Blockchain technology continues to evolve and adapt to industries across the globe

Gaurang Torvekar , 04 Jan 2018 - Cryptocurrency AdoptionOpinion

Gaurang Torvekar co-founded and serves as the CTO of Indorse, the decentralized professional network powered by ethereum technology. Torvekar also serves as the CTO for and co-founded Attores, which enables data and documents to be shared securely using smart contracts and blockchain technology. Attores partnered with Ngee Ann Polytechnic to formally issue blockchain diplomas.

2017 has been a great year of progress, we saw bitcoin rise to over $20,000 USD, while simultaneously attracting international coverage that captured people’s attention and curiosity. Meanwhile, ICOs have raised billions of dollars, helping further promote innovation and growth in the sector.

Many industry leaders believe 2018 will see the blockchain industry become increasingly mainstream, and looking at the year ahead, I believe there are eleven technologies in particular to look out for:

1. Bitcoin

The grandfather of all the blockchains, Bitcoin blockchain has continued to grow amidst a lot of speculation, accusations and ever growing support by the community. While the meteoric price-rise is helping it gain attention from the masses now, some of the limitations are also coming to the fore. Scalability has remained one of the challenges, and updates to the code have been controversial. But I think the community will definitely keep working on the scalability challenges and solve it by increasing the capacity of the blocks or reducing the block contents. Bitcoin uses the Proof of Work algorithm to timestamp the transactions and validate the blocks. This is not slated to change any time soon, although there have been continuing efforts to increase the throughput of the system (though contentious). These efforts have resulted in several forks of the Bitcoin blockchain, although the underlying technology remains more or less the same.

2. Ethereum

Last year, Ethereum did not have a clear use case, a killer app, so to say, according to a lot of people (I, for one, disagreed). But ICOs have emerged as a clear killer app for Ethereum, and the explosion of this phenomenon has forced governments and regulators to take it seriously. The issues regarding scalability were highlighted when a so-called “first game on the blockchain”, Cryptokitties, threatened to bring the entire blockchain to a standstill.

Ethereum just had an “upgrade” to its underlying system, with a hard fork called Byzantium. The second phase of this hard fork should happen in 2018. Although Ethereum is currently working on Proof of Work algorithm, serious work is going on towards transitioning it towards Proof of Stake. In fact, the Ethereum Foundation just launched an alpha version of the Casper protocol on the testnet, called Casper FFG protocol. There is a possibility that the next fork, dubbed Constantinople might have a basic version of the Casper algorithm, thus slowly transitioning the network towards Proof of Stake. 2018 will definitely be an interesting year to watch as the network transitions to more stable and scalable version, while constantly hunting for the next killer app!

3. NEO

Neo has been dubbed as “Ethereum of China” and is gaining wide popularity amongst the community. Some companies had planned to do their ICOs solely on NEO before the China ICO ban. Also, some companies have already moved from Ethereum to NEO in a bid to woo the Chinese market. Frankly, both the tech and marketing team at NEO is quite good and they might deliver value to their token holders, as opposed to some other ICOs that came out of China earlier. While the main focus of Ethereum Blockchain itself is on Smart Contracts, NEO, on the other hand, focuses more on a Smart Economy.

There have been some people who are skeptical about both Ethereum and NEO, while some people are ardent followers of both. As a technologist, I personally feel that both of them will serve the ultimate goal of decentralizing the economy and will continue to run in parallel. While ICOs have been a killer app for Ethereum, we need to see what 2018 has in store for NEO.

4. NEM

The NEM blockchain platform is advertised as ‘The Smart Asset Blockchain’. It was launched in March 2015, with the current headquarters in Kuala Lumpur, Malaysia. It works using the POI (Proof of Importance) algorithm. The importance of a NEM user is determined by how many native coins they have and how many transactions have gone to and from their wallet.

The NEM blockchain focuses on Smart Assets and enterprise systems. Assets include Financial Assets, Documents, Contracts, Supply Chain related technologies, and they also claim that you could even create your own “tokens” and hence, crowdfunding campaigns on the NEM blockchain itself. The NEM blockchain platform is completely API driven and hence it is relatively easier to integrate with the existing financial institutions, for instance.

Although the foundation is a Singapore based entity, they recently also opened a foundation in New Zealand.

5. Qtum

Qtum is supposed to take the best concepts from Bitcoin and Ethereum and merge them together to create a better all-round package. Qtum has Smart Contracts capabilities and the UTXO mechanism, taken from the Bitcoin blockchain. In addition, it also uses the Proof of Stake mechanism, that Ethereum is planning to add in the next few releases. Qtum has added this so that it can be better suited for enterprise use cases. It also has an important push towards Smart Contracts development from mobiles, thanks to the use of light wallets.

Since Qtum is supposed to be an infrastructural project, rather than a higher level project along the stack, it stands to reason that the community is pretty excited about this. Apart from that, they are also announcing some ICOs and other projects that have been building atop their blockchain. If we see this trend rising in 2018, then Qtum’s popularity will continue to grow, and we might see a curve similar to NEO or NEM. Although the project is relatively new, a strong tech team, interesting combination of technologies, and ‘Forbes 30 under 30’ co-founder Patrick Dai leading the team, it is definitely one of the projects to look out for this year.

6. Zcash

Zcash is the embodiment of the zero-knowledge proofs, fondly also known as ‘Moon Maths’. While most of the private blockchain implementations are done to protect privacy, Zcash is trying to achieve the same end goal in a public setting by using Zero Knowledge Proofs. To put it simply, a Zero Knowledge Proof is a way to prove to someone that you have knowledge of something, without actually revealing that thing. As an example, you could prove to someone that you have found Waldo in a newspaper puzzle, by maybe cutting out the Waldo’s outline without actually showing where the Waldo is in the puzzle.

The Zcash team is planning two major updates in 2018 — the first one in order to boost the security and governance capabilities, while the second one in order to boost the scalability of the network. They are also considering the possibility of adding Proof of Stake mechanism, and private Smart Contracts. I think this is one of the most interesting technologies out there, and considering the updates they are planning, it would be a serious contender for anything that has to do with privacy and shielded transactions.

7. Hyperledger

Hyperledger is an umbrella organisation created by the Linux Foundation to “incubate” many different enterprise blockchain technologies. Fabric, which was submitted by IBM as their incarnation, has far outstripped any others in terms of popularity, utility, and adoption amongst the enterprises. One of the reasons being the constant push by IBM developer ecosystem, and their marketing and business teams to increase its adoption. They released their v1.0, a production ready version in the market in 2017.

In 2018, more and more systems and enterprises, NGOs, IT vendors will start using Hyperledger Fabric and related technologies, and take them to production. What I see personally is two things —

  • Since technologies like Fabric are mature and production ready, they will gain wider adoption with the help of the IBM machinery

  • There will be consolidation between other Hyperledger incubated technologies, which are closely compatible, for example, Sawtooth and Burrow, to begin with.

Hyperledger is also going to focus more on their community outreach, developer training courses and interoperability between their various technologies. I think that the Hyperledger umbrella of technologies is going to be a favorite amongst the open source community, for those who want to build private networks and work on enterprise grade systems.

8. R3’s Corda

Corda isn’t actually a “blockchain” per se, since their PR and marketing teams always call it a “DLT”. But for all intents and purposes of the audience reading this article, I think it is safe to assume that they would be forgiving if I use them interchangeably. Coming back to Corda, it has been making waves in the Financial Services industry, especially due to its close collaborations with banks over the last two years. In 2017, they also closed two out of three tranches of their Series A round, raising almost US$ 107 million from 40 financial institutions. Later in October, they also launched their version 1.0, signaling a readiness for production releases. Another milestone in their journey was their launch on Amazon Web Services.

All this bodes well for the well-funded company, and it takes them even closer to enterprise adoption, especially on the side of financial institutions. I think that since the company R3 has a narrow focus on banks, and financial industry, they will do well in 2018 in that area. While other technologies like Ethereum and Hyperledger are trying to be an infrastructure of a new era of decentralized applications, Corda just wants to be the rails for financial systems. Leaving aside the questions like whether it is a blockchain or not, Corda is definitely in a position to do well enough in 2018, and finish some serious production ready systems.

9. Quorum

Quorum can be called as an answer by the Ethereum community to challengers like Hyperledger and Corda. Quorum combines the characteristics of both Hyperledger and Corda, combining open-source private blockchain developments, with a focus on financial institutions. While it is true that Quorum can be a general purpose private version of the Ethereum blockchain, all with private transactions and ability to control the participant nodes, most of the adoption seen to date has been within the financial sector. Quorum is an effort being fronted by JP Morgan, one of the largest banks in the world.

Even at home in Singapore, Quorum was used as one of the technologies in a test done by MAS, the central bank of Singapore and other local banks. In this test, dubbed Project Ubin, they tested a tokenized version of the Singapore Dollar. The Enterprise Ethereum Alliance is also seeing a push towards using Quorum for its enterprise and banking projects. I see that enterprises who want a private blockchain implementation, but still want to stay within the Ethereum ecosystem will definitely move towards Quorum. And since the Enterprise Ethereum Alliance also boasts a roster of partners and members to rival that of Hyperledger and Corda, it would be interesting to see how these three giants in the private blockchain space go head to head in 2018.

10. Ripple

Ripple is one of the most popular cryptocurrency platforms in the industry. It has seen a great surge in interest in the past month or two, mainly due to growing interest from institutional players and their partnerships with some of the biggest companies like VISA. Ripple is a blockchain, or a currency exchange protocol, to be accurate, which mainly concentrates on payments. It is being used mainly by financial institutions as a payment/forex system.

Over the next year, the company wants to invest more in the ecosystem, in order to accelerate the growth and adoption of the technology. Along with that, Ripple also has many institutions currently experimenting with the technology and they may start using the network in production in the next year. With all these developments, and a big war chest behind them, further augmented by the dramatic increase in their token price, it is certainly one of the protocols which will make ripples in the tech world.

11. Launch of fully Decentralized exchanges

With so many “traditional” exchanges already working to get a pie of the increasing trading going on in the market, the competition for new tokens and ICOs coming out to get listed is getting fierce and increasingly expensive. While we have been looking at standalone blockchain protocols in general, DAPPs being built on top of various ICOs in order to offer more options for the various tokens out there, and decentralizing the exchanges in the process, are going to be another game changing technology. The launch of Kyber, Airswap, 0x (Radar Relay) and other similar exchanges are going to take the industry a step further!