Technology Trend in 2021
It’s taken a long time for blockchain to shift center stage, but as people increasingly trust algorithms, which it’s based, its time has come. Decentralized finance will continue to grow over the next few years because of the increased demand for online financial products, but it will need to continually address the balance between decentralization, security, and scalability.
Increasingly, government bodies are leveraging blockchain for their activities, moving from incredulity to embracing the technology. With this, we’re going to see regulation surrounding blockchain become ever more pronounced. Our client Block. one reported this year that Google Cloud is taking steps to become a network block producer, a sign that the world’s largest companies are committed to ensuring that information on public blockchains is secure. In five years’ time, using blockchain could feel about as edgy as banking with HSBC.
Blockchain can only be updated by consensus between participants in the system, and when new data is entered, it can never be erased. The blockchain contains a true and verifiable record of each and every transaction ever made in the system. While it has great potential, blockchain technology is in its infancy and CIOs and their business counterparts should expect setbacks in deploying the technology, including the real possibility for serious bugs in the software.
For example, one of the most prevalent blockchain platforms, Ethereum, doesn’t support the use of decimal points in its script for smart (self-executing) contracts. Those coding a blockchain network would need to create a workaround.
The Linux Foundation has created tools for building out blockchain collaboration networks. And in July, the open-source developer unveiled Hyperledger Fabric 1.0, a collaboration tool for building blockchain distributed ledger business networks, such as smart contracts.
While some industry groups are working toward standardizing versions of blockchain software, there are also about 200 startups working on their own versions of the distributed ledger technology. As a result the global blockchain market size is expected to expand from USD 3.0 billion in 2020 to USD 39.7 billion by 2025, at an effective Compound Annual Growth Rate (CAGR) of 67.3% during 2020–2025.
“Expectations for 2021 are positive” “It is estimated that next year, at least 25 percent of the Forbes Global 2000 will use blockchain as a foundation for digital trust at scale.”
2. Covid-19 will further accelerate blockchain transition
We will see a reorientation of the various blockchain projects. Experts predict that 90% of blockchain projects will require replacement within a year.
That is because most are ignoring key features such as tokenization, smart contracts, and decentralized consensus. Next to that, the pandemic has caused more realistic and pragmatic approaches to blockchain initiatives specifically focused on the day-to-day business “to continue their growth path”. Blockchain projects with clear benefits are expected to do that next year at an even faster pace. There has also been an uptick in the number of companies interested in participating in networks that specifically help to address some of the supply chain issues that the pandemic has put forward.