Oliver Bussmann is founder and managing partner at Bussmann Advisory, the president of the nonprofit Crypto Valley Association and former CIO group and general manager of UBS.

The following article is an exclusive contribution to the CoinDesk 2017 edition.

2017 was a year of phenomenal growth for blockchain, but not in the expected way.

At the beginning of this year, I and others were predicting that 2017 would be the year when blockchain would move from proof of concepts to production. We have seen some notable successes in this regard.

Ripple has become a fully operational platform with over 100 members and payment volumes in the billions, and industries have started to form blockchain business networks, for example, the Digital Trade Chain Consortium (DTC).

But overall, I expected to see more "dead lives" than us. On the other hand, I do not think anyone expected an unprecedented growth in the market capitalization of cryptocurrencies or the related ICO boom.

So, what will the new year bring? Despite the obvious dangers of making predictions, I am convinced that, among other things, we will see the following:

Blockchain solutions will continue to come into production as "ripe fruits" are processed.

Cryptocurrencies will continue to grow, fueled by actors and traditional asset management techniques.

Companies will focus on the evolution of business models as the blockchain begins to transform market structures.

New ecosystems with smart contract technology will emerge as platforms for integration between existing industries.

The OIC will become "professionalized" and will be transformed into IPO 2.0.

The extensibility and performance of blockchains will become a critical problem, and there will be interesting new approaches

People will increasingly recognize that local blockchain ecosystems are a critical factor of success.

Let's get rid of the details now.

Fruit at your fingertips

Although it is calmer than expected this year, I believe we will continue to see blockchain solutions go into production as companies tackle the "easy fruits" by digitizing businesses and using cases where blockchain can have the most impact. ]

In fintech, the two most promising use cases remain payments (where there are potential savings of $ 50 billion to $ 60 billion) and trade finance (which is expected to save $ 15 billion) .

As we saw the payments in 2017, I expect that commercial financing will begin to work in blockchain in 2018. In payments, the momentum will accelerate and volumes will increase as the big banks , including the corresponding banks, will enter the law. These players will be tempted by the benefits that blockchain offers in terms of real-time processing, lower risk profiles, reduced costs and transparency.

The Blockchain can serve as a stick and carrot, simply by proving that there are better alternatives to the status quo in many industries. We can imagine, for example, that the blockchain played a role in the European-wide transparency exercises of the European Banking Authority.

We were all somewhat surprised – so nicely – by the way cryptocurrencies worked well in 2017 as speculative assets. Indeed, growth has been dramatic, with the asset class rising from $ 14 billion in December 2016 to more than $ 450 billion in December 2017 in terms of market capitalization.

I think this growth will continue to be fueled by traditional asset management approaches, including bitcoin futures, crypto hedge funds and others, which will increase demand for cryptocurrencies and chips.

New economic models

As the blockchain continues to change the market structures, companies will focus more and more on changing business models.

In a world where middlemen become obsolete, companies will have to learn to stop thinking in isolation and be more open to partnering with ecosystems or larger platforms. To do this, one must decide what types of business models they want – that it's all about platform games, product games, omnichannel strategies, and so forth.

These discussions will become multidimensional, encompassing both existing services and, increasingly, new types of services that blockchain allows – particularly when blockchain combines with IoT and AI to create new types of markets where Industrial silos fall in favor of large horizontal structures.

One of the most satisfying parts of 2017 for me was seeing that this was starting to happen closely among the companies with whom I have the privilege of working. (See disclosures below.)

Deon Digital has partnered with Mercedes Benz to develop a new operating system that will help break silos in the mobility space. Skycell is a good example of IoT and blockchain opening the pharmaceutical supply chain to encompass payments, billing and insurance. TEND rethinks investment management by creating a 2.0 sharing economy for high value assets.

I think we should keep a special eye in 2018 on the fund industry, where companies like Melonport are using the blockchain to rethink asset management. I think we will see more things and that the fund industry will start to be significantly disrupted next year.

This will start with the management of cryptographic assets, but over time we will see that traditional assets are increasingly segmented, migrated to block strings and managed on the chain.

The morphing of ICOs

With startups raising more than $ 3.5 billion from ICO, 2017 was clearly the year of the symbolic launch.

For me, the boom of the OIC is important, not necessarily because of the amounts raised, but because we are witnessing the beginnings of the democratization of venture capital. And while the concept has had a great year in 2017, the world of ICOs will change in 2018 as more traditional players become involved.

Over the next 12-18 months, I anticipate that people with experience and expertise in the IPO world will adopt tokenization as a technical platform, and all of the 39, business will be professionalised, with book building, pricing, start-up assessment, etc. more along the traditional lines.

As we have already begun to see it, it will be more difficult to obtain funding simply by the aid of a white paper. Investors will demand strong business plans and high levels of transparency, with all that entails.

Scalability and Ecosystems

One of the main challenges of existing blockchain technology is the scale and performance. I anticipate that next year we will see alternatives to current blockchain technologies that will be more scalable, faster and that will minimize energy consumption.

IOTA, which has gained a lot of popularity lately, is, I think, a project to follow in this regard.

I also believe that people will increasingly find that local blockchain ecosystems, where critical services are located in the same geographic area, are critical success factors for blockchain projects.

This is certainly what we see in the "Crypto Valley" in Switzerland. As president of the Crypto Valley Association, I hope that readers will forgive me for predicting – or at least showing – Switzerland's continued success as a blockchain ecosystem.

Crypto Valley has a high concentration of all the services blockchain projects will need to raise and install, including legal, advisory, tax, accounting, smart, utility KYC / AML and other platforms. marketing expertise.

This added to Switzerland's other advantages, from its state-of-the-art infrastructure to its highly skilled workforce, will mean, in my opinion, that it should continue to attract blockchain companies – in the new year and, hopefully, many years to come.

Disclosure: Oliver Bussman is a strategic consultant to IOTA, Deon Digital and Tend, mentioned in this article.

Disagree? CoinDesk 2017 Review is in progress – and open to submissions. Send an e-mail to news@coindesk.com to present your article ideas.

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