In 2017, blockchain technology was a revolution that was supposed to break the global financial system. In 2018, it was a disappointment. In 2019, it will begin to become commonplace.
Some cryptocurrencies are falling more than 90% from their peak at the end of 2017, but the underlying technology is not at all out. Although they are still new to many people, blockchains have a decade (with precursor technologies that are even older) and the crypto world has recovered from huge price declines (in percentage terms) earlier. Many of the developers who have poured into space in 2017 are still working on it; Innovative sound projects are still alive and even close to bear fruit. And several large companies plan to launch major blockchain-based projects in 2019.
Here are three reasons why 2019 will be the year when blockchain technology will finally become normal.
Big projects from Walmart and Wall Street
Walmart has been testing a private blockchain system for years as a food supply tracker. He says he will start using the system next year and has instructed his suppliers of green leafy vegetables to join by September.
Meanwhile, on the cryptocurrency front, the Intercontinental Exchange (ICE), owner of the New York Stock Exchange and one of the most influential actors on Wall Street, plans to launch its digital stock exchange at the start of 2019. Fidelity Investments has recently created a new company called Fidelity Digital Assets.
The main thing that Fidelity brings to the table is a so-called custody service for crypto-goods. Enthusiasts of cryptocurrency have argued that big investors such as hedge funds, family offices and sovereign wealth funds want to put billions of dollars in digital assets, but they can not because there is not enough infrastructure approved by the regulator.
In the United States, for example, large investment funds are required to keep their clients' assets in individual accounts with banks or other entities – "custodians" – that can protect them from theft or fraud. Secure storage of crypto-goods is a technical challenge, however, since unlike conventional money transactions, blockchain transactions can not be canceled if they are fraudulent. Fidelity, whose solution implies a variety of sophisticated security measures, has defined this "the most pressing question without answers" for the institutions. In recent weeks, however, it has become clear that the lack of infrastructure is not the only big thing that keeps them away. Fidelity and ICE still seem to be busy even when other major Wall Street companies hesitate. But this is a crypt and things can change quickly.
Smart contracts: finally good for something in the real world
Smart contracts are pieces of code that make an agreement between two parties, such as a flight insurance policy that pays automatically if the flight is canceled. In principle, they would eliminate the need for all types of expensive intermediaries. The idea has been around since the 1990s and Ethereum was designed in 2013 specifically as a blockchain able to execute smart contracts.
However, for the automated flight insurance policy to work, a reliable source of real-time flight data, an "oracle" in industrial language, would be needed. If not, what prevents hackers from delaying fraudulent flights and requesting payments? The lack of reliable oracle technologies has so far limited the use of smart contracts.
Now that technology is improving. A startup called Chainlink has recently partnered with Cornell's academic researchers to create what defines the first "safe and proven" oracle network. " Its oracles use cryptography and a type of secure hardware called a trusted enclave to securely feed data on smart contracts. blockchain.
A practical use of smart contracts that could appear in 2019 is in legal technology. Chainlink has partnered with a project called OpenLaw, which is developing simple legal agreements based on smart-contract (for example, an agreement between a worker and a company). And OpenLaw has partnered with Rocket Lawyer, a popular online service that allows users to create their own legal documents.
The idea behind the collaboration, according to Rocket Lawyer's CEO, Charley Moore, is to use smart contracts to track the rights and obligations of legal agreements (such as a freelance contract) on the blockchain and, once the conditions of the contract are met, automate payments using cryptocurrency. Moore says the plan is to start in 2019 and that the system should be easy to use, even for people who are not familiar with cryptocurrency.
Rocket Lawyer is not alone. A startup called Monax recently launched a private beta phase for a similar sounding platform for blockchain-based legal agreements executed on a new smart-contract platform called the network of agreements. And a startup called Clause says she is working with LegalZoom to create smart contract-based legal services.
Digital currencies supported by the state
Although the oil-backed cryptocurrency supported by oil, the petro, seems to have been a scam or a flop, at least 15 central banks of countries are seriously examining the launch of national digital currencies. Even if this year will not be issued, it is expected that the discussion on them will be strengthened in 2019 as cash use continues to decline worldwide and new payment technologies, including cryptocurrencies, improve.
The head of the International Monetary Fund, Christine Lagarde, has examined the case of cryptocurrencies supported by central banks in a recent intervention. Crypto-tokens, supported by the state, he said, could reach more people and offer more security, privacy and consumer protection than private cryptocurrencies or commercial payment technologies.
A digital form of banknotes guaranteed by governments? In many ways, it is the opposite of the revolution that the original pioneers of cryptocurrency had predicted. But revolutions do not always explain the way revolutionaries had in mind.