Future Of Blockchain Technology: What To Expect
At Ideaction we always keep an eye on the current technology trends in order to determine which direction to focus on next. In the last couple of years, the technology trend has been focusing on one word – blockchain. 2017 seemed to be a breakthrough year for the blockchain technology. However, we can see now that blockchain is far from mass-adoption. Let’s take a look at what the future of blockchain technology holds.
Major Blockchain Milestones So Far
Even though blockchain is far from being mainstream, the technology has nevertheless went through many major milestones. Bitcoin, the most well-known cryptocurrency that uses blockchain technology and put it on the radars, surged from less than $20 in 2013 to $20,000 in December 2017. However, since then the cryptocurrency has declined to around $3,500.
There were thousands of blockchain projects launched, although most of them flopped. At the same time, some notable projects such as Ethereum, and Ripple enjoyed some success. Moreover, they helped blockchain evolve past cryptocurrencies to some real-world applications. For example, a number of banks adopted Ripple as a way to transfer money more efficiently.
Large tech companies have also validated blockchain technology either through blockchain-based projects, or by providing solutions to speed up the adoption. International Business Machines has partnered with several companies to develop solutions for the shipment and supply chain segments. Microsoft introduced Ethereum Blockchain as a Service, a cloud-based environment to develop smart contracts.
The list of accomplishments and milestones that blockchain technology has enjoyed over the past years can go on and on. This alone is enough to make us excited about what we can expect from blockchain technology in the future.
Will DAG Replace Blockchain?
DAG stands for Directed Acyclic Graph and it’s a new branch of distributed ledger technology of which blockchain is also a part of. Blockchain gets is name from the way data is stored – in a chain of blocks. A Directed Acyclic Graph stores data in a non-linear fashion. This allows for faster processing since new data can be added right away instead of having to wait its turn, as is the case for blockchain.
Because it solves some major issues of blockchain technology, such as slow processing time and high processing costs, some experts ventured the opinion that DAG might replace blockchain technology at some point. However it’s unlikely to be the case. DAG has its benefits in certain areas, such as microtransactions. However, the only well-known DAG application in existence is IOTA. On the other hand, blockchain has proven itself more reliable, more secure, and more popular. Therefore, people will keep using blockchain for more sensitive data such as large transfers of money, contract signing, and property rights transfers.
Will Cryptocurrencies Finally Replace Money?
While we may speculate about the future of blockchain technology, one thing that we can be certain about is that cryptocurrencies will not replace money. The ascension of Bitcoin’s price was fueled by convictions that it’s going to be widely adopted. Currently, there are hundreds of merchants around the world that still accept Bitcoin as a form of payment. Some local authorities even allow paying for services in Bitcoin or other cryptocurrencies.
However, this is only because there are a limited number of people using them. Once the system goes mainstream, it will simply break down. For example, currently it takes around an hour for an average Bitcoin transaction to be processed. If there are millions of transactions, it would take days or even weeks to process them.
In addition, it’s highly unlikely that blockchain-based cryptocurrencies will replace fiat money, because money are backed by governments. Therefore, you can trust that a $10 bill will still be worth $10 tomorrow because the US economy is pretty strong. In the case of a cryptocurrency that doesn’t have an overseeing authority, most people simply won’t trust it.
Which Industries Will Blockchain Technology Disrupt In The Future?
In 2017, when the hype around blockchain was at its peak, many experts called it the biggest disruptor since the Internet. More specifically, blockchain could revolutionize the way we do many things. Similarly, thousands of startups emerged claiming to develop a new solution for a particular industry using blockchain technology.
However, as the noise died down, it’s clear that blockchain, while still being a major disruptor, will not affect everything around us. Nevertheless, what we can expect from blockchain technology in the future is that it will dominate a number of industries.
Industries that likely will switch completely to blockchain are those that involve moving around many parts. For example, shipping requires a lot of effort to ensure that something gets delivered on time and to the right place. Because items pass through many points along their journey, shipping is more prone to human error. Therefore, blockchain can significantly reduce the involvement of humans in the shipping process. That’s why shipping is one industry where we can expect blockchain technology to be widely present in the near future.
Supply chain also requires a lot of effort to work efficiently and blockchain can help to address many of its needs. A car or even a bar of chocolate is the result of a long journey that components make before their assembly into a single product. Blockchain allows tracking each component individually back to its origin.
Government and DRM
Other industries where we will see a commercial adoption of blockchain technology are those related to record-keeping. Governments deal with tons of data for various purposes. This data is vulnerable to theft. In addition, often records get lost or are not complete. Blockchain’s properties make it perfect for government use.
Another area is digital rights management (DRM). Blockchain can ensure respect of copyright laws and the owners’ rights.
What Blockchain Has To Change To Become Mass-Adopted
Even though blockchain technology has many attractive features, it also has some limits that prevent it from reaching its true potential. Most blockchain solutions currently present don’t have a user-friendly interface. Therefore, they are only accessible for people with great technical skills. Moreover, blockchain technology is still struggling with a high volume of transactions. Until these issues are fixed, we are unlikely to see a commercial adoption of blockchain.
In conclusion, what we can expect from blockchain technology in the future is for it to be there. In the next 5-10 years, the technology will continue t evolve. At the same time, industries that require it the most will continue to implement blockchain-based solutions. Within 10-20 years, blockchain will likely become an important part of our lives and will play an essential role in many of our day-to-day activities.