5 Major Predictions for the Blockchain Technology in 2020.Blockchain, since its realization, has come a long way. With pillars like trust, decentralization, transparency, and most importantly security, it has been doing wonders in financial landscapes. It also aims to provide solutions for many other industries. With new advancements shaping up with the integration of blockchain technology in every industry, it is natural to ponder over its future. Let’s have a look at some of the predictions for blockchain technology that we think will dominate in 2020:
1. The Rise of DeFi
DeFi is short for Decentralized Finance, which refers to a financial system built on Ethereum that includes digital assets, financial smart contracts, protocols, and Dapps. In other words, DeFi could be referred to as an evolution happening in the financial ecosystem due to Blockchain technology.
With a multi-directional order of applications in finance functioning hand-in-hand with Blockchain, we have more than $695m in December this 2019 locked in different applications in DeFi ecosystem from less than $2m in November 2017. Some say that this increase is mostly due to Maker DAO and Dai stablecoin, but still, the rise in decentralized exchanges, prediction markets, and lending/borrowing applications cannot be overlooked.
2. We’ll see more Stablecoins
Cryptocurrencies have proven to be very volatile in nature. To avoid that volatility, stablecoins, which were tokenized fiat currencies used for easier exchange mechanism on cryptocurrency exchanges, were introduced.
In the past few years, stablecoins were just at their initial phase. But in 2020, we might observe an increased adoption of stablecoins, mostly fiat-backed, and driven from trading exchanges.
This is a common trend noticed by people who understand the macroeconomics of stablecoins. Projects like Fnality and J.P.Morgan’s stablecoin will come to life. Some increased interest will also be induced by the introduction of FaceBook’s cryptocurrency “Libra” in 2020.
3. The Federated Blockchain will advance
Blockchain networks can be of four types: Private, Public, Federated or Hybrid. Federated Blockchain can be said to be an upgraded form of the basic Blockchain model. In this type of Blockchain model, multiple authorities can control the pre-selected nodes of the blockchain instead of one organization. Just like the importance of devops in the new era of continuous integration and development, blockchain needs to be federated too.
These group of nodes controlled by the authorities has the task of validating blocks for the transactions to process further. The rise in the Federated Blockchain can be explained by its ideality in specific use cases. These Federated Blockchain models will be at a rise in 2020 for imparting the private Blockchain with a more customizable outlook.
4. The Security Token Market will Grow Significantly
Traditional securities can represent an ownership position in a publicly-traded corporation, a creditor relationship with a governmental body/corporation, or rights to ownership as represented by an option. When these traditional securities are owned in a tokenized, digital form then it is known as security tokens.
It is a concept that aims to boost the liquidity of traditional finance. In 2020, we’ll see that the creation of security tokens from scratch will be less popular than wrapping the traditional assets with tokens. Although security tokens are set to disrupt traditional finance, its technology allows us to fractionalize ownership of major funds and tech companies. This might helps us create a second market for tech biggies like SpaceX or Apple.
5. Blockchain solutions for Social Media Problems
Social media has become an integral part of our lives. In 2019, an estimate of 2.77 billion people were using at least one social media platform. But the problems of privacy and security with social media are persistent since its dawn. What social media lacks in security can be provided over by Blockchain solutions.
It will be able to solve problems of scandals, privacy violations, data control, and content relevance. With Blockchain at their disposal, the developers can ensure that published data be untraceable and cannot be duplicated. To bolster user adoption, however, significant improvement in brand voice will be needed.
We have all seen the rise of blockchain from a nascent technology to be one of the most important parts of boardroom discussions between CXOs. The runway has been built for the technology, and it seems set to disrupt the course of tech in the next decade. Great adoption by users and streamlined implementation by corporations will be just the push that it needs to really take off.
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