Winter 2019 Issue
January 3, 2019 represented 10 years since the launch of the Bitcoin blockchain. Although the blockchain and cryptocurrency space has evolved since its inception, 2018 saw some of the most drastic changes to regulations, the market, and the industry itself. In 2019, we can expect more speculation, adoption, and better functioning business applications in this rapidly shifting industry.
Here are five predictions for blockchain technology, the industry, and the market in 2019.
1. Moving from Proof-of-Technology and Proof-of-Concepts to Business Applications.
The 2017-2018 period has marked both a boom of initial coin offerings (ICOs) and a time when enterprises explored the technical viability of blockchain technology through Proof-of-Concepts (PoCs). During this time when blockchain was going through the peak of the hype cycle, many companies were looking for anything "blockchain" to build and investors were looking for anything to invest in.
Fast-forward to the end of 2018 and many of these projects did not have a functioning product, ran out of funds, and had to either return investor contributions or simply close up shop.
However, for each four out of five failed ICOs and blockchain projects, there is an example of a business or technology enhancement driven application that has provided value and usability to groups of both early adopters and newcomers. The hard work and dedication from these teams has opened up possibilities for knowledge sharing and created examples of successfully executable code.
With the foundation for functioning use-cases now starting to appear, larger organizations are able to apply their newfound understanding of blockchain and crypto to build business-value driven projects. With a myriad of existing concepts to build off of, for some implementations companies may be able to design blockchain solutions without needing to create or develop projects from scratch.
In other areas, the advancements in both the technology and an appreciation of when to use it will continue to form a stronger foundation for blockchain as it goes through what Gartner calls the "trough of disillusionment" in the first half of 2019 to pick up some steam again in the last half of 2019. As a result, while the activity may seem slower, the quality of the projects will be far better than what we've seen to date.
2. Solving Usability Gaps
Even though blockchain technology has come a long way in terms of being able to meet the needs of users, there are still some solutions that leave a lot to be desired. Scaling, interoperability, and user experience are some of the major hurdles that have yet to be overcome during blockchain’s growth spurt.
However, 2019 should be the year that we truly focus on what is needed to increase adoption and usability. As an example, Ethereum is already working on solutions for ease of use, developer acquisition, and improving scalability. Keep an eye out for development teams looking to enhance protocols to meet the needs of businesses, both small and large.
3. Incorporating Tokens and Tokenomics
Now that we’ve overcome some of the knowledge gap when it comes to the benefits and use cases for blockchain technology, businesses can finally begin to incorporate one of the strongest, complimentary tools to blockchain technology, namely "tokens."
Until now, there has been a “blockchain, not bitcoin” attitude towards tokenization, brought on mostly by uncertainty surrounding regulations and to some degree – a demonetization of all things crypto in many corporate cultures. As a result, even using tokens to provide incentives to participants was simply avoided.
This greatly limited both the business value of blockchain and the attractiveness of projects for participants. In 2019, I expect to see an increase in more meaningful deliberation around governance and business models that explore the utilization of tokens, resulting in new revenue generating business models. One must understand that the true value of blockchain implementation comes from shared networks. While many blockchain consortia have gained traction, their models have generally avoided cryptocurrencies and tokens almost entirely.
4. Further Evolving Standards
Blockchain technology and cryptocurrencies are not going anywhere any time soon. As a result, in 2019, regulators globally will have their work cut out for them in continuing to evolve and adapt to the emerging elements of crypto. The popularity of STOs, a regulated token sale approved by security commissions, began around last summer and has continued to grow ever since.
The supposedly better "regulatory compliant" alternative to ICOs are popping up on crypto exchanges as well as traditional ones, though their regulatory landscape is not fully outlined as of yet. There is no easy way to fit the advances of blockchain tech into the previously generated laws of its predecessors, but this needs to be a focus in 2019.
5. Market Recovery
Of course, there are no guarantees here – the markets are most likely to continue their roller coaster of upward and downward pressure throughout 2019. On the other hand, for the market to recover from its current $135 billion market cap (down from $590 this time last year) several things will need to happen.
A user’s ability to analyze and trade in crypto markets needs to improve; the process today is cumbersome and time consuming. Also, a better-defined regulatory environment and more crypto-friendly environment from financial institutions regarding the space would help with global acceptance from businesses. Lastly, a continued clampdown on the fraudulent projects that have riddled the space will encourage investment while reducing volatility and risk.
As long as your ideation and development projects consider the future of blockchain and cryptocurrencies in a business setting, you’re already starting off on the right foot. However, if you find navigating this industry particularly cumbersome, know that you're not alone.
Want to learn more about blockchain? Participate in workshops available through TransformationWorx. The blockchain training available includes courses, in partnership with the CIO Association of Canada and CMC-Ontario, that lead you to obtaining the CIO Certified Blockchain Professional Designation. To learn more, visit Transformationworx.com or contact Dawood at firstname.lastname@example.org.
Dawood Khan is a Partner at RedMobile Consulting and Founder of TransformationWorx Inc. RedMobile Consulting is an innovative consultancy that is a trusted advisor to the world's leading public and private sector organizations. TransformationWorx is a startup focused on organizational resource capability and professional development in high-demand areas of emerging tech. TransformationWorx has partnered with the CIO Association of Canada to offer the “CIO Certified Professional” designation training in Blockchain and Digital Transformation. The program has a leading faculty of industry experts and a cross-sector Board of Advisors representing C-level executives from leading organizations including the TMX Group (TSX, TSE), Scotiabank, P&G, and IBM.
Mr. Khan has been providing Management, Innovation and Technology consulting services and advising executives and business leaders for over 23 years. He is an industry expert in business and digital transformation, and use of smart, emerging and legacy technologies to innovatively meet business goals. He has worked with clients on developing mainstream innovation focused strategies, plans, business cases, get funding for capital projects, and develop technology investment and ROI assessments for clients in several different sectors including municipalities, retail, financial institutions, public safety, and telecom carriers.