Andrew Keys is the director of communications of ConsenSys and co-founding member of ConsenSys Enterprise, the consulting group within ConsenSys. Previously, Andrew worked for UBS in equities analysis.
Here, he offers 16 predictions for the blockchain and decentralized technologies sector in 2016.
1. Many who used the terms 'blockchain' or 'distributed ledger' will learn they actually meant Ethereum
Ethereum will begin to demonstrate its power as less effort is required on the protocol (given the successful version 1.0 release on 31st July, 2015), and more development is focused on decentralized applications.
Moreover, Ethereum browsers like Meta Mask and Mist and the uPort wallet and self-sovereign Identity portal will be usable by the 99.5% of the world who aren't computer programmers, so the average user will not have to access Ethereum via command-line.
The price of Ether will be over $1.15 by 29th February, 2016.
2. Scalability will become the holy grail of public blockchain tech
Ethereum will establish itself as the clear leader in this regard.
Bitcoin may have sidechains and Lightning Networks, but both require deep protocol changes that could take a very long time to implement.
Other systems, like Digital Asset's Hyperledger, are more scalable but don't have general decentralized smart contract capability.
Ethereum has state channels and the Raiden network solution that are similar to and more flexible than Lightning Networks for off-blockchain transactions like micropayments. The only blockchain-based apparatus required to make these solutions work are smart contracts, so these mechanisms will be available soon on Ethereum.
Ethereum has been working for over a year on replacing bitcoin's slow and wasteful proof-of-work consensus formation algorithm with a proof-of-stake system with many better features.
Also, for over a year, Ethereum has been working on a solution for sharding address space enabling only subsets of transaction validators to process subsets of transactions in each time frame. So while Ethereum, which is presently capable of 25 transactions per second (TPS), is not in danger of bumping up against difficult scaling issues soon, it will be able to handle many TPS with Ethereum version 2.0 – levels comparable with the Visa and American Express networks.
Once this occurs, we can expect technology giants like IBM to use Ethereum as the backbone to their Internet of Things platforms.
3. Hopefully this year we learned what a blockchain is
The buzzwords of 2016 will be 'smart contract', 'Merkle tree' and 'proof-of-stake'.
4. Private and public blockchains will co-exist
The idea of integrated private and semi-private (or consortium) blockchain solutions will grow in prominence. And business solutions will be splayed over these and the public Ethereum network.
5. There will be further awareness that the Internet is broken
Inter-Planetary-File-System (IPFS) will begin to eat the world.
6. 2016 will be the year of blockchain programming 101
There will be more proofs-of-concept (PoCs) and minimal viable product (MVP) blockchain examples from Fortune 500 companies.
7. PoCs and MVPs will be part of blockchain-as-a-service solutions
These cloud services, like Microsoft's Azure platform, will provide a safe place for new developers to wrap their heads around concepts such as smart contracts while applying them to their corporation's pain points.
8. Regulators will come to understand (and love) blockchain technology
After the 2008-2009 financial crisis, the CFTC and other regulators enacted collateral rules for uncleared swap transactions.
These rules can be embedded into smart contracts with an automated collateral rebalancing system to ensure regulatory adherence and transparency.
Imagine if the regulators had the ability to see all the swap positions across counter parties and the collateral supporting them in real-time during the crisis.
9. Law firms will begin to write smart contracts
10. We will learn what self sovereign digital identity is and how we should own our identity
This sea change will be spearheaded by progressive thinkers like Joseph Lubin, Christian Lundkvist and Vinay Gupta
11. Bitcoin will continue to be a relatively small currency
Bitcoin will continue to be used as an excellent transfer of value protocol, but not much else. However, its price will continue to rise due to halving and continued interest from Chinese investors.
Coinbase may become the first blockchain unicorn. The price of bitcoin will be above $475 by 29th February, 2016.
12. Banks will continue to file patents and build internally on blockchain tech
This will continue even though they may be part of a consortium.
13. Linux Foundation's Open-Ledger Project will begin to facilitate the evolution of blockchain technology
14. Governments will begin to realize the potential of blockchain technology
They will, however, be engaged by its variety of use cases ranging from title registry to identity.
15. Blockchain hype will not die
The world will begin to understand that blockchain could disrupt… everything.
16. All of us in the blockchain sector will learn that we are better off with a healthy dose of humility
CEOs, bankers, accountants and attorneys will learn there is much to digest with respect to technology, while computer scientists will learn they may have to outsource legal, accounting, business development and executive skills.
It is my hope that we learn from each other the art of comparative advantage, compromise and interpersonal trust while building trust-less technology to expedite the next big thing.
This article originally appeared on Medium and has been republished here with the author's permission.
Image via ConsenSys