In the year 2018, blockchain saw its fair share of ups and downs. Not all predictions made at the start of the year came true, however, we can say for sure the early doubts pertaining to the long-term viability of this nascent technology have now finally lain to rest. We witnessed tech giants such as IBM, Oracle, and Amazon getting in on the technology, with small-scale companies not left far behind. So, in simple terms, 2018 has been the year of acceptance for blockchain. But now that we have entered 2019, will more of blockchain’s proof-of-concepts be brought to limelight, in turn, moving it into an era of mainstream acceptance and exponential growth or will only the same industries continue to utilize it?
While we can’t say with absolute certainty, if we look at the trends, it is quite evident that blockchain continues to be hailed as the disrupter of another industry or facet of our lives. With industries realizing the capabilities of blockchain, the technology continues to grow at a rapid pace. So, with a year as exciting as 2018, let’s look at what the future potentially holds for blockchain.
1. Development of security tokens
The year 2018 has been a rollercoaster ride for cryptocurrency, attaining an adequate position at the beginning, then falling below the remarkable highs we saw it achieve in 2017. Although, cryptocurrencies such as Ethereum and Bitcoin have shown a steep downfall, industry has been rife with the talk of a new trend in development which will end up revitalizing it. This new development in the cryptocurrency space is termed as security token.
The arrival of institutional investors in the market has been anticipated for a well extensive time period. With ICOs being a major player in dampening the entrance of investors that are typically accustomed to purchasing stakes in companies, 2017 didn’t see much progress of the cryptocurrency market in this area. However, with the arrival of security tokens, things are bound to look up.
Even though, primarily the use of ICOs was widespread, for institutional investors, they aren’t substantial. Since their inception, a lot of ICO scams have been brought to the limelight which have scared off a plethora of potential investors. Unlike ICOs, security tokens protect the privacy and rights of an investor, in turn regulating the whole process and reinvigorating investors’ trust in cryptocurrency.
So, what are security tokens? While, it is difficult to define security tokens in a generalized manner, let us give you a non-in-depth definition. Before we talk about security tokens, it is imperative to understand securities. Securities are any form of assets which can be traded. For example, stakes, shares, bonds, etc. In addition to that, securities can also include stocks, which are means of partially owning a company without having an actual occupancy of it. Stocks are used by establishments to raise money by enabling people to invest. These investors are further rewarded by companies in the form of dividends or interest on their investment.
So, when this whole process is carried out using a cryptographic token, it is known as ‘Security Token’.
2. Growth of crypto into an institutional asset class
Financial institutions utilizing cryptocurrency to get an edge over the market has been talk of the town, especially with the arrival of security tokens turning crypto into a powerful and regulated asset class for the investors. This opens up a lot of opportunities for well-established assets that conventionally were less liquid.
For a real-world example, consider the wonders cryptocurrency would do for SMEs and Real Estate Assets that even though offer generous and quick returns, don’t have global exposure, in turn only being valid for local investors. Establishments and government will be able to generate capital internationally, and their growth will expedite by a tenfold if not more.
3. Widespread acceptance of blockchain in Asia
Even though, events such as China putting a ban on cryptocurrency, dampening the crypto hype and extensive acceptance of blockchain have been a huge obstacle in the growth of blockchain, we have seen other Asian countries rife with the adoption of this thriving technology. Southeast Asian countries such as Thailand and Singapore have been seen taking an innovative approach towards the technology. Thailand’s government has been set out to encourage all the blockchain related initiatives and endeavors, making it the ultimate blockchain retreat for the region. The interest of South Korea has also piqued in blockchain, where they are already finishing up their blockchain powered voting system.
4. Rebranding of blockchain
Blockchain, which initially started as a means to back a decentralized payment network, in this day and age has morphed into the disrupter of industries. However, an issue raised due to the popularity of bitcoin is that new entrants in the market or non-tech-savvy individuals consider blockchain and cryptocurrency to be interchangeable terms, tainting the credibility blockchain has created for itself by confusing it with the dubious cryptocurrency. Due to this mix-up, people shirk from getting onboard with blockchain service providers and avoid blockchain as a whole.
In 2019, it is expected that blockchain hubs and experts will do a better job at branding blockchain as it is quite evident by facts that the need of it is dire.
5. Enhancement in scalability and development of UX
Through learnings and experiences, it has been realized that we don’t have the technology adequate enough for mainstream acceptance of blockchain. This revelation was disclosed when in 2017 Cryptokitties almost lead to the crash of the Ethereum network.
Scalability and UX have been huge hurdles which have led the growth of blockchain technology to crawl at a snail’s pace.
Big enterprises and backers of blockchain have realized the implications of this roadblock, so in 2019 it is quite likely that we will be exposed to solutions which will cause blockchain to become more mainstream.
While blockchain is a flourishing technology, it is still nascent in the market. So, for it to grow, there are certain improvements that need to be made. The above 5 trends are a proof that analysts and executives in this industry are moving this technology in the right direction to let it thrive.