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MIT Report: Blockchain Will Become Boring in 2019 - And That's Not a Bad Thing
FinTech, Blockchain, Financial Services
One of our top four storylines to watch in 2019 already includes the growth of blockchain beyond cryptocurrencies, and now we’ve got even more reason to be bullish on this development happening: According to the very smart people at the Massachusetts Institute of Technology, this will be the year that blockchain actually becomes normalized.
In an article for the MIT Technology Review, associate editor Mike Orcutt writes that not only will blockchain technology become much more commonplace in 2019, but that “it will start to become mundane.” However, while blockchain’s development in other industries – such as healthcare – will aid in its normalization, Orcutt doesn’t rule out the potential for stability within the cryptocurrency space. either.
Two developments that could normalize cryptocurrencies in 2019 (or at least make them a little less volatile), according to Orcutt: Fidelity Investments’ new unit to manage cryptocurrency assets for hedge funds, family offices and market intermediaries, called Fidelity Digital Asset Services, LLC, that will offer institutional investors custodial services and trade execution; and a new company called Bakkt that’s been launched by the Intercontinental Exchange (ICE) – the parent company of the New York Stock Exchange – which will create an open and regulated, global ecosystem for digital assets.
There is growing agreement that institutional money is absolutely essential for the long-term growth and stabilization of cryptocurrencies – and the new units from heavyweights like Fidelity and ICE offer a lot of promise to this end. However, the reality is also that Wall Street essentially took two steps forward and two steps back last year in its cryptocurrency efforts, with Bloomberg noting that both Goldman Sachs and Morgan Stanley have either shelved or slowed down plans for building Bitcoin trading infrastructures.
But Orcutt also points to the potential growth of state-backed digital currencies as possible avenue for cryptocurrencies to gain further traction in the global markets, as he expects the “discussion about them to heat up in 2019 as cash use continues to decline around the world and new payment technologies, including cryptocurrencies, improve.” It’s worth noting that Robinhood co-CEO Baiju Bhatt told a conference last year that he believes cryptocurrencies will someday become the default currency of sovereign nations – a point he made even as the price of cryptocurrencies were plummeting.
Although it’s nearly impossible to make any sound predictions about cryptocurrencies given their volatile history, the MIT Technology Review points to a much more well, boring, application for blockchain that could see significant growth in 2019: smart contracts. The biggest step toward making smart contracts actually functional has been the development of a secure decentralized oracle network – the first of its kind, according to Orcutt – through a collaboration between a startup called Chainlink and academic researchers at Cornell.
These blockchain-powered smart contracts could prove especially popular in the legal field:
One practical use of smart contracts that might appear in 2019 is in legal technology. Chainlink has partnered with a project called OpenLaw, which is developing simple smart-contract-based legal agreements (for example, an agreement between a worker and a company). And OpenLaw has partnered with Rocket Lawyer, a popular online service that lets users create their own legal documents.
Charley Moore, Rocket Lawyer’s CEO, tells the MIT Technology Review that the idea is “to use smart contracts to track the rights and obligations in legal agreements (like a freelance contract) on the blockchain and, once the contract’s conditions have been met, automate payments using cryptocurrency.” Moore – who says the plan is to launch it “sometime in 2019” – insists that the system should not be difficult for people to use, even for those who know nothing about cryptocurrencies.
With all that said, here’s hoping 2019 proves to be a boring, innovative year for blockchain technology.
Photo: Getty iStock