DeFi, NFT-art, Ethereum 2.0, metaverses, and central bank digital currencies are the main trends in the world of blockchain, Fintech, and cryptocurrencies now. Everyone talks about them, and their development is easy to predict. In this article, we will try to show you some of the other appearing trends that significantly impact the cryptocurrency markets. We will share our opinion on how these trends and aspects may affect the value of virtual assets and shares in 2022 and the following years.
What is blockchain?
Blockchain is a digital database that allows storing records of certain operations simultaneously on many computers. This technology contains digital information – data on transactions, contracts, and contact databases – held in the form of consecutive interconnected blocks.
Blockchain technology was first used in 2009 to create the cryptocurrency “bitcoin” and has gained widespread popularity for developing other cryptocurrencies, such as Ethereum, Ripple, and bitcoin. The positive qualities of the system contributed to its further penetration into the economy resulted in the great its use in banking, public administration, law, and other areas.
The main features of blockchain technology:
- transparency – the blockchain stores data on all transactions for the entire history of the system (cryptocurrency)
- stability – you can’t delete or replace the information “retrospectively,” but only make a new one
- independence – data is stored not on one central server but many computers of network participants.
Let’s see the principles of the blockchain, considering the example of a transaction based on the transfer of cryptocurrency, such as bitcoin:
- Client 1 wants to transfer one bitcoin to Client 2
- The blockchain forms this operation into a block together with other similar transactions. The new block contains the number and hash of the previous block.
- The generated block is sent to all participants of the blockchain system.
- If there are no errors, each participant writes a block of information in their database.
- The block is added to the chain of previous blocks, thus containing information about all previous transactions.
- Cryptocurrency passes from Client 1 to Client 2.
Next big developments in blockchain
Blockchain statistics show that almost half of the human population uses blockchain technology—no wonder why the new trends appear so fast. Experts are already predicting the development of the cryptocurrency market by the end of 2022. It can help investors to find the most promising assets.
The most popular cryptocurrencies – Bitcoin and Ethereum – have a “green” competitor. Cardano cryptocurrency (ADA) has become the third most valuable as miners look for more environmentally friendly alternatives.
The impact of mining on the environment has become part of the environmental agenda of states. For example, China and Iran temporarily banned mining this summer, arguing that the computers used consumed too much energy and caused power outages.
The Cardano token undoubtedly wins against the backdrop of Bitcoin and Ethereum. If Bitcoin consumes the same amount of energy as the state of Chile – 77.78 terawatts per hour, then Cardano consumes only 0.006 terawatts per hour. The latest data shows that the annual emissions from Bitcoin mining are more than 57 million tons of carbon dioxide per year, which is about the same as the annual carbon emission of a small European country.
Development of Blockchain as a Service (BaaS)
Another trend we will see in 2022 is the companies and platforms that can offer customers BaaS solutions (“blockchain as a service”). Such a service will allow businesses to focus only on the main work and functions of the blockchain without technical difficulties and the need to invest in expensive infrastructure and other technology solutions.
Blockchain as a Service (BaaS) is a unique product that allows customers to use cloud solutions to create, use and host their blockchain products as quickly as when launching websites. BaaS is based on the Software as a Service (SaaS) model and works similarly: it is a third-party service offering that deals with general infrastructure maintenance (installation, configuration, monitoring, and maintenance).
The benefits of using BaaS for business are obvious:
- reducing the complexity and cost of using a blockchain;
- the ability to take advantage of the blockchain without having to code your network solutions: blockchain chains, smart contracts, and Dapps;
- increasing the security and transparency of business processes.
For several years, giants like IBM, R3, Amazon, and Microsoft have offered customers enterprise BaaS solutions based on Ethereum, Hyperledger, and Corda networks. But they primarily work with large companies and states. At the same time, their BaaS products are still too complex for small and medium companies to use, which hinders the mass use of this service.
Blockchain and Web3
The Internet has become an essential part of human life, but its integration is still not over. In the current environment, most of the information is consolidated by five centralized companies:
- Alphabet (Google)
- Meta (Facebook)
These corporations dominate online advertising, eCommerce, cloud computing, streaming, etc. In 2014, Ethereum co-founder Gavin Wood proposed a new concept of decentralization.
Some large companies have already begun to conduct technology research. Reddit and Discord considered the possibility of integrating Web3. The latter abandoned the idea due to the negative reaction of users. On the one hand, Web3 will make the Internet more anonymous. On the other hand, it can lead to an increase in fraud.
Manufacturing and tracking vaccines
Blockchain technology is on the way to controlling and tracking the efficient delivery of vaccines directly from manufacturers to patients. With this kind of achievement, the problems associated with blockchain currency will decrease. The system provides documentary registration of transportation accounting and change of location. The blockchain revolution will eliminate difficulties at any stage and guarantee authenticity at all stages.
Development of NFTs
Tokenization allows you to confirm the user’s right to a physical or virtual asset. NFT became a new trend in 2021, undermining the market. In just a couple of months, the volume of secondary sales has increased tenfold. Tokenization will continue to grow – individual users and companies already use it. And now there is a whole new industry for business relations.
Transferring property rights in the future may be much easier. You will no longer have to sign contracts and hire a lawyer for this. Just one transaction will allow you to instantly transfer an apartment, car, yacht, painting, or meme.
Several big brands have already cooperated with NFT:
- Pepsi has released the Pepsi Mic Drop collection.
- The great French game publisher Ubisoft has announced the launch of a marketplace on Tezos.
- Adidas has partnered with Bored Ape Yacht Club (BAYC), GMoney, and Punks Comic.
The Rise of the Metaverse
Metaworld is currently actively discussed by technology companies, marketers, and analysts, calling it the future of the Internet. The metauniverse is a concept of a permanent interactive 3D universe that combines several different virtual spaces. It’s like a future iteration of the Internet. The metauniverse will allow users to work, meet, play, and communicate together in the 3D spaces.
Cryptocurrencies can be significant for the metaverse. They allow you to create a digital economy with different ways of using tokens and virtual collectibles (NFT). Metaverse also benefits from using cryptocurrency wallets such as Trust Wallet and MetaMask. In addition, blockchain technology can provide transparent and reliable management systems.
Like the metaverse, Blockchain applications already exist and provide people with the resources. Axie Infinity is a “play to earn” game that many users play for profit. SecondLife and Decentraland are other examples of successful mixing of the world’s blockchain and virtual reality applications.
This year we should expect the development of such networks. Big brands, such as Google, can also claim to create their metaverse. The corporation is watching the trends, and, according to statistics, users’ interest in such projects by the beginning of 2022 has grown significantly.
Strengthening the security of DeFi solutions
In 2022, security will become one of the priority trends for DeFi protocols. Projects focusing on safety and preventing hacker attacks will help secure decentralized applications, contributing to the growth of their number of users and increasing confidence and trust in DeFi as a financial ecosystem.
These can be blockchain-based insurance platforms or services that ensure cryptocurrency savings. The top cryptocurrencies to keep an eye on in the DeFi space are ETH, Solana (SOL), Cardano (ADA), and Polkadot (DOT). These third and fourth-generation chains offer maximum protection while maintaining high scalability and decent throughput.
In addition, projects such as Forta (allowing centralized applications to track the security of execution) and Nexus Mutual (insurance of users of decentralized applications from smart contract exploits) are of interest.
Division of capital
The bitcoin dominance index was falling throughout 2021. During this period, the first cryptocurrency updated its all-time high, reaching $68,789 in mid-November. However, the bitcoin dominance index continued to fall. This suggests that part of the capital began to flow to altcoins.
When the price of bitcoins remains the same for a while (the exchange rate fluctuates within certain limits), investors pay more attention to alternative coins. Their volatility is significantly higher, and thanks to the introduction of new technologies, they retain their growth potential.
In 2022, bitcoin’s dominance in the market will continue to decline. The main problem is the relatively slow development.
P2E blockchain games
Digital assets can be used not only to exchange but also to buy and sell goods. Token blockchain entertainment has some applications. The first cryptocurrency game appeared in 2017. In CryptoKitties, each NFT represents a virtual pet – the cost of some kittens reached $ 100,000.
Today, a new genre of games has appeared on the market – P2E. The blockchain creates more complex projects, such as the Gods Unchained card strategy or the MMORPG Chainmonsters. The idea of such games is not more about the opportunity to earn but about the right to own. In the digital entertainment industry, there are several large platform holders:
- Sony PlayStation
Among them, only Steam has a full-fledged trading platform. However, users have to put up with several problems as
- No output. Money cannot be transferred in cash – it can be spent on games or other items.
- Commission. About 13% are charged from sellers.
Such restrictions on Steam have resulted in a large number of resellers. Third-party marketplaces bring together buyers and sellers that allow you to get actual money for a virtual item.
How Upplabs can help
This year can bring a lot of exciting events, decisions, and trends to the cryptocurrency and blockchain market. Blockchain allows you to create more than digital assets. Every year, cryptocurrency demonstrates its potential. There are enormous prospects for growth, and users are faced with a choice – to be a passive observers or to become part of the community.
According to predictions published in the Cision PR Newswire report, the size of the global blockchain market will increase from $ 3 billion in 2021 to $ 39.7 billion in 2025. Blockchain is the most significant financial innovation for digital transactions. Its management is distributed, which means that it cannot be controlled by a particular person, company, government, or bank. While companies are concerned about the security of this advanced technology, the growing recognition of the blockchain as a way to create a secure digital registry cannot be ignored.
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