As a company whose mission has always been to connect businesses to the blockchain, AIKON keeps a finger on the industry pulse and a close eye on fast emerging blockchain trends.
With the rate the technology is evolving, a certain kind of hype has always been present about its business applications – how to utilize the blockchain to take out the middlemen in the business marketplace and operate more efficiently by moving applications to the platform.
Marc Blinder, the CEO of AIKON, recently hosted a workshop panel on the subject The New Normal of Blockchain & Cryptocurrency with an all-star guest line-up, including Yoon Kim, Luke Lombe, Sota Watanabe, and others. Keep reading our blog for feature posts on each of the guests and their unique insights on blockchain industry trends.
During the panel, Mr. Blinder observed that there has recently been a great deal of uptake for financial use cases of blockchain technology, with a special focus on the decentralized finance movement that has everyone in the industry buzzing.
This is caused by a variety of factors. One of them is the insistence of the US government to enforce rules on blockchain tokens and treat them as securities, creating a financial regulatory environment. There are also technical factors which make transactions more expensive and slower than traditional cloud hosting. This, in turn, makes them more relevant for high-value transactions rather than ultra-fast, low-value transactions, thus, being better for certain financial use cases instead of web applications.
“[DeFi’s] combination of transparency and decentralization of trust […] as well as […] the inherently global nature of these systems has allowed the free flow of liquidity across borders in quite a revolutionary way” – Marc Blinder
Case in point – tech companies are getting situated in this space by purchasing mass quantities of cryptocurrency, including Microsoft buying a large amount of Ethereum and PayPal buying Bitcoin.
These emerging crypto market trends come on the heels of numerous hedge funds and investment funds getting involved in large purchases of cryptocurrency as an alternative asset. This is in part due to the realization that different players on these decentralized markets are now able to trust the system completely regardless of the country they come from or the traditional banking system they’re part of.
This point is further supported by the theory that foresees the US stepping down as the global economic superpower and the possibility of having Bitcoin stepping up as the next global reserve currency.
This is one of the crypto industry trends discussed during the panel by Mr. Yoon Kim, a crypto analyst, strategist, and founder and CEO of Vestry Capital (to be covered in depth with a feature post).
“The timing is very auspicious […] it becomes rational and logical for a lot of people to push Bitcoin as a reserve currency” – Yoon Kim
Another emerging trend in the blockchain industry is the rise and ever-increasing popularity of DeFi – a marketplace where all participants can enter financial transactions freely and cheaply. The fact that within this system everyone is their own bank makes it the most democratic creation in our lifetime, which further supports the blockchain industry growth we’re experiencing.
The way these decentralized markets work and how they too may be subject to fraudulent behavior was discussed by Mr. Luke Lombe, founder of Echelon One and MYNTD, and a blockchain-specialized advisor with a deep understanding of the technology [to be updated later with Luke’s individual post].
“[One of the major risks associated with DeFi is the emergence of specialized] fully automated […] bots, computer programs or algorithms that identify opportunities within […] smart contracts […] and trading platforms.” – Luke Lombe
In that sense, creating the necessary legal framework for blockchain is paramount for its future development across the world. However, countries are slow to understand relevant industry trends and opportunities, as well as mechanics required in order to translate it into a legalized environment, conducive to nurturing blockchain growth.
Mr. Sota Watanabe, the CEO of Stake Technologies, [to be updated later with Sota’s individual post]. reflected on the challenges related to the blockchain legal framework in Japan and China’s long-term strategy, as well as the related efforts from the rest of the world.
“The Chinese government is moving very strongly towards creating its own blockchain and crypto environment. This is a direction Japan needs to move in more forcefully.” – Sota Watanabe
Finally, aside from FinTech, other emerging blockchain trends in 2020 are supply chain type use cases – groups of companies running private blockchains and utilizing that collaboration to optimize their infrastructure and processes. Their evolution is centered around data reselling, AI models, data feeds, etc. as an area which Mr. Blinder identified as the one with the most potential for growth.
Moreover, the tokenization of assets is part of the future which has already started. Converting high-value physical assets into tokens that will skyrocket in value after the expected hyperinflation of fiat currency induced by COVID-19 and other economic factors, is a topic to be greatly discussed by all interested in the opportunities it offers. Keep following our blog to get the rest of the insights about blockchain future trends!