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What's in store for blockchain in 2019

Consortium-backed pilots could build blockchain momentum in the coming year.

Blockchain is one of those technologies that always seems to be on the verge of breaking into the mainstream but never quite gets there. It’s known as the technology underlying cryptocurrencies, but blockchain can also be used in many other ways, from securing supply chains to guaranteeing secure transactions.

What does 2019 hold for blockchain? Will it finally get its time in the sun? Here’s what some of the experts have to say.

Moving on from blockchain 1.0

Blockchain was invented in 2008—10 years ago, which is an eternity in tech time. It saw its first use as the transaction ledger for the cryptocurrency Bitcoin and seems as if it’s been around forever. So it’s easy to forget that in many ways, blockchain is still in its infancy, says Tom Golway, director and distinguished technologist at Hewlett Packard Enterprise. Until now, blockchain has primarily been used to power Bitcoin and other cryptocurrencies, he says. 

“We call use of it for cryptocurrency blockchain 1.0,” Golway says. “But there’s also blockchain 2.0, which will be used for enterprise-to-enterprise transactions and for consortiums of businesses to create efficiencies for a wide variety of purposes—in supply chains, for example, or syndicated loans, in which multiple partners collaborate in providing loans to an individual buyer.”

Beyond blockchain 2.0 is blockchain 3.0, Golway says, in which blockchain will be used for IoT and artificial intelligence. “Version 2.0 is where a lot of the hype is and the expectations will be.”

As to where progress will be made in the coming year, Golway is unambiguous: “The work in 2019 will be in pilot programs established by consortiums,” he explains.

Blockchain guide: IDC explains how to drive business transformation with distributed ledger technology and smart contracts.

Establishing consortiums are vital for blockchain’s benefits to be unleashed, because the technology’s benefits are often the greatest when groups of enterprises use them for transactions, says Golway. And because of that, issues that need to be resolved aren’t necessarily technological. Instead, he says, business relationships need to be clearly defined, along with legal, safety, governance, and privacy guidelines.

“The technology is the easy part of setting up a blockchain consortium,” Golway says. “It’s the non-technical aspects, like governance, that’s the hard part.”

Golway says work has been done setting up consortiums in healthcare and financial services, but the consortiums have yet to use blockchain to make their work more efficient. In 2019, he believes, some consortiums may start piloting its use.

Both industries have begun using blockchain in a relatively limited fashion. Massachusetts General Hospital in Boston is piloting a blockchain project with Korean startup MediBloc to use blockchain networks to allow medical institutions to share data while protecting patient privacy, Golway points out. The Mayo Clinic has also developed a number of blockchain pilots, and financial technology firm Finastra has been using the R3 Corda blockchain platform to increase the efficiency of making syndicated loans.

Golway believes blockchain will see increasing use in supply chains in 2019. As a model, he points to Walmart’s blockchain use for its food supply chain, to help keep consumers safe by tracing problems such as E. coli outbreaks more quickly. And he notes that the pharmaceutical industry has been looking at increasing the safety of its supply chain; it may establish consortiums and then turn to blockchain to help accomplish that.

It’s all about the pilots

Alison McCauley, CEO of Unblocked Future, a consulting group specializing in blockchain, agrees that 2019 will be a big year for establishing consortiums that might eventually use blockchain. She also believes more enterprises will begin examining the technology for competitive reasons.

“Companies are going to have to start raising their blockchain literacy in 2019 and get more people across the organization to understand what the technology is capable of so they can identify best use cases,” McCauley says. “They’ll have to experiment, because once the technology takes off, they don’t want to be left behind by their competitors.”

McCauley expects blockchain to be used to combat online ad fraud—meaning false and robot-created clicks, whereby humans never view the ads that advertisers pay for. Even more important, she says, will be the myriad ways financial services companies will begin using it in 2019. One of the more serious problems the financial services firms face is verifying that people who sign up for accounts are who they say they are. Blockchain will help with that, she says, and aid in combatting money laundering.

By 2022, 150 million people across the world will have blockchain-based digital identities.


“Financial services firms pay a tremendous amount of money and effort for this today, and blockchain will be able to do it more effectively," McCauley says. 

One serious problem holding back blockchain is that many applications that use it offer “abysmal” user experiences and have poor design methodologies. “So in 2019,” McCauley says, “we’re going to see a lot more designers move in and tackle how the applications can be made simpler and more intuitive.” 

As for blockchain technology being used directly by consumers rather than enterprises, McCauley believes that’s still some time away. “We’ll see back-end adoption into businesses before blockchain will start to be used by general consumers,” she says. However, there may be one exception, she adds: Big, brand-name companies may start small pilot programs in 2019 in which they issue blockchain-based cryptocurrency tokens directly to consumers for loyalty and frequent-buyer programs.

Trust and digital identities

IDC projects that in 2019 and beyond, blockchain will be increasingly used to help people establish their identities so they can better participate in the world’s economy. IDC's report “IDC FutureScape: Worldwide IT Industry 2019 Predictions” warns, “A surprisingly large number of people around the world cannot prove who they are. More than 1.5 billion people are virtually excluded from being able to participate in the 21st century economy and lack access to financial services, healthcare services, government services, and more because they lack any documentation that would establish their identity.”

The report says a number of governments and non-government organizations (NGOs) have begun using blockchain-based identity services to combat that and “offer citizens a way to prove who they are.” Estonia, Singapore, and India, it says, have already begun doing this. In 2019 and in the years after, more government and NGOs will follow suit, the report adds.

However, it warns of significant roadblocks, including a dearth of people with enough experience to build solutions. It’s not only engineers who lack the knowledge, but also business managers, regulators, and other participants. So, the report warns, “while blockchain holds promise for supporting verifiable identity, it's at the earliest stages of its development. The requirements in terms of storage, networks, and so forth to manage a large-scale project are still unknown. Even the basic protocols required to secure and run an identity management program at scale are still developing.”

Still, the report projects that by 2022, 150 million people across the world will have blockchain-based digital identities.

IoT and blockchain

One of the biggest blockchain trends in 2019 will be its use with IoT, says Ahmed Banafa, who teaches courses about blockchain at Stanford University and is on the engineering faculty at San Jose State University.

“Internet-connected devices need some sort of security system that ties them together and makes their data secure,” Banafa says. “Blockchain technology can do that by providing a secure and scalable framework for communication between IoT devices. While modern security protocols appear to be vulnerable when used with IoT devices, blockchain has a high resistance to cyberattacks.”

Golway adds that blockchain’s use with IoT in 2019 will go beyond making devices more secure. He believes a blockchain pilot program will be launched by year’s end that will allow consumers to monetize data and resources from IoT devices in their homes.

Golway notes that as IoT devices become more common in residences, smart electricity meters can become a hub for gathering data about appliances and devices, for example, tracing electricity use over time or tracking the failure rate of refrigerators and stoves. That data, he says, is extremely valuable to appliance manufacturers and utility companies. So consumers’ smart meters could be put on a blockchain and consumers could then use it to sell their data, anonymized so it isn’t traceable back to them. “If you had a storage device such as a hard disk, you could even sell storage cloud that way,” he says.

A very early pilot program is already underway. HPE and a blockchain-backed data platform called Streamr are collecting information in real time from the communications bus in an Audi Q2 car. The data, including fuel consumption, location, acceleration, and other information, can be streamed and kept secure with Streamr. If the pilot ever goes into full production, consumers would be able to be paid for the anonymized data sent back to Audi.

The bottom line

So what’s in store for blockchain in 2019? Experts say there will be successful blockchain production use cases in 2019, but they will be very focused, relatively small in scope, and based on transforming established business models.

Banafa sums it up this way: “There’s nothing but opportunity ahead for businesses who want to utilize blockchain. However, most blockchain application development trends in 2019 require more than just developers. Companies will also need to make changes to their workforces and their overall business strategies in order to effectively leverage its benefits. And that takes time.”

Blockchain in 2019: Lessons for leaders 

  • Pilot projects created by consortiums will give blockchain’s profile a boost this year.
  • Millions of people worldwide will have blockchain-based digital identities by 2020, according to IDC.
  • IoT security stands to gain a lot. Blockchain technology can provide a secure and scalable framework for communication between IoT devices.

This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.