2019 has been an extraordinary year for blockchain and cryptocurrencies. Let’s take a look at some of the possibilities for the blockchain ecosystem in 2020.
Lightning Network is a second layer payment protocol implemented on any blockchain-based cryptocurrency. It paves the way for instant Bitcoin transaction settlement.
The protocol leverages off-chain data to speed up transaction processing while reducing associated fees. In the coming year, we will see more nodes, channels, and applications built on the Lightning Network infrastructure, allowing us to recognize unforeseen market efficiencies.
Derivatives of Cryptocurrencies
Cryptocurrency derivatives have now grown significantly in size and accessibility. Earlier, only a few exchanges offered this service, today, most exchanges allow investors to trade futures and options on large cryptocurrencies.
This development will make the market more competitive in 2020 as more exchanges enter the space.
Decentralized finance (also known as DeFi) has broad advantages and is the way of the future. DeFi projects are currently worth over $650 million.
Although it was hard to believe a few years ago, the lack of trust and security in financial services has now introduced new lending and margin trading instruments. It enables traders to easily switch between different debt positions.
Ethereum 2.0 has now entered the final stages of testing with the release of the public multi-client test set. Thankfully, the team spearheading the development of the client and components pays close attention to the feedback provided by the community. They have also been actively providing updates on progress.
Privacy in Transactions
There is a growing concern about the privacy of transactions within the marketplace. Thankfully, we’ve also seen the development of privacy tools.
For example, Ernst & Young has developed Nightfall for private transactions in the Ethereum ecosystem. This is a great example of how companies will drive their transactions through a public mainnet in the case of zero-knowledge privacy protocols.
Crypto friendly laws
In the past two years, the US state of Wyoming has enacted 13 laws related to blockchain and cryptocurrencies. Suddenly, the least populous state in the U.S. has become a hotbed of global cryptocurrency companies. This is because the regulations are friendly to digital banks and divide digital assets into three categories. It’s hardly surprising when other U.S. states and regulators have followed suit. We can expect other regulators to do the same in the coming year.
Overall, 2020 will be a pivotal year for blockchain technology and the digital asset ecosystem. We have several major threads to follow, and 2020 will be a year of continued growth in usage, measurement, and adoption of major blockchain protocols and digital assets.
Responsible editor: Ct