Crypto in 2019: What the New Technologies Will Bring
“Technical development-wise, I see a lot of coins simply stopping technical development altogether.” “We’re going to see the rise of mimblewimble.” “This is a year for everyone to get their heads down and focus on delivery.”
2019 is a big year for crypto and blockchain technology. It’s been a decade since Bitcoin’s genesis block, and while the original cryptocurrency and many of its rivals have evolved over the past ten years, neither they nor blockchain more generally have witnessed widespread adoption, despite interest from the worlds of finance, industry and government.
The absence of massive adoption might imply that blockchain and crypto tech is stagnating, yet 2019 will bring a range of novel technical developments. And while these won’t be shared across the board, they’re set to make certain coins and platforms more usable, scalable and adoptable.
Scaling for some, no development for others
There are now more than 2,000 cryptocurrencies in existence, yet some commentators believe that only a small percentage of these will evolve meaningfully in 2019.
“Technical development-wise, I see a lot of coins simply stopping technical development altogether,” says Bitcoin Core developer Jimmy Song, speaking to Cryptonews.com via email. “A ton of projects got off the ground and had built-in assumptions about their coin going up in value forever, which was never sustainable. The only projects really doing anything interesting technically are Bitcoin, Ethereum, Monero, ZCash and Decred.”
“Bitcoin is the one that’s most interesting because it has real users and a proven use case as a store of value,” Song adds, perhaps unsurprisingly given his allegiances. “It’s getting faster with Lightning and scales well on that layer. I’m anticipating Lightning to get easier and faster to develop on with the new Segwit v1 upgrade coming in the next year or two. I also expect more services to develop around Lightning and more of the ecosystem to build out.”
And according to fellow Bitcoin Core developer Bryan Bishop, scalability will be enabled by another technology that will spread this year. “For bitcoin, some developers are focusing on a proposal for Schnorr signatures,” he says, “which has the potential to make transactions smaller.”
As we discussed in a previous article, Schnorr signatures will enable greater scalability by essentially compressing numerous signatures into the space of one.
However, while the foregoing might give the impression that Bitcoin is the only currency developing this year, other coins are planning upgrades. As hinted at during the Devcon4 conference at the end of October, Ethereum is planning its long-awaited Constantinople fork, when it will introduce ‘off-chain’ state channels that will in turn provide its blockchain with greater scalability.
The rise of Mimblewimble
One new technical solution that won’t be restricted to Bitcoin is mimblewimble. No, this isn’t typo: there is new privacy technology named after a spell used in the Harry Potter universe, and in a strange kind of way it mirrors the tongue-tying effects of its namesake, making transactions untraceable by mixing them together.
“We’re going to see the rise of mimblewimble, which offers privacy and confidentiality,” Bryan Bishop says. “We might even see a bitcoin sidechain offering mimblewimble.”
Indeed, mimblewimble has already begun appearing and being implemented, because Beam – a new privacy coin that uses the protocol – went live on January 3, offering users the ability to choose “which information will be available and to which parties, having complete control over [their] personal data in accordance to [their] will and applicable laws.”
Specifically, mimblewimble uses what are known as ‘blinding factors’ to encrypt the sum of crypto they’re sending to another party, in addition to using CoinJoin, a privacy protocol that protects Bitcoin transaction privacy, to mix different transactions together.
It’s likely that mimblewimble will spread to other coins launching this year, since in addition to Beam, January also brought the launch of Grin.
Focus on delivery
Moving away from crypto, blockchain technology in general is likely to witness significant developments, as explained to Cryptonews.com by PricewaterhouseCoopers’ Blockchain Leader, Steve Davies.
“We are likely to see two major trends. The first is the further evolution of platforms that are faster and more secure than in the past,” Davies says. “A lot of the money raised through ICOs [initial coin offerings] last year has been going into this area. This will allow new uses for example in payments applications, that may not have been commercially viable in the past.”
“Secondly, after a lot of hype last year, especially in the crypto space, this is a year for everyone to get their heads down and focus on delivery. We are likely to see more practical applications being rolled out – in fact this is already happening; for example birth certificates in India.”
Birth certificates in India is one example of a new application of blockchain, with the Indian government issuing the first certificate in December, using an ID platform built by Lynked.World and based on the Ethereum blockchain. And while this relates more to developments in how blockchain tech is being applied than how it’s being built, recent patents point towards new kinds of blockchain solutions and technologies.
At the end of last year, for example, the Bank of America patented blockchain tech for cash ATMs, IBM patented blockchain-based technology for building trust in AR (augmented reality) gaming, Xerox patented a blockchain-based system for checking whether electronic files have been altered, while Intel patented a new method for making Bitcoin (and proof-of-work) mining more energy efficient.
There is, then, every reason to think that there will be plenty of technological developments in the world of crypto and blockchain this year, with the growing need for tangible results making such developments even likelier than in previous years.
