2019 Blockchain Trends to Keep an Eye Out For
Blockchain has been the hottest topic in the technology world for a while now. But with a fairly dampening cryptocurrency hype, it’s easy to lose sight of the exact extent of what this burgeoning technology has to offer.
So we rounded up some of the hottest trends that have conspicuously stood out and are set to dominate the blockchain technology space in 2019.
Preference for Alternative Asset Classes
While the blockchain itself is largely accepted as a powerful technology, investors widely regard investing in cryptocurrencies themselves as a difficult process – at least for an average investor. The process generally involves several stages that take effort and time, not to mention the several risks that the investor faces, such as multiple accounts and complicated validation protocols.
Now, with more and more traditional players such as Swiss Stock Exchange, London Stock Exchange, and Nasdaq developing their respective digital asset platforms on blockchain, and attracting a growing body of interest in these asset classes, we are going to see a lot of investors shift from crypto to digital assets investing by the time the market infrastructure is in place later on in 2019.
The huge drop in prices of cryptocurrencies towards the end of 2018 is playing a significant part in this shift.
Blockchain As A Service (BaaS)
The recent few years have seen tech giants like Microsoft, IBM, Amazon, HPE, Oracle, and SAP become more actively involved in pushing Blockchain-as-as-Service, or BaaS offerings. These are cloud-based offerings that allow businesses to build their own products powered by blockchain without having to personally create, manage and maintain their own blockchain solutions.
With BaaS, customers can integrate blockchain features with their existing cloud services and enterprise software and build things like smart contracts and apps without having to set up, manage and/or execute their own blockchain infrastructure – which is not always entirely feasible.
With blockchain revenue expected to exceed US$10.6 billion by 2023, we expect 2019 to see major increases in interest and investment in BaaS. More and more companies will want to jump aboard the blockchain bandwagon without having to put up with the hefty initial investment, and blockchain as a service will come in as the enabling alternative.
Security Tokens Being a Hype
When Initial Coin Offerings (ICOs) first hit the crypto world, they instantly became a hype but then, being largely unregulated, a lot of scams entered the space in the name of ICOs. This made it hard for investors to know where to put their money safely without risking a total loss.
STOs, or Security Token Offerings, have come in as the regulated equivalent of ICOs, leading to the restoration of investor trust in this space.
STOs redefine the entire process through which companies raise money, and help protect the rights of investors. They generally sort out some of the fundamental security issues associated with the traditional ICOs.
Given the sweeping decline in investment in Initial Coin Offerings by the last quarter of 2018 and the steady growth of blockchain technology overall, we can confidently expect STO investment to grow significantly in 2019.
Hybrid Blockchains Becoming Mainstream
Currently, there are three main classifications of blockchain networks — private blockchains (permissioned, so no one can join unless invited by network administrators), public blockchains (have no access restrictions), and consortium blockchains (permissioned, but controlled by multiple companies that each operate a node on the network instead of just a single organization).
A hybrid blockchain is a recent trend, one that attempts to use the best of both private and public blockchain solutions. So, on a hybrid blockchain network, the network administrators provide the functionality and best features of both private and public blockchain solutions, in essence, attempting to cancel the weaknesses of each category.
This makes the most sense to organizations that need to interact with people in a public fashion while retaining their security and network control, which isn’t feasible in a public blockchain. A hybrid blockchain, therefore, provides these organizations with the best of both worlds.
As a recent trend that is just taking shape, the growth of hybrid blockchains is going to gain even more momentum in 2019.
Blockchain Regulation, with China at the Leading Front
There is no denying that tremendous amounts of capital are flowing through the crypto industry and the wider blockchain platform. This is attracting quite a substantive amount of attention from many prospective players.
As traditional securities and mainstream economies move to inject capital into the blockchain space, intergovernmental bodies and global governments are increasingly feeling the need to introduce stricter regulations, especially against the backdrop of the many recent stories of fraudulent behavior.
Until recently, blockchain was characterized with legal ambiguity allowing startups to jump in without much of a bottleneck. But that is fast changing, especially in China where the decision to regulate blockchain and crypto business is getting more solid by the day.
Already, the Cyberspace Administration of China (CAC) has rolled out a number of guidelines and pieces of legislations to govern the operations of blockchain companies and startups within the country.
As these CAC rules come into effect beginning February 19, they are likely to give other regulators in regions other than China the impetus to fast-track the implementation of guidelines for blockchain-based operations.
There is so much volatility that comes with businesses in an unregulated space. With clearer and more solid regulations, however, blockchain technology may see a more definite direction with increased investor confidence leading to more money being channeled into blockchain investments through 2019 and beyond.
A Good Year for Blockchain
Whichever way you look at it, these changes that are coming into effect in 2019 hold great promise to blockchain companies and related businesses, making it a potentially good year for the industry. Added to the fact that technologies like the internet of things (IoT), machine learning and artificial intelligence that blockchain integrates with, and that heavily determine its adoption are growing rapidly, there’s just so much underway and a lot to expect for blockchain this year.