Future of Blockchain

In this chapter, we are going to discuss the future of the blockchain technology. There are a number of trends and developments that are likely to drive the development of the blockchain technology and its adoption in the coming years. As with any sort of prognostication, none of the things that we will discuss are set in stone.

In particular, blockchain will be driven by a few key themes:

• Ongoing fragmentation and specialization
• Legal and regulatory evolution
• Technological stabilization
• Intersection with AI and IoT

Ongoing fragmentation and specialization

Blockchain began with only a single implementation: Bitcoin. Now there are thousands of blockchains and hundreds of blockchain technologies. In such a crowded marketplace, it is only natural that the technology will begin to have more purpose-driven implementations. Many of the drawbacks of blockchain systems, such as the speed, ease of use, and so on, are easier to solve with a purpose-specific blockchain system.

We've already seen the beginnings of this. Steemit is a blockchain-based social network built from bitshares/graphene technology. It has a consensus algorithm based on witnesses and voting, and the whole operation is designed around hosting social and blogging content. While still having many of the features of a public blockchain, by being purpose specific, the Steem blockchain is better able to function in its desired ecosystem...

Legal and regulatory evolution

A certain near-term change in the blockchain technology will come from regulation. Nearly every major country is looking at the ICO landscape and working out how best to regulate or capitalize on blockchain. In the USA, the SEC seems to be looking at ICOs more and more as a securities offering that will necessitate companies to carry out an ICO to provide financial and other documentation more typically related to stock offerings.

Other countries, such as Belarus, are taking a very hands-on approach in the hopes of luring blockchain companies and investment to their countries.

Security token offerings

In response to the continued SEC action and the failure of a large number of blockchain projects...

Technological stabilization

Technologies tend to go in waves. There is usually a period of growth and experimentation followed by consolidation and standardization before the cycle begins again. Currently, there are a few technologies that are clearly in the lead for being standardization targets.

Ethereum and Hyperledger

Ethereum, Neo, and Hyperledger are all technologies that have already attracted substantial traction from different projects. Any newcomers will have to not only offer a superior technology at the blockchain level, but will also contend with the host of tools and existing libraries and tutorials that are already being developed. In particular, the Ethereum and Hyperledger ecosystems have a tremendous amount...

Intersecting with AI and IoT

The two other major technological buzz-phrases of the moment are AI and IoT. There are a number of ways that these technologies could overlap and intersect.

Blockchain-intersecting AI

Artificial intelligence requires a vast amount of data to be effective. This is part of why so many big companies are pursuing AI projects with such fervor. Larger companies have access to more data, and are therefore able to produce superior AI results than companies that have less data. Thus, larger companies have a vast competitive advantage over small ones if they are able to leverage AI expertise effectively. Public blockchains remove this advantage because the same data is available to all. In this realm, smaller...

Summary

In this chapter, we've discussed the near-term likely future of blockchain technology. It is impossible to know the future, but from what can be gauged, these are the industry trends and forces shaping the technology as it exists today. For those businesses investigating blockchain, each of these three major trends will act to either encourage blockchain adoption or cause avoidance. We hope that the governments of the world issue clear and well thought out regulation as soon as possible, as well as put in place safeguards to prevent fraud. With this in place, this technological evolution will have more guidance in terms of how to bring blockchain products to market safely and with less risk.

Blockchains, in general, will continue to be applied to different industries. It is unknown what new networks such as EOS and Cosmos will bring to the table, as no major chain...