How Blockchain Will Evolve In The Future
There has been a lot of enthusiasm surrounding blockchain recently & through this article we will try to see where blockchain technology is headed in the future.
Gartner Hype Cycle
Above is the image of Gartner’s hype cycle which maps out the hype around emerging technologies & years to their mainstream adoption.
According to Gartner, blockchain is currently in ‘the peak of inflated expectations phase’ & is 5–10 years away from mainstream adoption. The reason for the hype is actually tied to Bitcoin. Most people get to know about blockchain through bitcoin & since the popularity of bitcoin is at an all-time high so is the hype around blockchain.
Bitcoin is a truly revolutionary technology in the sense that it involves innovation in both CS with proof of work & decentralised consensus algorithm & Economics with assigning value to a currency of zero intrinsic value & dedicated institutional level support. Bitcoin has two use-cases : storing value like gold & performing transactions like in the case of fiat currencies (issued by governements). Currently, the storing value use-case dominates the transaction use-case as the merchant support for bitcoins is still in a nascent stage & the time it takes to do a bitcoin transaction is pretty high.
Bitcoin acted as a great proof of concept of blockchain technology & people’s thinking of the technology is that if it can power something as revolutionary as bitcoin, this technology has the potential to change the digital world.
During the initial days of the internet (1990s), no one had thought the internet will be used so widely as it is today & it will disrupt almost everything from retail to transportation OR when C++ came out it was marketed as just a programming language, it was only later that people figured out that one can do amazing things like write games in it. Similarly in the case of blockchain, it’s more like we have created something amazing (Bitcoin) & we are figuring out what other things we can do with the technology that powers it (Blockchain).
Speaking as a developer I believe the underlying infrastructure to build a blockchain app is massively underdeveloped.
Blockchain projects which are just the decentralised version of a normal company are still far from mainstream adoption. Examples being OpenBazaar (decentralised Amazon), Casa (decentralised AirBnB) etc. This is because currently they don’t offer the same functionality as their centralised counter-parts.
In the future people will be using a blockchain powered software without even knowing it. Imagine a bank shifting from a SQL to a NoSQL database, in this case only people at the bank know about the change in technology. Similarly, we will have a blockchain based record keeping system OR blockchain based digital trust solution but the end user may never come to know about it. Also, there will be use cases in both B2B & B2C spaces, some of them are discussed below.
There are various reasons to use blockchain, in the B2C space the main goal is to create decentralised version of everything, ranging from decentralised DNS servers to decentralised Amazon & Google. The main motivation behind the decentralised theory is to reduce the concentration of power of the big guys on the internet (Google, FB etc.). Public blockchain is used in these cases.
In the B2B space blockchain solves the issue of security & convenience. Since it uses cryptographic sealing, once a transaction record is added to the blockchain, it’s almost impossible to alter that, hence the security use-case. In use-cases like supply chain, blockchain is convenient as all the parties involved share one common ‘database’ in which relations between all parties is specified in the form of smart contracts & it’s very easy to track provenance of each component in a complex system.
Permissioned blockchain is used in these cases.