Move into the mainstream world through business use

The American market research company Forrester recently published its forecasts for blockchain technology for 2021. The report reveals interesting results and notes that 2020 was an important year for blockchain technology to grow at the enterprise level and in the DLT technology space.

Martha Bennet, Forrester Principal Analyst and co-author of the report, told Cointelegraph that enterprise-level blockchain predictions are based on turning points that show significant changes rather than continuation of trends. For example, The report predicts that 30% of global projects will go into production in the next year. This is partly due to the effects of the COVID-19 pandemic.

According to Bennet, many of the blockchain-based systems in existence today have one common factor: less time to fix inconsistencies. In some cases, It could even happen instantly. Bennet noted that this common factor applies to supply chain use well as financial services:

“It’s not just about using fewer people for certain tasks, but also about reducing the time elapsed and freeing up liquidity. A crucial point is that this is possible today in the context of existing processes and operating models.

Development “takes time”

Move into the mainstream world through business use
Move into the mainstream world through business use

While this may be so, Bennet said that longer-term strategic projects in financial services typically revolve around possible changes in market structure and operating models. Many of these cases also require regulatory adjustments. “”This takes time, resources, and effort. This is the main reason the volatility and uncertainty associated with COVID has led many banks to back off some of these longer-term projects related to DDTS for the time being.“Said Bennet.

The report also notes that almost all of the initiatives that will move from pilot to production over the next year will be run on blockchain enterprise platforms that use the cloud. This most likely includes solutions from Alibaba, Huawei, IBM, Microsoft, OneConnect, and Oracle.

Allistair Rennie, CEO of IBM Blockchain, told Cointelegraph so The forecast that 30% of corporate-level blockchain projects will go into production in the next year is in line with IBM’s previous expectations with customers::

“With increasing pressure on supply chains from the pandemic, customers are realizing that there is an urgent need to accelerate their digital transformation in order to emerge stronger than before. We are seeing expansions to both existing and new blockchain projects. Successful are those that are based on strong business use cases and have a well-defined value to improve business. “

The Most Critical Technical Prediction: Zero-Knowledge Proofs

From a technical point of view, Bennet mentioned that the most critical prediction in the report is the growing need for knowledge-free evidence. “” Knowledge-free evidence is required due to the confidentiality challenges currently withholding projects“he said. The report also describes the problem that CCPs can solve:

“For companies that do not want to rely on established encryption techniques, the only option was to just keep hashes in the chain or to use constructs such as selective replication or private data collection. In many cases, existing techniques are also ignored.” Exposure problems due to metadata. “

But still, Much progress has been made recently with regard to CCPs. For example, the auditing company Ernst Young is developing a ZKP project. Known as “Nightfall”, it is data protection software that enables blockchain-based private transactions with ZKPs. Paul Brody, Global Blockchain Leader at Ernst Young, told Cointelegraph that the company’s top priority in the coming year is to make Nightfall and ZKPs more user-friendly for developers:

“The biggest challenge with using and implementing ZKPs is that they are much more complex than encrypting a smart contract with no privacy. I would compare this to adding SSL and encryption to websites in the early days – not something most people do you learn when you learn solidity development, and right now it’s not that easy to implement. “

Brody also said that Nightfall’s work is focused on improving transaction privacy by hiding the metadata that could be inferred from analyzing network activity. While the product currently supports private transfers and payments with compliance, Brody stated that the company plans to extend this by creating new privacy tools. “”If we do our job well, people will move from developing DApps (decentralized applications) to developing ZApps (zero-knowledge proofs).“said.

In addition, IBM’s blockchain platform uses ZKPs to ensure data protection. Ramesh Gopinath, vice president of blockchain solutions at IBM, told Cointelegraph that IBM uses ZKPs and related cryptographic schemes, such as: B. secure multi-party calculations in order to enable reliable analyzes to protect privacy in addition to AI data in the blockchain. The Forrester report notes that IBM will be one of the most widely used blockchain platforms for production-ready projects over the next year.

The Baseline Protocol is another open source project that relies heavily on ZKPs to coordinate confidential workflows between companies. John Wolpert, a group leader for the main corporate network at blockchain software company ConsenSys, stated in the minutes: With ZKPs, companies with different recording systems can be verifiably synchronized without passing on confidential information.

Public DeFi and Blockchain Predictions

The Forrester report also predicts that Decentralized Finance (DeFi) will have a negative impact on public blockchain adoption. According to the report, corporate-level technology leaders are now open to discussion about the role of public blockchains. Unfortunately, the rise of DeFi in 2020 has resulted in questionable activity on public networks like Ethereum. “”This has re-associated blockchains with the cryptocurrencies of the Wild West and will continue to deter decision makers from knowing the facts and risks.“says the report.

Kyle Thomas, CEO of Provide – an enterprise-level blockchain provider that works with SAP and Coke One North America – disagrees and tells Cointelegraph Companies will soon see public blockchains just as they do on the Internet: “A large part of the market is at stake as ‘Enterprise DeFi’ becomes a reality every day.”

Kevin Feng, a cybersecurity expert at PwC and former COO of blockchain company VeChain, told Cointelegraph that while the DeFi room might look similar to the 2017 ICO frenzy, DeFi shows the power of intelligent contracts for financial services.

As such, Feng mentioned that the DeFi space will likely shy away from public blockchains for businesses in the short term, but as the space matures, public blockchains will prove to be better for financial use cases: “If we look at DeFi from a different angle, it shows how blockchain can be used for financial use cases. This is the missing element for enterprise-level blockchain use cases.“.

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