In this exceptional year, we have quickly noticed how dependent we have become on technology. But also, the great possibilities that they offer. From WhatsApp bots that warn you when there is not crowded in the supermarket to drones that disinfect environments and robots that deliver food.
The hype surrounding the blockchain now seems to be over for good. That's a good sign. Because companies, startups, and non-profit organizations are on the verge of entering the markets with blockchain-based products and services in 2021.
Although, according to McKinsey, most use cases are not published by companies due to the consideration of possible competitive advantages, according to the Forrester study "2021 Predictions" the number of companies that intend to start with blockchain projects in 2021 is increasing by a third.
Triggered by the Corona crisis, a major change can be observed: While the budgets for purely experimental and speculative blockchain projects drastically decreased in 2020, projects with clear benefits will not only be developed but will also be driven forward even more vigorously.
In this article, we will explore the trends that the Blockchain society is looking forward to next year. So, what awaits us in the field of Blockchain?
Trend 1. Strong Supply Chains
Companies that primarily address problems in the supply chain that have come to the fore as a result of the pandemic.
In a short space of time, we've seen how incredibly vulnerable, but also very important are the strong supply chains.
Since the outbreak of the Corona crisis, there have been massive disruptions in global supply chains. So if building materials from Poland, wines from Italy, and electronic devices from China have only reached their destination with delays for months, now more and more people are thinking about "reshoring", the return of foreign production to the respective home country. Companies like Apple, Adidas, Boeing, Zara, and Philips are working on this.
Years ago, Toyota set the standard with the "Just In Time" principle. All supply chains are so perfectly matched that there is practically no stock, but Corona almost brought to a standstill. With blockchain technology, however, it can be possible to accelerate the processes in the supply chains again. One of the best-known examples of this is the Tradelens platform launched by IBM and Maersk, the world's largest container ship company. It is an open, neutral blockchain-based platform that digitizes global supply chains and ensures a lot of transparency, optimal data exchange, and much faster processes.
Up to now, signatures from up to 21 parties were required for unloading, which sometimes took days. The entire administration is now carried out via the blockchain at the click of a mouse. This saves an incredible amount of time and money. But the blockchain also helps to reduce the environmental impact. Because every year around 100 million empty containers are transported by sea, which leads to pollution of around 280 million tons of CO2 emissions. Companies like Cubex also use the blockchain to load containers much more efficiently.
Blockchain is not only mentioned as the means to regain trust and resilience in global supply chains. Now it is also being accelerated and widely used. With all the experiences of the past year, we hope this will become the biggest blockchain trend in 2021.
Through a wonderful collaboration with other technologies, such as the Internet of Things, it is easy to track where the loads are. Convenient, if you, as a representative of a country, want to know where the important load with medical masks is. Or if you as a consumer want to know what the supply chain of your food and beverages is like. IDC expects that in the next year 30% of all producers globally will make their chain transparent with Blockchain technology, which will reduce 35% of transaction costs.
Trend 2. The government's crypto
Blockchain for digital currencies.
In the course of the year, citizens and companies were financially supported by the governments to help them overcome the corona crisis. In the Netherlands, for example, these aid measures are completely digital, from application to payment. In other countries like the US, millions of checks are sent through the mail, with all the associated risks of fraud and abuse. No wonder if, according to the OECD, these economic stimulus packages, unfortunately, arrive far too late in many countries.
This “helicopter money” could be perfectly distributed via a digital currency from the central bank. To do this, a digital euro or dollar would have to be created and spent by governments. This digital currency is called Central Bank Digital Currency (CBDC). Many governments in larger countries are already working on their development. The bank for International Agreements expects that 10% of governments will present some type of CBDC next year.
The Chinese government is at the forefront of this and has already carried out many tests with electronic payments in digital currency which is about to be presented to the masses. The European Central Bank will make a clear decision on the digital euro in January 2021.
It is interesting to follow which countries also come up with this. And if so, then the thought of a ‘synthetic hegemonic currency‘ (a global digital currency) also has a chance of success.
Trend 3. The catechization of our society
Blockchain technology is having a huge impact on the financial industry. The area of decentralized finance (DeFi) is a trend that is expected to develop much faster in the coming year, as these alternative forms of financing perfectly fit into the fintechization trend of our society. A large number of fintech companies are currently adjusting to this growing trend.
Strong growth in tokenization, the digital storage of fragmented assets in the blockchain, is also expected in 2021. The 250 largest fintech companies already invested around 50 billion US dollars last year.
More and more companies, including PayPal, are launching amazing services built on Blockchain technology.
Trend 4. Blockchain and data protection
Privacy is and will continue to be a hot topic, especially given all the scandals surrounding stolen or misused data, that keep popping up in the news. Data privacy concerns hinder blockchain-based projects. Therefore, an important trend in 2021 is the 'Zero-Knowledge Proof (ZKP). This technique was developed in 1980 at MIT. This means that a blockchain will soon be used more frequently to check sensitive data without the sensitive data being displayed.
A “zero-knowledge proof”, for example, involves checking whether a borrower has enough money in his bank account to grant the loan, but without the lender actually seeing the account balance. ING-Bank has already taken important steps, for example, to include mortgage applications in the blockchain and to automatically approve or reject an application using ZKPs as a kind of notary
The great challenge remains above all complexity of developments. Complex or not, the growing demand for privacy will become a major trend in the coming year.
We tend to overestimate the impact of new technology in the short term but underestimate it in the long term.
Blockchain will provide new advancements
At the time of this post, Bitcoin is increasing in value to an 'all-time high'. Governments and businesses are stumbling when they announce new Blockchain innovations and implementations. Next year promises to be another good year in the field of Blockchain technology. Where a few years ago it was kept mainly as a 'solution of almost nothing' in 'a revolution that has not yet taken off', the latter is now obsolete. Along with all kinds of other technologies, like artificial intelligence and machine learning, it will create great advancements.