With the growing buzz around the Blockchain technology, we have gathered predictions of experts from different branches of the industry, on its future evolution and prospects going forward.
Blockchain and Bitcoin have become mutually inseparable, however Blockchain is much more than just a collection of records for a cryptocurrency. A Blockchain is at its core a ledger of records, which is distributed across different parties. It can only be updated with the consensus of the majority of the participants it is shared with and is inerasable.
The beauty of the Blockchain is that its applications go beyond cryptocurrency transactions. 2015 saw a lot of hype around Blockchain and its adoption by the mainstream financial services industry.
We talked with some industry experts and took their view on the evolution of the FinTech sector and integration of Blockchain as a tool in the hands of the financial sector. With the help of these experts we have compiled together some upcoming trends in Blockchain tech for 2016.
Smart Contracts are here to stay
With the advent of Ethereum, there will be growing buzz in 2016 around smart contracts. Smart contracts are basically the digital equivalent of their paper peers.
Ethereum is particularly interesting in this context because the Ethereum Blockchain can contain smart contracts as account holding objects, which contain certain code functions and can interact with other existing contracts, store data or even send Ether to others. Large tech companies such as Microsoft are excited by the possibilities that this technology has opened up.
Marley Gray, Director BizDev & Strategy for Cloud + Enterprise: Blockchain at Microsoft, writes in his blog:
“In Financial Services particularly, Blockchain is a major disruptor to some of their core businesses, and FinTech companies are driving innovation in this space. Ethereum is open, flexible can be customized to meet our customer’s needs allowing them to innovate and provide new services and distributed applications or Đapps. Ethereum enables Smart Contracts and Distributed Applications (ĐApps) to be built, potentially cutting out the middleman in many industry scenarios streamlining processes like settlement. But that is just scratching the surface of what can be done when you mix the cryptographic security and reliability of the Blockchain with a Turing complete programming language included in Ethereum, we can’t really imagine what our customers and partners will build.”
Focus will be on Blockchain integration
Banks and other financial institutions may benefit from the transparency, security and other benefits that Blockchain technology has to offer but there will be a significant amount of integration required to make it all work. This means Blockchain needs to fit in with other banking systems such as Know Your Customer (KYC), Anti-Money Laundering (AML) etc. There is already a buzz in this space.
Fran Strajnar, Co-Founder & CEO of Techemy Ltd, parent company of BraveNewCoin.com and Techemy.co, says:
“Over $1b USD worth of investment would state that it is possible to integrate Blockchains into a variety of Financial Services solutions. We will see 5-10 'Blockchains' that matter (which get adopted) in 5 years time. Meanwhile there is dozens of Blockchain designs competing for various FinTech verticals.”
2016 will see titling and voting based Blockchain applications
Unique and innovative solutions from land titling to voting would go digital with the help of Blockchain technology. This is likely to put more non-technical people on the street in touch with Blockchain tech than ever before. In fact for many people, these are the uses of Blockchain that would allow them to trust the system and perhaps even explore cryptocurrencies; once they see the value in Blockchain based systems.
Valery Vavilov, CEO and founder of Bitfury Group, a leading fully integrated Bitcoin Blockchain infrastructure provider and transaction processing company, explains:
“The Blockchain is the most transformational technology since the Internet and the possibilities for its overall growth and impact are substantial and immeasurable at this early stage in its creation and evolution.”
Companies such as the BitFury Group are engaged in securing transactions of assets on the blockchain. They have the ability to secure and easily provide accessibility to assets enabling easier transactions. The ability of modern blockchain leaders to provide such services as well as enable transactions such as titling and voting etc can open doors to many.
2016 will be about Hit and Trial
All new technologies have teething troubles, and the integration of Blockchain into the FinTech system would be no different. In fact it could be argued that failure is the necessary ingredient to success in the long-term. Problems of scalability and faulty system integration architecture maybe initial stumbling blocks.
According to Marley Gray of Microsoft, there is scope for experimentation as he describes in his blog. Mr. Gray says that “Ethereum Blockchain as a Service” provided by Microsoft Azure can allow financial services customers and partners to toy with, experience and even fail quickly at relatively lower costs in a readymade developer/test/production environment. He writes that it will allow people to create all types of Blockchain environments using industry-level frameworks.
Technology will come of age
In the past Blockchain has attracted a lot of attention but little has come in the way of concrete innovation. 2016 will be the year when this technology will finally start making its mark on how we live our lives.
When asked about the availability of Blockchain based tools, Fran Strajnar told us that we are likely to see more tools and interfaces become available and he cited the case of Microsoft Azure, which as previously stated has started to provide “Blockchains-as-a-service”. This will enable developers to build more tools, according to Fran.
Security would be at the forefront
As the Blockchain system handles more and more assets, contracts and other valuable information, security would take centre stage. This means that companies would need to work out systems and put them into place so that the integrity of data remains intact.
Valery Vavilov, CEO and founder of Bitfury Group, confirms:
“There is the extremely important matter of security that the Blockchain is poised to solve for business and individuals all over the world. Due to its significant computing power, the Bitcoin Blockchain is one of the most secure computer networks in the world. BitFury has taken a lead in this space through our work and our contribution to the Blockchain Alliance.”