Trends in Blockchain for 2022

Blockchain is hot right now. The industry has a staggering compound annual growth rate of over 69% between 2019 and 2025. Blockchain is no longer just relevant to cryptocurrencies, as well – blockchain-based applications are emerging to support many other scenarios that require decentralized data storage and accessibility.

I recently met with Medha Parlekar, Co-Founder and CTO of CasperLabs, to learn about some of the most important trends likely to affect this booming sector in the coming months. According to Parlikar, we are still in the early stages of developing both blockchain and NFT, and 2022 will see continued growth in this sector.

These moves are likely to include more significant investments in blockchain technologies and the emergence of micro-business models that take advantage of NFTs. It is likely that Proof of Stake (PoS) models will become more important to reduce negative climate impacts and more solutions will emerge to support development and operations that support blockchain-based applications.

Continuing Blockchain Investing

First, we will likely see greater investments in blockchain technology in the coming year. Unsurprisingly, finance is likely to be the most adopted, with blockchain usage in the financial sector expected to reach $22.5 billion by 2026. But outside of finance, blockchain investment will seep into innovative areas as well. For example, blockchain spending in healthcare is expected to rise to $5.61 billion by 2025.

Not only does Blockchain attract corporate interests, developers on the ground seem to be excited as well. “Developers are waking up to the opportunities that blockchain offers,” Parlikar explained. “We will see a significant increase in developers moving to the blockchain.” She noted the increasing interest of developers in blockchain to create tools beyond tools to extract real business value.

We are also seeing a peak of interest in blockchain finance from nation states. For example, in 2021, the European Union announced plans to invest billions of euros in blockchain infrastructure.

Uncertainty about regulations

Blockchain opens with major economic transformations. But the cryptocurrency market is still a “wild west” with little regulation. According to recent reports, it appears that the US Securities and Exchange Commission is preparing to regulate the cryptocurrency industry closely in 2022.

“More investment in blockchain is bringing it into the mainstream, but what is holding back a lot of adoption is regulatory uncertainty,” Barlekar said. Similarly, Forbes reported that regulatory uncertainty is the biggest challenge facing blockchain entrepreneurs.

Blockchain is no longer relegating to the startup domain either; Well-established financial institutions also want to participate in the massive boom, Barlekar said. This excitement caused the development of a development first, law later mindset, similar to the legal gray area that followed Uber as it expanded its ride-sharing business.

“[Blockchain] Barlekar explained that companies are trying to hedge risks. “We want compliance and we don’t do nefarious things on purpose – there is just a huge opportunity to innovate, simplify processes and increase the end user experience.”

New NFT strategies to emerge

If you follow any artist accounts on Twitter, you’ve probably heard a lot about NFTs lately. Non-Foldable Tokens (NFTs) use blockchain technology to imprint ownership and value on all types of assets.

“I see NFTs as a great representation of the real world,” Barlekar said. Blockchain-powered NFT technology creates markets from ephemeral or purely digital objects – such as 3D artwork – that cannot easily be traded in typical markets.

But we’re probably just on the cusp of NFT usage in general. “The value of NFTs is still underutilized,” Barlekar said. At the moment, NFT markets mainly revolve around asset ownership only. But there is no reason why one should not build, say, an NFT rental system that shares access for a while, or one that offers subscriptions for recurring revenue, as you suggested.

“[There are a] “Lots of interesting markets that could emerge,” Barlekar said. For example, the combination of NFTs and the Internet of Things (IoT) could bridge the metaverse to the real universe, proving ownership of our physical assets.

Proof of Stake (PoS) response to backlash energy

The dark side of cryptography is that it requires great computational power. Unnecessary calculations are an energy drain that exacerbates human environmental impact. And if your word in the network is only related to computational power, there will inevitably be an escalating computational arms race against others in the network.

This is why Parlikar puts his trust in the Proof of Stake blockchain. “Proof of stake is definitely the way to go,” she said. In PoS networks, power is related to condition For each actor in the network, which can be identified or modified by a consortium. Participants can agree on a governance model and set limits. This contrasts with Proof of Work (PoW), where your strength in the network is directly related to computational ability.

Parlikar explained that Proof of Work systems become unsustainable for organizations trying to spin their blockchain networks, or when trying to scale up an entire industry, in addition to increasing negative environmental impacts. Thus, PoS is more suitable for achieving enterprise-level collaboration for federation networks.

More Blockchain DevOps Solutions

Overall, blockchain penetration is still relatively low. This is partly due to the fact that it is still difficult to use. As I’ve covered before, blockchain-based development is still relatively inaccessible. It requires a thorough theoretical understanding and specific technical knowledge to implement it. “It’s not a trivial thing,” Barlekar added. “Dealing with private keys and getting the keys — getting started is still pretty complicated.”

Blockchain management can also use a dose of DevOps. However, the immutability and decentralized nature of the blockchain creates friction with traditional DevOps. “The majority of protocols will not allow you to place a smart contract under a CI/CD,” Barlekar explained. Thus, organizations may choose blockchain solutions that play well with test-driven development. These solutions potentially enable iterative development using established DevOps pipelines.

Benefits and challenges ahead

Interest in blockchain and distributed ledger technologies continues to rise. But, what are the ultimate benefits of this blockchain and the reality saturated with NFT? According to Parlicar, we are heading towards “a world of greater trust and transparency.”

Blockchain guarantees the source. Frankly, it confirms that something was done at a certain time. With this knowledge, network participants can prove things beyond a reasonable doubt.

This has the potential to avoid corruption and unlock more cooperation and valuable potential. “You don’t have to trust someone — you can trust the information they give,” Barlekar said.

It is still early days for the blockchain revolution. “Blockchain technology is still in its embryonic stage and faces many challenges,” the European Commission wrote in its report, Blockchain Now and Tomorrow: Assessing the Multidimensional Effects of Distributed Ledger Technologies. For blockchain to reach everywhere, the community will have to overcome challenges, including reducing its energy footprint, improving developer usability and responding to imminent legislation.

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