Blockchain is one of the most exciting tech trends at the moment. It is a distributed, encrypted database model that has the potential to solve many problems around online trust and security.
Many people know it as the technology that underpins Bitcoin and cryptocurrencies. However, its potential uses are far broader, encompassing digital “smart” contracts, logistics and supply chain provenance and security, and protection against identity theft. There are countless others–blockchain evangelists say it might improve security and integrity in any system that involves multiple parties sharing access to a database.
I expect business spending on blockchain solutions to reach $11.7 billion in 2022. Here are some trends that will drive this, as well as some predictions for how this will affect and more people in the coming year.
Blockchains have the potential to consume a lot of energy and emit a lot of carbon dioxide, which is why Tesla CEO Elon Musk decided to temporarily stop accepting Bitcoin as payment for his cars in 2021. For this excellent reason, efforts to "greenify" blockchain are likely to receive a lot of attention in 2022. There are a few ways to do this, including carbon offsetting, though many people believe that this is merely bandaging a wound that shouldn't have been caused in the first place.
Another option is to switch to less energy-intensive blockchain models, such as those that use "proof-of-stake" rather than "proof-of-work" algorithms to generate consensus. Ethereum, the second most well-known blockchain after Bitcoin, plans to switch to a point-of-sale (POS) model in 2022. Cathy Wood, CEO of tech-focused hedge fund Ark Invest, has advocated for another path to a greener operating model. This assumes that rising energy demand will lead to increased investments in renewable energy generation, which will then be used for other purposes, including the operation of blockchains.
NFT is expanding its reach beyond the realm of online art.
In the year 2021, Non-Fungible Tokens (NFTs) were the hottest topic in the blockchain world. Artwork such as Beeple's The First 5000 Days fetched astronomical prices, bringing the concept of unique digital tokens stored on blockchains firmly into the public consciousness. It's also firmly established in the music world, with artists such as Kings of Leon, Shawn Mendes, and Grimes all releasing NFT-formatted tracks. But, like blockchain the concept has potential beyond its initial attention-getting applications.
NFTs, which are used to prove each bottle's provenance, were recently sold alongside bottles of 46-year-old Glenfiddich whisky by distillers William Grant and Son. The monster-breeding game Axie Infinity, which allows players to "mint" their own NFT creatures to send into battle and currently has around 300,000 concurrent players, is one example (Fortnite, for comparison, has around 3.5 million). Both Dolce & Gabbana and Nike have designed NFTs for their clothing and footwear. And the metaverse concept, which was championed this year by Facebook, Microsoft, and Nvidia, opens up a slew of new NFT use cases.
Bitcoin and national cryptocurrencies are being adopted by more countries.
2021 saw El Salvador become among the first nations to adopt Bitcoin as legal tender, meaning it can be accepted across the country to pay for goods and services, and businesses can use it to pay their employees. According to many commentators, during 2022, we will see a number of other countries follow suit.
Because of global inflation and rising remittance fees from financial "middlemen" organizations used to send money home by overseas workers, Alexander Hoptner, CEO of cryptocurrency exchange BitMEX, predicts that at least five developing countries will begin to accept Bitcoin next year.
National cryptocurrencies, in which central banks create their own coins that they can control rather than adopting existing decentralized coins, will also grow in 2022. These projects typically involve digital currencies that will coexist with existing traditional currencies, allowing users to conduct their own transactions and manage their custody without relying on third-party service providers while also allowing central banks to maintain control over the circulating supply – keeping the token's value pegged to the country's traditional currency. While the UK government-backed Britcoin is unlikely to be ready for launch until 2022, others have already done so, including China, Singapore, Tunisia, and Ecuador, with more to follow, including Japan, Russia, Sweden, and Estonia.
Integration of blockchain and IoT
Because it is great for creating records of interactions and transactions between machines, blockchain is a great fit for the Internet of Things (IoT). Due to the automated, encrypted, and immutable nature of blockchain ledgers and databases, it has the potential to help solve many security and scalability issues. It could even be used for machine-to-machine transactions, allowing cryptocurrencies to be used to make micropayments when one machine or network needs to procure services from another. While this is an advanced use case that may require us to travel a little further down the road before it has an impact on our daily lives, we are likely to hear about more pilot projects and initial use cases in this field in 2022.
The ongoing rollout of 5G networks is likely to drive innovation in this field, implying greater connectivity between all manner of smart, networked equipment and appliances – not just in terms of speed, but also in terms of new types of data transactions, such as blockchain transactions.
The use of blockchain in vaccine production and tracking
It's clear that combating the global Covid-19 pandemic will remain a top priority through 2022, and that it will be a key use case for many of this year's top tech trends. In the tracking and distribution of vaccines, blockchain technology has several important potential applications. In a world where counterfeiters are known to create and sell fake vaccines, blockchain allows the authenticity of vaccine shipments to be verified, as well as their distribution to be tracked to ensure they reach their intended destinations. There's also a need to ensure integrity at every step of the supply chain, such as ensuring that batches of vaccines are stored at the correct temperature, as many of them require.
IBM has created a system to allow coordination between the many different and varied agencies and healthcare authorities involved with vaccine distribution, using blockchain to unify recording of vaccination rates and efficacy across the various tools and platforms they all have in use. A pilot project also showed how blockchain could potentially speed up the ability to recognize where a product recall might be needed – for example, in a case where a batch seems to be causing an unusually high occurrence of side-effects – from three days to just a few seconds. Breakthroughs that come about due to the unprecedented response to this pandemic are likely to go on to enable more use cases for blockchain technology in the manufacture, distribution, and management of vaccinations in 2022.
The article was written by Amit Caesar
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