How COVID-19 Will Transform Blockchain In 2020 And Beyond

Blockchain, News, Opinion | April 21, 2020 By:

The coronavirus pandemic will accelerate major technological advances that were already underway to accommodate the new digital society status quo. Blockchain is one of the most important innovations that will be pushed forward. What specifically about this uncertain climate will make 2020 so crucial for blockchain? Below, I’ve outlined my predictions for the blockchain space and digital currency for the remainder of 2020, as well as how coronavirus will affect these sectors.

COVID-19 will accelerate blockchain adoption

During 2020, blockchain will continue to grow in the finance sector, ahead of other sectors. Applications like food tracking, authentication of goods 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 may 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 were not prepared for the crisis, whether in terms of infrastructure or their financial arrangements. Well-prepared start-ups will be accelerated as a result.

Cryptocurrencies will also 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 also 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 probably already be available this year.

Blockchain and online gaming

With people staying home like never before, more online gaming will certainly happen globally at scale. This will result in a rise of in-game digital currency usage and related blockchain technology.

Think first about what kind of games will see an increase in popularity. People staying home will lead to a huge increase in casual gamers – people who play simple games on their smartphones or tablets, rather than serious hobbyists who have gaming PCs. These games are often built by small teams and can be very profitable given the size of the casual gaming market. So, there is 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 very 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.