Exploring the Frontiers of Blockchain: Emerging Technologies and Trends to Follow
Blockchain technology has been around for more than a decade, but it keeps evolving through broader and more versatile applications and advancements. While most people think of blockchain in terms of cryptocurrencies, innovative businesses continue to find new ways to leverage blockchain to disrupt their sector. This article explores some new trends in blockchain that have the potential to reshape various industries.
The rise of enterprise blockchain solutions is one of the most important new trends in blockchain technology. Deloitte states Businesses are coming up with enterprise blockchain solutions or dApps to make key value chain processes efficient, transparent, and secure. Some businesses are even setting up private blockchains to exercise more granular control on data and protocol required by their data-sensitive value chains. Traditional value chains in sectors like financial services, logistics, consumer goods, and retail are utilizing blockchain solutions to unlock new dimensions of efficiency, transparency, and security.
Forbes reported that the rise of decentralized finance (DeFi) is one of the most significant recent developments in blockchain technology. The term “DeFi” is used to describe a new generation of financial services that are based on blockchain technology and operate independently of conventional financial institutions. There are a number of advantages that DeFi solutions can provide, such as faster transactions, lower fees, and increased accessibility. More businesses will likely begin investigating ways to incorporate DeFi solutions into their operations as DeFi continues to gain traction. DeFi marks a disruptive rethinking of traditional financial instruments like currency exchange, insurance, investments, trading, lending and borrowing, asset management, etc. On top of that, it fosters a new breed of use cases like flash loans, arbitrage, uncollateralized loans, staking, vesting, etc.
Transaction is perhaps the most prominent aspect being transformed by blockchain. With the increasing popularity of decentralized finance (DeFi), interoperability is a growing emphasis, enabling the transmission of data and assets across different blockchain networks through decentralized cross-chain bridges safely and affordably. High throughput and fast finality chains like Fantom are becoming popular as they can provide speedier payment solutions optimized for high-speed transaction confirmation while ensuring deterministic finality and safety. Strides in Self-Sovereign Identity (SSI) concepts, which grant complete control to individuals over their digital identity, brings much-needed regulation enabling the verified use of transactions, signatures, and other dApps. As reported by Forbes, SSI can provide open access, convenience, immutability, decentralization, and lock-tight security if it is implemented correctly. With these developments and growing mass appeal, proof-of-reserve currencies like central bank digital currencies (CBDCs) are gaining ground in the monetary policy of prominent countries. Mckinsey reports, these CBDCs can reduce costs, improve the speed and efficiency of electronic payment systems and enhance payment security decreasing the chances of fraud.
Another rapidly developing application of blockchain is NFTs, which are transforming how we think about copyright, music, art, collectibles, etc. State-of-the-art NFT concepts are bridging the real world with the digital world through phygital assets, in-game NFT purchases, and metaverse assets. According to Gartner, companies are expanding and enhancing their current businesses in unprecedented ways using NFTs to augment physical products, create virtual experiences on gaming platforms, and allow new forms of loyalty marketing. Impact NFTs is yet another upcoming trend, facilitating a novel way of fund collection for impactful causes from around the globe.
Lastly, blockchain technology can also be used to address the increasing social and environmental issues. According to The Economic Times, blockchain can be used to track a product’s origin, allowing the growing environmentally-conscious consumers to make more informed purchasing decisions. Concepts like verified carbon credits from Verra Registry are at the forefront of climate action, enabling organizations to transparently offset their carbon footprint. These systems will allow businesses to track and offset their carbon emissions by purchasing and retiring carbon credits. Therefore, this has the potential to support the global effort to combat climate change and assist organizations in achieving their sustainability objectives.
So why should companies integrate these new blockchain trends into their work and companies? The primary reason for this is that blockchain is a versatile technology undergoing rapid transformation, continuously disrupting diverse sectors of business. By enabling secure, transparent, and effective solutions, blockchain technology addresses age-old ubiquitous business problems. Hence, in the coming years, businesses and tech companies that are able to incorporate these new blockchain trends into their work businesses may have a significant advantage.