Will 2020 be the year blockchain overcomes its hype?

blockchains

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Sheila Warren, Head of Blockchain and Distributed Ledger Technology, World Economic Forum


  • In 2019, the focus on blockchain shifted from hype to quality.
  • In 2020, there is an opportunity for blockchain to have a social impact.
  • But projects will only succeed if there is adequate governance and a collaborative approach.

Another year has rolled on by, and while many things in the blockchain space have changed, a lot remains the same. 2019 saw a continued cooling of indiscriminate funding and a renewed focus on quality over hype. In addition, we’ve seen the acknowledgement by some big names, including Facebook and the other Libra Association members, and even a few central banks, that blockchain technology, and digital currency, are truly exciting innovations that just need a bit more experimentation to stick.

At the World Economic Forum, we’re keen to ensure that greater blockchain adoption, which we deem inevitable, happens in ways that support inclusion and avoid replicating the consolidation of power that currently exists, particularly in the financial system. In addition, we remain focused on rationalizing this technology across sectors and publicizing our learnings in an effort to guide the public sector and civil society knowledge, funding, and robust experiments.

How is your organization spending on blockchain?
Image: Image: Statista

To go far, go together

Last year, we saw less of established actors pitching competitors on unilateral projects. Instead, we saw either totally internal initiatives or creative attempts at consortium building (for example, Food Trust, Tradelens, INATBA, Libra), with varying degrees of success. Companies are waking up to the idea that to go far, they ought to go together. (As an example, the Forum recently launched a consortium to explore the use of blockchain technology in the mining and metals sector, where a collaborative approach would have been hard to imagine even a few years ago).

We expect to see a similar collaborative approach from the public sector as 2020 progresses, and in fact, the Forum has already seen an increased willingness on the part of public sector agencies to share learnings and challenges. (An example is our Central Banks Digital Currency project, which has brought together more than 45 Central Banks to explore parameters for successful deployment of a CBDC. Our CBDC Policymaker Toolkit, co-created with over 45 Central Banks, will launch in Davos at our Annual Meeting.)

Devil in the details

The term “governance” used to cause immediate recoil among even blockchain enthusiasts. But 2019 saw a gradual recognition (or perhaps resignation) that governance is a feature that drives adoption.

Of course, as Facebook learned, the promise or potential for good governance is not enough; the devil is in the details, and 2019 saw laypeople diving deep into the specifics of operations, business models, and legal structures in an effort to assess risk. That was also reflected in regulators’ investigations in the 2017-2018 slate of ICOs, exemplifying the importance of specifics (despite the lack of clarity that continues to cloud the regulatory space globally).

Social impact

At the Forum, we’re focused on bringing together stakeholders to pilot policy projects focused on social impact. The social impact space continues in an ongoing, and frustrating, attempt to remedy complex societal problems with technical solutions. Our view, which is informed by the previous generation of tech experimentation, is that technology alone simply cannot adequately address social challenges, and that accompanying policy is essential to ensure that a blockchain, or really any technology, is deployed in a way that addresses its limitations.

Celo, a payments startup, is a good example of a team that understands cultural and social realities and its baking that learning into its user experience. Another example is AZA Group (aka Bitpesa), with its deep knowledge of frontier markets, particularly in Africa.

In a similar vein, our government transparency project, which focuses on aligning civic engagement with a blockchain deployment designed to reduce corruption in public procurement, will pilot in Colombia in early 2020 and looks to develop local talent needed to maintain deployment over time and avoid vendor dependency.

We are seeing increased understanding that blockchain technology is not exempt from the need for robust understanding of context. This is a welcome change from the insanity of 2018, when merely adding the word “blockchain” to a pitch was enough to claim authenticity.

Of course, there is still a long way to go. The reality is that the most transformative applications of blockchain technology are arguably best-suited to the most challenging contexts (for example, “banking the unbanked” is a deeply complex problem that can’t be solved by simply rolling out a token), and we are still a long way from realizing the true potential of this technology in the social impact space.

Whither 2020?

This year, we expect to see increased experimentation with hybrid blockchain models, both in the financial sector (for example, decentralized finance or DeFi and “synthetic” CBDCs) and the public sector (increased use of smart contracts). These are a great way to increase comfort with the technology.

We are not close to realizing the promise of truly decentralized systems, but the space continues to evolve in exciting new ways, and it’s just a matter of time before something huge gains traction.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Eurozone: How can 200 banks find €400 billion?

Amazon, a pair of shoes and my Data Privacy walks away

An Easter Special: Social protection of migrants in Europe as seen through the eyes of European youth

COVID-19 is threatening the lives of migrant children held in US custody

“None of our member states has the dimension to compete with China and the US, not even Germany!”, Head of EUREKA Pedro Nunes on another Sting Exclusive

A ‘charismatic leader’ dedicated to making the world a better place for all: officials bid farewell to former UN chief Kofi Annan

Tackling the toxic norms that hold women back in Asia

A Sting Exclusive: “Our ambition is by 2020 Indonesia to become an emerging power of World’s Maritime Access”, reveals the Chargé d’Affaires at the Embassy of Indonesia in Brussels, treating WEF, ASEAN and EU-Indonesia relations on the eve of the World Economic Forum East Asia 2015 in Jakarta

World Mental Health Day is a chance to listen to those with the condition – the biggest experts of all

5 amazing schools that will make you wish you were young again

This Japanese concept will help you see the world – and learn – in a different way

Is Haiti better prepared for disasters, nine years on from the 2010 earthquake?

WHO working to save lives following powerful earthquake in Albania

How to give start-ups a head-start

What is carbon offsetting?

EU to spend €135.5 billion in 2014 or 6.5% less than this year

ECB’s Draghi favours a cheaper euro to serve all Eurozone countries

How the world can gear up for the fight against cancer

Health spending set to outpace GDP growth to 2030

Here’s how retailers can encourage more sustainable behaviour

UN human rights chief denounces grave ‘assaults’ on fundamental rights of Palestinian people

Africa is set to get its first vertical forest

UN health agency identifies 5-year-old Congolese boy as first confirmed case of Ebola in Uganda

GSMA Mobile 360 Series – MENA in Dubai, in Association with The European Sting

We need to rethink neuroscience. And you can help us

rescEU assets mobilised to help Greece fight devastating forest fires

JADE visits Lithuanian Junior Initiatives

Stop cooperation with and funding to the Libyan coastguard, MEPs ask

Progress made in UN talks to end Yemen war, Envoy lauds ‘positive and serious spirit’

COVID-19: ‘Top priority’ must be on containment, insists WHO’s Tedros

UN rights chief ‘deeply concerned’ over Jehovah’s Witness sentencing in Russia

Available mental health services: is it only about professionals or institutions?

International community makes important progress on the tax challenges of digitalisation

AIESEC @ European Business Summit 2015: The power of an individual and how we can awaken Europe’s Youth

European Commission calls on national political parties to join efforts to ensure free and fair elections in Europe

Climate change will shrink these economies fastest

Tuesday’s Daily Brief: #GlobalGoals progress, essential meds, updates from Cox’s Bazar, Sudan and DR Congo

UN lauds special chemistry of the periodic table, kicking off 150th anniversary celebrations

Why sustainable packaging is good for profits as well as the planet

COVID-19: MEPs free up over €3 billion to support EU healthcare sector

Moscow’s Eurasian Union lost significance after the crisis in Ukraine

Egypt urged to free prominent couple jailed arbitrarily since last June: UN rights office

Only international actions can settle the world’s ‘enormous and diverse cross-border challenges’, Qatar tells UN Assembly

Will we join hands for a tomorrow without antimicrobial resistance?

More ambition needed for EU recovery instruments, says majority of MEPs

New Zealand has unveiled its first ‘well-being’ budget

Will the Greek economy ever come back to growth?

The global economy is woefully unprepared for biological threats. This is what we need to do

Germany may prove right rejecting Commission’s bank resolution scheme

Bolivia: UN underlines support for ‘credible, transparent and inclusive’ election

In an era of global uncertainty, the SDGs can be our guide

UN rights office calls on Zimbabwe Government to end ‘crackdown’ in response to fuel protests

How is the global economy fairing 11 years after the financial crisis?

Nairobi summit: Women’s empowerment a ‘game changer’ for sustainable development

Food safety: New rules to boost consumer trust approved by MEPs

Ebola cases rising in DR Congo, but UN health agency cites progress in community trust-building

We can solve climate change – if we involve women

Six children among 53 confirmed fatalities after Libya detention centre airstrikes: Security Council condemns attack

New chapters in EU-China trade disputes

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s