The Biggest Highlights of 2020 in Blockchain Technology
Although it is somewhat difficult to associate the year 2020 to anything other than the Coronavirus pandemic, technology never sleeps. Especially blockchain technology. This year has seen some tremendous developments in the industry, as it begins to slowly mature from its wild times of 2017. It is clearer than ever that blockchain and crypto are not mere buzzwords, but are finally coming into their own. Let’s take a look at some of the year’s biggest highlights so far.
DeFi Takes Hold
It is impossible to talk about blockchain and crypto in 2020 without mentioning DeFi, short for Decentralized Finance. DeFi is completely peer-to-peer and includes the whole gamut of what you’d see in the traditional financial world – digital asset management, compliance, borrowing and lending, derivatives, decentralized exchanges aka dexes, margin trading, staking, insurance and much more. It is an entire ecosystem that has already garnered over $11 billion in total locked value. Some of the most popular players in the DeFi space are Uniswap, a decentralized exchange hosted on the Ethereum blockchain. It’s completely on-chain allows for swapping of ERC20 tokens as well as ETH. The biggest DeFi lenders on the market are Maker and Aave, which each have over one billion dollars locked in – and that is not a small amount.
Bitcoin Halving
Bitcoin halved on May 11, 2020. Such an event occurs every four years – with every 210,000 blocks mined. Although this means that the reward for mining Bitcoin transactions decreased by 50%, it also means that Bitcoin’s inflation rate and the rate at which new BTC enters circulation is also halved. This built-in synthetic inflation helps the currency combat inflationary issues that other currencies, like the dollar or the yen, face.
Increase in Crypto Demand from Institutions
According to Forbes, “multi-billion dollar bitcoin and crypto-asset manager Grayscale reported its biggest ever quarterly inflows of almost $1 billion.” Grayscale reported inflows of $905.8 million in the second quarter of this year, compared to the first quarter when it recorded $503.7 million, representing a near doubling. Although this is a significant representation in numbers, it is clear from the behavior of institutions that they know that crypto and blockchain are the future. Goldman Sachs recently named a new head of digital assets who envisions “a future in which all of the world’s financial assets reside on electronic ledgers, and activities that today require squadrons of bankers and lawyers like initial public offerings and debt issuances could be largely automated,” according to CNBC.
Ethereum Classic and the 51% Attacks
Earlier this year, Ethereum Classic received multiple 51% attacks. Such an attack on a proof-of-work blockchain can occur when a bad actor is able to take control of the majority of the network’s hashrate – 51% and above – which gives them the ability to undo transactions. This resulted in a double-spending of millions of dollars of its cryptocurrency, ETC. Despite this unfortunate scenario, it has given Ethereum Classic an opportunity to address this vulnerability that all proof-of-work blockchains contain by the nature of how they operate. This will hopefully not only help Ethereum Classic but also other proof-of-work blockchains become more resilient to such attacks in the future.So there you have it, some of the biggest happenings in blockchain technology so far this year. Next year will bring about much more innovation, so be sure to stay tuned. And if you’re a tech company, you should consider implementing the benefits of this novel technology wherever you can. Be sure to check out Blockchain Collective to see how we can help you streamline and improve your company!