Eric Piscini, a principal with Deloitte Consulting LLP, is the global leader of Deloitte’s financial services blockchain consulting efforts and co-lead at its the global blockchain and cryptocurrency team.
The following article is an exclusive contribution to CoinDesk's 2017 in Review.
As the technology behind bitcoin nears its 10th year in the market, let's celebrate the positive.
The world has seen tremendous interest in blockchain across industries and countries, from thousands of new startups, to blockchain labs popping up in commercial and federal organizations, to a number of consortia established looking to solve their industry’s biggest challenges.
One can go so far as to argue that 2017 saw the democratization for cryptocurrencies.
Democratization of a given technology can happen in many ways, from the number of people, products and solutions using that technology, to its business value or the level of disruption it activates. As opposed to previous technology waves – like open source – blockchain technology is, at its core, is designed to empower people versus organizations. It is thus natural that blockchain democratization is also core to its success.
With kids accepting bitcoin on lemonade stands, teenagers investing in ether to pay for college and traders standing up crypto-trading desks, there is no doubt that cryptocurrencies have helped democratize blockchain. Ask anyone who has been involved in blockchain without being involved in bitcoin for proof of that. In a way, blockchain has been democratized via cryptocurrencies — but the real democratization of blockchain is about to happen.
With democratization at its core, here are some of the things I expect to see happen in the year ahead.
For a host of reasons, it is a critical year for every aspect of the space.
1. Killer apps
2018 might very well be the year of the killer customer app on blockchain.
While the CryptoKitties were cute, they also demonstrated some limitations of the technology platforms; it will likely incentivize those in the industry to develop more stable and scalable blockchains. And, as the foundations mature, we will see major advancements in the usage of blockchain solutions for consumers. Whether it be personal electric grid management, digital identity, gaming, loyalty or credit scoring, we will probably use a blockchain app in 2018 without knowing that it is backed by blockchain technology.
2. Major tech developments
Advancements will come in the next few months that will make the use of blockchain platforms easier than ever before. And it will happen across the main stacks of Hyperledger, ethereum and Corda, among others.
This will address a key challenge that we all face today — the scarcity of talent, especially in developers and architects. When it's easier to provision and develop on blockchain technologies, innovation will be unleashed, many more solutions will be created, which will help drive more experimentation and successful platform launches.
3. Governments and regulators will drive adoption
These groups are now engaging and leading in blockchain efforts after studying and getting up to speed on the technology.
They now understand the value of blockchain for themselves and their constituencies. We will see large-scale use of blockchain led by governments, probably first in developing economies and small countries where incumbents are less influential. Financial inclusion, digital identities, regulatory reporting and payments will be the main areas improved by blockchain in 2018.
4. Corporations and non-profits will become major players
I believe these organizations will be the main engine in translating the promises into real commercially viable solutions, a massive role in the democratization of blockchain. Most importantly, they will have to accept that their long-term role in our economies might be dramatically different than it is today. We have seen both sides of the coin so far, pun unintended.
Those taking the defensive position – like notaries – will go the dinosaur way. On the other hand, those going on offense, with aggressive moves from major corporations, like banks, insurance companies and other financial institutions, will help build the next generation of business platforms on blockchain.
The biggest question: Will they be nimble enough to compete with the startups? Will they be protected by regulations? Will they generate return on their investments so far?
5. The jobs market will take notice
When it comes to talent, which is the first thing I think about when I wake up each morning, the job market too will be impacted and blockchain will offer new productive lives for many. The decentralization of work has already started and I’m a big believer that blockchain will fuel its growth. Imagine a world where each of us can monetize our time, skills and experiences on-demand and be rewarded with micropayments from a decentralized platform.
Work has been democratized many times over but it might very well be the last phase.
All that said, there might be a downside to the democratization of blockchain. If you consider blockchain as a non-human trustee, autonomous organizations running on blockchain are – as we have seen with the DAO – not so sci-fi anymore. Democratization of technology often requires strong ethical behaviors and, sometimes, a regulatory framework. We cannot overstate these aspects in our race to introduce blockchain to the world.
6. There will be surprises
No, I did not forget cryptocurrencies and other tokens.
They have reached democratization in financial markets already, with many exchanges and financial instruments. Will it open a new wave for anyone to invest into a new asset class, will it burst into flames, will it enhance existing businesses, or will it create new decentralized business models? All of the above, which is why 2018 is going to be the most exciting year in blockchain so far.
Democratizing blockchain will be central for us in 2018, as I believe it will generate an unprecedented level of change in the next decade.
Participation image via Shutterstock