2019 was an excellent year for blockchain technology. It led to the creation of new collaborative projects between blockchain startups and major firms. Various crypto products were launched, major crypto coins survived the bear market, and different blockchain protocols experienced a lot of growth.
There was also increased interest in blockchain technology by central banks and governments. One of the best examples is China, which has decided to embrace blockchain technology as a core technology in its development. 2020 is the start of a new decade. It marks the gradual development of blockchain technology, leading to more real-world solutions for the world. This year may mark the turning point for the technology. Here are some of the top trends that are likely to define blockchain technology this year.
The Growth of Decentralized Finance
One of the areas that are likely to cause ripples is decentralized finance on the Ethereum blockchain. This is the growth of financial applications, which utilize blockchain technology. The field of decentralized finance is likely to experience more interoperability between various applications launched in previous years.
The main driver of growth for decentralized finance will be the benefits it offers. For instance, it reduces transaction speeds in the financial world from days or hours to mere seconds or minutes. Besides that, it lowers the cost of transactions a great deal. The DeFi applications will most likely gain more access to a wider user base in 2020.
China Will Intergrade Blockchain Technology into its Economy
One of the biggest developments for blockchain technology in 2020 will be the integration of technology in China's economy. The technology will start to permeate all aspects of life in China. This could include things such as a national identification system embedded in the blockchain to the integration of the technology in its financial system. As various benefits such as reduced costs and increased speeds of transactions begin to be realized, many other nations could follow suit. China will definitely play a major role in the blockchain sector. With government support, various blockchain startups could begin moving to China or working with Chinese companies to bring blockchain-powered solutions to the market.
Increased Adoption of Stablecoins
Many people would like to use cryptocurrencies such as Bitcoin. Unfortunately, these coins have proven to be quite volatile. However, a new breed of digital currencies has evolved out of the chaos, stablecoins. To avoid the volatility of cryptocurrencies while still maintaining the benefits of blockchain-powered coins, many people are likely to embrace stablecoins.
For instance, Facebook Libra plans to launch its stablecoin this year. While most of these coins are still in their initial stages, they are likely to make a huge impact this year. The Libra project has no doubt sparked a lot of interest in stablecoins, and many nations and large corporations are likely to enter the space to avoid being left behind.
The integration of Blockchain Technology with Social Media
There are almost 3 billion users of social media globally. However, social media networks are marred by numerous problems, which could be resolved using blockchain technology. The Twitter CEO Jack Dorsey has already said that in the future, the social media network could run on the blockchain. Some of the uses of blockchain technology by twitter could start emerging this year.
One of the benefits that blockchain technology could bring for social media users is that they could take back control of their data. For instance, it could ensure that once a user leaves a social media platform, the data is gone forever and cannot be duplicated once it is deleted.
It will also help to give more to content creators, instead of having a social media platform being in control of the content. This could make users feel more secure about using a social media platform since they will have control over what they view. One of the main challenges will be convincing social media platforms to adopt blockchain technology. This could come voluntarily or due to laws in some nations, as blockchain technology evolves. A good example of the use of blockchain technology in social media is the Brave Browser project. While it is still in its infancy, 2020 is likely going to be another good year for them.
Increased Interoperability of Blockchain Networks
Various permissioned blockchains have emerged in the past few years. Most of them are quite mature now, and they have working ecosystems. In 2020, there is likely to be increased convergence of these networks. There are already talks going on behind closed doors to improve the interoperability of these platforms. 2020 is going to be the year of cross-blockchain pilot projects.
Use of Blockchain Technology in the IoT Sector
The IoT market has grown a great deal in the past decade. One of the main challenges facing the sector is security. There are currently over 26 billion IoT devices in the world, and this has led to increased interest from hackers. In 2020, IoT operators could turn to the blockchain to help secure these devices. Even the US Air Force is currently working on a project to secure their IoT devices using the blockchain.
One of the main reasons why it is so easy to hack into IoT devices is that they utilize a centralized infrastructure. It makes the IoT market a saturated market for hackers since all they have to do is compromise one centralized point to gain access to the data of millions of users.
Blockchain technology could prove to be the defining technology for dealing with security challenges facing the IoT sector. For one, its decentralized nature ensures that there is no single point for hackers to compromise an entire IoT network. Besides that, the immutable nature of records stored on the blockchain ensures that it is easier to trace the origin of a hacker. There are already many IoT firms working on blockchain-powered security solutions, and a number of them could hit the mass market in 2020.
Summary
In general, 2020 is set to be an excellent year for blockchain technology. Those firms that embrace the technology will likely emerge the clear winners in their fields due to the competitive advantages offered by blockchain technology.