U.S. market research firm Forrester recently released its blockchain forecast for 2021. The report reveals some interesting results, noting that 2020 has been a significant year for the growth of the enterprise blockchain and technology space. of the distributed ledger.
Martha Bennett, senior analyst at Forrester and co-author of the report, told Cointelegraph that the company’s blockchain predictions are based on inflection points that show specific changes rather than continuing trends. For example, the report predicts that 30% of global projects will go into production next year. This is in part due to the impact of the COVID-19 pandemic.
According to Bennett, many blockchain-based systems that are in use today share a common factor: less time to resolve discrepancies. In some cases, it can even be instantaneous. Bennett noted that this common factor applies to supply chain use cases as well as financial services:
“It’s not just about needing fewer staff to accomplish certain tasks; it’s also about shortening the elapsed time and freeing up cash. A key point is that it can be done today, within the context of existing business processes and models.
Development “takes time”
While it may be, Bennett shared that longer-term strategic plans in financial services tend to revolve around potential changes in market structure and operating models. Many of these cases also require regulatory adjustments. “It takes time, resources and effort. This is the main reason why the volatility and uncertainty related to COVID has led many banks to pull out of some of these longer term DLT related projects at this time, ”Bennett said.
The report also states that nearly all of the initiatives that go from pilot stage to production next year will be executed on enterprise blockchain platforms using the cloud. These will most likely include solutions from Alibaba, Huawei, IBM, Microsoft, OneConnect and Oracle.
Allistair Rennie, Managing Director of IBM Blockchain, told Cointelegraph that predicting 30% of enterprise blockchain projects will go into production next year is consistent with what IBM has seen with its customers so far:
“With the increased pressure that the pandemic is placing on supply chains, customers are seeing an urgent need to accelerate their digital transformation to emerge stronger than before. We are seeing both extensions of existing blockchain projects and new ones. The most successful are those that are built on solid business use cases and have clearly defined value to add to the business. “
The most critical technical prediction: the unconscious evidence
From a technical standpoint, Bennett mentioned that the most critical prediction listed in the report is the growing need for zero-knowledge evidence. “ZKPs are necessary due to the challenges of preserving confidentiality that are currently delaying projects,” she said. The report further describes the problem that ZKPs can solve:
“For businesses that don’t want to rely on established encryption techniques, the only options have been to keep only chain hashes or to use constructs such as selective replication or private data collections. In many cases, existing techniques also do not solve the exposure problems associated with metadata. “
However, a lot of progress has been made recently around ZKPs. For example, a ZKP project is under development by the firm Big Four Ernst & Young. Known as ‘Nightfall’, it is privacy software that will enable private blockchain based transactions using ZKP. Paul Brody, global head of blockchain at Ernst & Young, told Cointelegraph that the company’s top priority over the coming year is to make Nightfall and ZKP easier for developers to use:
“The biggest challenge in using and implementing ZKPs is that they are much more complex than coding a smart contract without confidentiality. I would compare this to adding SSL and encryption to web pages at the start – it’s not something most people learn when they learn Solidity development and at the moment it’s not so easy as it could be to implement.
Brody added that the work around Nightfall is focused on increasing the level of confidentiality of transactions by hiding metadata that could be inferred by analyzing network activity. And while the product currently supports private transfers and payments in compliance with regulations, Brody explained that the company wanted to expand 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 applications),” he said.
Related: Unknowingly Evidence Explained
In addition, IBM’s blockchain platform uses ZKPs to maintain data privacy. Ramesh Gopinath, vice president of blockchain solutions at IBM, told Cointelegraph that IBM uses ZKPs and related cryptographic schemes such as secure multi-party computations to enable trusted analytics preserving privacy as well as AI data on the blockchain. The Forrester report notes that IBM will be one of the most used blockchain platforms for production-ready projects next year.
The Base Protocol is another open source project that relies heavily on ZKPs to coordinate confidential workflows between companies. John Wolpert, a group executive for the corporate mainnet at ConsenSys, a blockchain software company, explained that over the protocol, ZKPs allow companies with different record keeping systems to be synchronized in a verifiable manner. per recording without sharing sensitive information.
DeFi predictions and public blockchains
The Forrester Report also predicts that decentralized finance will negatively impact the adoption of public blockchain. According to the report, leaders in enterprise technology are now open to discussing 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 public blockchains with the Wild West cryptocurrency and will continue to drive away informed compliance and risk decision makers,” the report says.
Kyle Thomas, CEO of Provider – an enterprise blockchain provider that works with SAP and Coke One North America – does not differ, telling Cointelegraph that organizations will soon see public blockchains the same way they do. do it on the Internet: to win because “Enterprise DeFi” is becoming more and more a reality over the days. “
Echoing Thomas, Kevin Feng, former chief operating officer of enterprise blockchain company VeChain, told Cointelegraph that while the DeFi space may look like the initial coin-offering spree from 2017, it is different in that DeFi illustrates the power of smart contracts for financial services.
As such, Feng mentioned that the DeFi space will likely make companies wary of public blockchains in the short term, but as the space matures, public blockchains will prove better for financial use cases: ” If we look at DeFi from another perspective, it shows how blockchain could be used for financial use cases, which is the missing piece for business blockchain use cases. “