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Top Predictions For Blockchain Technology In 2016
Blockchain technology took centre stage this year. Huge investments and several initiatives suggest the beginning of a new era – perhaps with blockchain tech in a pivotal role. Going forward, here are some of the predictions for the technology in 2016:
Integration of blockchain technology with other areas of fintech system
This year major banks like Barclays, Goldman Sachs and many others, tech companies like IBM, Intel and others have come forward to explore the potential of blockchain technology. Next year, the interest in this field is expected to reach higher levels.
In a blog post on Level, Chris Hart writes that next year focus will be more on how to integrate blockchain with other areas of the fintech ecosystem.
“The networked nature of Blockchain solutions means that it’s not just a case of installing Blockchain technology within one organisation, but rather getting many organisations to adopt, and integrate their existing systems with the technology - not to mention the business process and organisational changes. This will be no easy challenge and will take years to implement”, said Adi Ben-Ari, Co-Founder at Applied Blockchain, in an online post.
Blockchain adoption by capital markets
Shagun Bali, TABB research analyst, says that the adoption of blockchain across capital markets is now seen as a matter of “when, and not if”. Over the next 12 to 24 months, she sees early adoption rising as blockchain solutions are rolled out for syndicated loans as early as Q2 2016, although use cases such as equity clearing may still a decade away.
“Within capital markets, a number of top use cases are coming to the fore, opening new opportunities for efficiency and generating revenue from greenfield projects, including private equity, interbank payments and corporate debt, among others”, Bali said.
Popularity of Private Blockchain
Leading global banks have showing growing interest in blockchain technology this year. Ben-Ari says that due to heavy regulations in the banking system, adoption of public blockchain will be a challenge. Andrew Keys of ConsenSys says that both public and private blockchains will co-exist.
“The idea of integrated private and semi-private (or consortium) blockchain solutions will grow in prominence”, Keys added.
The authorities and regulators will gradually understand the concept of blockchain and given the rapid progress made in this field, they will work towards a much better understanding of how to effectively regulate it, says Chris Hart.
“Regulators will continue the trend of the SEC’s ruling on the Overstock.com share issuance by ruling on more narrow matters. This may be frustrating for banks looking to innovate, but it is the most pragmatic approach possible”, Hart added.
More importance to blockchain, less to digital currency
While blockchain started its journey as a ledger for storing bitcoin transactions, the past year saw companies and institutions interested in applying it to other areas. Ben-Ari believes that many other applications of blockchain will emerge throughout 2016.
“Blockchain hype will not die. As people wrap their heads around the technology, they will begin to understand that it could disrupt … everything”, said Keys.