Many people discuss the high potential and the revolution in blockchain technology. But only this year, the concept began to attract the public attention.
In the financial sphere, everybody talks about encrypted databases. Being the first tangible blockchain example, bitcoin contributed to its value in many ways. In the first half of 2017, financial startups that use this technology attracted more than $240 million. Blockchain started to penetrate into other sectors of the economy. That’s why this trend is likely to continue in 2018.
Here are five main blockchain predictions for the next year.
1. The use of the blockchain beyond finances
The blockchain impact on the financial sector is visible. However, any industry or organization can benefit from new technologies if it is necessary to register and monitor operations. IDC Health Insights forecasts that 20% of healthcare companies will have ready-made prototypes on the blockchain by 2020. Specialists expect a considerable progress in this direction in 2018.
Staff services use the blockchain platforms for the qualification tests. They simplify the selection of candidates and ensure that they have appropriate experience.
The efficiency of legal work will also increase thanks to the use of distributed databases. Next year we should expect the emergence of such innovations in the legal field.
According to forecasts of the Blockchain Research Institute based in IBM, Pepsi, and FedEx, the blockchain will become a "second generation" of the digital revolution (the first was the Internet). For example, the electronics manufacturer Foxconn plans to use the blockchain to track transactions in the supply chain.
2. Blockchain and the Internet of Things (IoT)
Combining these two technologies will significantly improve the business processes and daily life.
The blockchain and the Internet of things are fit well because of the security — encrypted and decentralized blockchain nature is ideal for monitoring the growing number of networked devices at work and home. Studies show that the computational power, consumed to generate the bitcoins, can be used to prevent smart homes from the next generation of cyber-burglars, who are ready at any time to "break in" and steal your data.
Another promising opportunity is that cryptocurrencies on the blockchain base are perfect for microtransactions between devices.
Distributed databases will be used not only for recording and analyzing operations. The machines will exchange payments when one company robots interact with other robots. IDC Health Insights forecasts that 20% of healthcare companies will have ready-made prototypes on the blockchain by 2020
3. Smart contracts
Smart contracts are also based on the blockchain technology. The idea is that contracts are executed automatically when certain conditions are met. In other words, payments, deliveries and other actions, determined by the agreement, can be performed independently from human intervention.
Smart contracts are distributed nature of blockchain for its existence. The deal is made when all the stipulated conditions are met. For example, employees can receive bonuses after the implementation of the plan.
The insurance company headed by AIG develops a system of smart contracts to oversee the creation of complicated insurance policies that require international cooperation. Most likely, the first prototypes of these methods will appear next year.
4. State cryptocurrencies
At first, the countries do not have much enthusiasm for the digital currencies, and there are reasons for it. Bitcoin was designed to avoid any centralized authorities.
Some countries (e.g., China) have responded hostile to the new technology. Beijing banned the work of the cryptocurrency exchanges on the territory of the country and warned the public about the high risk of investing in cryptocurrencies.
However, the situation can change radically in 2018. The governments can finally increase their support taking into account blockchain potential in improving the efficiency and transparency of financial and government services.
5. Blockchain projects that fail
There is no doubt the blockchain is a revolutionary technology. But it can be dangerous like all innovative ideas because many projects do not have clear objectives and detailed development plans.
It is important to remember that just like in the case of artificial intelligence and big data, blockchain technology will change the world forever, but the process will go slowly and gradually.
Today we are all accustomed to sharing information through a decentralized, interactive Internet platform. However, when it comes to sending money, we usually have to use the services of the old centralized financial institutions (banks). Methods of payments via the Internet appeared immediately at the start moment of this network, but they typically require integration with a bank account or credit card. Otherwise, we cannot use them.
Blockchain technology offers a tempting opportunity to get rid of this "extra level." It can take on three important roles traditionally played by the financial services sector: registration of transactions, proof of identity and contracts.