Blockchain has gone a long way since its inception in 2008 by Satoshi Nakamoto. Originally the core component of the Bitcoin cryptocurrency, blockchain has been forecasted by experts to provide solutions in many industries, financial and non-financial alike.
The distributed ledger technology has risen from obscurity to ubiquity. Since the boom of Bitcoin in 2014, blockchain technology has generated much buzz for many reasons. One reason is the seeming endless potential applications of this technology. In fact, despite concerns and controversies over cryptocurrencies, the year 2017 still marked a special year for the blockchain, as crowdfunded blockchain-based ventures flourished via Initial Coin Offerings (ICOs).
With so much attention and investment being poured on this technology, we can expect a bright and exciting future for blockchain. But before that, we should look at the current trends in blockchain technology that can potentially shape its future.
Here are some key trends in the world of blockchain.
1. More ICOs but lower success rate
The year 2017 is a landmark year for ICOs as it raked billions for blockchain-based startups. According to analysts from IBA Group, the success of ICOs has broadened the entire digital currency ecosystem and has poured in enough capital to help blockchain technology mature significantly. Currently, numerous ICOs are being launched every day. However, as ICOs grow exponentially, the success rate has fallen and the amount raised has decreased proportionally. This is because investments are diffused among the different projects launched. Although the growth rate of ICOs seems to overwhelm available investment, continuous funding will nevertheless pave the way for the development of blockchain.
2. Increased interest in the global market
With the hype in blockchain, there is a growing interest in blockchain technology on the global market. Asia and the Middle East have shown keen interest in the potentials of blockchain. For instance, financial institutions in Japan have started studying how to incorporate blockchain technologies in their processes. Reportedly, blockchain has helped reduce same-day international remittance cost by up to 30 percent.
3. Stringent international regulations
Concerns over blockchain-based digital currencies have led some countries to enforce strict rules and regulations. China, for example, has banned ICOs, effectively shutting down Bitcoin transactions. Other countries have followed suit.
But while this is a great setback to blockchain’s progress, it has opened opportunity for new players as well as new markets. Although some markets have chosen to be more cautious, the aggressive push for blockchain technology in other regions has off-set the exclusion of other markets. In fact, 2017 was a very successful year for ICOs even in the absence of China.
Furthermore, having strict regulations is also a double-edged sword, as it makes the blockchain sector more organized and competitive. Players are challenged to make their service more transparent and secured.
4. Shift to digitization
Blockchain technology has paved the way for a massive digital transformation in the form of tokenization of physical assets, digitization of processes, automation, and codification of complex contracts. This current trend has been apparent in many industries and is seen to continue as blockchain becomes pervasive. With the benefits of digitization, more organizations and businesses will be motivated to create their own private blockchains.
5. Development in Blockchain-AI technology
Developing an artificial machine (AI) capable of performing beyond its programmed algorithm is a very elusive goal. But with the current research and developments on blockchain and AI, this long-standing quest can soon be finally realized. Blockchain can provide a massive database capacity that AI implementation needs. AI machines can utilize the network of databases for exchange of massive data. This current trend in the world of blockchain and AI is something worth watching out for.
Many tech experts predict a bright future ahead of blockchain technology. Its inherent properties of immutability, transparency, and security make blockchain a very useful technology in the digital age.
Although there are some hurdles that blockchain needs to surmount, such as regulatory conclusions, negative environmental impact and adaptability of blockchain in financial institutions, investors are still very bullish on its prospects pouring in lots of capital to the technology. In effect, this opens up lots of opportunities that attract new talents and an increased attention to it. All of these current trends create the perfect environment for development of blockchain.