The conversation around cryptocurrency is challenging to do without also talking about blockchain. Hailed as the technology that makes crypto possible, some experts labelled blockchain as the true goldmine in the age of digital assets and purchasing.
Blockchain is, in simple terms, an online decentralized and encrypted database, which is hosted on numerous servers across multiple locations. Copies of data in these servers are synchronized constantly, making it so that any changes are only possible with a consensus. All information is recorded on the blockchain (like XMR wallet) or another crypto exchange platform; all the information is recorded on the blockchain. As blockchain relies on cryptography rather than human disposition, crypto advocates note that it is a more secure and trustworthy way of storing and distributing information.
Despite being a relatively new piece of technology, blockchain has progressed by leaps and bounds, opening new doors of opportunity in the crypto space. Even with the COVID-19 pandemic, the development of blockchain tech has not ceased. Interested parties, including big financial service companies and even individual traders, should watch for the following products to keep up-to-date on this continuously evolving tech.
Push for Greener Blockchain Initiatives
One of the biggest criticisms of blockchain is energy consumption. It takes much power to work, which translates to potentially exorbitant amounts of carbon emissions. In an era of environmental awareness, it is a significant cause for concern, and it played a massive part in why Tesla removed Bitcoin as a mode of payment for their cars earlier in 2021. Hence, the natural course of action is to search for ways to make blockchain more environment-friendly.
So far, professionals see two main ways that this could happen. Firstly, cryptocurrency could move to more miniature energy-consuming models of blockchain tech, such as adopting "proof of stake" algorithms rather than "proof of work." The second is to invest in the research and production of renewable energy, which will help power blockchain, among many other uses.
Expansion of NFTs Beyond Online Art
NFT stands for non-fungible tokens and uniquely identifies digital assets, such as pictures, codes, music, and contracts. When a person purchases an NFT, this is recorded on the blockchain and becomes proof that they are the owner of that particular asset. While it is mainly used in the humanities space, people from other industries are slowly tapping into NFT's unique potential.
The primary advantage of using NFTs is that they are a means to authenticate the ownership of any item, whether tangible or intangible. This could be a gamechanger in multiple markets, particularly luxury brands and real estate, which often consider the ownership history of select assets. For example, people purchasing a luxury good (like a limited edition watch or a heavy piece of jewellery) can use NFT to certify that they are the legitimate owner of that particular piece.
The subscription-as-a-service (SaaS) model has increased in popularity over the years, and a fascinating piece of tech like blockchain has also entered the fray. Industry giants such as Microsoft, IBM, and Amazon have started providing BaaS products, which opens the opportunity for all companies to start using blockchain technology regardless of size.
To elaborate, BaaS is a cloud-based service that will give its clients access to the tools and platforms of blockchain without actually investing up-front in the skills and infrastructure related to it. As a result, they can utilize its many features without worrying about the tech's maintenance and development.
More effective data security, increased transparency, and better accountability are only some of the perks that BaaS has to offer to companies considering blockchain.
Wider Adoption of Crypto on a National Level
El Salvador made history the first country to accept Bitcoin as a legal tender. Doing so means that businesses based in El Salvador can buy crypto as a form of payment and pay their employees with this particular cryptocurrency. One significant reason for this is to remove the financial "middlemen" when sending money from overseas, especially in the case of global inflation. This adoption is a milestone in the relatively young crypto history, and it would not be surprising if other countries began following suit.
That said, other countries may not necessarily go about it the same way. For example, one possibility is that central banks may develop their coins, so they have more control over coin supply and align the coin's value to the country's traditional currency. In this manner, central banks can keep the levels of coin circulation in check while ensuring that users can still independently transact without going through third-party service providers.
Indeed, blockchain and crypto, by extension, have come far, and it does not seem that they will be going away soon. There are many exciting developments to watch out for and probably a few more that all parties, expert or not, may not expect at all. Hence, make sure to keep an eye on the news and other sources of information on the blockchain. It is, after all, here to stay and here to grow.