In 2022, the use of blockchain for reasons far beyond the creation of cryptocurrencies will surely continue.
As with most technologies, its adaption and acceptance are likely to both intensify and increase existing difficulties (depending on the technical expertise of the firms).
In the past year, we have watched blockchain’s expansion in a variety of fields which include:
- Various types of Smart Contracts
- NFTs or Digital Art
- Identity Protection
- Security of Data and Assets
- Logistics and many more!
So, What does the future of Blockchain technology look like? How will Blockchain technology fare in 2022?Read on to find out!
Predictions for Blockchain Technology in 2022
Blockchain is currently one of the most promising technological trends, with vast application possibilities.
It is essentially a distributed and encrypted variation of a database, which can tackle a variety of online privacy, security and trust challenges.
While many people identify blockchain with cryptocurrencies such as Bitcoin, it has numerous other applications in various other domains such as
- Execution of Digital Smart Contracts
- Identity Theft Protection
- Supply Chain Management
According to a leading report, business investment in blockchain technology is expected to reach $11.7 billion by 2022. This is an increase from the estimated $6.6 billion in 2021. This may stimulate growth potential for investors and businesses.
Following are the anticipated trends that will drive this tremendous increase, as well as some insight into how it may affect our daily lives.
Massive energy consumption is one of the greatest obstacles to a prosperous future for blockchain technology. Due to this, blockchain technology carries with it the drawback of perpetually rising carbon emissions.
Did you know?
In 2021, Elon Musk, CEO of Tesla, said that the firm will no longer allow Bitcoin as payment for Tesla vehicles. Therefore, the primary focus of blockchain developments in 2022 would be the introduction of a greener blockchain.
As solutions to these issues, a multitude of novel, innovative strategies, such as carbon offsetting, are emerging.
But simply focusing on carbon offsetting isn’t sufficient and such issues shouldn’t have happened in the first place without the presence of immense technical knowledge and expertise.
However, many blockchain networks are moving in the right direction after identifying the simple underlying issues.
3 Biggest Blockchain Trends of 2022
The proliferation of Green Blockchain Technology
Another advantageous way for developing a sustainable and environment-friendly blockchain this year would emphasize blockchain network models that require less energy.
Heard about the Proof of Stake consensus model?
Well, the idea behind this consensus algorithm is the non-requirement of extensive computational power for verifying/validating transactions in a blockchain network.
So, to put it simply, if you hold a particular cryptocurrency (based on the proof of stake model), you become a validator and your held cryptocurrency acts as a validating mechanism for transactions.
This is what many blockchain networks are trying to transition into!
In 2022, Ethereum, one of the largest blockchain networks, will most likely adopt a Proof-of-Stake consensus methodology.
Another example of the move to efficient and environmentally-friendly blockchain networks is the technology-focused hedge fund Ark Invest. Future blockchain expansion may be driven by the eco-friendly operational principles of blockchains like Ark Invest. How?
The models imply that rising energy demands can result in increased investments in the production of renewable energy for blockchain operations.
Governments will Integrate Blockchain into Operations
Using blockchain technology, various government entities can conduct their affairs more efficiently. As governments begin to understand the value of blockchain infrastructure in terms of performance, public confidence and efficiency, they will take full advantage of its plethora of applications.
In recent years, various governments have experimented with using blockchain technology in a wide range of sectorssuch as:
- Food Supply Chains
- Identity Management
- Land Registration & more
Here are a few instances of governments leveraging blockchain technology solutions to their advantage:
- The United Kingdom is investigating the technology to monitor the disbursing of welfare.
- Australia Post, for instance, has announced strategies to utilize blockchain technology for local voting.
- Estonia is leveraging blockchain to ensure the credibility of its tax and business registration frameworks as well as electronic health records.
As government adoption of blockchain technology increases, numerous countries have attempted to address the issue of trust.
As a result, the World Bank established a three-tiered framework for design and implementation to prevent any conflicts between technology and intended application.
These rules for blockchain adoption can also be utilized by enterprises.
Introduction of Central Bank Digital Currencies (CBDCs)
A few years ago, the widespread adoption of blockchain-based solutions and cryptocurrencies appeared quite implausible. In addition, it was nearly inconceivable that any nation would accept bitcoins as a legitimate form of payment. Nonetheless, the answer to the question “what is the future of blockchain?” can provide numerous promising ideas.
In 2021, El Salvador was the first nation to accept Bitcoin as legal money. Companies might use Bitcoin to pay their employees’ salaries, and Bitcoin can be used nationwide to purchase products and services.
According to industry analysts, several other nations will follow in El Salvador’s footsteps in 2022.
According to the projections of prominent corporate professionals for blockchain technology in 2022, emerging nations may use Bitcoin as legal cash.
Increasing international money transfer fees and global inflation would be the primary drivers promoting the acceptance of cryptocurrencies as legal currency.
In 2022, the idea of national cryptocurrencies will be another attractive field for blockchain development. The concept of national cryptocurrencies is closely tied to CBDC (Central Bank Digital Currencies), which proposes that central banks will create their own coins as opposed to opting for decentralized coins.
Developing national currencies typically focuses on digital currencies, which can coexist with current conventional currencies.
Therefore, blockchain developments may enable users to conduct financial transactions and manage asset custody. Notably, users are not reliant on third-party providers, and central banks might potentially exert control over the circulating supply.
Thus, the central banks are able to preserve the value of the national currency token alongside the nation’s traditional currency.
Bitcoin, which has the support of the UK government, is one of the most noteworthy examples of such blockchain-based movements in 2022.
Even if it is not ready for its debut in 2022, numerous other nations are actively working to introduce national currencies based on blockchain technology.
Blockchain is without a doubt among the most powerful & advanced technology solutions currently available.
This technological innovation comes with a suite of features like:
- Improved security
- Better transparency
- Enhanced Data immutability
- and Seamless Accessibility than conventional networks.
While blockchain has been crucial in driving several improvements across various industries, it is currently undergoing development.
In order to successfully navigate the complexities of the blockchain world, it is necessary to closely monitor blockchain trends.
The characteristics of blockchain demonstrate its suitability as a prospective technological intervention. Moreover, the trends for blockchain in 2022 demonstrate how it evolves with each passing year.