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American market research firm Forrester recently released its blockchain predictions for 2021. The report reveals interesting findings, noting that 2020 was an important year for growth in the blockchain technology and corporate distributed ledger industry.
Martha Bennet, Forrester’s principal analyst and co-author of the report, told Cointelegraph that the company’s blockchain predictions are based on turning points that show definite changes rather than continuing trends. For example, the report predicts that 30% of global projects will go into production next year. This is partly due to the impact of the COVID-19 pandemic.
According to Bennet, many of the blockchain-based systems that are active today share a common factor: less time spent resolving discrepancies. In some cases, this could even be instantaneous. Bennet noted that this common factor applies to supply chain use cases and financial services:
“It’s not just about needing fewer people to do certain tasks; it is also about shortening the time spent and freeing up liquidity. A key point is that it is possible to make it happen today, in the context of existing processes and operating models. “
Development “takes time”
While this may be, Bennet shared that longer-term strategic projects in financial services tend to revolve around potential changes in market structure and operating models. Many of these cases also require regulatory adjustments. “This takes time, resources and commitment. This is the main reason why COVID-related volatility and uncertainty has led many banks to withdraw from some of those longer-term DLT-related projects for the time being, ”Bennet said.
The report also says that nearly all initiatives set to move from pilot to production next year will run on enterprise blockchain platforms using the cloud. These will most likely include solutions from Alibaba, Huawei, IBM, Microsoft, OneConnect, and Oracle.
Allistair Rennie, general manager of IBM Blockchain, told Cointelegraph that predicting 30% of enterprise blockchain projects will go into production next year is consistent with what IBM has seen with clients so far:
“With the pandemic’s increased pressure on supply chains, customers are discovering that there is a desperate need to accelerate their digital transformation to emerge stronger than before. We are seeing both expansions of existing and new blockchain projects. The most successful of these are those that are backed up by solid business use cases and have clearly defined value to add to the business. “
The most critical technical prediction: zero-knowledge evidence
From a technical standpoint, Bennet said the most critical prediction listed in the report is the growing need for zero-knowledge evidence. “ZKPs are needed due to the difficulties in maintaining confidentiality currently holding back projects,” he said. The report further outlines the problem that the ZKPs could solve:
“For companies that don’t want to rely on established encryption techniques, the only options were to keep only the hashes in the chain or use constructs like selective replication or private data collection. In many cases, even existing techniques do not address the exposure problems arising from metadata. “
However, much progress has recently been made with regard to ZKPs. For example, a ZKP project was developed by the Big Four Ernst & Young company. Known as “Nightfall”, this is privacy software that will allow blockchain-based private transactions using ZKP. Paul Brody, global blockchain manager at Ernst & Young, told Cointelegraph that the company’s biggest priority in the coming year is to make Nightfall and ZKP easier for developers to use:
“The biggest challenge in using and implementing ZKPs is that they are much more complex than coding a smart contract with no privacy. I would compare it to adding SSL and encryption to web pages in the early days – it’s not something most people learn about when learning Solidity development, and right now it’s not as easy as it could be to implement. “
Brody also shared that work on Nightfall focuses on increasing the level of privacy for transactions by hiding metadata that could be inferred from analyzing network activity. And while the product currently supports regulatory-compliant private transfers and payments, Brody said the company wants to expand that by creating new privacy tools. “If we do our job right, people will move from developing DApps (decentralized applications) to developing ZApps (zero-knowledge applications),” he said.
Related: zero-knowledge evidence, explained
Additionally, IBM’s blockchain platform uses ZKP to preserve data privacy. Ramesh Gopinath, vice president of blockchain solutions at IBM, told Cointelegraph that IBM is using ZKP and related cryptographic schemes as secure multi-party computations to enable reliable, privacy-preserving analytics alongside AI data on the blockchain. The Forrester report notes that IBM will be one of the most used blockchain platforms for production-ready projects next year.
Core Protocol is another open source project that relies heavily on ZKPs to coordinate confidential workflows across enterprises. John Wolpert, a group executive for the corporate mainnet at blockchain software firm ConsenSys, explained that on the protocol, ZKPs allow companies with different record-keeping systems to be verifiably synchronized record by record without sharing sensitive information. .
DeFi predictions and public blockchains
The Forrester report also predicts that decentralized finance will have a negative impact on public blockchain adoption. According to the report, business technology leaders are now open to discussing the role of public blockchains. Unfortunately, the rise of DeFi in 2020 has led to questionable activity on public networks like Ethereum. “This has re-associated public blockchains with Wild West cryptocurrency and will continue to alienate compliance and risk decision makers,” the report said.
Kyle Thomas, CEO of Provide, a corporate blockchain provider working with SAP and Coke One North America, asks to be different, telling Cointelegraph that organizations will soon see public blockchains the same way as the internet: “A lot of mindshare is up for grabs as “Enterprise DeFi” becomes more and more a reality with each passing day. “
Echoing Thomas, Kevin Feng, PwC’s cybersecurity expert and former chief operating officer at corporate blockchain firm VeChain, told Cointelegraph that while the DeFi space may resemble the initial coin offering frenzy of 2017, it is different in how much DeFi illustrates the power of smart contracts for financial services.
As such, Feng said the DeFi space is likely to make businesses wary of public blockchains in the short term, but as the space matures, public blockchains will prove better for financial use cases: “If we look at the DeFi from another angle shows how the blockchain could be used for financial use cases, which is the missing piece for enterprise blockchain use cases. “
