Blockchain technology is witnessing increased adoption by various Businesses, Financial Institutions & Government Agencies. So, what predictions can we expect for Blockchain in 2021? Read on to find out!
7 Predictions for Blockchain Technology In 2021
- The Emergence of National Cryptocurrencies
Ever heard of the Crypto Rouble? It is a national cryptocurrency that is being proposed by Vladimir Putin (President of Russia).
A wide range of companies from various industries have already discovered the potential of cryptocurrencies. Many of these companies are closely working with government agencies. So, it is only natural that government entities will get to know about the immense benefits of blockchain technology & blockchain-based currencies.
However, this was not the case a few years back when Bitcoin first came into the limelight. There was a huge amount of skepticism by the government in regards to the application of Blockchain currency. Many countries including China have still banned the Bitcoin exchange. But that might change in 2021 as governments are getting to know about its advantages for the public & its potential for various government services.
Interesting Fact: Venezuela has already introduced Petro – A National Cryptocurrency. This Blockchain-based currency is currently backed by Venezuela’s Mineral & Oil Reserves.
- Blockchain Applications will be adopted by Financial Institutions
Since Blockchain primarily emerged as a form of currency, it won’t be that difficult for financial or banking institutions to implement Blockchain technology in their processes.
After the emergence of Bitcoin, financial institutions began to seriously consider the potential prospects of Blockchain technology for various traditional banking processes.
Here is an interesting example of the use of Blockchain in Financial Institutions:
ReiseBank AG, Germany leveraged blockchain technology to carryout instantaneous payments. These payments were done by two clients on a cross-border basis & the transaction took merely 20 seconds!
A leading Global Fintech Report stated that in 2020, more than 77% of financial institutions will look to adopt blockchain technology for their internal processes or as an in-production system.
Some benefits of leveraging Blockchain by Financial Institutions include reduction of bureaucracy, improved secrecy & security of data as well as faster transactions at reduced costs.
- Blockchain will be Integrated into Government Entities
Most Government Agencies collect & manage data in centralized servers. One of the biggest disadvantages of this process is that the data is prone to illegal access or hacking. Let’s look at some of the Biggest Data Breaches/Hacks Of 2020:
- Wawa – More than 30 million payment cards were up for sale in the Joker’s Bazar (A Black Marketplace)
- Wishbone – A Leak of 40 million user records.
- T-Mobile – A mysterious hack that exposed phone numbers, names & other sensitive information.
- Estee Lauder – More than 440 million records were illegally accessed.
Due to such cases, the concept of distributed ledger technology i.e., Blockchain can be an attractive prospect for all the government agencies who want to scale up the security of data & operations.
As of now, each government entity has its own database that stores all the data about various Government activities. This can be a huge security risk. But this is where Blockchain technology can make the difference!
With the help of Blockchain-based services, government agencies can effectively secure & manage all the data. This will also improve the operational efficiency of the agencies.
Did you know?- Estonia has already started leveraging Blockchain technology for government services. They have developed a decentralized ledger know as X-Road which holds all the data about the citizens & residents of Estonia. Additionally, all the public services can securely access the X-Road for information about citizens or residents.
- Increased Demand for Blockchain Experts
Due to the rise in adoption of Blockchain technology by Banking, Financial & Government agencies, there will be an increased demand for Blockchain experts.
One of the leading freelancing databases Upwork recently stated that they have been witnessing an increasing demand for people with blockchain skills. Since the technology is new, only a few blockchain experts are available.
But due to the rise in demand for Blockchain experts, more people will show interest in learning about Blockchain technology & its allied services. This will go on to be one of the most interestingfuture trends of Blockchain Technology.
- Blockchain Startups will tread a Treacherous Path
Blockchain technology is new & is currently evolving. While many express skepticisms, others tend to welcome Blockchain technology & its services with open arms.
So, startups who primarily deal in Blockchain technology might have to go through hard times if the technology doesn’t meet the expectations of investors. This might also result in failed innovations or refusal of blockchain technology by various institutions.
But it goes without saying that Blockchain will have a positive impact on almost every aspect of businesses in 2021 & beyond. However, this process will take time & Blockchain startups need to be careful in their decisions & roadmap for 2021 and the following years.
- Integration of Law into Smart Contracts
The idea behind Smart Contracts is that it executes automatically when all the necessary conditions are met. For example, the delivery of goods after receiving the payment.
But that is just one aspect of the smart contract. Most of the conditions of smart contracts should be regulated. This is why AIG Insurers are working on a Blockchain-based system that enables you to create complex yet robust insurance policies.
Smart contracts work on the fact that all parties meet the necessary conditions. However, if two parties disagree with some conditions, then how should the participants proceed? What if the disagreement is between parties who belong to two separate countries? In such cases, it is recommended that the rule of law be integrated or enforced into smart contracts so that all the disputes will be resolved amicably.
- The Combination of IoT & Blockchain
According to a leading report by IDC (International Data Corporation), a large number of IoT companies are contemplating implementing Blockchain-based technology in IoT solutions.
A primary reason for this phenomenon is the provision of a scalable & secure framework for seamless communication between IoT devices.
Many companies have already leveraged some of the latest security protocols but they proved to be vulnerable. However, that is not the case with Blockchain! Blockchain technology has shown excellent resistance to common as well as complex cybersecurity threats. These are 7 future predictions for blockchain technology in 2021. ARSR is a Blockchain development company in USA that offers innovative Blockchain services like Consulting & Advisory, DLT Implementation & Integration, Innovation Labs & more.