The blockchain concept is widely known among those with an interest in digital technologies. While Bitcoin and Ethereum are commonly cited as classic examples of blockchain, there are numerous other networks in existence, including some unusual applications such as cannabis cryptocurrency, which seeks to regulate the cannabis market.
If you’re interested in the future of blockchain, you might wonder about the most promising trends for 2023. Our experts in blockchain technology have compiled some insights on this topic that we’d like to share with you in this article.
Blockchain has encountered various challenges, such as the recent exchange crisis in Canada, leading Forbes to note the technology’s lack of regulation and complexity. However, despite these issues, blockchain remains highly promising, and developers are striving to resolve problems, expand its potential applications, and enhance its benefits for investors.
Now, let’s delve into the top ten trends in blockchain for this year.
1. Security Tokens
The utility token market has experienced a slowdown due to a range of concerns surrounding the ICO process. Criticism has been directed at the lack of tangible value and regulatory uncertainty associated with ICOs, which has led to limited profit potential for many investors accustomed to traditional IPOs. Additionally, given the potential for market manipulation and low liquidity, some view cryptocurrencies solely as a short-term investment.
In response, security tokens have emerged as a solution to address the major issues with ICOs. These tokens are based on the concept of programmable equity, combining the benefits of blockchain technology with stakeholder principles. Unlike ICOs, they offer investors greater value, including ownership rights and the potential for passive income through dividends. Entrepreneurs are familiar with this concept, and it has the potential to redefine the IPO business by increasing liquidity, efficiency, and 24/7 capital access.
2. Blockchain Consortia
The primary objective of such an organization is to foster productive collaboration among competitors. Since the success of any blockchain platform relies on its community, involving more members can significantly enhance the relevance of shared data and bolster the technical security of the network.
Blockchain consortia can have either a business or technology focus. Business-oriented consortia aim to establish and maintain platforms that address specific business problems, while technology-focused consortia seek to develop reusable platforms based on technical standards. Some consortia, such as R3, may feature characteristics of both types.
However, blockchain consortia may encounter challenges in attracting more members and integrating this concept into the existing IT market. Therefore, it is advisable to observe the major players in the consortia landscape and learn from their blockchain use cases and structural challenges.
3. Alternative Asset Classes
One of the prevailing blockchain trends at present is the concept of asset tokenization. Essentially, any high-value asset, such as real estate or commodities, can be tokenized and used for exchange. This transition from cryptocurrency to digital assets backed by tangible assets can be especially valuable for small to medium-sized enterprises, providing them with greater market access. Given the vast potential of blockchain technology, these companies can attract more investors and benefit from the high liquidity and transparency of exchanges.
Another type of token is designed to address the volatility issues associated with Bitcoin. These tokens combine the advantages of most cryptocurrencies, including privacy, security, and transparency, with the reliability and stability of fiat currency. Since they are backed by fiat currency, they are not affected by market conditions and have a fixed price.
There are several types of stablecoins, including fiat-collateralized, commodity-collateralized, crypto-collateralized, and non-collateralized tokens. Currently, there are several well-known stablecoin currencies, such as Tether. However, these systems have their drawbacks, such as being centralized and potentially eliciting less trust from investors.
As the Technology-as-a-Service model gains popularity, it is likely that we will see an increase in the number of blockchain platforms adopting a similar approach. In essence, Blockchain-as-a-Service (BaaS) enables customers to leverage the best features of this technology without the need to create their own platform. With access to the cloud, they can build apps, execute smart contracts, and take advantage of the existing, well-developed infrastructure.
Several providers, including Amazon, are already offering BaaS, and we anticipate more companies to enter this market. For instance, Huawei recently launched its Blockchain Service, enabling its clients to use blockchain technology through HUAWEI CLOUD.