Out of the coronavirus pandemic will emerge a new digital society status quo — one that will accelerate major technological advances that are already underway. Among the many important innovations that the pandemic will push forward are blockchain and cryptocurrency.
What is it about this uncertain global climate that will make 2020 such a pivotal year for those two innovations? Here are some predictions for the blockchain space and digital currency for the remainder of the year, as well as how they’ll be affected by the coronavirus.
During 2020, blockchain will continue to grow in the finance sector, ahead of other industries. Applications such as food tracking, goods authentication, and storage of sensitive data involve significant regulatory work to tie real-world objects to their tokenized equivalents.
The most significant breakthrough in this area that we’ll see is the application of blockchain’s fundamental technology to sovereign currencies. China might well attempt an experiment in a model city like Shenzhen this year, and Sweden is another country interested in this possibility.
There will be greater consolidation in the blockchain space. Many companies weren’t prepared for the crisis, whether in terms of infrastructure or their financial arrangements. Well-prepared startups will be accelerated as a result.
Cryptocurrencies will become increasingly used as non-correlated investment options. If you look at the recent market crisis precipitated by the coronavirus, cryptocurrencies and the stock market were only correlated for a little over one week. Bitcoin’s drop was primarily a liquidity issue — gold had the same behavior in that period — and it quickly became apparent that the currency was oversold. The markets are once again uncorrelated. This will drive further interest in blockchain-based financial instruments.
It’s quite possible that, by the end of the year, we may even see what mass adoption will look like. The kind of services and tools that will be used widely in the future will likely already be available this year.
With people staying home like never before, more online gaming will certainly happen globally at scale. This will result in the rise of in-game digital currency usage and related blockchain technology.
Consider what kind of games will see an increase in popularity. People staying home will result in a huge increase in casual gamers — those who play simple games on their smartphones or tablets, rather than serious hobbyists with gaming PCs. These games are often built by small teams, and can be highly profitable given the size of the casual gaming market. As a result, there’s a lot of incentive to seize the opportunity.
It’s also not difficult to imagine what will be popular: party games for people in quarantine who want to have fun socially but can’t spend time together. It’s easy to incorporate blockchain in these sorts of games. The most obvious use is for in-game currency. But it’s also possible to consider non-fungible tokens as digital collectibles, either as special prizes or for people who want to customize their game world.
Fábio Canesin is co-founder of Nash, a fintech company using blockchain as infrastructure for the digital finance space.