From Disillusionment to Enlightenment
The dust has settled on the blockchain hype. All the crypto tokens and coins have seen dramatic loss in value, and only the ones with fundamentally sound technology, decentralized value proposition and transparent, decentralized governance will rise from this in 2019. On the enterprise blockchain front, only those enterprises that can effectively combine the technology with consortium governance will succeed in creating business value.
Enterprise Blockchain applications: rubber meets the road
With the availability of robust production grade platform releases last year, a lot of enterprises have built products and services with the leading blockchain or distributed ledger platforms, such as Corda, Hyperledger Fabric and Quorum. Multiple high-profile enterprise blockchain pilots were rolled out in 2018 and live production-level transactions were demonstrated. As more of these pilots go into production, the community is gaining insights into what works with enterprise blockchains and what doesn’t, especially in the areas of governance structures, identity, security, enterprise integration, performance and efficiency. The performance of blockchain platforms will play a key role in their success. We expect 2019 to be the year where governance structures standardize, multiple inter-ledger protocols for asset and data movements across different blockchain platforms become available, enterprise-grade tools for operational automation and deployment (on-premise and multi-cloud) emerge, nodes scale horizontally and tools for advanced performance tuning become available.
Blockchain-enabled self-sovereign Identity as a viable and powerful identity alternative
We see blockchain as being one of the key enablers for self-sovereign identity. Self-sovereign identity is a decentralized identity that is created and managed by the user, enabled by blockchain as the underlying decentralized infrastructure. Self-sovereign identity applications allow users to securely store their identity information with them and only share it when necessary with concerned parties with user-consent. Users can obtain digital attestations from issuers and present these attestations to verifiers to simplify their onboarding for different service offerings.
In 2018, we saw many self-sovereign identity solutions using blockchain in development or early trials. In 2019, we expect to see this technology mature to a level where it will be considered a viable alternative to today’s siloed and federated identity solutions both in the enterprise and public blockchain spaces.
Public blockchains will emerge stronger from the ashes
2018 saw a comprehensive and brutal rout among public blockchains in the cryptocurrency and ICO space. This was a much-needed bursting of the irrational bubble that had built around public blockchains, tokens and cryptocurrencies. Most projects were either vaporware, ill-conceived or outright scams. Those hopefully will no longer be around. We expect to see several technically sound projects emerge from this meltdown and do well in 2019. Bitcoin has launched the lightning network as a low-fee, high-speed settlement layer (layer-2) atop bitcoin’s slower, more secure (layer-1) network. This is seeing rapid growth in the network and increasing user adoption. Questions around its viability remain, given the capital requirements for channel creators, but despite those, layer-2 solutions will gain ground in 2019. Ethereum similarly will see successful layer-2 scaling with “Plasma” sidechains and will see more efficiency in the layer-1 network with the launch of Casper, which shifts the consensus layer from proof-of-work to proof-of-stake. This change will allow Ethereum to increase its transaction throughput significantly. While platforms like Bitcoin and Ethereum continue to innovate in areas like transaction scaling and sharding, we are very excited about a newer platform Blockstack that just had its first major release. Blockstack is a global blockchain platform for decentralized apps (dApps) which integrates identity, storage, authentication, encryption and decryption mechanisms that allow apps to be built in such a way that users control their identity as well as their app data. Blockstack is light-weight and offloads most of the data and computation off-chain. It is built based on a virtual chain concept, which allows it flexibility to use any blockchain as a building block and allow for migration to a different blockchain if there are issues with the underlying blockchain. These features and the grounds-up, user-centric, decentralized design make it a compelling project to track and innovate with this year.
|Scaling in public blockchains||Scaling of enterprise blockchains||Blockchain business networks|
|Self-sovereign identity||Inter-blockchain asset/data transfer||Developer|
|Avalanche protocols||Smart contracts for constraint automation|
|Directed Acyclic Graphs|
- Have a boardroom conversation about blockchain first before having a technology conversation. Blockchain value creation requires a business strategy shift and alliance formation even before the technology adoption.
- Plan who will be the key stakeholders participating in your business blockchain network as users, network participants, operator(s), and governing authority. The value proposition and incentives for each of them will be different.
- Investigate if your business model or domain can be disrupted by a decentralized peer-to-peer workflow without requiring a trusted third party. If yes, you need to pre-empt that disruption by re-thinking your business model.
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