(Rejected:2) Three Next-Generation Products That Could Shake Up Cryptocurrencies in 2020
People across the world have spent billions of dollars on the new virtual form of money.
As we start the new decade, a few technologies being created behind the scenes may assist in solving some of the biggest challenges facing the growing blockchain ecosystem.
The creation of next-generation products would seem to be the routine work of blockchain-based firms to fill the gaps in the crypto market.
Here are three next-generation products that are likely to shake up the cryptocurrency world in 2020.
1. Decentralized Insurance
Decentralized insurance serves as a safety net for the DeFi ecosystem. From smart contract insurance to wallet insurance, the comfort of knowing your digital assets are protected in the case of a hack or bug creates peace of mind for cryptocurrency investors.
The previous decades saw many exchange hacks and several crypto investors mishandling their private keys, eventually leading to the loss of billions in investor capital.
Furthermore, several smart contracts existing today, particularly DeFi-based contracts, are valuing storing contracts, which could be vulnerable to manipulation through loopholes. Dao Hack is an excellent example of a hacked value storing contract in 2016.
Although insurance is not frequently mentioned throughout the DeFi community, it’s one sector with huge potential to offer investor confidence and protection. Traditional insurance is a multi-trillion-dollar industry with several unethical or shady players.
The trustless and transparency nature of DeFi and decentralized networks is a perfect fit to disrupt the existing insurance industry. As a result, decentralized protocols will democratize the power of insurance and return its historical roots of serving as society’s safety net.
Some of the companies that will increasingly provide decentralized insurance in 2020 include Nexus Mutual, Etherisc, CDx, and others.
2. Private Stablecoins
Stablecoins hit the crypto market in 2019, with cryptocurrency startups, big tech, and banks all claiming to provide blockchain-based versions of fiat currencies. These stablecoins are now being utilized for trading on cryptocurrency exchanges making money transfer, and lending and borrowing in the fast-growing CeFi and DeFi markets.
But the recent rise of stablecoins has invited scrutiny from regulators because of concerns over lack of reserves, money laundering, and surveillance across networks.
Stablecoin issuers now act like centralized banks by blacklisting addresses and freezing assets of suspected criminal activities.
Blockchain surveillance firms can provide a constant broader view of distributed ledger activity. For instance, CipherTrace is a blockchain surveillance company that works in partnership with various law enforcement agencies. CipherTrace is said to have the ability to see nearly 90% of all cryptocurrency trading volume. This implies that the majority of stablecoins are also under surveillance.
At the current time, $USDT on Liquid network and $DAI are the only stablecoins that cannot be frozen blindly. Out of these, only $USDT on Liquid provides privacy functionality through Liquid network’s Confidential Transactions. However, this privacy functionality comes with uncertainty related to the reputation of Tether.
This, therefore, leaves a massive gap in the market for a truly private and decentralized stablecoin. Haven’s xUSD is an excellent example of a decentralized and private stablecoin that is currently in the development phase. This digital asset uses Monero’s privacy tech – bulletproofs, ring signatures, and stealth addresses – to create algorithmic, non-asset backed, and private stablecoin. The launch of Haven’s xUSD is likely to occur in the first quarter of 2020. Other private stablecoins may follow suit.
3. MPS Custody
Poor crucial private management practices are a persistent problem in the cryptocurrency industry, contributing to losses of millions of dollars. This issue has made retail investors face difficulties after losing vast amounts of money. This concern also has made the most prominent institutional investors scared of investing their money in cryptocurrency.
Secure multiparty computation – MPC – is seen promising to revolutionize crypto asset custody. MPC removes the need to take control of private keys. Instead, MPC-based solutions utilize mathematical algorithms to sign transactions in the blockchain network with a secure cryptographic operation.
The new method creates exceptional security without the need for the complex withdrawal process.
Curv, Unbound, Qredo, and Fireblocks are some blockchain-based companies that provide this new technology. Each company has a different approach to develop the MPC-based security infrastructure, which could eventually give big institutions the confidence required to enter the space.
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