What transformation will Blockchain bring by 2020?
Blockchain is the new electricity and the biggest invention after the emergence of the Internet. Now it is the most disruptive distributed technology, used to conduct secured transactions, carried out in a decentralized manner. Although this technology has been introduced with Bitcoin and is commonly associated with cryptocurrencies, it is currently getting more and more attention in many industry and governance sectors. Many EU Member States have launched initiatives to this end, and large IT giants already offer Blockchain solutions to customers. Here are just a few examples: IBM is developing a blockchain-based payment system, Amazon plans to include blockchain in their AWS suite of applications, and Microsoft already provides "Blockchain as a Service" on their cloud platform Azure.
Here are three main trends that experts predict for blockchain development by 2020.
Blockchain will dominate the financial sector
30% of today's blockchain developments are in the financial sector, especially due to the cryptocurrencies that have capitalized on how this technology works. Currently, 9 out of 10 bank directors have said their institutions are exploring the benefits of this technology for traditional bank operations. Blockchain technology will allow banks to reduce excessive bureaucracy, make faster transactions at lower costs, and increase security. Gartner expects the banking industry to earn more than $ 1 billion from blockchain based cryptocurrecies by 2020, while a recent PWC report predicts that 77% of financial institutions will adopt blockchain technology as part of a production system or process by 2020.
Blockchain for Governance and Public Services
In eGovernment, one of the main challenges faced by the authorities is the secure management of very large amounts of data. Blockchain can be a very effective solution in this context and can be applied to integrated health systems or electronic voting systems, thus eliminating the possibility of fraud in the system and enhancing the security of data and communications. Using a distributed, decentralized and secure network, blockchain improves security, data transparency and data history.
Among the EU Member States, Estonia has already implemented blockchain technology at government-level by developing X-Road, a decentralized information system for all citizens and residents, to which all public services in Estonia have access. Currently, X-Road is also implemented in Finland, Azerbaijan, Namibia and the Faroe Islands. Since June 2017, automatic data exchange has been implemented between Estonia and Finland, leading to the first platform in the world to automatically exchange data between countries.
According to a Gartner study, by 2022, more than one billion people will have personal data stored in blockchain systems.
In the same context, Gartner estimates that by 2022 at least 5 countries will have their own national cryptocurrency. Russian President Vladimir Putin was the first to propose "Crypto Ruble", a national cryptocurrency, and governments are expected to accept blockchain based currencies due to potential benefits for public services.
Blockchain and IoT
The main reason for integrating blockchain into IoT is security. Strong encryption techniques used in the blockchain can provide a secure and scalable framework for communication between connected IoT devices in our homes and offices. The International Data Corporation (IDC) reports that many IoT companies are considering the implementation of blockchain technology in their solutions and expect about 20% of IoT implementations to leverage blockchain services by 2019.
Although we expect the blockchain technology to revolutionize business processes in many industries in the future, its adoption requires time and effort. Blockchain will stimulate people to acquire new skills, while traditional businesses will have to completely rethink their processes. Considering that governments are starting to accept the benefits of blockchain and use them to improve financial and public services, it is very likely that by 2020 we will see more examples of successful implementation of this technology.