Cryptocurrency is also fintech, financial technology, among other things. With Bitcoin (BTC) hitting its highest market cap ever in November, the financial part of that combination has received a lot of attention in recent months, but what about the technological part?
While they don’t make as much headline as price increases (and decreases), developers associated with Bitcoin, Ethereum (ETH), and other major platforms have been tacitly working on upgrades for much of 2020, and their work is likely to be more will be prominent next year. According to industry information and developers in conversation with Cryptonews.comThese developers will build on the growing interest in crypto by introducing new technologies that aim to make crypto more accessible and usable to a wider user base.
From Ethereum 2.0 to Bitcoin’s Schnorr and Taproot, the focus is mostly on scalability and, to a lesser extent, on data protection. At the same time, other platform upgrades – like Cardano’s Goguen (ADA) – will improve decentralization and enterprise-level utility.
2020: What was predicted last year
Returned to the end of 2019, and experts predicted something similar for 2020: greater scalability and growth in consumer crypto platforms that simplify the user experience for retail investors.
While 2020 was promising and aiming for greater scalability, when it came to large platforms, we didn’t see that much in terms of finished products, platforms, or upgrades.
For example, Ethereum 2.0 received a lot of hype and attention, but its mainnet has not yet officially launched (after numerous delays) and is expected to arrive in 2021. Likewise, the long-awaited proposals from Schnorr and Taproot were actually merged into Bitcoin Core on October 15, but they have yet to be activated Support among miners grows constantly.
However, we have seen an increase in cryptocurrency platforms that are more geared towards the “average consumer”. Especially, PayPal launched its cryptocurrency service in October, as did the UK-based finance app Revol.
2021: Scalability and data protection in real time
Delays in scalability and data protection technology in 2020 make predicting the technology trends of 2021 pretty easy as we can hope that on hold upgrades will finally roll out next year.
This means that when Ethereum 2.0 launches, it will greatly improve the scalability of Ethereum by switching to a Proof-of-Stake (PoS) consensus mechanism.
“The move to proof-of-stake and sharding should allow the network to overcome its current scalability issues and high gas charges, especially during times when the network is congested. It will also reduce the barriers to participation and secure the network, making it arguably more decentralized than its current state, ”said Simon Peters. eToroResident Cryptocurrency Analyst.
In 2021, Taproot and Schnorr signatures – which improve Bitcoin’s privacy and increase the amount of transactional information that can be contained in a single block – could also finally be activated, adopted and widely distributed as part of Bitcoin.
“I think the main topic and development focus in 2021 will be the introduction of Schnorr and Taproot to Bitcoin. This means many advantages and also a lot of work for software and hardware wallet companies, ”said developer Stepan Snigirev.
Snigirev also told Cryptonews.com that the introduction of Taproot and Schnorr will enable a number of further technological innovations for Bitcoin.
“Lightning will no longer be distinguishable from normal single-key transactions,” he added. “Multisig and MuSig are embedded in Taproot and cannot be distinguished from other transactions.”
Simply put, technology developments in Bitcoin should improve the privacy and scalability of its network while making it more user-friendly. However, this focus doesn’t just apply to Bitcoin, it will be a general trend across cryptography in 2021.
“We also anticipate that Litecoin (LTC) will launch Mimblewimble to offer opt-in privacy features, which is also a significant change,” said Jacob Illum, chief scientist at Chain analysis.
Mimblewimble will improve Litecoin’s scalability and privacy, while NEO will be another platform set to scale in 2021.
“We know that NEO 3.0 is close by. We’ll surely see it in 2021. It is extremely ambitious, and if it succeeds, we will see the first massively scalable blockchain with a block final of less than a second. This is very important for bank quality transactions, ”said Mark Jeffrey, CEO of GuardianCircle.
Ease of use and user experience are more important
Although Jeffrey recognizes that scalability is important, he estimates that the focus in 2021 will be on improving the user experience.
“There are too many people scaling up and not enough users,” he said. “User experiences will be the focus of 2021. Most importantly, we need to solve this first.”
Lex Sokolin, ConsenSys chief marketing officer and co-head of Global Fintech, also suspects that improving the user experience will be a major technology goal.
“We expect continued growth in both decentralized finance (DeFi) in the public chain and on the corporate side in financial services and global trade. Simplified and improved user experiences within DeFi, such as MetaMaskwill drive further adoption and use, ”he said Cryptonews.com.
According to Csilla Zsigri, an analyst at 451 researchEase of use will be especially important in making blockchains and platforms more useful for businesses.
“We see vendors’ activity in the company’s blockchain / distributed ledger technology stepping up the stack – in addition to core ledger protocols – to improve various aspects of the technology such as interoperability and usability, and ultimately it made more usable by both developers and developers. Average user. “
Sokolin agrees that improving technology for the benefit of businesses will become increasingly important over the next year.
“Potentially the BSN (Blockchain Service Network) and DCEP (China’s Digital Yuan) are worth pursuing as platforms that could have a significant impact on our space and integrate more and more applications. The BSN connects to Ethereum as well as other programmable chains [e.g. [URL=”https://cryptonews.com/coins/tezos/”]Tezos[/URL], EOS; NEO]and also like the corporate offers of Chinese fintechs Alibaba,” he said.
More decentralized decentralization
Cryptocurrency is known to offer a decentralized form of money and in 2021 different platforms will focus on making their networks more decentralized.
“After the Cardano network successfully completed its own major upgrade earlier this year, it is now more decentralized. Development is underway for the next phase, Goguen, which will be released in March 2021 and will allow developers to build decentralized applications and enter into smart contracts on Cardano, ”said Simon Peters.
Likewise, IOTA (MIOTA) 2.0 could be rolled out in 2021, removing the centralized coordinator node that is currently monitoring consensus on the network.
“The IOTA team is currently working on a major protocol upgrade – IOTA 2.0 (aka ‘Coordicide’) – which is slated for 2021 and takes a three-phase approach: releasing pollen, nectar and honey,” said Csilla Zsgiri. “Pollen and nectar are test networks for testing and validating the new concepts of IOTA 2.0, while Honey will be the first version of the production-ready decentralized IOTA main network.”
Price and development
There is one last question: would potential price hikes in 2021 increase the momentum for technological development?
Opinions are divided on this question, and Jacob Illum believes that there may be an indirect relationship between the two.
“I think the price hike will increase awareness and adoption, which in turn will lead to technological improvements in Bitcoin,” he said.
However, Stepan Snigirev is not so sure and expects Bitcoin development to continue at the same pace, regardless of whether 2021 brings a massive bull (or bear) market for Bitcoin.
“Development activity is not correlated to price so I think we’ll just keep working on things as usual.”
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