What will be the phenomena determined by the application of the blockchain? Here are what developments to expect this year according to IBM researchers
In 2019 the blockchain reached numerous organizations and today the already active blockchain networks are transforming the world of industry. The IBM Blockchain team, i.e. researchers and technology experts who work closely with customers active in this area, has identified the 5 key trends that it expects to become reality during 2020.
The data below is contained in the 2019 Blockchain Economy Study of the IBM Institute of Business Value -IBV, conducted on 1001 respondents.
1 - The rise of pragmatic governance models. With a growing adoption of blockchain on the horizon, governance will become a key factor. However, creating a governance model that all participants agree on can be a challenge. In fact, 41% of organizations believe that the lack of uniform governance standards between partner organizations is the most significant challenge to advance their blockchain proof of concept (PoC) or mimimal viable ecosystem (MVE). In 2020, we will begin to see the adoption of new governance models that allow large and diverse associations to approach decision-making processes, authorization systems and even payments more efficiently. These models will help standardize information from different sources and collect new and more robust data sets. In the next few years, 68% of CTOs and CIOs even expect scalable governance models for interactions between multiple blockchain networks to become key properties of their organization's blockchain environment. To reach a group decision, however, it is necessary that there is a desire for cooperation and collaboration between all members of the group, especially starting from the key decision makers who contribute decisively to the success of the network. To do this, encouraging participation can be a starting point: members of existing networks this year could push strategic players in their sector to join the association by using economic incentives.
2 - Interconnectivity is increasingly reality. Blockchain success is based on collaboration. However, with the potential of tens, hundreds or even thousands of participants in a network, it is unthinkable to expect that we will make use of the same supplier or choose to adopt a new processing environment to take advantage of a single application; even if this were the case, the essential need for companies to be able to share data without interference or interruptions would remain. Achieving full interconnectivity may take many years, and the very definition of interoperability can differ greatly from one organization to another. Despite this, today 83% of companies believe that the guarantee of governance and standards that allow interconnection and interoperability between blockchain networks, whether authorized or not, represents a crucial factor, even essential for a fifth of respondents, to join a blockchain network involving an entire business sector. Although there is still a lot of work to be done on this front, it is plausible to expect that every single member of the network will highlight the need for common guidelines on the integration between different protocols.
3 - The blockchain will be increasingly integrated with complementary technologies to generate new benefits. Today blockchain solutions are collecting millions of data and permeating many sectors with reflections on daily life, therefore new features will be introduced to support this technology: Internet of Things, 5G, Artificial Intelligence and Edge Computing are just some of the exponential technologies that will be integrated to generate value-added services for each member of the networks. The blockchain solutions that best match IoT and AI, compared to other emerging technologies, will be powerful accelerators in future markets that already use the blockchain. The combination of technologies complementary to the blockchain will allow to obtain results never achieved. The greater reliability of the blockchain data will represent a source of information that will allow to strengthen the underlying algorithms. The blockchain will help protect data and control every step of the decision-making process, and will represent a reliable source for companies, which will thus be able to obtain more detailed and secure information.
4 - Validation tools will begin to counter fraudulent data sources. According to the research, 88% of institutions believe that guaranteeing standards for communicating data to and from blockchain networks is an important factor in joining a reference network for an entire sector. As a result, trust and transparency become essential. But, in a world where data is collected and transferred quickly, inconsistencies are inevitable, both for human error and for ulterior motives. With the need for greater data protection mechanisms, this year, blockchain solutions will implement the joint use of validation tools and crypto-anchors, beacons and IoT, mechanisms that connect digital resources to the physical world by incorporating data from external sources in networks. This will increase trust in the blockchain and reduce the need for human intervention, often subject to errors and fraud.
5 - Central banks will expand into Central Bank Digital Currencies sales and distribution centers. Tokens, digital currencies and central bank-backed digital currencies (CBDC) have been a topic of growing interest in capital markets. Tokenizing assets and securities, converting them into digital tokens, and then negotiating, exchanging and regulating the custody of these digital assets, are activities that are transforming the efficiency, security and productivity of the capital markets. In fact, 58% of the organizations surveyed agree that new sources of revenue can be obtained by tokenizing the assets traded in a blockchain-enabled market. In addition, new organizations were also founded and new regulations entered into which facilitate the creation, management, negotiation and reaching of an agreement on these tokens and digital currencies. What changes can we see in this field in 2020? If we consider that Asia, the Middle East and the Caribbean are starting to experience CBDC in real time, there is no doubt that these currencies will continue to increase in importance and to redefine payments in different ways. First, a growing expansion is expected in the sale of wholesale CDBC, while the first CBDC experiments will occur at retail. In addition, the tokenization and digitization of other types of assets and securities, such as central bonds for treasury bonds, will attract more and more interest. Imagining the evolution of this innovative technology is undoubtedly interesting but it is necessary to consider that the market is continually influenced by ever new dynamics that could challenge trends, generating extremely different scenarios from those that can be assumed today. In fact, many other trends are emerging such as digital identity for the blockchain. However, one thing is certain: the blockchain will continue to intertwine with every aspect of the world as we know it today, promoting evolution and progress.