In recent years, blockchain technology has made significant progress in both its development and application. The commercial implementation of new technologies requires not only time to adjust and alter, but also a forward-looking mindset from practitioners to explore and innovate.
On January 12, 2022, the State Council of China rolled out a plan to facilitate the development of the digital economy in the 14th Five-Year Plan period (2021-2025), setting down that the country should accelerate the promotion of digital industrialization, enhance innovation in strategic fields, and focus on strategic and cutting-edge technologies such as sensors, quantum information, network communication, integrated circuits, key software, big data, artificial intelligence (AI), blockchain, new materials, etc. China would leverage the institutional strengths of socialism, employ the advantages of the new system of pooling national resources and strengths, and take the advantage of a super large-scale market to improve the basic R&D capacity of digital technologies.
In fact, we have seen the development of the global digital economy has significantly accelerated since 2020. Represented by 5G and blockchain, "new types of infrastructure" are in gear, with blockchain being deeply integrated with leading-edge technologies such as the Internet of Things (IoT), big data, cloud computing and AI. New technologies, products, applications and models have emerged, with a more healthy and prosperous industrial ecosystem that unleashes the power of innovation in the blockchain industry. In addition, with a range of central banks worldwide announcing plans to issue digital currencies, the application scenarios of blockchain will be richer than before, and we will see an era of blockchain to enable business transformation and economic development in all respects.
On the basis of blockchain industry, we have listed a few predictions for this sector in 2022.
1. Digital Capitalization Will Be Accelerated by NFT
The non-fungible token, commonly known as NFT seems to bring a more exciting future for blockchain technology.
NFT is a spanking new approach for people to buy and sell digital assets that represent real-world items. As the name suggests, NFT is not fungible or exchangeable, and this kind of unique asset can only be bought, sold, traded or given away by the original owner or creator.
Speaking of digital capitalization, it is a process that enables digital items, which are native to the Internet, to declare ownership and protection by on-chain tokenization. In the past, digital properties such as equipment in games and virtual gifts were stored on game operators' servers but not owned by players, Therefore, property damage, stealing and black-market trading are common to see. With blockchain, developers are able to create their own virtual assets with scarcity, and users can safely and trustfully store and trade their properties.
NFT has endless possibilities, which could have a major impact on the future of digital ownership and it doesn't sound too unreal to pay for everything from artwork to cars in NFTs in the next coming years.
More importantly, NFTs will accelerate the trend toward digital capitalization. Compared to traditional assets, digital assets of blockchain have new advantages in transparency, trustworthiness, cryptographic security and programmability. All of these could reduce the cost and time of transactions, simplify rights management and allow partial ownership which could be considered an essential foundation for the future development of the digital economy.
2. Faster and Easier Transactions
With the nature of security and decentralization, blockchain will make it harder for hackers or malicious parties to tamper with transactions. Data will be highly secure and trustworthy with blockchain verification, meaning much faster transactions without corrupting security.
Meanwhile, the banking and financial industry is moving towards a completely digital landscape. In China’s recently-released development plan for the digital economy during the 14th Five-Year Plan period, it has been advised to deepen the digital transformation of key industries comprehensively. The plan calls for accelerating the digital transformation of the financial sector, making joint efforts to promote applications of big data, AI, blockchain and other technologies in the fields of banking, security and insurance. Meanwhile, new working models such as smart payments, smart bank branches, smart investment advisers and digital financing will be developed accordingly, with efforts to steadily promote the R&D of digital yuan in pilot regions. It is predicted that blockchain technology is gaining popularity among financial professionals, with 66% of banks that could deliver blockchain solutions in the next three years.
In addition, blockchain-based finance services would be able to process 24/7 transactions, enabling enterprises, governments and consumers to conduct transactions anytime, anywhere.
3. Rapid rise in cryptocurrency adoption
The global adoption of cryptocurrencies has exploded in 2021, with countries such as El Salvador making bitcoin legal tender. In 2022, it is expected to see more Latin American countries including Panama, Cuba and Paraguay accepting cryptocurrencies. According to the Global Cryptocurrency Adoption Index of Chainalysis, cryptocurrency adoption worldwide jumped over 880% in the past year.
Meanwhile, major players like PayPal, MasterCard, Starbucks, Amazon, and Visa are in various stages of cryptocurrency pilot programs and are planning to manage cryptocurrency transactions on their payment networks.
Ultimately, the growing popularity of cryptocurrencies should be attributed to their growing usefulness, and this kind of popularity can be seen in instant messaging applications such as Twitter, Discord and Telegram. By doing so, newcomers would have solid bases to interact with project owners and experienced investors, gaining insights into the projects and strengthening their sense of trust in cryptocurrencies.
4. More Mature Technology of Blockchain
As prediction goes, not only will cryptocurrencies reach an unprecedented height in 2022, but the supportive blockchain technology may also dazzle eyes.
Gartner, leading technological research and consulting firm, stated that emerging technologies are changing the way we define and use the concept of various platforms. Blockchain will expand the concept of distributed ledgers and is expected to change the business patterns of the industry. By 2022, 10 percent of businesses could be completely transformed by blockchain, and it could become a mainstream solution within 5-10 years. According to IDC, by 2022, 30% of enterprises will use conversational voice technology for business development and customer services; 15 million people will have their blockchain-based digital identities; 70% of new applications will use microservices architecture to improve the ability to design, debug, update and leverage third-party codes. In addition, global spending on blockchain solutions will hit $11.7 billion in total.
5. Blockchain Will Stand out in the Era of Metaverse
Being a buzzword throughout the second half of 2021, metaverse is considered to be the future of the Internet. Generally, it is a network of 3D virtual worlds that is parallel to the physical one. Metaverse is highly interoperable and encompasses a range of modern technologies such as AR/VR, cloud computing, AI, 5G, blockchain and IoT. Among all, blockchain is regarded as the "infrastructure" to build a metaverse. Relying on distributed ledgers, smart contracts, distributed storage, NFT, and multiple cryptographic algorithms, we could construct a reliable decentralized basic network for the metaverse. Meanwhile, users will be encouraged to create, contribute and collaborate in a distributed manner through the "consensus mechanism", so as to secure users' virtual assets and identities to realize value exchange in the metaverse, and ensure transparent implementation of system rules. With its capabilities of cascading and activation, blockchain will support the metaverse to become an integrated, ecological, visible and tangible existence.
As a lot of tech giants like Snap, NVIDIA, Meta, and Microsoft rally to support metaverse with their state-of-the-art products, the catchword will likely usher in explosive growth in 2022. Since blockchain technology could be applied to identify any unique virtual object without the involvement of a central authority and clear ownership is critical to the operation of the metaverse, blockchain and cryptocurrencies will be the key to building metaverse, as suggested in a research report from Goldman Sachs.
6. Blockchain and IoT integration
Blockchain is compatible with IoT because it could create a history record of interactions and transactions between machines. Due to the automated, encrypted and immutable nature of distributed ledgers and databases, it may resolve many issues surrounding security and scalability. Especially after the deployment of 5G, the need to use blockchain will be reinforced by the increased connectivity between various intelligent, connected devices and appliances.
7. Green Blockchain
One drawback of blockchain is its high energy-consuming and heavy carbon emissions. For this reason, attempts to make a more environment-friendly blockchain industry would be a public focusin 2022,
with viable approaches that include the adoption of carbon offset and shift to blockchain technology models with lower energy intensity, e.g., Ethereum has planned to move to a POS (proof-of-stake) model in 2022, which is the underlying mechanism that activates validators upon receipt of enough stake.
Green blockchain requires everyone in the industry to form a greener operating model. With the growing demand for energy, investment in renewable energy would surge to supply the power that applications and blockchain operations need.
8. Blockchain in Vaccine Manufacturing and Tracking
Fighting against COVID-19 may continue to be an essential task that governments in the world couldn't bypass throughout 2022, while blockchain could play a crucial role in this area with potential use cases in vaccine tracking and distribution against the global pandemic. As blockchain could verify the shipments of vaccines and monitor the distribution process, fake vaccines could be lessened and quality ones will be supplied to their intended locations. In addition, blockchain may help to ensure an undivided supply chain. For instance, by utilizing blockchain technology, a batch of vaccines could be guaranteed to store under appropriate temperature conditions that are prerequisites for vaccine storing.
Conclusion
It is possible that 2022 will see even greater breakthroughs in blockchain technology, of which the utilization will not be confined to a single organization or a specific ecosystem, but extend to a further field where no one has been in the past decade. Cryptocurrencies, digital currencies and NFT, with so many emerging terms coming closer to people's daily life in the past year, we may have explosive growth in the use of blockchain in 2022 and in the next decade that may change our life in a world-shaking manner.
