Deloitte’s global cryptocurrency community (dc3) has been actively engaged over the past year in combining the firm's strategy and innovation consulting practices with a growing ecosystem of the world’s leading entrepreneurs, scientists, technologists and business leaders.
This has led to groundbreaking collaborations with entities such as the World Economic Forum, Singularity University and MIT Media Lab's Digital Currency Initiative.
As an industry thought leader, Deloitte's goal is to provide forward-looking perspectives, and in this article we tackle the question: What does 2016 hold for blockchain?
Deloitte surveyed its internal cryptocurrency community to address this topic, asking: "What do you think will be the biggest breakthrough in the blockchain space in 2016?"
The high-level results are shown in the graph below:
Based on the detailed results of the survey, Deloitte has identified the following overarching industry themes for 2016:
- Leave the labs
- Age of consortiums, alliances and governance
- Next-gen platforms
Key industry activity to look out for across these three dimensions are detailed in the subsequent sections.
Leave the Labs
2015 was a pivotal year for blockchain, as skepticism around the use of blockchain technology generally faded, and understanding of its potential increased.
Survey respondents believe that 2016 will likely see a continuation and acceleration in this trend, and many anticipate experiencing the output of multi-million dollar investments and for prototypes start becoming a reality.
We expect to see existing use cases for blockchain technology come to life, completely new use cases emerge, and an increased number of joint product launches mostly from financial institutions and blockchain startups.
Having developed multiple blockchain proof-of-concepts (PoC) with large financial institutions and in other industries in the past year, Deloitte anticipates that many of these tested financial services use cases (such as cross-border payments, trade settlement, loyalty, KYC and others) will slowly be rolled out into full-fledged products in 2016.
Whether it is through internal blockchain labs, direct partnership with blockchain tech companies, or through collaborations with platforms such as Deloitte’s own Rubix, many of the main financial institutions are now past the thinking and ‘testing-the-waters’ stage, and into the product development stage.
We also believe that the full potential of blockchain has not been explored yet.
With the recent release of Augur’s prediction market, or Symbiont’s trading platform, we continue to see thoughtful innovation in the blockchain space, which our specialists expect to progress in the coming year.
Age of consortiums, alliances and governance
In such a fast-paced environment of innovation and solution development, many established companies, startups, affinity groups, and regulatory agencies have found partnering to be key to their success in this industry.
In addition, one of the conditions for blockchain to be effective, is that multiple parties should be involved. This trend will likely pick up steam in 2016 as companies may leverage the capabilities of allies to help drive critical research and development of new blockchain use cases in specific sectors.
New York-based R3, one of the most high-profile consortiums, leads a large group of more than 40 companies to drive innovation and standards in financial services.
In the Internet age, governance bodies came to life to create and maintain standards as well as ensure interoperability. Similarly, 2016 may give rise to blockchain governance and standards, especially for public blockchains. It might seem counterintuitive to bring governance to a technology that was designed to not have any but it can be key to larger adoption.
Certain firms also look to provide "network leadership" within the space – that is, to help connect the dots between different players within the ecosystem who may benefit from large forums in which to market themselves and share knowledge.
Deloitte currently plays a role in this capacity within the blockchain industry, and aims to be a key player going forward. Such collaborations have been explored and formed at major conferences such as Money 20/20, SXSW and the World Economic Forum.
Selecting the right groups and partners can be a challenge for organizations looking to benefit from blockchain technology.
The final trend that Deloitte blockchain specialists anticipate is the expansion of next-gen platforms, such as Ethereum and inter-operable platforms.
We have already seen many interesting use cases that combine the functionality of smart contracts with already existing trends, such as IoT, and we expect these to become operational and launched in 2016.
One example of this is Slock.it, whose decentralized renting application through an Ethereum Computer is showing the potential of smart contracts and Decentralized Autonomous Organizations (DAOs).
Equally important is the rise of inter-operable blockchain platforms. With many financial institutions choosing to build private federated blockchains, there a clear need for interoperability is expected in the coming future.
Companies like Credits, who recently partnered with the Linux foundation to create an open-source platform, or Rubix by Deloitte, who worked with Colu to explore the role of colored coins in interoperability, are integral to the long-term effectiveness of the technology.
Blockchain has the potential to transform financial services infrastructure. As the technology evolves, additional use cases will impact a wide swath of industries, representing significant potential cost savings, new disruptions and new revenue opportunities for organizations.
We predict that blockchain will become a reality for many in 2016.
As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please click here for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.
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