Conference Presentation, Panel
Blockchain Applications on the Brink of Transforming Business
Milken InstituteGarrick Hileman, Jamie Burke, Sally Eaves, Sean Kiernan, Ioana Surpateanu, Garrett Keilman, Sally Hughes, Yana Surpachanu
- Jamie Burke forecasts a 10-year investment horizon for blockchain projects to navigate volatility, predicting aggressive M&A activity this year where well-capitalized protocols acquire market traction and equity companies, noting that an equity company cannot acquire a tokenized protocol; he estimates 60% to 90% of startups would fail in the first three years without open-source token models enabling code reuse.
- Burke anticipates a cyclical capital shift from the protocol layer to the application layer during the current bear market, reverting to infrastructure investments once market conditions improve, while noting that most existing crypto funds are likely "dead" due to holding excessive ETH treasuries rather than liquidating.
- Security tokenization and asset-backed tokens are expected to reshape funding barriers for SMEs from $100,000 to $10,000 and drive the Swiss Six Digital platform to launch security token trading in 2020, though Burke notes venture firms will increasingly hold crypto assets on balance sheets as they invest in businesses building down the tech stack.
- Regulatory frameworks are projected to evolve significantly, with granular token function analysis expected in Q1 2019 to distinguish utility tokens from financial instruments and enable businesses to flourish, while private blockchain rails for intra- or inter-company transactions are not expected to be adopted by major players for a few years pending regulatory clarity.
- Future blockchain innovation is predicted to merge AI and machine learning to impact health tech and precision medicine, potentially serving 1.7 billion unbanked individuals via applications aligned with sustainable development goals where measuring social impact outcomes is critical.
- Infrastructure and identity governance are identified as necessary hurdles for institutional access, with Big players expecting to move to private rails only after regulations provide security, while a dedicated group of ten is tasked with monitoring quantum computing impacts on technology in the years to come.
- Bitcoin is anticipated to experience short-term declines before stabilizing as a "digital gold standard," while the internet is viewed as requiring a machine-to-machine economy with native currency due to a projected 50% bot population, half of which are malicious.
- Market mechanics are expected to feature a spectrum of privacy via zero-knowledge proofs where data revelation becomes optional, alongside increased high-quality airdrops to onboard unbanked populations and a transformative shift where 90% of projects adopt open-source models day one, moving away from proprietary financing.