The coronavirus crisis is having a profound effect on industries around the world – and blockchain will be no exception. However, given the disruptive nature of this technology, it is quite possible that the present crisis could accelerate existing trends.
The major trend we currently see in blockchain is towards adoption in the financial sector, ahead of other sectors. Applications like food tracking, authentication of goods and storage of sensitive data involve significant legal work to tie real-world objects to their tokenized equivalents. Creating existing financial products and services on the blockchain is comparatively simpler, which is why financial applications will take the lead.
The most significant breakthrough we are likely to see in 2020 is the application of blockchain’s fundamental technology to sovereign currencies. China may well attempt an experiment in a model city like Shenzhen, and Sweden is another country interested in this possibility.
The coronavirus crisis is likely to speed up current developments for two reasons.
Firstly, 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.
As a fully remote startup, Nash has several advantages over our competitors. Nonetheless, we have also felt some impact. One of our partners has gone offline and some team members have faced intermittent effects such as power outages. Team members must also worry about family who don’t have the opportunity to work remotely. We are taking all the precautions and offering all the support we can.
A second effect of the crisis on the industry is that it will become increasingly clear that blockchain-based assets are not correlated to stocks. During the recent market crisis precipitated by the coronavirus, blockchain and the stock market were only correlated for a little over one week. Bitcoin’s drop was primarily a liquidity issue – people panicking and looking for liquid assets – and it quickly became apparent that the currency was oversold. The markets are once again uncorrelated. Awareness of this resilience will drive further interest in blockchain-based financial instruments.
It is 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 in 2020.
The humanitarian cost of the coronavirus crisis is not to be understated. We are thankful to find ourselves in such a fortunate position, both regarding our company structure and the prospects of our industry.
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