Emerging Blockchain Trends For 2020
Anant Kadiyala is Senior Director of Transformational Technologies at Oracle, where he leads business innovation and enterprise solutions with blockchain, ML/AI, IoT, and VR/AR.
In a typical B2B setting business participants spend significant time and effort for transaction reconciliations, settlements, tracking, compliance, and closing of books. As we transition from the industrial age to the intelligence age, we need mechanisms that enable new models for business coordination, transactions and trust scaling. This is why blockchain is important and relevant in the enterprise space.
Enterprise blockchain platforms have matured rapidly in recent years and today they offer many exciting features. Let’s explore what 2020 might have in store and how companies might harness these capabilities.
1. Automation of business workflows
Streamlining cross-company workflows for business operations is the top use case for enterprise blockchain today. In 2018 and 2019 companies adopted blockchain for supply chain operations such as product journey tracking, raw material provenance, recall traceability, validating product authenticity, proving compliance, invoice factoring, and trade finance.
“Over the next 5-10 years, blockchain is on the path to be an important infrastructure layer, much like internet is today”
In 2020 companies will continue to adopt blockchain for use cases where business partners have to coordinate and transact, despite varying degrees of trust relationship among them. Therefore, procurement, contract, warranty, and credentials management are other good targets.
2. Privacy Tech
Strong security, privacy and confidentiality are essential for business transactions. As technology and business models evolve, and as the pace of business increases, we need better ways to handle the nuances of privacy, confidentiality, and security. Recent developments in cryptography such as zero-knowledge proofs (ZKP), differential privacy, multi-party computation (MPC), trusted execution environments (TEE) are making their way into blockchain.
In 2020 we can expect major blockchain platforms to offer and enhance these capabilities, especially ZKP.
3. Tokenization of assets in the enterprise
Tokens are the digital representation of an underlying asset, physical or digital. Blockchain based tokens enable a programmable, efficient way to manage the ownership and transfer rights of the underlying asset. This enables better liquidity, asset utilization, and capital allocation.
A few companies in solar and consumer goods verticals are experimenting with tokenization today. In 2020 we will see other verticals also innovating in this space.
4. User-Centric Identity
As businesses adopt new technologies, evolve business models, and go through M&A, the current identity and access solutions begin to fall short. Emerging models in the ‘future of workforce’ are pushing identity management to transform from company-centric to individual-centric paradigms.
Decentralized identity is a blockchain based way of managing the user identity and enterprise access. With enabling concepts like verified credentials, digital wallets and others, users are expected to have much lower friction for context-based usage, portability, and privacy; while making it difficult for hackers to steal information.
Industry verticals like healthcare, education, public sector and retail are ripe for taking advantages of such solutions, and in 2020 we will see these concepts gaining momentum.
5. Stable coins, DeFi and CBDC
Cryptocurrencies are volatile assets. This makes them less attractive as a medium of exchange. However, cryptocurrencies espouse many features that fiat currencies do not. Stable coins address this gap. This is a nascent space with most use cases targeting user-to-user transactions. The new wave of solutions based on stable coins and cryptocurrencies is called as Decentralized Finance (DeFi). Encouraged by the innovation in this space, many countries around the world are considering the launch of respective central bank digital currencies (CBDC).
This is a fast moving space and it is very likely that a few countries will launch CBDCs in 2020. Once that happens, it would encourage enterprises to experiment with concepts from cryptocurrencies and DeFi for business innovation.
6. Digital Wallets
Today’s digital wallets mostly handle transactions with fiat currencies. Some wallets hold other assets like boarding passes and tickets. Future digital wallets though, will be massive platforms that offer very sophisticated functionality across devices to manage contracts, cryptocurrencies, fiat currencies, documents, art, tickets, and many other assets. They would also come with workflows for key recovery, exception handling, joint ownership, etc. In essence, digital wallets will be to blockchain what the browser is to the internet. By abstracting away the complexity, digital wallets will enable new kinds of transactions for companies and individuals that were not possible before.
The enterprise digital wallet market is just starting. In 2020 we will see the rise of both custodial and noncustodial wallets.
7. Enterprise Data Markets
How might a researcher access DNA data while preserving patient privacy? How might a business monetize their data without the risk of data theft? Blockchain based data markets enable these kinds of solutions. By building ‘control valves’ that make the right data available for the right context for the right purpose to the right user, information can be put to good use in a safe and secure way.
The products in the market today are early and evolving. Except in a few niche areas, it is too early for companies to adopt in 2020.
We’re Just getting Started
Blockchain is a powerful paradigm that companies have just started to explore. Over the next 5-10 years, blockchain is on the path to be an important infrastructure layer, much like internet is today. Blockchain is valuable today, but the best is yet to come!