Will blockchain leave crypto behind in 2019?
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Will blockchain leave crypto behind in 2019?

This is a contributed article by Eric N. Shapiro is the co-founder and CEO of ArcTouch

 

Like many, I've been burned by the recent demise of cryptocurrency. While not a heavy investor, my Bitcoin investment declined 80% in value from a year ago. And the cryptocurrency bubble probably is still deflating.

But if you look past crypto, the technology behind blockchain remains as promising and potentially disruptive as ever. From our perch, as a leading blockchain developer, we're seeing tremendous enthusiasm for blockchain among our clients, including many in the Fortune 500. Some are already piloting the technology and learning how a decentralized app with an immutable blockchain can transform their business processes.

So, despite the hype around cryptocurrencies waning, the business interest in blockchain technology is increasing. So what can we actually expect from blockchain in 2019?

 

Blockchain will find a killer (app), spurring a commercial rush

We think something like this scenario is likely next year: A major grocer will use its blockchain pilot to quickly and definitively identify the specific source of a global food contamination. One candidate: Walmart is already using its influence to drive blockchain adoption with some suppliers to track the path of food in its supply chain.

Blockchain can efficiently track the journey of produce all along the supply chain, from farm to table, through the decentralized ledger technology. Blockchain could have spared a lot of sickness from the recent E. coli outbreak in romaine lettuce. Not to mention the expense of the FDA's broad recommendation to destroy all romaine lettuce on the market. The agency couldn't identify the specific source and extent of the problem.

In 2019, blockchain might help avert a public health crisis. And the buzz about the events -- along with the realization of the potential cost savings -- could spur businesses to accelerate adoption of blockchain across a wide range of industries.

 

Blockchain technology gets divorced from Crypto (but they remain friends)

 

"Blockchain without crypto is boring." That's what a partner at venture capital firm Andreessen Horowitz presented at one of the blockchain industry events I attended last year. 

Of course, "boring" is a subjective term. But his point was, as others have said, you can't have blockchain without cryptocurrency. This sentiment was firmly established in the digital gold-rush of late 2017 and early 2018 for these alt currencies. But even with Bitcoin, that sentiment has shifted with the recent demise in cryptocurrency values.

And like bandwagon sports fans, casual investors in crypto and blockchain have turned their attention elsewhere. Good. Because the "boring" stuff is usually the important stuff, and where we believe the magic will happen this year.

2019 will be the year that we start solving real problems with blockchain. And in so doing, the perceptions about cryptocurrency will be divorced from the technology. Cryptocurrency, of course, will still be a part of some blockchain solutions -- but it won't be THE thing the industry is fixated on.

 

The crypto startup bubble bursts 

Along with the rise and fall of crypto fanaticism comes startup failure and consolidation. The number of startups built around cryptocurrencies will experience a disproportionately sharp decline in 2019. This will take place in two ways. First, many startups will simply fail and dissolve. Second, an increasing number of crypto-based startups will be acquired by more established companies.

And while the vast majority of all startups follow one of these two paths, new cryptocurrency startups won't emerge at nearly the same rate. Because…

 

New blockchain startups will pursue funding the old-fashioned way

One reason why so many cryptocurrency startups exploded is that they were able to fund themselves by distributing their own currency. Casual investors with a soft-spot for crypto would buy worthless tokens during ICOs based on the promise — as detailed in impressive sounding white papers — that those tokens would eventually become valuable. Just like Bitcoin.

But with the failure of many of those cryptocurrencies, startups will no longer be able to white-paper their way into a pile of cash. Instead, blockchain-based startups (whether crypto-focused or not) are going to need to take a more traditional path to funding. In other words, build your product or service and prove market fit, and then convince venture capitalists to fund it for growth.

One byproduct: We'll see a lot more tangible blockchain innovation from established companies, with their own deep pockets, than we do with startups during 2019.

And one last prediction: This time next year, no one will be talking about blockchain as being "boring."

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