What’s in Store for Blockchain in 2022
By Anju B Nair, Technical Content Writer Kerala Blockchain Academy.
Blockchain is one of the technologies that never stops its diameter from stretching. Right from the inception, it is seen to be constantly evolving, branching across different arenas resolving various conventional woes. The rising popularity of blockchain techniques is significantly seen to change the way digital and networking systems operate and manage. In the meantime, constant updations in blockchain technology are expected to bring new open issues and challenges for research communities. Well……all these bring certain predictions for Blockchain in 2022 as a much more felicitous solution in the market.
Let’s get started rolling certain facts from the previous year.
- Enhanced Crypto Market
Last year, the market capitalization of cryptocurrencies reached $3 trillion USD for the first time. If we trace back to the beginning of 2021, we could see that it was less than $800 billion USD then. With Bitcoin surging to an all-time high the last October, the demand for cryptocurrencies not only skyrocketed but also laid a bullish sentiment for the preceding cryptos. As per CoinMarketCap, within a few days of the 2022 pass by, the USD prices for the largest 20 cryptocurrencies have increased by triple digits by their Market Cap. It is noticeable that many native cryptocurrencies which are traded as potential Ethereum killers such as Solana, Cardano, Binance, Polkadot, Avalanche belong to this list.
Of course, who doesn’t know investments in the crypto-asset market are riskier than traditional investment opportunities, still, the demand doesn’t seem to subside for several reasons say the contrast of the price performance of cryptocurrencies.
Now the question is will the frenzy continue. Will 2022 be a year that rolls in more cryptos in the market or will it again go back to a long lull?
2. The Rise In DeFi
Likewise, DeFi now has a total value locked (TVL) of $100 billion USD on Ethereum alone. The Decentralized Finance market has made a massive rebound in the year 2021 after a long standstill. Now almost every day, new projects are surfaced in DeFi solving diversified real-world use cases. Since 2021, several DeFi coins and smart contract tokens are experiencing significant gains from yield farming, creating exhilarating opportunities for companies. It looks like the year 2022 will also be a seminal year for DeFi. As the much-anticipated transition of Ethereum to a full Proof-of-Stake (PoS) blockchain, in 2022, the DeFi is expected to yield more buoyant sentiment from the community. Why not???.. The Ethereum network value is to increase manifold with this makeover. Predictions also exist that Ethereum may flip Bitcoin sometime in 2022. Also, cross-chain networks like Polygon, are proven to catalyze and divide the load of the DeFi sector (such as low fees and fast transaction times).
3. NFTs: A New Source of Income
It looks like NFTs have taken the internet by storm. Its complementary accessories like Metaverse and GameFi have fortified its stance that now while looking into the future of NFT nowhere a fear of expiry is sensed. Through Metaverse, customers can virtually mirror their personal style and trade. GameFi is yet another fortifier. The year 2021, saw the Axie Infinity which enabled millions of players to participate and define a new source of income. The collaborative culture of NFT has opened a new egress, the possibility of virtually coming together, no matter from where to economically trade.
NFTs made a mark in 2021 through the Beeple artwork sale back in March. Since then it seemed to have crash-landed into every sector like game collectibles, artworks, sports memorabilia..to anything that holds the potential to be tokenized. Today the craze is madly gathering up and foreseen to reveal the best of it in 2022. Last year, we saw the footprints of many athletes, artists, and celebrities testing NFTs. The Bollywood celebrity, Amitabh Bachchan’s NFT collection garnered close to $1 million in 2021, imprinting the highest ever bidding in India. It looks times are no far that we’ll be carrying NFTs instead of physical souvenirs.
4: Emergence of Multi-Chain
The blockchain ecosystem is in a transition phase. From a siloed, individually-welled-up architecture, blockchain is now embracing a living of a multi-chain world in which multiple blockchains can come together and exchange values between each other. With the introduction of blockchain networks like Polkadot and the Cosmos, the Inter-Blockchain Communication Protocol (IBC), is given a new derivation and looks like finally, blockchains are capable of communicating with each other, working together for more prosperous functional capacity. In 2022, this trend is expected to continue bringing in more cross-chains in the market. In the meantime, more research on interoperability between different blockchain ecosystems and cross-chain protocols is expected to work diligently.
5. Work in Progress the Legality
The year 2021 made history. It witnessed a crypto-friendly approach when El Salvador adopted Bitcoin as an official currency alongside the U.S. dollars. El Salvador became the first country to adopt cryptocurrency as a legal tender. The initiative is expected to inspire many countries and urge them to at least seriously consider crypto assets and make a statement on how they will handle them in 2022.
The year 2022, is likely to witness different shades on the legality of blockchain, especially its crypto side. The world is eagerly looking into countries like China, the early adopters of crypto that whether they will ban or tighten the regulations of crypto assets. Or will it take the friendly approach as El Salvador took? India too was in the news last year for its widespread crypto ban rumours to the finance minister making remarks about the need for a calibrated approach to tackle crypto. We could say that every country is in a work in progress stage and is seriously winding policies and frameworks for blockchain. Especially the AML, KYC, taxes, and stable coins.
Recently, the total supply of stable coins pegged to the U.S. dollar surpassed the $113 billion mark, grabbing the attention of regulators and policymakers around the world, including U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler, U.S. Treasury Secretary Janet Yellen. All three have made their voices on quick look to the stable coin exchanges.
In 2022, the Markets-in-Crypto Assets (MiCA) regulation is expected to come into effect. If it realizes, a unified legal framework at the European Union level for service providers and issuers of crypto assets can be spotted.
6. Blockchain: To Be More Sustainable
Crypto investments are likely to go green this year as more sustainable options are adopted. Earlier, investors were reluctant to invest in cryptos especially Bitcoins for their high carbon footprints during the mining. However, now a sustainable treatment is adopted tapping renewable energy sources such as geothermal and solar energy for mining. There is an initiative of Green Bitcoin with El Salvador adopting geothermal energy from volcanoes.
Well, that said, here wrapping the quick predictions for Blockchain in 2022. Please note that the metrics listed in the article are purely based on data available at the time of writing. The above six are a quick rundown of the most talked predictions for Blockchain in 2022. The reality is that no one can predict the future of Blockchain until it tale itself. Further, this article should not be considered ultimate. As always, “do your own research” (DYOR) helps.
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