Developments in Blockchain in 2021
As March 2021 opens its chapter, we are (albeit cautiously) sighing in relief as the COVID-19 situation shows signs of improvements. Rather than put a damper on the development of blockchain, COVID-19 has intensified and stimulated new trends within the space. What developments can we expect in the blockchain and cryptocurrency space over the next year?
1, Long-term strategic plans will be put on the back burner
Experimental R&D projects of a strategic nature will have to be put on hold. It has been difficult to gather finances for these purely experimental R&D projects are becoming harder to obtain in the backdrop of COVID.
2, Organizations are compelled to accelerate digital transformation
Digital transformation is critical to survival. Businesses are set to be revolutionized by blockchain functionalities and therefore, a lot of industries are betting big on blockchain to be at the forefront of this transformation.
3, Around 1/3rd of projects are expected to make it into production.
As several blockchain projects switch to the production stage, there is an increasing sense of pragmatism and realism being demonstrated owing to the maturity of the technology.
Owing to the impact of the COVID-19 pandemic, 30% of international projects will make it into production. Production use cases are set to accelerate with double digit growth percentages throughout 2021, as several key trends drive the growth of blockchain, as explained in this blog.
4, Marked growth in blockchain market
Blockchain made significant inroads during the pandemic. Organizations wanted increasing blockchain integration to drive their business functions and processes. The blockchain industry is expected to witness a compound annual growth rate (CAGR) of 67.3% during 2020—2025.
5, The pandemic will drive blockchain development
The sense of urgency caused by the pandemic has thrust upon the blockchain scene more realistic and pragmatic initiatives with a focus on day-to-day business operations. An increasing number of organizations are taking part in networks that specifically help to address some of the supply chain issues that the pandemic has presented.
6, Permissioned, or private blockchains will dominate the landscape.
Private blockchains will be the dominating contributor to the progression of the blockchain market. Analysts predict that they will retain the largest market share in 2021. Enterprise blockchain solutions are tailored according to the requirements and specifications of a corporate entity. Private blockchain, therefore, gives more avenues to firms with regards to using blockchain tech for business-to-business use case. At long last, permissioned blockchains are expected to climb out of the ‘trough of disillusionment’.
7, Mature crypto and central bank digital currencies
Bitcoin’s unshakeable position right now is good news all around for permissioned blockchain. Mainstream investors are currently backing bitcoin, and is also a growing piece of MicroStrategy’s corporate balance sheet.
Large mainstream bitcoin holdings will drive innovation in decentralized finance applications where crypto such as bitcoin can be used as collateral over being idle, as a storehouse of value.
8, Truth in supply chain – due to ESG (Environmental, Social, Governance) goals
We are witnessing various various supply chain use cases with potential that work towards ESG goals. ESG goals enable potential investors to ascertain if a firm is conscious of its environment, whether it is socially responsible, and if its governance is ethical or not. Being data driven, the more depth and authenticity that data has to it, the more reliable are the ESG criteria.
9, Blockchain Middleware abstraction layers
Enterprise adoption of blockchain is a tough sell. There are several decisions to be made – choice of platform, apt environment for developing smart contracts, apps to develop dapps, identifying how they will interoperate across the varying range of blockchain platforms, how they will interface with legacy setups, and interact with other participants on the blockchain network when there is a clear dearth of data standards.
Various tech options are on the horizon, and are gaining a foothold in the market. They have been tagged as blockchain abstraction middleware solutions that safeguard enterprise users from the backend technical complications. Trusted integration brokers and Blockchain abstraction platforms are the two categories under which these solutions fall under. chain.link is an example of the former, and solutions from Copperwire and Settlemint are examples of the latter.
The COVID-19 has created a revolution in our lives, in how we work and play. With the ever increasing number of digital transactions, blockchain being one of them, the issue of trust comes into play. Keeping this in mind, establishing, building, and maintaining trust between two individuals becomes increasingly valued.
Blockchain is a significant lynchpin in fostering trust in our increasingly digital, and connected world. This is backed up by the numbers – investment in the technology is projected to reach US$15.9 billion in 2023, demonstrating a tenfold growth over the numbers seen in 2018.
Trust continues to be a prevailing factor surrounding the proliferation of blockchain. Countries like China and India have consumers who place a high value on the parameter of trust. Backed by the various developments in the technology, blockchain will play a significant role in improving trust in a number of important segments.