The final article of my 4-part series covering 1H 2018 Global Blockchain Industry Strategic Overview by Huobi Academy for Blockchain Application will focus on the segments of blockchain industry. The Huobi Academy for Blockchain Application is the research division of Huobi Pro. More information can be found from the complete document to be availed at the Blockchain Festival Vietnam in Ho Chi Minh City, on May 24 & May 25.
In this article, I will discuss the current state of blockchain technology infrastructure in a hierarchical manner, from how the technology works to interaction with the end user. We will also look at some of the emerging trends in the specific areas. These layers in order are:
📌 hardware infrastructure,
📌services layer and
Hardware producers: Bitmain, Canaan, Ebang
Chip manufacturers: Nvidia, AMD
Mining pools: Antpool, ViaBTC
Hardware infrastructure is a huge stakeholder in the world of cryptocurrency today because of the commercial importance. Founded in 2013, Bitmain is a Chinese company that designs ASICs and also manages the Antpool, one of the biggest mining pools. ASICs are used for mining Bitcoins and other Proof-of Work cryptocurrencies today. Demand for GPUs in cryptocurrency has created new opportunities for Nvidia, with the CEO claiming cryptocurrencies will be the core of the business, ahead of gaming. The design of GPUs for mining AI blockchain projects such as Matrix AI and Cortexlabs will be an interesting development in this area.
The future of mining hardware is likely to be influenced by:
· The competitive landscape of professional ASIC miners has taken shape and leading effect is expected to be more apparent in the future. Bitmain is gaining unassailable lead in this respect.
· GPU mining will coexist with ASIC mining even though the threat of 51% attack is still there with ASIC mining
· Future opportunities in low energy mining hardware for example CDN mining. Current mining operations consume a lot of power
Examples: Ethereum, EOS, Ark, Komodo, Zilliqa
Blockchain platforms are the base layer on which decentralized applications are built on, similar to a computer’s operating system. The optimization of blockchain platforms will set the groundwork for creation of decentralized applications(dapps) that will finally be used by the end users. Problems to be overcome include scalability and interoperability.
The infrastructure is still in its infancy, when technical limitations are overcome, fully developed ecosystems will reach upwards of $1 trillion when dapps become commonplace.
Expected future trends:
· Cross-chain interoperability. Advantages of this include performance improvement, information interaction and value transfer
· ‘Developer-friendly’ platforms will be just as important a factor as performance. Matrix AI seeks to implement natural language smart contracts increasing the platform reach to 350x more users than Ethereum which has the entry barrier of coding in Solidity
· Use-case specific blockchain platforms opportunities will rise for instance blockchains tailored for e-commerce
Niche specific blockchain applications making it easy for developers with common needs to deploy on top of instead of building from scratch. Some good examples include:
Decentralized ecommerce: Cybermiles, Elementh
Distributed storage: Filecoin, Siacoin, Storj
Decentralized data services: Chainlink, Bluzelle, Ocean Protocol
Decentralized exchange: Kyber Network, Loopring, ZRX
Important points to think about:
· Popularization of middle would accelerate the landing of distributed applications because of ease of creating niche-specific decentralized applications
· The maturity of distributed applications in verticals would in turn induce new demands in the middle layer
There are various services that are crucial for the harmonious working of blockchain ecosystem that are facilitated by the components categorized in this layer. Hubs for information and funds to circulate, serve as nodes for retail participants in the cryptocurrency ecosystem
Cryptocurrency exchanges: Huobi, HADAX, Binance, Bithumb, Upbit
Media and communities: Coindesk, Cointelegraph, Bitcoin Magazine
Market quotes and information providers: Coinmarketcap, CoinGecko, Icodrops, Mytoken
Important observations for the future prospects of this segment include:
· Existence of both centralized and decentralized exchanges
· Market quotes and information providers can provide aggregated trading services due to the liquidity silos issue created by fragmented exchanges
· Crypto assets wallets may become the entry point for distributed applications in longer run as users need tokens to use dapps(utility tokens)
Deliver the final service to the end user as the user interacts with them directly. Applications that are downloaded from Play Store or Apple Store, affording the user opportunity to utilize a blockchain ecosystem fall in this category.
Where blockchain applications may apply:
(1) there are inefficient communications and high costs of trusts
(2) there are strong demands for data validation and consensus
(3) there are needs for massive data sharing and high-computing power.
1. Monetary Market application such as payments and clearing
Examples: Oklink, Ripple, Wyre, Abra
Argentina Bank Banco Masventas is the first to use Bitcoin for cross-border payments over wire transfers. Cryptocurrency has significant advantages over wire payments. Time-saving, less costly and less bureaucracy to mention a few. A recent
The prospects for the future of mainstream application might be influenced by:
· In the short-term, using cryptocurrencies for cross-border payment is promising. Proposed solutions so far have had positive results.
· New payment protocols will emerge in the long-term revolutionizing the clearing industry. Current slow transaction times of bank payments are due to the traditional SWIFT model. Adoption of new protocols will standardize ledgers of financial institutions improving clearing significantly.
2. Applications for securities, commercial notes, and alternatives:
Examples: Tzero, Polymath, Global Reit
Tokenized securities are going to be very huge for blockchain space once regulation to incorporate them is established. Unlike utility tokens which are mainly criticized for being vaporware, security tokens unlock movement of value backed by real assets.
Noteworthy observations in this sector include:
· More developed countries following the US lead on regulation of blockchain application in the securities market
· Central Bank of China pioneered blockchain-based commercial notes
· Increase in tokenized asset exchanges as more assets are tokenized
Examples: Medibloc, Medicalchain, Medishares
The health sector can utilize blockchain technology broadly in terms of running of medical organizations, service delivery to patients and the tracking of supply chain of pharmaceutical products. Aspects of the medical industry which can be disrupted by blockchain technology include electric medical records, remote medical diagnosis and medical insurance
Some of the benefits of blockchain technology in this space include:
· Multi-dimensional and customized health management and disease prevention can be realized.
· Hierarchical medical system will be further promoted ensuring information integrity across different layers
Blockchain Festival Vietnam
The complete report will be revealed at the Blockchain Festival Vietnam held in Ho Chi Minh City. Use the code WRITE50 to get a 50% discount when purchasing tickets. Don’t miss.
Huobi Pro: www.huobi.pro