As CTO for Clause Inc. I breathe the rarified air of blockchain, AI, IoT, and Legal-Tech (joke). Seriously, I do read quite widely, so in time-honored fashion, here are my predictions for 2018.
THIS IS NOT INVESTMENT ADVICE
Permissioned Distributed Ledgers
There’s going to be a fair amount of disillusion in 2018, largely because projects and consortia have been much harder to get off the ground than expected. It turns out that having a distributed ledger technology doesn’t remove the need to get people around a table to agree on data models, permissions, IP, security, HA/DR, and governance.
There will also be some major projects that move into production, however, so the outlook will be mixed. I’m thinking payment solutions involving Stellar and Ripple, Global Trade Digitization from Maersk/IBM, food-safety from Wallmart/IBM, Digital Asset Holdings working with the Australian Stock Exchange and several R3 projects.
We will start to see consolidation in the market, with the smaller players that fail to get traction struggling to remain viable. Building enteprise grade DLT is very expensive. Hyperledger Fabric and R3 Corda will continue to duke it out, with a handful of more specialized solutions finding their niche.
The support teams for the major DLT platforms will be having a busy and stressful year, as they struggle to operate the platforms at scale. There will be high-profile outages and much blood, sweat and tears.
I fear the (ir)rational exuberance of this market is not over yet. People may continue to get-rich-quick on exotic altcoins and ICOs for a while longer. There’s lots more money (retail and investor) that could enter the market to keep prices high. Or confidence could crash and everyone will run for the door. Who knows!
It would not surprise me at all if there is a catastrophic zero-day exploit on at least one of the platforms. Possibly some sort of protocol-level network attack of a type and sophistication that we have not seen before. There’s so much money in play at the moment that criminals with very deep pockets will fund teams to attack these immature networks, exchanges and wallets.
I also think that the terrible User Experience and downtimes of some of these networks will start to drive people towards other platforms, at least the people that want to actually transact digitally at volume, as opposed to holding an equity. We may see an open (fairly centralized) payment platform start to emerge: imagine if Mozilla and Visa had a child. The code would be open, backed by a not-for-profit foundation, with transaction fees used to fund the physical network. Orderers/validators would be elected and would be compensated using transaction fees. The network would support government KYC/AML regulations and regulators (perhaps using Self Sovereign Identity), would be low cost (pennies) and would support very high transaction volumes (>1K transactions per second). We have the technology to build this network today. Watch Stellar and Ripple in this space.
I’m not sure if this a prediction or a plea, but I really hope that the WebAssembly support for Ethereum quickly gets traction and that the Ethereum community turns the page on Solidity and on the EVM with all its craziness. WebAssembly would give Ethereum a sane stack-machine implementation and would open up a whole host of languages for writing chain code (ok, smart contracts to some of you people!).
I’d also expect some rather chaotic scalability improvements, and wouldn’t it be wonderful for Proof of Work to be consigned to the immoral dustbin of history? We’re heating the planet so we can run a distributed random number generator…
AI is now such a broad and misused term that it is certain that some applications of it will succeed and be game-changing, while I suspect people’s overall sentiment will be “meh”. It just ain’t that smart when it is confronted with people and the confusion we deal with every day. Going from using voice recognition to order products, to a general purpose digital assistant (comparable to a human assistant) is a massive leap.
AI is amazing at dealing with huge volumes of unstructured (digitized) information, however, so the legal profession is rightly very excited by it. There have been amazing advances in how we train AIs, in robotics and in sensor technology. All of these point to a deeper integration of AI into our everyday experience and on the factory floor.
I also wonder whether we will see a concerted privacy and civil liberties backlash against some of the applications of AI, things like real-time CCTV facial recognition, in-store customer tracking, reselling/fusing online and physical activity data, consumer-grade (apps) facial recognition, social issues with algorithmic bias, police use of social media and facial recognition to suppress political dissent. This recent article from the Wall Street Journal may be the first of many, some of which will be much closer to home.
Internet of Things
IoT has been steadily (and relatively quietly) advancing over the past few years. The platforms are relatively mature now and analytics capabilities are in place. It feels like we are on the verge of some sort of breakout in this technology, at least within the enterprise space. I think we’re approaching the Plateau of Productivity and it’s getting easier and easier to consume IoT data. The hard part is actually exploiting it and to detect complex stateful situations in real-time and at scale.
Saving the best for last, I’m really excited by what we will be building at Clause during 2018. I’m obviously biased, but I think 2018 will mark the year that we make Smart Legal Contracts and Connected Contracting a reality.