5 key trends in 2019 for professional blockchains

Konstantin Richter
What a ride 2018 has been for us. While thinking about what to mention in this end of year post, I realized that I don’t want to talk about the usual hyperbolic start-up CEO stuff. While it is hard to forgo the perspective of ever enthusiastic(/terrified) CEO, I will try to give an account of the year that focuses on the processes and challenges we underwent to get to where we are and give 5 predictions about the market, revenue potential and product.

Blockdaemon saw exponential growth showing a rush to mainnets.

The delta that was bridged this year ranges from a seed stage startup with 1 person on payroll (our CTO Arun), 1 contractor (Rick), and 3 enthusiastic customers eager to figure out their future-state mainnet, to a 16 person team handling multiple internal deploys per week, thousands of users and 10 large scale partnerships, ranging from Citizen Reserve, Madhive.com, ICOx blockchain and GCoin to Algorand, Aion, Gochain, Stellar, Springlabs and Zayo. We launched hundreds of Bitcoin and Ethereum nodes (by far the most activated nodes to date).

Vision about orchestrating across hybrid clouds remains intact.

Our vision remained the same: make the blockchain revolution part of the cloud revolution, by supporting professional infrastructure developers with data-migration tooling offering logs and security brought by blockchain. We do this by auto-scaling nodes of major chains across a large network of cloud providers to ensure latency performance and layer 1 decentralization. We then create new data-connections and dynamic tooling/APIs to seamlessly link existing data-lakes to permissioned blockchain networks anchored in larger public ones. You can see our progress by taking a look at our dynamic decentralization tool.

Adding data-connections and integrations.

We are fascinated with data-reservoir and how they get moved, interlinked, protected and queried. I used to describe dynamic APIs with a SWOOSH sound (mimicking the sound when spiderman shoots out strings of his synthetic net) — driving our team crazy— testnets containing multiple different protocol nodes, spun up at speed to connect to a live chain or API at an instant, and then disconnect to verify/secure somewhere else. Nodes will live for seconds, so will certain chains, and data be logged and changed. Translating that into a story and actions that gel with iterative/linear capitalization will be the challenge. This isn’t about enterprise adoption, it is about data-abstraction. Our kineticledger is a first start.

The endurance phase builds real customer adoption but takes time.

We are now in the endurance phase of the market and our venture — we need to keep on iterating, adding new customers and extend platform services. What counts is keeping the monthly acceleration, which can only be done by repetitive processes yielding creative solutions. It can get stressful with little opportunity for success, and I need to make sure the core team doesn’t get fatigued or worn out by the negativity in the market and the sometimes seemingly slow progress. This is where unique value is created — in the stretch, meticulously measuring speed, results and customer satisfaction. The responsibility to provide a narrative for everyone is on me, and the more the market and expectation changes goes from hot to cold to hot, the more the story matters. We learned a ton about UI and the whole flow of self-onboarding customers has changed to a much more informative and dynamic interface.

Enough about us, let’s dive into 2019 and 5 key trends.

  1. Trials rather than POCs. Joining complex long-term projects via consortia is costly and often leads to little results (Hyperledger excluded). Professional users will want to “play” with real product and architecture to have a sightline on connecting continuous deployment cycles to blockchain applications. In addition, running HA nodes in testnets to mimic transactions and run real end-points into chains will be important. Custody, Security and SLAs are the next big pieces that need to be worked on. We are doing that by offering a “passport-program” to 9 different protocols in a test-environment for less than $10pm.
  2. Decentralization is not a zero-sum game. Let’s not spend time on checking everyone else’s progress or non-progress and don’t engage in bad-mouthing other projects. I have been quick to dismiss potential competitors (one of the tasks as a venture backed CEO is to ensure investors you got this) and their approach/solutions. There are a ton of great projects, and this market will not be a zero-sum game. This is not about moats or network effect driving towards a monopoly, this is about decentralization. There can and will be more than one winner. And the more quality solutions that pave the way for actual use-cases in production, the better for anyone. So I raise my hat to the great projects in this space: First and foremost Parity with their Substrate parity solution, and Clovyr with their extensive work around Web 3.0. Great teams eager to offer real solutions. Kaleido and Infura, the Consensys companies did a great job pushing Ethereum networks, and their UI is amazing. Then there are the large monopolists, most notably MS Azure blockchain (I really like their product) and AWS blockchainin certain aspects. GCP kubernetes offers the best generic cloud tooling, of which we use a ton.
  3. Revenue is tricky: When will new corporations suck up substantial value and in which form to successfully capitalize progress needed? We have seen non-linear revenue growth and explosive usage, but business models are still evolving and will require iteration itself. I do believe that we are the largest pure SaaS play in the space (monthly recurring charges via credit card for services), but this isn’t a traditional software market. I am predicting that we will cross $200k mrr by end of year for dev-ops services, data-connections and queries; but that you won’t see a $10mm ARR game in the enterprise space that excludes data or transactions shares until 2020.
  4. Connecting to the cloud revolution. Bitcoin is the real deal and stands alone as a real blockchain centric solution. Everything else enhance existing functionalities, and serves in context of larger macro data trends. A fortune will be spent migrating on-prem apps to clouds next year, and blockchains can play a small but significant part here. That is why we work with companies like kloudless.com and other cloud providers.
  5. Tell better stories: Every venture needs a story, and so does every movement set out to disrupt. Blockchain will need a different narrative this year, if there is any significant traction to be made with professional data use-cases. The same is true when you set out as a founder with your little start-up crew — a bunch of pirates on a quest; the story matters. We have seen some starts — Web 3.0; DLT etc., but we need more and better stories that connect to reality now. Run nodes, be a living part of networks and help us build the highway for seamless data transference without middle-men nor centralized players. Satoshi’s white-paper was a start, now there is room for the next chapter to be told, and my guess is that we will hear from an as mercurial story-teller as her soon again.

We look forward working with all of you in 2019.

Happy Holidays!

The Blockdaemons