As the year draws to a close, it is time to think about what to expect in the world of cryptocurrencies in the upcoming year. How will the use of blockchain change, when will the state cryptocurrencies emerge and other forecasts in this article.
Since the emergence of Bitcoin (EXANTE: Bitcoin), many crypto-enthusiasts started predicting the rising potential of blockchain technology and the revolution that it will bring into the world. Yet, only this year the concept really began to attract public attention.
Many in the financial sector started talking about the encrypted distributed ledgers. In many respects, the rapid rise in the price of Bitcoin, the first tangible product of blockchain, contributed to this. In the first half of the year, financial startups using this technology attracted more than $240 million, and the blockchain began to penetrate into other sectors of the economy.
In 2018, this trend is likely to continue. The following are the five main blockchain predictions for the next year.
1. Using blockchain outside of finance
The impact of blockchain on the financial sector is obvious, but any industry or organization where recording and controlling operations is required can benefit from the new technology. IDC Health Insights predicts that in healthcare, 20% of organizations will use blockchain by 2020.
When recruiting personnel, HR is increasingly using the platform based on the blockchain technology to verify qualifications. They allow you to simplify the selection of candidates and make sure that they have the suitable experience.
The effectiveness of legal work related to tracking the transfer of ownership such as intellectual property or real estate rights, will also grow through the use of distributed ledgers. In 2018, you will witness the emergence of such innovations in the legal sphere.
According to the predictions made by the Blockchain Research Institute, founded by IBM (NYSE: IBM), Pepsi Co. (TICKER: PEP.NYSE) and FedEx (NYSE: FDX), blockchain will be the "second generation" of the digital revolution after the Internet. For example, the electronics manufacturer Foxconn plans to use blockchain to track transactions in the supply chain.
2. Blockchain and the Internet of Things
The combination of these two technologies will significantly improve both business processes and everyday life.
Blockchain and the "Internet of things" are perfectly combined for its security reasons - the encrypted and decentralized nature of the block is perfect for monitoring the ever increasing number of devices connected to the Network at work and at home. Studies show that the computing power used to mine bitcoins can be used to protect smart homes from the next generation of cyber-thieves who are ready at any moment to steal our data.
Another promising feature is related to the fact that cryptocurrencies based on the blockchain are perfectly suited for micro-transactions between devices.
Distributed ledgers will be used not only for records and analysis of operations - machines will be able to independently exchange payments between each other. Next year, probably, we will see a break through in this area.
3. Smart Contracts
Smart contracts are also based on the blockchain. The idea is that contracts are executed automatically if certain conditions are met. In other words, payments, deliveries and other actions determined by the contract can be carried out independently of the person's participation.
Thanks to the blockchain, smart contracts are possible due to the distributed nature of the technology, based on the universal consensus. The contract is executed only when all the agreed conditions are met. For example, bonuses can be paid to employees when executing a plan, or orders can be sent when money is deposited into an account.
AIG (NYSE: AIG) insurers are developing a system of smart contracts to oversee the creation of complex insurance policies requiring international cooperation. Most likely, the first prototypes of such systems will appear next year.
4. State cryptocurrencies
Among the first ones to express such an idea was Russian President Vladimir Putin (sooner or later politicians had to pay attention to the advantages of cryptocurrency based on the blockchain).
At first it seemed that countries do not have much enthusiasm for digital currencies - and there are good reasons for that. Bitcoin was designed in such a way as to exclude the possibility of manipulation by governments.
China, for example, reacted to the new technology with a great hostility. Beijing banned crypto-exchanges in the country and warned the public about the risk ofi nvestment in cryptocurrencies.
However, the situation can radically change next year and the governments will finally soften their positions, as the potential of blockchain in improving the efficiency and transparency of financial and public services is obvious.
5. Many blockchain projects will fail
No doubt, blockchain is a revolutionary technology. However, just like any revolutionary idea, it can be dangerous mainly because many projects do not have clear goals and detailed development plans.
As with any other hyped technologies there is a risk that the desire of people not to miss their chance makes them act hastily and unwisely. Keep in mind that as in cases with Artificial Intelligence and Big Data, the blockchain technology will change the world forever, but it will progress slowly and gradually.