The blockchain will become mainstream in 2019, and there is a lot happening in the industry to arrive at this conclusion. But to understand why this will occur, it is necessary to understand how we got here, 10 years after Satoshi Nakamoto (whoever that is) gave us this technology.
Blockchain Technology: The Journey So Far
It has not been an all-glory trip for blockchain technology, as the industry has had to undergo a painful self-cleansing process. It is the same process that some of the technology we use today has had to go through. In our recent history, we have seen the advent of several disruptive technologies which were met with initial incredulity, muted and then more populist acceptance, widespread misapplication, re-evaluation, re-assortment, institutionalized entrenchment and widespread adoption. Many of the technologies of today which have changed the way we live, work and study were introduced to the world, gained the attention of optimists and sceptics alike, and were abused or misused by people who really knew nothing about them. Some pretty bad things happened, forcing everyone to reappraise the benefits or otherwise of such technology. Finally, after a period of successful reappraisal and re-deployment in more responsible ways, such technology becomes accepted as a new way of life.
History tends to repeat itself
We saw this process with several disruptions such as cable TV, video gaming, the internet and the accompanying dot com bubble. Out of the ashes of the dot com boom and bust have risen the likes of Amazon, Google, Apple and Microsoft: companies that have become the drivers of many of the innovations we see today in information and communication technology.
Blockchain technology has also been through at least three of these phases. The world got an introduction into this technology 10 years ago through Satoshi Nakamoto’s Bitcoin. Thousands of cryptocurrencies and crypto-based products were created as a somewhat unintended consequence of the advent of this technology, leading to the creation of various crypto-based assets, initial coin offerings (ICOs), crypto hedge funds, etc. What followed can best be described as arguably the greatest bull runs of any financial assets in history in 2017. But like the dot com bust, the crash of the crypto market in 2018 became a sobering reality, as the uninformed investors got themselves burnt and began to jettison their holdings in panic after holding on for dear life for several months. Many ICOs have fallen by the wayside, and there is very negative sentiment in the cryptocurrency market at the moment.
But 2019 promises to be different, as the 2018 crypto market crash has sort of “purged” the market of the overtly optimistic gambler-investors who really did not have a clue as to what cryptos and indeed blockchain technology were all about. The crash of 2018 has also directed attention away from the cryptocurrency market and the “get rich quick” mentality that tainted it, and has brought into focus the real-life use cases of the distributed ledger technology into mainstream focus.
Blockchain tech versus cryptocurrencies
In discussing this topic, a clear distinction has to be made between blockchain technology itself on one hand, and cryptocurrencies, which are just one of several applications that can be derived from distributed ledger technology (DLT). To the layman, a mention of the blockchain evokes memories of Bitcoin and other cryptocurrencies, and the precipitous fall that occasioned that market in 2018. But blockchain technology goes way beyond cryptocurrencies. Blockchain technology has the potential to touch every facet of life as we know it, especially as many aspects of work, study and living have become heavily digitized and data-centric.
Why Blockchain Will Become Mainstream
2018 has forced major stakeholders to re-assess blockchain technology and where efforts at utilizing the benefits therein should be directed. Several governments are now taking the lead to isolate and separate blockchain technology as a whole, from the “madness” of cryptocurrency trading. Some governments that are notoriously opposed to anything cryptocurrencies are surprisingly pushing hard for blockchain utilization. China is one such country which hates cryptocurrencies but loves the blockchain.
Governments and private companies are gradually seeing the benefits of emergent technologies such as artificial intelligence and the blockchain, and are gradually testing and deploying various blockchain-based solutions to problems in government administration and industry in general. Now that the blockchain ecosystem has undergone a period of purging and self-cleansing, there is a great chance for blockchain technology to go mainstream in 2019.
Here are a few reasons why the blockchain will become mainstream in 2019.
1) Gradual Adoption is Already Being Pushed by Several Governments
Unlike other sectors where governments are prepared to take a backseat and allow the private sector to drive development in those sectors, the blockchain industry is seeing a departure from this trend. This is because governments across the world are just as forceful in the adoption of blockchain technology as the private companies. Governments are now recognizing the potential for blockchain technology to deliver better government-citizen interaction, cut costs of government functions, deliver better identity management and improving on existing security systems. Government adoption of blockchain is, therefore, something that is expected to increase over time, driving the distributed ledger technology to mainstream use.
Several governments are already using blockchain technology in some form. Many others are testing the technology and getting ready to deploy in 2019. In many of the country examples, the use of blockchain and other emergent technologies has either been engrained in law or has been integrated into the national technological development policies. These initiatives have served to institutionalize the use of this technology. Blockchain technology is already being deployed in some form in the US, China, UK, Estonia, Denmark, Sweden, Norway and the UAE.
Dubai government as the pioneer in adoption of blockchain tech
One country that is actively using a blockchain-based solution to drive better delivery of its services is the UAE. Already aspiring to go 100% digital in its operations in 2019 and to achieve 100% usage of the blockchain for government operations in 2020, the Dubai government has implemented a blockchain-based solution to manage the document processing system it uses to handle the documentation of the millions of travellers that breeze into its borders for tourism and business. Apart from speeding up the process, Dubai aims to achieve massive cost savings with the blockchain. As Smart Dubai puts it, 5.5 billion dirham in savings annually can be achieved by using blockchain technology in document processing alone.
A full description of government-powered blockchain projects already in operation around the world is outside the scope of this article. As the immense benefits of blockchain technology become evident to the world’s policy makers, we are only going to see more of these kinds of blockchain-based deployments across the world in 2019 and beyond. These will make blockchain technology more mainstream than we could ever imagine.
2) Private Companies are Also Deploying the Blockchain
It is not only in government that we see a growing mainstream use of blockchain technology. The private sector is not left out, as businesses are also seeing the beneficial use of blockchain technology. Indeed, businesses have been the first to see the benefits of deployment of blockchain-based payment systems, even if governments have largely distanced themselves from this aspect of distributed ledger technology. Many businesses have been accepting blockchain-based payment systems since the early days of the blockchain. Even though governments have been slow to catch up on the potential benefits, it is believed that effective regulation of blockchain-based payment systems may help unlock the full potentials of this component of distributed ledger systems.
But aside from the payment systems, blockchain technology is seeing increasing use in inventory management and supply chain management. Some businesses are already using the blockchain to achieve cost savings in several parts of their operations and improve efficiency. For instance, the blockchain can help a business streamline many processes in its supply chain processes, which will ultimately lead to lower cost of goods and services for the consumer. Every physical item has passed through several hands from production to consumption. Along the way, there are inefficiencies: delays occasioned by physical reconciliations, payment confirmations, shortage of manpower, etc. An immutable record of transactions, deliveries (and in future, the inclusion of payment processes using a blockchain-based cryptocurrency) will eliminate these costly inefficiencies and provide benefit to both producers and consumers.
Again, as the benefits become evident, there will be wider adoption of blockchain solutions of businesses and this will help make the technology more mainstream in 2019.
3) Synergistic Use with Artificial Intelligence
One factor that will drive mainstream adoption of the blockchain in 2019 is the potential for great synergism with another emergent technology, artificial intelligence (AI). There are already several models of the conjoint use of artificial intelligence and the blockchain in operation. One can point to the United States as an example, where the Department of Health and Human Services has started to combine blockchain technology with artificial intelligence in its operations. At roughly $25billion, the budget of this department is one of the largest of any ministries in the United States, and with thousands of contractors engaged to provide a wide range of services to the department, it has to deal with lots of data. HHS Accelerate is the combined blockchain and AI technology tool that will enable the department to immediately access live data from five contract-writing systems and close to 100,000 contracts. By being able to get data and analytics about strategic purchases in a matter of seconds (as opposed to several months with older systems), HHS Accelerate will give the Department of Health and Human Services better negotiating power with contractors, and ultimately get better pricing which will save costs.
With governments being pressed to make their budgets go a longer way in delivering services to citizens, we will only see more deployment of such blockchain-based initiatives across various levels of government all over the world.
Conclusion – why the blockchain tech will become mainstream in 2019
Advancements in existing technology, as well as the introduction of new ones, serve to make life better for everyone. Once the benefits of any technology become evident, mainstream adoption is a natural occurrence that is sure to follow. When smartphones hit the world, they became mainstream immediately. It was no longer a question of being able to make and receive calls; it was also a question of being able to chat, trade, communicate and exchange data. That is what the blockchain will achieve as the world now focuses on its many other beneficial uses. So 2019 sure looks like the year that blockchain technology will become a mainstream attraction for governments, businesses and individuals.