This is what industry leaders foresee in the development of Blockchain technology and crypto space in 2021.
It would be fair to admit that after 2020 and everything it put us through, making any prediction for next year is more likely to be a blindfolded game. In the meantime, I am sure that humanity has much to learn from its past transgressions, and will move forward by correcting our mistakes and weaknesses. That is what we have always done. Without a doubt, the main driver of our development this year was the outbreak of COVID-19. The effects of the current global pandemic on all aspects of our lives will shape our future, and there are some trends that we started last year that will most likely continue into 2021.
COVID-19 revealed the urgent need for solutions in economic efficiency and transparency, and most urgently within the health sector. The deployment of new blockchain solutions will strengthen health systems, if not revolutionize them, helping both physicians and patients worldwide. Despite promises to preserve citizens‘ private data during the global pandemic in the name of public health, blockchain-based solutions that store COVID-19 data have raised serious concerns, as they do not appear to be private at all. While the potential of these emerging technologies is promising, balancing privacy with appropriate solutions should be a priority for those involved in this industry.
In driving our technological development into the future, the pandemic has also had a significant and ambitious impact on the financial sector. On the one hand, governments around the world have made great strides in developing digital central bank currencies (CDBC) this year. With CBDC implementations getting closer, serious privacy concerns have rightly been raised within the crypto community, as the technology represents another step towards a more centralized financial system.
On the other hand, people have been looking for alternative, decentralized solutions, resulting in the unprecedented growth of the decentralized finance sector (DeFi) that has been observed this year. Both trends will undoubtedly continue to be fundamental in this 2021.
In the midst of the new coronavirus pandemic, world governments began printing money, raising new concerns about the health of the financial sector and drawing people’s attention to alternative assets – cryptosystems. As a result, Bitcoin (BTC) proved to be a hedge against inflation while its position as a store of value strengthened, unlike in 2017.
Serious institutional investors, hedge funds and other sophisticated financial players, such as Grayscale Bitcoin Trust, MicroStrategy, Square and PayPal, among others, entered the crypto space, and this trend is likely to continue this year. With more investors and service providers joining the industry, the true utility of digital assets will further drive the mass adoption of crypto currencies around the world, which in turn will drive crypto charities and philanthropy.
With inexpensive, scalable systems that are unreliable, Blockchain technology is improving supply chain efficiency in many industries, from blood drives to food companies, and there are sure to be more DLT-backed use cases around the world. Some even argue that business block chains are the next step in the evolution of economic architecture, and that not taking this step along with all the others will be a serious mistake for large companies in 2021.
Last but not least, there is the potential of the chain of blocks in our efforts to combat climate change and global warming. Blockchain technology managing the environment will be crucial for the future, from sustainable digital finance and carbon emissions to green energy cryptomining and transparent fuel use. As we enter the third decade of the 21st century, achieving the United Nations Sustainable Development Goals without Blockchain technology seems an impossible task.
Blockchain and crypto-currency are not a panacea and will not solve all our problems, but it would not be wise to ignore their potential to improve the world. Cointelegraph contacted industry leaders and asked them for their personal expectations for 2021 to get some information about what awaits cryptomonics and Blockchain technology in 2021.
What will 2021 bring for the development of the cryptomint and blockchain space?
Brian Behlendorf, executive director of Hyperledger:
„I don’t have a magic 8-ball when it comes to predictions in cryptomonal space, although I suspect that volatility will remain its defining characteristic. The use of the block chain, distributed general ledger and smart contract tools will continue to grow as they have in 2020.
The more difficult economic times that are likely to continue into 2021 mean little room for proof-of-concept projects, but those conditions also tend to lead small and large companies to greater cooperation rather than battles that add nothing to market share, which means more consortium efforts, more realistic expectations about the benefits of those efforts, and less fuss and noise. We have already seen that some networks, such as Food Trust, reliably achieve increased value through network effects.
If your industry doesn’t already have a DLT transaction network at the heart of its business processes, it will by the end of 2021. And where there is competition, those block chain consortia whose governance is more open and with networks that are easier to link will have the advantage.
Brian Brooks, acting comptroller of currency for the Office of the Comptroller of the Currency of the U.S. Department of the Treasury
„Crypto-currencies are to banking what the Internet was to libraries. Just as the Internet existed for a decade before 1995, its rapid adoption was only possible after it became accessible to everyone, not just programmers.
In 2021, I hope to see the beginning of that same transition to cryptomonics. I think we are approaching the critical mass for a much more ubiquitous acceptance of cryptomonics as a tool for everyone to use, not just those who look like Silicon Valley. That acceptance, of course, is not guaranteed. Cryptomoney developers, exchange operators, and others need to remain focused on addressing concerns about anti-money laundering compliance, fraud detection and prevention, and a host of other things that must be addressed if the industry is to operate at scale.
Charles Hoskinson, founder and CEO of IOHK
„Blockchain technology is at a critical juncture. To deliver on the technology’s high promise and achieve mass adoption, the industry needs to learn to work together. This is not a new concept, in conventional technology companies rarely work in silos. We wouldn’t expect, for example, that a Samsung phone would only work with Samsung wireless routers, and we shouldn’t expect this in cryptosystems. If we continue to take the attitude that a platform needs to ‚win‘, then we risk shooting ourselves in the foot.
2021 will be a crucial test of this. If companies can prioritize the search for ways to interoperate, recognizing that the industry will benefit from a rich ecosystem of partners, all working together seamlessly for the end user, then there is nothing stopping us from having our ‚bluetooth moment‘ and replacing global operating systems with better and fairer solutions for all participants.
We could see the adoption of Blockchain technology on an unprecedented scale in the developing world by 2021. For developing countries, the pace of growth is often held back by the lack of basic infrastructure. However, this could begin to work in their favour. The Blockchain’s agile capabilities mean it could scale to serve entire populations, without the need for existing infrastructure. After a record year for the development of the Blockchain, the technology is finally mature enough to take them there.
Not only could this allow developing nations to grow at a much faster rate, but it also means they are not hampered by the challenges developed countries face in overhauling existing legacy systems.
Da Hongfei, founder of Neo, founder and CEO of Onchain
„In the future, I believe that 2021 could be the year when Blockchain technology becomes mainstream. Bitcoin Pro already proved its value to conventional investors in 2020, while DeFi’s projects affirmed the transformative power of Blockchain. In addition, the COVID-19 pandemic revealed the various cracks in the current global system and the growing need for more Blockchain-driven solutions to overcome current limitations.
In 2021, I do not see any of the above trends slowing down, if anything, only continuing to accelerate as major institutions increasingly adopt Blockchain technology.
Denelle Dixon, CEO and executive director of the Stellar Development Foundation
„Although 2020 was far from the year most of us expected, I think it was an important year for the blockchain and digital currencies. It demonstrated the positive impact Blockchain technology can have in delivering payments more quickly and efficiently. It established a solid foundation for the coming year.
In 2021, I believe we will see more adoption of the Blockchain technology as we work to create connected and easy to use products. For us at the Stellar Development Foundation, we are doing that by working to expand our base foundation, organizations that issue fiat tokens and provide financial entry and exit ramps, to make Blockchain technology seen as useful, versatile, and scalable. This foundation will better support the most common use cases we see for next year, cross-border business-to-business payments and customer-to-customer remittances, and will encourage additional applications to emerge in the marketplace.
Elissa Shevinsky, former product manager at Brave, former editor of Lean Out
„I believe that well-funded players will continue to run and maintain the crypt-currency business. Bitcoin will continue to be newsworthy. I think we’ll see more corporate stuff and less independent stuff, because of the way the funding is currently being distributed.
I think 2021 will be an extension of 2020 in many ways, rather than a year in which we see a dramatic change. 2021 will see a lot of optimism, as people get vaccinated and life starts to feel more ’normal‘.
I am seeing a growing distrust of governments and a lack of confidence in the way countries handle financial policies and basic functions. Did you know that the recent cyber attack (using SolarWinds, Microsoft, etc.) included a breach in the US Treasury? Would you invest in the US dollar? That’s what you do when you put dollars in your savings account. All of this makes me bullish about cryptomonies.
Emin Gün Sirer, CEO of AvaLabs, professor at Cornell University, co-director of IC3
„In 2021, DeFi will become a cross chain ecosystem, where users will find and pursue performance opportunities with the same assets across multiple chains through bridges. We will also see many use cases released for the first time, as developers explore networks capable of sub-secondary purposes and much cheaper fees than those they are currently working with.
Significant decentralization, as measured by the number of full nodes participating in the consensus, and on-chain governance will come to the fore as users and newcomers to cryptomonies become more aware of how centralized many block chains are and the risk involved.
Finally, we will see institutions and companies begin to move beyond just buying crypto currencies as an investment, to also developing real applications and infrastructure on platforms that can meet their performance requirements and be modified according to their data and compliance mandates.
Heath Tarbert, President and CEO of the U.S. Commodity Futures Trading Commission
„The digitization of markets is a macro trend. Of course, digital assets are part of that. Digital assets and their underlying technology are pushing conventional boundaries. I’m going to make a relatively safe prediction, which is that this is going to continue to be a vibrant and active space.
Digital assets, and in particular the underlying Blockchain technology, are very promising for our economy and for world markets in general.
Innovation in this space must continue to thrive. The financial services industry of my parents‘ generation, or even when I was growing up, is not what it is today. And I don’t expect today’s to be the same as my grandchildren’s. The markets must continue to evolve. We’ve seen firsthand how these markets, and especially these technologies, have no geographic boundaries. It is important that regulators develop coordinated, principle-based approaches to this ever-changing industry.
Irene Gao, Antminer’s sales director for North, Central and South America at Bitmain
„The current bull run is different than the one in 2017. Unlike previous years, we are moving from retail speculation to conventional market integration. We have already seen an increase in interest from financial institutions and regulators alike, and this will only continue in 2021.
It is likely that planned and delayed mining deployments will resume because of the COVID-19 pandemic, particularly in the United States. As such, next year, we are likely to see greater diversity in Bitcoin mining as U.S. miners expand their operations. We have improved the efficiency of our factory in Malaysia to serve more of our customers overseas and have enhanced cooperation with our customers to help them in the continued expansion of their mining operations.
We look forward to moving forward to 2021. We are improving services for our customers. Recently, we have extended the warranty on our Antminer 19 Series from 6 to 12 months and have started cooperating with more local partners in different regions to provide better support worldwide.
Jean-Marie Mognetti, CEO of CoinShares
„During 2020, Bitcoin exhibited similar patterns to those seen in 2013 and 2017. Price movements and trading volumes also show that trading, especially Bitcoin, has a kind of kinetic energy. If this trend continues, we may see Bitcoin following a parabolic movement in 2021.
We’re likely to see a continued increase in the number of institutional investors and companies adding digital asset and Bitcoin investment vehicles to their portfolios. This will result in some Bitcoin investment vehicles, such as CoinShares‘ ETP (exchange traded product) and Grayscale’s Bitcoin Trust, continuing to acquire more Bitcoin than can be mined daily, a pace that will likely accelerate in the new year. I think we’re about to see a repeat of the 2017 or 2013 trends in 2021, albeit in a much more structured and less emotional way, unless a six-sigma event occurs that disrupts the kinetic momentum of the market.
Jimmy Song, writing from Programming Blockchain
„A giant bull market and many more institutional investors. I don’t think anything in the blockchain space will have any impact, as it has in the last six years. The cryptomoney will be largely for new investors who will learn that anything other than Bitcoin is really a scam.
Joseph Lubin, co-founder of Ethereum, founder of ConsenSys
„I believe that the DeFi will become more relevant to ordinary people and the technology used to interact with them will be even easier to use.
I also continue to predict that the parts of Web 3.0, decentralized storage, bandwidth and value, will become even more integrated with each other. We spent a year collaborating on a bridge between Filecoin and Ethereum via Codefi’s DeFi bridge, and Infura’s IPFS service transferred over 300 TB of data this year alone. Web 3.0 is showing the potential for providing more open content creation, the ability to publish, participate, create, conduct e-commerce, communication, video, etc.
We will also be closely involved in the escalation of Ethereum, both with our research contributions to Eth2, our Teku client team, Codefi Staking, and the Infura beacon chain API. The merger of Eth1 and Eth2 may occur in 2021, and we expect a more flexible and scalable settlement layer for the planet.
In the early 1990s, you couldn’t buy anything legally on the Internet; now we’re seeing the same democratization in the financial industry. We’ve replaced bank books and calls to brokers with online interfaces. The distribution of financial services accessible to anyone is a great achievement, and we believe this will continue to take off in 2021. I believe the 21st century is about to begin in 2021.
Mance Harmon, co-founder and CEO of Hedera Hashgraph and Swirlds Inc:
„In 2021, the intersection of three trends – tokenization, DeFi, and business logic moving to layer two – will pave the way for enterprise adoption of public DLT networks. These trends, combined with the hard lessons learned from attempts to deploy private networks, have made enterprises susceptible to public DLT networks in ways that were not previously the case.
Today, digital tokens are designed for economic activity within supply chains, not just as a way for stratups to raise capital. The combination of tokenization, fiat-backed stablecoins and DeFi, the underlying technology, not the short-term turmoil, will make traditional financing operations faster and less expensive, fundamentally changing existing processes for purchase order financing, working capital borrowing, insurance purchasing, inventory financing guarantee and invoice factoring.
And companies are realizing that they can make their applications run business logic on layer two networks and simply use layer one for consensus and arbitration. This approach combines the advantages of public networks (distributed trust) with the advantages of private networks (low cost, scalability, privacy and regulatory compliance).
The intersection of these trends will lay the foundation for enterprises to use DLT in routine business transactions, driving a significant acceleration in enterprise adoption by 2021.
Mathew Yarger, Director of Mobility and Automotive, Iota Foundation
„2021 is going to be a year of hybrid DLT, interoperability and real-world integrations. Let’s look at it as a great transition year for the DLT space. Moving from the mistaken mentality of „DLT is the cure“ to the realistic understanding that DLT is a tool, just like artificial intelligence and cloud services.
We should see a growing understanding that some DLTs are good for some things, while others are good for other things, and that they can be combined in interesting ways to obtain interesting solutions. Other major issues to pay attention to are: interoperability between DLTs that are allowed and not allowed by enterprise applications, connecting DLTs focused on the Internet of Things to DLT environments hosted in the cloud, verifying key knowledge by using DLTs for consumer-oriented solutions, and testing more secure architectures in real-world environments, predominantly in healthcare, energy, mobility and supply chain solutions where ecosystems are highly fragmented or highly regulated.
There are many pragmatic and exciting things that will permeate the technology, affecting traditional technology companies with them showing a strong commitment to the DLT space, and driving their technologies in new and exciting ways.
Mike Belshe, CEO of BitGo
„We believe that 2021 will be the year when institutional investors accept and agree with Bitcoin’s thesis: that the scarcity of the asset is paramount to the long-term value. As such, we expect 2021 to be a very big year for BitGo and the industry as a whole. A combination of factors caused by the global COVID-19 pandemic, the influx of institutional investment, and the Bitcoin boom cycle will continue to accelerate growth and attract new investors on both the retail and institutional sides in the new year.
In the longer term, we also see enormous potential, as the future of money depends on a transparent and profitable way of doing business across borders, as well as helping people around the world have greater access and freedom to build financial security. We strongly believe that we will continue to accelerate growth in 2021 and attract new investors on both the retail and institutional sides.
Paul Brody, director and global innovation leader for Blockchain technology at Ernst & Young
„Adoption of the Ethereum core network by business customers and early adoption of privacy-enabled DeFi by business users. Rapid maturation of DeFi’s security and audit tools Early adoption of decentralized business applications beyond finance Shift from DApps to ZApps, zero-knowledge applications that do the same job, but support user privacy First regulatory frameworks that specifically cover stablecoins linked to a fiduciary currency and their use in consumer and business applications.
Roger Ver, CEO of Bitcoin.com:
„Almost every year has been better than the previous year. I don’t think this is going to change in 2021.
Samson Mow, chief strategy officer of Blockstream:
„In 2021 we’re going to see Bitcoin make incredible gains as more and more institutional players arrive. However, we’re also going to see a wave of shitcoins in the retail market as con artists try to take advantage of Bitcoin’s aura to get rich.
Scott Freeman, co-founder and partner of JST Capital:
„We believe that many of these existing trends around institutionalization will continue and we expect to see great growth, particularly within the decentralized credit and decentralized derivative offerings over the next 12-18 months.
We believe that investors will begin to see cryptosystems in a slightly different light, as people see Bitcoin more as a store of value and begin to see the utility value of other currencies. This could lead to a reduced correlation between traditional crypto assets and increased investment opportunities.
Vinny Lingham, CEO of Civic
„This year was a warm-up for next year. In 2021, we will see decentralized storage, decentralized finance and non-political currencies take off.
My favorites are Bitcoin, Ether and Filecoin. However, Ethereum’s scalability problems must be solved next year if we expect to see continued success in 2022.