It would be fair to admit that after 2020 and everything we’ve been through it, predictions for the year ahead will most likely be a blindfolded game. In the meantime, I am sure that humanity can learn much from its past transgressions and will move forward by correcting our mistakes and weaknesses. We always do that. Without a doubt, the COVID-19 outbreak was the main driver of our development this year. The impact of the ongoing global pandemic on every aspect of our lives will determine our future, and there are some trends that we started last year that are most likely to continue into 2021.
COVID-19 has highlighted the urgent need for solutions for economy and transparency and most urgently in the health sector. Further deployments of blockchain solutions will empower, if not revolutionize, healthcare systems by helping both doctors and patients around the world. Despite the promise to preserve citizens’ private data in the name of public health during the global pandemic, the blockchain-based solutions that store COVID-19 data have raised serious concerns as they appear not to be private at all . While the potential of such new technologies holds out promise, balancing privacy with appropriate solutions should be a priority for those in this industry.
Connected: How has the COVID-19 pandemic affected the crypto space? Experts answer
As the pandemic drives our technological development into the future, it is also having a significant and ambitious impact on the financial sector. On the one hand, governments around the world have made great strides in developing central bank digital currencies this year. With the convergence of CBDC implementations, serious privacy concerns have rightly been raised within the crypto community as the technology represents another step towards a more centralized financial system.
Connected: Did CBDCs affect the crypto space in 2020 and what’s next in 2021? Experts answer
On the flip side, people have been looking for alternative – and decentralized – solutions, which has led to the unprecedented rise of the decentralized financial sector this year. Both trends will certainly remain of central importance for the coming year.
Connected: Was 2020 a “DeFi year” and what is expected of the industry in 2021? Experts answer
Amid the novel coronavirus pandemic, global governments began printing money, creating new concerns about the health of the financial sector and turning people into alternative assets – cryptocurrencies. As a result, Bitcoin (BTC) has proven to be a hedge against inflation, while strengthening its position as a store of value unlike 2017.
Related Topics: Did Bitcoin Prove To Be A Reliable Store Of Value In 2020? Experts answer
Reputable institutional investors, hedge funds, and other sophisticated financial players like Grayscale Bitcoin Trust, MicroStrategy, Square, and PayPal have entered the crypto space, and this trend is likely to continue for the coming year. With more mainstream investors and service providers joining the industry, the true utility of digital assets will continue to fuel the global mass adoption of cryptocurrencies, which in turn will fuel the charity and philanthropy of cryptocurrencies.
Connected: Will PayPal’s crypto integration deliver crypto to the masses? Experts answer
With cheap and scalable, trusted systems, blockchain technology improves supply chain efficiency in many industries, from blood donations to food companies, and more DLT-based use cases are sure to be implemented around the world. Some even argue that corporate blockchain is the next step in the evolution of economic architecture and that in 2021 it will be a grave mistake for large companies not to take this step with everyone else.
Connected: Unforgettable: How blockchain will fundamentally change the human experience
Last but not least, blockchain is the potential of our efforts to combat climate change and global warming. Blockchain technology for protecting the environment will be vital for the future, from sustainable digital finance and carbon emissions to environmentally friendly crypto mining and transparent fuel usage. As the third decade of the 21st century begins, it seems impossible to achieve the United Nations Sustainable Development Goals without blockchain.
Blockchain and crypto are not a panacea and do not solve all of our problems, but it would be unwise to ignore their potential for improving the world. Reached out to industry leaders, Cointelegraph asked about their personal expectations for 2021 for an insight into the coming year in crypto and blockchain.
What will 2021 bring for the development of the crypto and blockchain space?
Brian Behlendorf, Managing Director at Hyperledger:
“I don’t have a magic 8-ball when it comes to cryptocurrency predictions, although I suspect that volatility will continue to be the determining factor. The use of blockchain, distributed ledger and smart contract tools will continue to increase as in 2020.
Tighter economic times, which are expected to continue into 2021, mean little room for proof-of-concept projects, but these conditions also often mean that small and large companies are more inclined to collaborate rather than zero-sum market share battles – which means more consortium efforts and more realistic expectations on the return of such efforts and less hype and noise. We have already seen that some networks like Food Trust reliably achieve increasing value through network effects.
If your industry does not yet have a DLT transaction network at the center of its core business processes, it will be by the end of 2021. And where there is competition, the blockchain consortia whose governance is the most open and whose networks are the easiest to connect have the advantage. “
Brian Brooks, Acting Treasury Department’s Acting Currency Auditor:
“Cryptocurrency is to banks what the internet was to libraries. Just as the Internet existed for a decade prior to 1995, its rapid adoption was only possible after it was accessible to everyone, not just programmers.
In 2021, I expect the same transition for cryptocurrency to begin. I think we are approaching critical mass for far more ubiquitous adoption of cryptocurrency as a tool that anyone can use, not just Silicon Valley types. This assumption is of course not guaranteed. Crypto developers, exchange operators, and others need to remain focused on addressing anti-money laundering compliance concerns, fraud detection and prevention, and a host of other things that need to be addressed if the industry is to operate at scale. “
Charles Hoskinson, Founder and CEO of IOHK:
“Blockchain is at a critical point. In order to deliver on the high promises of the technology and achieve widespread adoption, the industry must learn to work together. This is not a new concept – in mainstream technology, companies rarely operate in silos. For example, we wouldn’t expect a Samsung phone to work only with Samsung WiFi routers, and we shouldn’t expect this in crypto. If we continue to hold the stance that a platform must “win”, we run the risk of shooting ourselves in the foot.
2021 will be a crucial test for this. When companies can prioritize their search for interoperability and realize that the industry benefits from a rich ecosystem of partners who all work together seamlessly for the end user, nothing prevents us from taking advantage of our “bluetooth moment” and global operating systems replace with solutions that are better and fairer for all participants.
An unprecedented blockchain adoption was seen in developing countries in 2021. For developing countries, the pace of growth is often slowed by a lack of basic infrastructure. However, this could work in their favor. The agile capabilities of the blockchain mean that it can be scaled to serve entire populations without the need for existing infrastructure. After a rush year for blockchain development, the technology is finally mature enough to get it there.
Not only could this enable developing countries to grow faster, but it could also mean they will not face the challenges developed countries face in overhauling existing legacy systems. “
Da Hongfei, Founder of Neo, Founder and CEO of Onchain:
“I believe 2021 could be the year blockchain really goes mainstream. Bitcoin has already proven itself for mainstream investors in 2020, while DeFi projects confirmed the transformative power of blockchain. In addition, the COVID-19 pandemic has highlighted the various cracks in today’s global system and the urgent need for blockchain solutions to overcome current constraints.
I don’t see any slowdown in these aforementioned trends until 2021 – if at all, they will only accelerate further as mainstream institutions move increasingly to blockchain technology. “
Denelle Dixon, CEO and Executive Director of the Stellar Development Foundation:
“While 2020 was far from the year most of us expected, I think it was an important year for blockchain and digital currencies. It showed the positive effects blockchain can have in delivering payments faster and more efficiently. It has laid a strong foundation for the year ahead.
I believe that we will make more use of blockchain technology in 2021 if we work to develop consumer-friendly and connected products. For us at the Stellar Development Foundation, we’re working to expand our base of anchors – organizations that issue fiat tokens and provide financial in and out ramps – so that blockchain technology is seen as useful, versatile, and scalable. These anchors will better support the most common use cases we see for the next year, B2B cross-border payments and C2C cross-border transfers, and bring additional requests to market. “
Elissa Shevinsky, Former Product Manager at Brave, Former Editor of Lean Out:
“I think the well-funded players will continue to run and maintain the crypto business. Bitcoin will continue to be current. I think we’re going to see more entrepreneurial and less independent things because of the way the funds are currently being distributed.
I believe 2021 will in many ways be an extension of 2020 as opposed to a year in which we are seeing a dramatic change. There will be a lot of optimism in 2021 as people get the vaccine and life feels “more normal”.
I see increasing distrust of governments and a lack of trust in how countries deal with financial policy and basic functions. Did you know that the most recent cyber attack (with SolarWinds, Microsoft, etc.) involved a breach of the US Treasury Department? Would you invest in the US dollar? You do that when you have dollars in your savings account. All of this makes me optimistic about crypto. “
Emin Gün Sirer, CEO of AvaLabs, Professor at Cornell University, Co-Director of IC3:
“In 2021, DeFi will become a cross-chain ecosystem where users across bridges find and pursue multiple revenue opportunities with the same assets across multiple chains. We’ll also see many use cases launched for the first time as developers examine networks that are capable of operating in a split second and charging much more economical fees than they are now.
Sensible decentralization – measured by the number of full nodes involved in the consensus – and governance in the chain will move closer to the top as users and newer crypto providers become more aware of the centralization of many blockchains and the associated risk.
Eventually, we will see that institutions and companies not only buy cryptocurrencies as an investment, but also build real applications and infrastructures on platforms that meet their performance requirements and can be tailored to their data and compliance mandates. “
Heath Tarbert, Chairman and CEO of the US Commodity Futures Trading Commission:
“The digitization of the markets is a macro trend. This of course also includes digital assets. Digital assets and their underlying technology cross traditional boundaries. I will make a relatively sure prediction that this will continue to be a living and active space.
Digital assets and especially the underlying blockchain technology are very promising for our economy and for global markets as a whole.
Innovations in this area must continue to thrive. The financial services industry from my parents’ generation – or even from my childhood – is not what it is today. And I don’t expect today to be the same as it was for my grandchildren. The markets need to evolve. We have seen firsthand that these markets – and these technologies in particular – have no geographical boundaries. It is important for regulators to develop coordinated, principle-based approaches to this ever-changing industry. “
Irene Gao, Antminer Sales Manager, NCSA Region at Bitmain:
“The current Bull Run is different from 2017. Unlike previous years, we are shifting from retail speculation to mainstream market integration. Interest from financial institutions and regulators has already increased, and it won’t stay that way until 2021.
Planned mining operations delayed by the COVID-19 pandemic are expected to resume, particularly in the U.S. Hence, we are likely to see more diversity in Bitcoin mining over the next year as U.S. miners expand their activities. We have improved the efficiency of our Malaysia factory to serve more overseas customers, and improved the cooperation with our customers to further support the continued expansion of their mining operations.
We are confident of going towards 2021. We improve our services for our customers. We recently extended the warranty on our Antminer 19 series from six to twelve months and started working with more local partners from different regions to provide better support around the world. “
Jean-Marie Mognetti, CEO at CoinShares:
“In 2020, Bitcoin showed similar patterns to 2013 and 2017. The price movements and trading volumes also show that trading, particularly Bitcoin trading, has some kind of kinetic energy. If this trend continues, it is possible that Bitcoin will be seen in 2021 after a parabolic move.
The number of institutional investors and companies adding bitcoin and digital asset investment vehicles to their portfolios is expected to continue to grow. This will result in some Bitcoin investment vehicles like CoinShares’ ETP and Grayscale’s Bitcoin Trust continuing to acquire more Bitcoin than can be mined on a daily basis – a pace that is likely to accelerate in the New Year. I believe we will repeat the 2017 or 2013 trends in 2021, albeit in a much more structured and less emotional way, unless a Six Sigma event occurs that disrupts the kinetic dynamics of the market. “
Jimmy Song, Lecturer at Programming Blockchain:
“Huge bull market and a lot more institutional investors. I don’t think anything in the blockchain space is going to have any impact like it has done for the past six years. Crypto will mainly be intended for new investors who will learn that anything but Bitcoin is really a scam. “
Joseph Lubin, Co-Founder of Ethereum, Founder of ConsenSys:
“I think DeFi is becoming more relevant to ordinary people and the technology it interacts with becomes even more user-friendly.
I also continue to assume that the parts of Web 3.0 – distributed storage, bandwidth, and value – will continue to integrate. We worked together for a year on a bridge between Filecoin and Ethereum via Codefi DeFi Bridge, and Infura’s IPFS service transferred more than 300TB of data this year alone. Web 3.0 has the potential for more open content creation, the ability to publish, participate, create, run e-commerce, communication, video, etc.
We will also be closely involved in the scaling of Ethereum, both with our research contributions on Eth2, our customer team Teku, Codefi Staking and the Beacon Chain API from Infura. The merger of Eth1 and Eth2 could happen in 2021, and we look forward to a more flexible and scalable settlement layer for the planet.
In the early 1990s you couldn’t legally buy anything on the internet – we are now seeing the same democratization in the financial sector. We have replaced bank books and calls to stockbrokers with online interfaces. Distributing financial services that are accessible to everyone is a great achievement, and we believe this will continue to grow in 2021. I think the 21st century won’t start until 2021. “
Mance Harmon, Co-Founder and CEO of Hedera Hashgraph and Swirlds Inc .:
“In 2021, the intersection of three trends – tokenization, DeFi and business logic on layer two – will pave the way for companies to adopt public DLT networks. These trends, combined with difficult lessons from attempted private network deployments, have made organizations accessible to public DLT networks in ways they were not before.
Nowadays, digital tokens are being developed for economic activity within supply chains, not just to raise capital for startups. The combination of tokenization, fiat-backed stablecoins and DeFi – the underlying technology, not the short-term hype – will make traditional financing operations faster and cheaper, and fundamentally change the existing processes for order financing and obtain loans for working capital. Taking out insurance, securing inventory financing and invoice factoring.
And organizations are realizing that their applications can run business logic on layer two networks and easily use layer one for consensus and arbitration. This approach combines the advantages of public networks (distributed trust) with the advantages of private networks (low cost, scalability, data protection, and regulatory compliance).
The intersection of these trends will lay the foundation for companies to use DLT in routine business transactions, which will greatly accelerate company adoption in 2021. “
Mathew Yarger, Head of Mobility and Automotive at the Iota Foundation:
“2021 will be a year of hybrid DLTs, interoperability and real integrations. We’ll see it as a big year of transition for the DLT space. Moving from the flawed “DLT is the cure” mindset to the realistic understanding that DLT is a tool just like artificial intelligence and cloud services.
We should see a growing understanding that some DLTs are good for some things while others are good for other things, and they can be combined in interesting ways for interesting solutions. Other important topics to look out for include: interoperability between authorized and permissionless DLTs for business applications, connecting IoT-focused DLTs to cloud-hosted DLT environments, reviewing key findings using DLT for consumer-facing solutions, and testing more secure architectures in real-world environments predominantly in the areas of healthcare, energy, mobility and supply chain where ecosystems are highly fragmented or highly regulated.
There are many pragmatic and exciting things that will permeate the technology that affect traditional tech companies that are showing a strong commitment in the DLT space and advancing their technologies in new and interesting ways. ”
Mike Belshe, CEO at BitGo:
“We believe 2021 will be the year institutional investors accept and agree with the Bitcoin thesis: the scarcity of the asset is of paramount importance to long-term value. So we expect 2021 to be a very strong year for BitGo and the industry as a whole. A combination of factors brought about by the global COVID-19 pandemic, the influx of institutional investment and the upward trend of Bitcoin will further accelerate growth and attract new investors in both retail and institutional in the new year.
We also see tremendous potential in the long term, as the future of money depends on a transparent, cost-effective way of doing business across borders, giving people around the world better access and freedom to build financial security. We firmly believe that we will continue to accelerate growth in 2021 and attract new investors in both retail and institutional sectors. “
Paul Brody, main and global innovation leader for blockchain technology at Ernst & Young:
“Introduction of the Ethereum mainnet by corporate customers and early introduction of data protection-enabled DeFi by corporate users. Rapid maturation of DeFi security and audit tools. Early introduction of decentralized business applications beyond finance. A shift from DApps to ZApps – knowledge-free applications that do the same job but support user privacy. First regulatory framework that specifically covers stable coins linked to fiat currencies and their use in consumer and business applications. “
Roger Ver, CEO at Bitcoin.com:
“Almost every year was better than last year. I don’t think this will change for 2021. “
Samson Mow, Chief Strategy Officer at Blockstream:
“In 2021, Bitcoin will make incredible profits as more and more institutional players step in. However, we will also see a tidal wave of shitcoinery across the retail market as scammers attempt to ride on Bitcoin’s aura enrich themselves. “
Scott Freeman, Co-Founder and Partner of JST Capital:
“We anticipate many of these existing institutionalization trends will continue and expect strong growth over the next 12 to 18 months, particularly in decentralized lending and decentralized derivatives offerings.
We believe that investors will view crypto a little differently as people tend to view Bitcoin as a store of value and consider the utility of other coins. This could lead to a decreased correlation between traditional crypto assets and larger investment opportunities. “
Vinny Lingham, CEO at Civic:
“This year was a warm-up for next year. In 2021, decentralized storage, decentralized finance, and apolitical currencies will all be on the rise.
My favorites for top performers are Bitcoin, Ether, and Filecoin. However, Ethereum’s scaling issues need to be resolved in the next year if we expect continued success in 2022. “
These quotes have been edited and compressed.
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