Blockchain technology and cryptocurrencies are interwoven with the role of blockchain in offering the peer-to-peer model of financial transactions. A closer reflection on blockchain predictions and relevant industry trends in 2023 is essential for identifying how blockchain technology and its applications will evolve in future. The year 2022 spelt a turbulent phase for blockchain and crypto with many significant events. For example, a drop in token prices and NFT valuation alongside radical growth in trading pattern volatility affected blockchain in 2023. On top of it, the downfall of popular centralized crypto firms also created waves of distrust in the effectiveness of blockchain.
Most of the predictions for blockchain for 2023 might take a page from the events in 2022. However, it was also important to look at the underlying causes of the unfortunate state of crypto and blockchain in 2022. Upon closer inspection, you would find that the majority of the issues did not have anything to do with problems in cryptocurrencies or blockchain technology. With the year 2022 in the past, it is important to look up to the future and find out the expected trends and estimates for blockchain technology in 2023.
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Why Do You Need to Know about Blockchain Predictions for 2023?
The volatility of cryptocurrencies has been an evident highlight of the new financial instruments since their inception. However, the recent downturn in the crypto market has created concerns regarding the feasibility of blockchain in future. At the same time, hopeful estimates for the growth of blockchain in 2023 paint a different picture. Cryptocurrencies are only one of the fundamental use cases of blockchain technology, which focuses on offering fundamental economic value and business applications. Which factors affected the volatile patterns in the crypto sector? The rapid increase in investor demand alongside excessive leverage and margin activity fuelled volatile trading patterns. In addition, inadequate business models and industry practices ignored due diligence and scrutiny.
The unprecedented decline in the valuation of NFTs also created valid concerns regarding the future of blockchain. Simultaneously, the example of the failure of FTX indicated that the future of blockchain technology might be headed nowhere. On the other hand, it is impossible to ignore the underlying causes behind the turbulent phase for blockchain and crypto in 2022. Fraudulent activity, user errors and excessive risk-taking were the primary factors leading to investor losses in billions. Did you notice why you should learn about predictions and trends for blockchain? Awareness of industry trends, new innovations and technologies alongside best practices could help in avoiding unwanted concerns. Most important of all, you can make better decisions regarding the use of blockchain technology or cryptocurrencies.
Most Popular Predictions for Blockchain Technology in 2023
The answers to “what is the future of blockchain technology” holds formidable significance in achieving a clear impression of how blockchain will evolve in 2023. Most of the attention on blockchain technology revolves around cryptocurrencies, without accounting for its other use cases. Blockchain has been revolutionizing many other processes, operations and systems in different industries. On top of it, blockchain has also offered a significantly better value proposition for governance as compared to traditional organizations and agencies. Where is blockchain headed in 2023? Let us find out the answer with the following predictions.
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1. The Dominance of Web3 and Metaverse
The big leap for blockchain towards the future might actually happen in 2023 with developments in web3 and metaverse technology. Now, the development of blockchain technology would target innovative advancements in web3 and the metaverse. Web3 and metaverse could define the future of blockchain 2023 and how the trends would dominate future developments in blockchain technology. The drive for web3 has been gaining momentum since 2008 with the exposure of pitfalls in centralized financial service systems.
Web3 focuses on developing an open, intelligent and autonomous internet based on decentralized protocols. 2023 would spell the rise of web3-centric blockchain networks. How will the web3 blockchain networks stand out from existing blockchains? Web3 blockchains would have distinctive traits such as seamless integration and censorship resistance in P2P file storage. Another significant highlight in the blockchain technology future predictions would point at the metaverse. The metaverse aims to bridge the gap between physical and virtual worlds while offering a new and immersive experience of the internet. Metaverse would utilize different technologies alongside blockchains, such as AI, AR & VR, cloud computing and IoT, for offering natural, seamless experiences with metaverse applications.
While web3 and metaverse emerge as profound value-based innovations in the field of blockchain technology, the concerns regarding centralized metaverse have been fuelling negative assumptions. The authority of centralized agents over the regulation, control, and distribution of user data creates possibilities for many setbacks. As a result, the predictions for blockchain suggest that the development of decentralized metaverse platforms would gain first priority. Some examples of decentralized metaverse platforms include Axie Infinity and Decentraland. Furthermore, advanced solutions in blockchain could help metaverse users in the regulation of different aspects pertaining to security and trust. For example, the adoption of NFTs for ensuring scarcity and immutability for preventing asset forgery.
2. Ethereum Gains Momentum
The future of blockchain 2023 predictions would also shed light on expectations from Ethereum. In the long run, the year 2022 will hold a prominent place in the discussions about blockchain technology. Why? Ethereum blockchain successfully completed “The Merge” in September 2022 by shifting to the Proof of Stake consensus protocol. As of now, Ethereum maintains its position as one of the most common layers 1 blockchain networks right now. Ethereum has introduced many protocol-level developments, leading to growth innovation, capital, user count and initiatives for development. It is most likely to extend its golden run in 2023 with the rise in the development and adoption of Ethereum. At the same time, it will be one of the most popular layers 1 blockchains for capital investments.
The Merge in Ethereum blockchain network emerged as one of the most significant events in blockchain history. In 2023, Ethereum would introduce many other advancements on similar lines, thereby promoting better adoption and capital investments. The Ethereum blockchain predictions for 2023 would emphasize the Shanghai upgrade, slated for the second quarter of 2023. The Shanghai upgrade would enable users to withdraw their ETH stakes locked in a deposit contract. With the facility of un-staking ETH, Ethereum could invite more staking activity.
Another prominent upgrade on the cards for Ethereum blockchain in 2023 is the EIP-4844 update. The EIP-4844 upgrade could facilitate proto-danksharding as an initiative for enabling full sharding and comprehensive scalability of layer 2 blockchains. Such upgrades could establish the foundations for faster development of comprehensive sharding alongside maximum Ethereum scalability.
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3. The Utility of NFTs will Increase
The utility-based applications of NFT will take centre stage in 2023. Non-fungible tokens have been considered a suitable instrument for representing digital artwork. However, the answers to ‘what is the future of blockchain technology‘ would point to more personalized, commercial, and sophisticated use cases of NFTs. PFP projects and zero-utility artwork have been prominent highlights in the world of NFTs for the past few years. Now, the use of NFTs would not focus only on digital art, as the users could witness many emerging applications of non-fungible tokens.
Many commercial giants, such as Starbucks, have started exploring the utility-based applications of NFTs. The effectiveness of NFT adoption by Starbucks could encourage other major brands to follow suit. On top of it, web3-native projects have been encouraging creators as well as brands to explore personalized utility in NFTs. The year 2023 would drive new developments for blockchain technology future by bridging the gap between physical and digital assets. For example, purchasing a pair of sneakers in real life would offer the facility of wearing them digitally as an avatar in virtual worlds. NFT projects without utilities could ultimately end up as lost players in the rapidly expanding NFT ecosystem.
4. Blockchain in Government Agencies
The next top prediction for the future of blockchain technology in 2023 refers to the integration of blockchain technology in government agencies. Distributed ledger technology presents many value-based advantages for government authorities. One of the biggest problems for government agencies is evident in the necessity for the administration of massive data volumes. Blockchain technologies could facilitate better and more innovative approaches to data management, which could boost the productivity of government agencies.
Over one billion people will have some form of personal data stored on blockchain by 2023. The features of blockchain could enable the decentralization of user information used for governance purposes. For example, the development of national identity verification systems based on blockchain. Such types of systems could enable the benefits of decentralization, anonymity and privacy of personal information for all users. On top of it, advancements in decentralized identity with web3 technologies could set the foundations for the broader adoption of blockchain in governance.
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5. Combination of Blockchain and IoT
The next big trend for blockchain in 2023 will focus on the rise of opportunities for combining blockchain with IoT. The growth of the global IoT market has called for a redefined approach towards IoT security with the advent of complicated security challenges. Most of the complex security issues with IoT can be attributed to the distributed and diverse nature of IoT technology. As the number of IoT devices crosses 26 billion, the concerns of hacking will become more common in 2023. Now, network operators have to work on preventing intruders from affecting their systems. The common centralized architecture for IoT has been identified as a prominent reason for IoT network vulnerability. On top of it, connectivity among billions of devices in the global IoT infrastructure opens up a bigger ground for security breaches.
The estimates regarding the future of blockchain 2023 would also point to the way in which blockchain enables new prospects for IoT security. Blockchain offers the foremost advantage of transparency, thereby helping every network participant witness the blocks and the transactions in them. At the same time, blockchain users can access their private keys for managing transactions. Another helpful implication of blockchain for IoT security focuses on its decentralized nature. Therefore, blockchain could deal with the setback of a single point of failure due to its decentralized nature. Furthermore, you can also identify the value of blockchain for IoT security in the trait of immutability, which prevents unauthorized modification in IoT databases.
Other Notable Predictions for Blockchain in 2023
The list of estimates for blockchain technology’s future in 2023 also includes many other promising entries showcasing the future developments expected in the blockchain. Here are some of the other trends you can witness in the blockchain sector in 2023.
Blockchain and AI Integration
The integration of AI with blockchain technology could open up new possibilities for developing applications to serve innovative use cases. According to the International Data Corporation, global expenses on AI would amount to almost $57.6 billion in 2023. At the same time, over half of the businesses are likely to adopt AI through blockchain integration.
Blockchain and Social Networks
As of 2022, the world had almost 4.74 billion social media users. However, social media networks have been subject to criticism on the grounds of security breaches and centralized control of tech giants. The predictions for blockchain technology in 2023 would invite attention towards the potential for integrating blockchain in social media applications. Blockchain could resolve concerns regarding the relevance of content, privacy violations, notorious scandals and data control privileges. The use of blockchain in social media platforms could empower users and content creators with complete control over their content and digital assets. With blockchain in the picture, content creators could be assured that their assets and data will be in their ownership.
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The detailed overview of trends for blockchain in 2023 reveals that innovation will rule the blockchain landscape this year. One of the most significant highlights for the future of the blockchain industry would refer to the rising prominence of web3. The applications of web3, such as the metaverse, could set new precedents for redefining the digital experiences of users. On the other hand, existing applications of blockchain in NFTs would find new routes for developments with utility-based NFTs. Furthermore, the support of blockchain for social media networks and IoT security could spell positive advancements in 2023. Learn more about blockchain trends and prepare for your next big decision now.
*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!