Blockchain In 2020 Part 1

How does blockchain in financial services avoid the trough of disillusionment? What will 2020 bring for an industry that is trying to move on from the buzz and look for real world implementation opportunities? Can Libra come back? Will the real Satoshi Nakamoto announce themselves and go on a highly publicised and lucrative academic tour? All will be revealed.

The industry is besotted with buzz around the latest technology. How this is going to change the world, make you rich, make your life easier and cause world peace; all within a moment of your early adoption. Fintech is full of what we like to call ‘early adopters’; organisations who are at the vanguard of embracing these new technologies in order to improve their processes or their offering to the client.

Blockchain is one of the ultimate examples of a technology that has come, been seen and been hyped to the nth degree. Just look at the price of bitcoin over the past 5 years; to see the volatility around this. However, with the perceived failure in adoption of Facebook’s cryptocurrency, Libra, and the slow nature of real enterprise adoption; is blockchain now in the trough of disillusionment?

I put this question to a few members of the FinTech Connect Blockchain Advisory Board, to get their opinions on what may await the industry in 2020. It is clear there is a mix of opinions on whether 2020 is a year of stagnation or celebration. Their viewpoints reflect an industry that is still going through a rapid period of change.

“2020 is shaping up to be a year of getting real with distributed ledger and blockchain technology enterprise context. Most companies experimenting in this space have by now figured out what this technology can and can’t do and found out that there’s a lot of work on network operations and governance levels that needs to be sorted out before moving into real production with any of these new value networks. While blockchain “inspired” technology offers some clear benefits in data governance, data protection and business rule enforcement for example, all the hard work in network building still needs to be done the old way: by sitting down with peers to create a collaborative network infrastructure and all the rules and agreements that come with it.“

Ville Sointu, Head of Emerging Technology, Nordea

“The cards are aligning for 2020 to be a big year for blockchain – particularly in five areas: (1) increased narratives around bitcoin as global macro hedge, (2) continued evolutions of stablecoins and central bank digital currencies, (3) digital securities finding meaningful traction, (4) further experimentation in the DeFi space, and (5) privacy emerging as a key theme across these efforts. With the right regulatory environment(s), we’re excited to see increased blockchain innovation and investment this year that will set the stage for the industry for years to come.”

Patrick South, Vice President of Development, Chamber of Digital Commerce

“2020 will be a year of failures and successes, with some failures disguised as successes.  Some companies will struggle to find their value within the industry and run out of funds while others might seize the opportunity to sell themselves before others realise that they have a limited lifespan by themselves.  However, there will be many successes as well.  Existing players will evolve their technology or business models to release more mature products.  The exploratory efforts of large financial institutions around the world will come to fruition as more and more of them announce transactions powered by blockchain technology.  In a year where we see some companies fade away, we’ll also see continued progress for the industry as a whole, this time led by not by blockchain startups and crypto funds, but by traditional financial institutions.”

Jor Law, Blockchain Consultant & Advisor

There are very different opinions here, and ones that show still a real excitement, amongst the potential for cynicism. Come back in a couple of weeks for the second part of ‘Blockchain in 2020’; where we will have more opinions from the industry about where DLT implementation will be heading in 2020.