Ever since the inception of the world’s first cryptocurrency Bitcoin in 2009, blockchain technology has remained hidden and out of the public eye until well into 2017. The resulting resurgence of popularity during the end of last year not only saw a massive spike in digital asset prices but an avalanche of investor funding, resulting in a glut of new blockchain start-ups hoping to take advantage of what seemed to be the newest gold rush.
Compared to 2014, where there was less than $20,000,000 in ICO funding, 2017 saw over $6 billion spread out in over 870 ICO’s – with 2018 estimated to at least double last years funding figures. What this also means is that the world of blockchain development has changed significantly over the past few years. In the years to come, blockchain start-ups will be hindered, assisted by, and otherwise influenced by these upcoming trends in the industry.
Ever Increasing Demand For Fewer Applicants
Two subareas within the field of information technology are sorely in need of professional developers – machine learning and blockchain. No matter where one looks, there is an overabundance of openings for blockchain engineers and developers and not enough professionals to fill them. Some statistics say that there are 14 open jobs for every blockchain engineer out there. Freelance platform Upwork saw Blockchain as the most in-demand skill for freelancers, showing a 35,000 percent increase in comparison to last year, with many of them charging over $200/hour for their services. Salaries for blockchain engineers in Silicon Valley average at around $150,000, 10 to 25 percent higher than their regular counterparts.
While this means that at present there is a considerable employee shortage for blockchain start-ups looking for talent. However, as is always the case of market shortages, an increase in demand for labor will drive up offered compensation until enough labor is provided by the market. In the years to come, the next generations of programmers and developers will begin jumping into the blockchain industry looking for secure, lucrative employment in an area sorely in need of professionals.
This expected trend will also apply to other auxiliary services within the blockchain world as well. Lawyers versed in digital assets, crypto-oriented copywriters, and other jobs and services will see an increase in applicants in the years to come as the field becomes increasingly lucrative – assuming that the billions in ICO funding don’t run dry.
Blockchain and Artificial Intelligence
As mentioned before, machine learning and AI is the other IT field sorely in need of qualified developers. However, these two areas also heavily influence each other, and as machine learning becomes ever more advanced, one of blockchain’s most promising case areas lie in its ability to facilitate certain parts of safe, efficient AI implementation.
For those interested in learning more, feel free to look through our previous article on how blockchain technology will change AI. However, as the years go on, more start-ups are going to be jumping into this area. In order for any artificial intelligence to function, vast quantities of information are required, which makes the production of AI’s economically impossible (save for large tech companies that engage in data mining). Blockchain technology can change this predicament by allowing regular individuals to willingly auction their data on blockchain-powered data exchanges, where companies can purchase data directly from end-providers.
This kind of hypothetical arrangement allows for more transparent, ethical transactions of data between companies and regular individuals. Considering that governments all across the world are working up to an AI “arms-race” of sorts, blockchain technology is going to be increasingly called upon in this area.
Blockchain and Internet of Things
Another trending area for blockchain start-ups is the upcoming Internet of Things (IoT) transition. Some experts estimate that as many as 20% of all IoT applications that get deployed will rely on some level of blockchain services to function. At the same time, the biggest security risks of future IoT deployments revolve around authentication and connections. Hackers in the past have succeeded in disabling cars remotely, hacking into implanted cardiac devices, as well as other problems.
This is precisely where blockchain technology can come in. Decentralized technology can do much to stabilize otherwise complex and vulnerable IoT systems, as well as ensure that there is no risk of a single point of failure in an IoT network if malicious parties launch an attack.
As the IoT becomes one of the largest trends in the tech world, blockchain start-ups will find a lot of potential applications of their technology in this field.
The Rise (and Possible Fall) of Ethereum
Whereas Bitcoin used to be the flag-bearer for the blockchain world, it’s usefulness in the ecosystem is strictly limited to its function as a medium of exchange. As the price of bitcoin continues to fall at the time of this article, Ethereum has now taken the mantle one of the most important platforms in the industry.
Ethereum, a platform which allows executable smart contracts to be programmed into its altcoins, has opened the gateway to a number of different applications in the industry. Additionally, Ethereum was designed with a powerful programming dialect called Solidity, which is mainly used in programming said smart contracts. As for why smart contracts are so desirable for real-world applications, there are three reasons for this – unrivaled security, fast execution, and the fact that it’s distributed across the network.
However, while the Ethereum platform and it’s personal brand of smart contracts promises to remain as a pillar in the development community for the coming year(s), there are still some problems. For one, the Ethereum blockchain in its current form is highly inefficient in terms of processing power, something that other platforms are hoping to be able to beat.
Some developers are turning to alternatives, such as NEO and Hyperledger, instead of Ethereum. NEO offers an advantage over its mainstream rival in that it uses an extremely energy efficient consensus algorithm known as dBFT (decentralized Byzantium Fault Tolerance). As such, NEO can process 10,000 transactions per second, while also supporting other programming languages such as C# and Python as opposed to Ethereum’s solidity, which is the only language the platform allows.
Hyperledger takes a different approach, allowing developers to launch their own private, “mini-blockchains” onto the companies “main” blockchain – a revolutionary concept that is beginning to see traction. Regardless, the blockchain development world will have alternatives to Ethereum in the coming years, opening up new development tools that otherwise aren’t available at the moment.
New Blockchain Markets
While Europe and North America have been the main markets for blockchain technology, other areas such as Asia and the Middle East will open up in the coming years. As legal rulings surrounding cryptocurrencies become more lenient, countries that formerly restricted these digital assets will find new industries springing up dedicated to this technology. Russia, which used to be extremely cautious in this area, now boasts one of the most prominent blockchain industries in the world.
It’s only a matter of time before new markets of both potential customers, sources of talent, as well as budding competitors will enter the blockchain world.
Moving from Promises to Production
For the past couple of years, the blockchain ecosystem has been oriented around ICO’s, securing funding, developing concepts as well as building prototypes of their projects. However, as time goes on, hundreds of blockchain start-ups will be transitioning from the earlier concept/funding/alpha stages of their product cycle’s to actually developing and launching their offerings onto the market.
Whereas blockchain technology has partially remained conceptual, the upcoming years are going to show markets, industries, as well as the general public just how applicable this technology can be to their daily life. Although a good number of projects might fizzle out and fail, if enough of these companies prove to the world the practicality of this technology, it will serve to only reinforce further waves of funding and completely legitimize this industry once and for all.
On the whole, blockchain technology has a promising future ahead of itself, and most of the aforementioned trends are a positive sign for the industry. In summary, blockchain start-ups can expect a larger pool of applicants to draw from in the future despite a seeming shortage at the moment. Many industries, not just AI and IoT, will demand blockchain technology solutions as they innovate, something that developers will be more easily able to do as more development tools become available for their use. Lastly, new markets grow the market as a whole while most of the current generation of ICOs move into finally putting finished version of their projects onto the market.
Also published on Medium.