Blockchain will make a big impact in 2020

By: |
December 30, 2019 2:41 AM

Not only can it reduce the time for transactions, but trade finance and insurance will get more accessible with the technology.

For starters, Facebook would launch its currency Libra, trying to take over the finance market.

The year, 2017, among other things, is remembered for bitcoin. The cryptocurrency, then in existence for eight years—it was launched in 2009—jumped in value from a $900 to over $20,000. There was a rush to buy bitcoins, everyone who had purchased them at $20 or $30, thought they had struck gold. A lot of people started doing bitcoin mining to try their fortunes in the modern-day version of the gold rush, an e-gold rush.

A lesser development was the technology that powered bitcoin, called blockchain, had started gaining currency. Investment in blockchain start-ups doubled to $1,053 million, from $550 million in 2015 and $524 million in 2014.

A year earlier, Pokemon Go, had taken the markets by storm. As more people took to smartphones, the game found millions of users around the world. Some even crossed continents to find Pokemons that they could not have found in their own country or continent. More than its ability to showcase how big gaming was to become in coming years, Niantic—Pokemon Go—showed that Augmented Reality could be significant as well.

Companies did find other uses to AR than just gaming. They used it to showcase products, but the enthusiasm for the futuristic technologies, both AR and VR, died as years progressed. Only limited games use AR and VR interfaces. Given the prohibitive cost of devices, it will not be easy for the technology to take off. What Pokemon had done was only replicable for specific use-cases.

Blockchain did evince investor interest till 2018. Funding tripled from 2017 to $4.1 billion—the biggest jump since 2014 when start-ups garnered $357 million as compared to $97 million in the previous year—but this withered away in 2019. In the first half of the year, blockchain start-ups could only attract $783 million worth of funding, with investments slowing there is little hope it shall surpass the $4.1 billion figure.

2019 was instead the year for mobile phones. In a break from trend—companies have been introducing incremental changes (read camera improvements) for years—Samsung and Motorola introduced foldable screens. Although it’s difficult to measure the success, it will surely upend the market given the interest they have been able to generate, and how they have been able to make it possible for, at least, smartphones and tablets to achieve singularity.
2020 could mark the comeback of blockchain; AR and VR still have a long way to go. Jobs and artificial intelligence would, undoubtedly, garner more headlines, but blockchain could hit it big, along with cryptocurrencies.

For starters, Facebook would launch its currency Libra, trying to take over the finance market. Given that the company has saturated in terms of growth, it is evident that it will venture into other domains. But Facebook is not the only entity to try its hand at cryptocurrencies; many central banks and international consortiums may also be ready with their currency launches. Fortunes won’t turn too drastically for bitcoin—more governments are banning it as they believe it used for money laundering by cartels—but the coming of Facebook currency would certainly upend global finance. Imagine, over a billion users being able to transact easily using the wallet (Calibra) in a currency that Facebook wants. Many have since left Facebook’s consortium over privacy and security concerns, but if the Menlo Park headquartered social media company can convince users and government to get on board, winning back friends won’t be an issue. But not until Facebook gains user confidence, it can roll out its currency. And, that may require some give and take.

Facebook will need to share some of these gains with the people. A revenue-sharing arrangement, where the company deposits money into people’s accounts for using their data. If Facebook does dispense off a few Libra to each person, it would undoubtedly start a market. By not allowing the currency to leave its platform, and onboarding small businesses, it will be able to help money make more money. Combined with cashback and discounts, the model can work in Facebook’s favour. It would not just be a social media platform; it will be the world’s biggest bazaar. Another issue that is of paramount importance is security, and this is where blockchain gains significance.

As people use more technology, they would want secure systems. Someone using an automated home would never want anybody sitting in a remote part of the world, gaining access to their house. Besides, the situation becomes even more precarious, if that someone can access a hospital’s database and control everything that is one the cloud, even the life-saving equipment.

This is where blockchain becomes useful. Even if one can gain access to a single block, it will be impossible to hack into the entire network. So, while hackers may still be able to cause some damage, it would not turn into a catastrophe.

The technology may have gone into slumber over the last year, but it will score big in 2020. Governments may come to rely more on blockchain as they integrate public services with the internet. Hospitals are one example. Telangana has been experimenting with technology for land records; the Indian government may also do so. But more important, it can help in voting. With most countries recording low voter turnouts, blockchain can provide an easy way out. The government can empower people to vote using their phones.

Banking and insurance have more use cases for blockchain. Not only can it reduce the time for transactions, but trade finance and insurance will get more accessible with the technology. Smart contracts are one feature that will make insurance processes smoother. International transactions can become cheaper, as well. All banks will have to do is integrate one blockchain with another, or make two systems interactive.

With a host of blockchain apps available for messaging and email, consumers can benefit too. Even companies may adopt technology for shareholder voting.

What blockchain does, most of all is help developing economies better their structures. Institutions in these countries are weak, and leakages are high, blockchain can address this problem. Every data point gets recorded, and every change is marked, ensuring trust between counter-parties.

AR & VR are still far off for the world. We’d see more companies using AR & VR to push more products, but don’t expect too many changes in the technology. Not unless a Pokemon Go is hiding somewhere ready to surprise the market. Even then till the devices don’t become affordable AR or VR won’t take off.

As for twistable, foldable, wrappable and portable technologies, there is undoubtedly much more to come.

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