2017 was a milestone year for blockchain payments and cryptocurrency adoption, Bitcoins in particular. The last quarter saw Bitcoins surge in popularity then slump to a 40% low and pave the way for rival currencies such as Ripple and Ethereum.
Blockchain payments are medium-agnostics, fast, and secure
Experts had anticipated Bitcoins to extend beyond “Proof of Concept” to real-world applications, but most were disappointed. There were some early breakthroughs such as R3CEV and IBM, but it remains to be seen if 2018 will be the year when blockchain payments go mainstream.
Rise of Bitcoin rivals
Bitcoins and other digital currencies will experience wild volatility owing to widespread trading. 2018 will see correction and flooring of their values. Bitcoins will lose ground to rivals such as Ripple that are a currency as well as a payment protocol.
Investors will explore other cryptocurrencies
Presently, blockchain payments are being used primarily by entrepreneurs and some early adopters. This year, institutional investors will step in with caution. Cryptocurrencies lack stability and anonymity of cash and will be used more a s a stock of value than as a payment network.
Payment Regulators will Surface
South Korea and China have already taken down fraudulent crypto exchanges and instituted watertight regulations to regulate Bitcoin trading. Central Banks in Germany, France and America have expressed concern over anonymous crypto accounts while European Union has pleaded for better vigilance towards cryptocurrencies.
Global Attitude towards Cryptocurrencies and their Regulation
2018 will witness audit and regulation of crypto exchanges. This can result in correction of Bitcoin rates.
ICO Boom will continue
Despite tighter regulation, blockchain technology adoption will continue unabated. Securities tokens will find their place and Initial Coin Offering (ICOs) will become more transparent. ICO are IPOs but with digital coins, mostly Bitcoins. It allows entrepreneurs looking for investors for their cryptocurrency venture to bypass stringent requirements of venture capitalists and get a part of their funds for a percentage of their digital wallet. This year this unregulated sector will be shaken down. To solicit investments, sound business plans, institutional funding and greater accountability will be required.
Initial Coin Offering Explained
Governments and banks will embrace blockchain technology
Many central banks are in favor of exploiting blockchain technology and distributed ledger system for trading and payment processing. Governments and premier banks will most likely experiment with their own versions of cryptocurrencies. These will be used to support orthodox payment methods to deliver better customer experience.
Wider Application outside of Finance
Wider use cases of blockchain payments will emerge. Manufacturing industry will find great use of blockchain payments to simplify and crystallize complex supply chain economics. Logistics errors will be ironed out; security and speed of financial transactions and better control over supply and demand will drive the second generation of digital payments.
Disruptive Blockchain Applications
Healthcare industry will also realize the benefits of cryptocurrency payments and use blockchain technology for operational management. In fact, by 2020, 20% health organizations will commence blockchain projects, says IDC Health Insights.
Legal legions will utilize blockchain for ownership transfer cases such as intellectual rights and property deeds.
Japanese banks recently announced their acceptance of Bitcoins as alternative asset for opening account and transferring funds. IBM has started transferring cross-border payments via Bitcoins. Cryptocurrency-powered wire transfers have fewer intermediaries and lower processing charges than traditional bank transfers.
Ripple’s settlement protocol will find more takers in 2018. Its decentralized Consensus network system will make exchange of dissimilar assets across borders easy and affordable.
Blockchain plus IoT
And one of the most prominent trends in the area will be a convergence of blockchain, artificial intelligence and IoT. The distributed nature of accounts will map very well with connected devices that have engulfed almost every facet of our everyday life. Enterprises will be able to rethink business models and grow their revenue streams exponentially by combining these two superpowers.
Blockchain’s Distributed Ledger System will Allow Connected Devices exchange information via IoT
To say that blockchain technology is a passing fad would certainly be an understatement. Its benefits are not lost on financial wizards, governments and enterprises. In any case, blockchain payments will be a win-win situation for consumers.