain: Power of intelligent computing, creation of diverse databases, data protection, monetization of data, confidence in decision making by artificial intelligence systems.