Over the last 18 months, the financial markets have undergone a significant transformation. Cryptocurrencies, once a niche interest, have seen a massive increase in value. At the beginning of 2017, digital currencies had a collective market cap of less than $20 billion. By 2018, this had grown to an impressive $850 billion – one of the most remarkable year-over-year expansions ever witnessed.
Renowned investor Tim Draper boldly predicted that the price of Bitcoin will rise to $250,000 in four years. Additionally, crypto startups are gaining unprecedented momentum.
However, while cryptocurrencies and their remarkable prices attract most of the mainstream attention, there is a growing recognition from industry experts and central governments that the underlying technology – blockchain – is the cornerstone and the most significant game changer of all.
The Value of Blockchain
As The New York Times recently stated, “The Bitcoin bubble may ultimately turn out to be a distraction from the true significance of the blockchain.”
In January, JP Morgan Chase CEO, Jamie Dimon, offered what could be considered high praise for the technology when he described it as “real.” Describing it more romantically, Mckinsey and Co. described the blockchain as the technology that could “revolutionize the world economy.”
On March 9th, the president of China’s central bank, Zhou Xiaochuan, expressed support for blockchain technology in his remarks to the National People’s Congress. These sentiments closely echoed statements from U.S. officials at the Securities and Exchange Commission.
In an official statement on cryptocurrency and blockchain, SEC Chairman Jay Clayton remarked, “The technology on which cryptocurrencies and ICOs are based may prove to be disruptive, transformative, and efficiency-enhancing. I am confident that developers in fintech will help facilitate capital formation and provide promising investment opportunities for institutional and Main Street investors alike.”
This doesn’t mean that blockchain technology is currently ready to disrupt the world. It’s still a relatively new technology that requires continued development and maturation to be presented as a commercial enterprise solution.
For instance, research and consulting firm Deloitte identified blockchain connectivity as a necessary and essential tech trend for this year. In a detailed report, Deloitte stated, “With the proliferation of platforms and protocols in the marketplace today, no single solution has emerged as the clear winner.”
In short, although blockchain technology is highly capable, its disjointed networks don’t currently lend themselves to easy enterprise solutions. Nevertheless, progress is being made.
Enabling Blockchain’s to Communicate With Each Other
Several initiatives are underway to connect blockchains or adapt their functionality for businesses.
Qtum, a Singapore-based blockchain initiative, links Ethereum’s smart contracts and Bitcoin’s blockchain, merging the two most prominent blockchain technologies available today.
Bitcoin, the foremost and most valuable cryptocurrency, is the primary candidate for broad implementation, while Ethereum has long been favored by enterprise initiatives.
By using a proof-of-stake verification method, Qtum establishes a system that’s adaptable and usable for widespread business solutions.
As Qtum provides ready-made tools, companies can use its platform to integrate blockchain protocols, smart contracts, and other features into their current business workflow. As an enterprise-level blockchain platform that doesn’t require programming skills, Qtum allows for effective workflows and connectivity.
With job postings in the cryptocurrency space increasing, a shortage of blockchain developers to fill these roles could prove to be a significant obstacle for the advancement and proliferation of blockchain. Platforms like Qtum could be a boon to the industry.
Another emerging platform is the ‘Overledger’ platform created by Quant. It positions itself as the ‘blockchain operating system of the future’ and is the first blockchain operating system facilitating the development of multi-chain applications.
Primarily, the platform aims to facilitate human-to-human and machine-to-machine trust, enabling them to transact with each other safely and securely. Additionally, the Overledger platform plans to address many of the main limitations of current blockchain technology that are hindering its true potential.
Another example of this is the Hyperledger Quilt, one of the Hyperledger projects hosted by The Linux Foundation. It is a Java implementation of the Interledger protocol (a protocol for making transactions across ledgers). The platform acts as a business blockchain tool that offers interoperability between ledger systems.
The platform’s purpose is to act as a connected ledger that makes it easier, cheaper, and faster to transfer value to users on different ledgers or networks.
Other platforms like TenX are working to connect blockchains by making the value derived from various blockchains accessible on other chains as well.
TenX uses a debit card payment system to make blockchain assets instantly spendable. By improving the blockchain’s ability to function across different platforms, TenX is making things like digital currency or decentralized rewards more usable.
Enterprise integration will require close integration and reliable communication between the best and most capable blockchains.
Changing the World With Blockchain
The blockchain has broad applications for almost every industry.
In the finance industry, the blockchain offers a more secure, stable, and rapid payment system that has the potential to significantly alter current operational models. Chosen as the ‘Global Bank of the Year’ in 2017, Santander recently introduced an international payment service based on Ripple’s xCurrent.
There are opportunities beyond finance. From supply chain management to e-commerce, the possibilities seem limitless. In South Korea, cryptocurrency can now be used as a currency to purchase products in over 6,000 stores.
Even more exciting is the news that Newegg Inc, the e-commerce website vying with Amazon for sales in the tech equipment and electronics industry, has recently expanded its payment options to accept Bitcoin from its Canadian customers.
However, the lack of communication between different blockchains remains a bottleneck, hindering the industry’s growth. For substantial progress to be made and for blockchain technology to reach its full potential, the various blockchains will need to easily connect and communicate with one another.
This is a key development priority, and platforms are already working to make it a reality.
Qtum is merging the two most prominent blockchains, Bitcoin and Ethereum, while TenX is making blockchain assets usable in the real world. This is a step in the right direction and the process that will realize the blockchain’s true value proposition.
Revolutionizing the entire global economy would change the world as we know it. And the most exciting part is that blockchains could actually achieve this. However, first, they need to be able to communicate and connect.
