Blockchain Field Review - What We Should Expect in 2020?

The year 2019 is coming to an end, and the blockchain hype seems to be slowly dying as well as the crypto bubble. But is it really dead or maybe now it has to offer even more than it had in 2017 when the total market capitalization of crypto was near $800 billion? In reality, it was something like a great purge for many unprofessional projects. Without investors throwing money at them, they died, like dotcom bubble projects before them. The general audience begins to understand that the blockchain technology isn't something that makes everything it's applied to revolutionary. It has its own applications, where it can shine, such as finances and supply chains, but also there can be many occasions where blockchain is totally unnecessary. For example, maybe creating a decentralized network for dentists isn’t such a good idea?

Now we can clearly see what the next year is going to be like. It’s gonna be a great demonstration of everything that matured blockchain technologies have achieved so far. Let’s start slowly. 

Since 2016, blockchain scalability is an issue that prevents global adoption of the technology. How can we take seriously a network that cannot handle even a moderately popular game? Since then, we have seen many new blockchains that call themselves “Ethereum killers”, but so far, EOS or Tron haven’t got as many developers as Ethereum did. So, the general audience waits for Ethereum scaling, and it’s very close. Currently, there are several projects that should help Ethereum scale. 

The first one is the main Ethereum 2.0 project, with Proof-of-Stake and sharding. The transition will happen presumably in the third quarter of 2020. The merging of the old chain into the new one will take some time, maybe even years, but eventually, it will become one chain. It will be a huge improvement, and the transaction speed of the network will increase to thousands of transactions per second, that means that more developers and companies will be able to launch commercial dapps on it. 

Another solution is the second layer, Plasma. Currently, the most viable project, working on Plasma, is OmiseGo, which is pretty close to launching it on the mainnet. The project went through various stages, from Pre-Alpha to Beta, undergoing code audits from Callisto, Quantstamp and Chainternals. Now almost everything is working, the integration with Ethereum is complete, and the white label wallet is already done. There are many large companies that are planning to use OmiseGo framework - Shinhan, Nomura, Burger King, blockchain startups Hoard, Cred and Brave. Plasma technology will allow anybody use blockchain network, secured by Ethereum blockchain, with almost no costs, with throughput of thousands of transactions per second. A true scaling for Ethereum, that will bring the adoption to the network. 

Another scaling project, this time for Bitcoin, is Lightning Network. In 2020, we’ll see an increased activity in the network, and the overall number of applications, using it, is also likely to increase. 

DeFi is a new paradigm, alternative to the existing financial banking system. It includes many projects, such as lending platforms, platforms for security tokens issuance, and decentralized banks. 

Among lending platforms we can name SALT, which is already fully functional now. On SALT, you can pledge your cryptocurrency and receive a loan in USD, paying a certain interest until you pay it off. It’s a great option for miners, who believe in the future growth of the market, but still need some fiat to maintain their operations. Also it’s a great option for investors, that can store their crypto while using the value of their portfolio for other goals. In addition, that’s a possibility to leverage your portfolio by taking a loan, and buying more crypto to profit twice on the growth of your assets. 

Security token issuance is the specialization of Polymath. They allow any company to register and issue special ST20 tokens on Polymesh blockchain. It’s an alternative to all existing ways of issuing and storing stocks, and in the future, the amount of tokenized assets will continue to grow, as it’s more cheap and almost absolutely secure. Such exchanges as Malta Stock Exchange already look at tokenization with interest. 

Crypto banks are one of the most numerous categories in DeFi. Some people might think that it’s better to use only the reliable wallets instead of any banks, and never touch any intermediary parties. Yes, you can store Bitcoin in your wallet, but you have nothing to worry about if you use crypto banks, as they also provide a decentralized service, that doesn’t require you to send them your crypto. One of the famous crypto banks is Bitwala, located in the European Union. It supports both BTC and ETH, and supports debit crypto cards, like an ordinary bank. 

Stablecoins are just another part of DeFi trend, but they are very important, so we’ll make them a separate section. Tether is still the king, but many other stablecoins threaten its position. TrueUSD, HUSD, DAI, USDC and such projects as Libra get more recognition, being more transparent than their USDT predecessor. Stablecoins serve as a bridge between cryptocurrencies and fiat currencies, and their role is very important in a global adoption - as not many people can handle the volatility of cryptocurrencies.

We already see such companies as Walmart and Carrefour using blockchain in their supply process. In the year 2020 we’ll see the growing demand for similar solutions. IBM is one of the leaders in this sphere with its Hyperledger solution. According to its estimates, it has already integrated Hyperledger into the business processes of more than 1,000 companies. Private blockchains are a more convenient form of the database for any large commercial company, as they combine all benefits of blockchain technology, but don’t require to share all sensitive commercial information with everybody, instead giving the option to give permissions and choose who’s able to see it. 

When it comes to blockchain and quantum computing, we can find some blockchain-related weaknesses. Blockchain works on the idea of connected nodes that can interact with each other to make critical decisions. The lack of a centralized entity opens up many possibilities. To ensure that blockchain remains secure, many protocols are implemented, including the consensus algorithm. These consensus algorithms make sure that the whole network is counterfeit-resistant.

The current generation of blockchain networks is capable of defending the 51% attack most of the time but can fail when quantum computing comes in.

Projects like QAN are working on this problem. QAN is a quantum-resistant blockchain platform powered by blockchain fintech brand Centrum Circle. QAN uses Lattice cryptography, making it resilient to quantum attacks that could become possible within the next five years, and which all major crypto networks are vulnerable to. The platform also aims at minimizing its energy consumption by using their unique Proof-of-Randomness consensus algorithm.

Overall, the year 2020 will be more interesting and less depressing than 2019. It’s possible that the bear trend on the crypto market will end, igniting the interest of the large audience again. That will bring more adoption to the blockchain technology, which is now a lot more mature than it was in 2016-2017. DeFi, private blockchains, stablecoins, and scaling - those will be the main topics of the next year. If the global crisis won’t crash all market, the next year is going to be exciting. 

The author is not associated with any of the projects mentioned.