Top game-changing blockchain trends that will transform the industry in 2023

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Blockchain is the ultimate disruptor as it changes the way we think about everything from finance to healthcare.

Blockchain technology is on the fast track with new innovations, applications and use cases being implemented around the world every day. That begs the question – what does the future hold for blockchain trends?

As businesses and corporations try to integrate blockchain into their organization, they need to learn more about new trends in this technology.

Here are some of the latest trends making waves in the blockchain world.

Top blockchain trends in 2023

DeFi 2.0

DeFi 2.0 is the next iteration of the development of decentralized finance (DeFi) applications and protocols built on the foundation of first-generation DeFi.

This new decentralized financial application will provide better availability, interoperability and scalability.

Just like the early days of DeFi where they provided basic applications like DEXs (decentralized exchange) and leading protocols, DeFi will also introduce new products for businesses to use.

One of them is new and innovative farming strategies for yield. This will allow investors to earn returns or profits on their cryptocurrency holdings in the form of transaction fees or interest.

Apart from that, DeFi 2.0 will also introduce sub-collateralized loans and algorithmic stable coins in the future.

NFT for digital identity and ownership

NFTs (non-fungible tokens) are digital tokens that represent unique items such as digital art, music or video. It is based on blockchain technology, which ensures that all NFTs are unique, verifiable and immutable.

Now they are going one step ahead and instead of claiming ownership, they are trying to establish a digital identity through NFTs.

However, there are many obstacles to achieving digital identity through NFTs.

Countries like China are trying to use new technologies like NFTs to identify anyone on the internet, which can be considered a violation of privacy.

Nevertheless, NFTs are the future, and soon they may integrate identity verification such as driving licenses and voter cards on the internet.

Metaverse

Metaverse is a virtual world entirely created by users where people can interact with each other in real time through avatars.

This long-awaited technological marvel will become a decentralized and secure platform through blockchain technology.

Blockchain will enable interoperability for the metaverse by creating shared protocols and standards. It will improve decentralized governance by creating community-driven decision-making.

Blockchain can help ensure the ownership and authenticity of digital assets in the metaverse.

DAOs

A DAO (decentralized autonomous organization) is a type of organization that automates tasks using smart contracts.

All decisions are made through a consensus-based voting system where token holders can vote on proposals for the network.

The DAO is the future of decision making – MeInstead of relying on central authorities such as CEOs or boards, every decision is made by all members.

Central bank digital currencies

CBDCs (Central Bank Digital Currencies) are the future of digital currency as they represent a digital form of fiat money. It differs from cryptocurrency as it is issued and backed by a central authority and operates within a regulated framework.

The emergence of CBDC was caused by falling usage in countries such as Norway, where only three percent of payment transactions are made with cash.

Many countries are already introducing their own CBD currencies such as Jamaica’s JAM-DEX, Nigeria’s eNaira and Project Aber of the United Arab Emirates.

Blockchain offers benefits such as transparency, security and decentralization to CBDC. We will see more examples of that in the future with integration in the blockchain.

Make two scaling

Layer two scaling refers to a process to improve the transaction processing speed and capacity of the blockchain network.

Blockchain has struggled with transaction speed for years, and that’s the only reason most companies refuse to adopt this approach.

Now, with ZK roll-up (zero-knowledge roll-up) and optimistic roll-up, we add a second layer to the blockchain to increase efficiency.

ZK rollup is a layer two scaling solution that moves computation and state into an off-chain network while data is stored on the layer one network. It will increase transaction speed without compromising security – while optimistic summary wrapped in multiple off-chain transactions in batches before submitting to the blockchain network.

Both of these solutions will help with layer two scaling of the blockchain network. Ethereum already uses these along with sidechains and plasma chains to improve transaction speed.

Blockchain-as-a-Service

BaaS (blockchain-as-a-service) is a cloud-based service model that allows companies to create, host and use their own blockchain application without investing in infrastructure.

It will provide the necessary computing resources, infrastructure and development tools to build their own apps.

In a typical BaaS, they offer services such as node management, smart contract development and deployment, transaction processing and more. It will change the way businesses approach blockchain technology, as it will be available to them as software-as-a-service (SaaS).

According to Allied Market Research, the current market share of BaaS is over $632 million in 2020 and it will reach $11,519 million by 2026.

Faster transaction with cutting

Sharding allows the blockchain to divide into smaller subsets called “shards”, as each of these shards can process transactions independently.

By dividing the blockchain into a smaller group of nodes that only need to process a subset of transactions, it will allow the blockchain to process a higher volume of transactions in parallel, which will increase throughput.

Ethereum will introduce sharding in their new version of Ethereum 2.0. It will upgrade their scalability and efficiency by providing better transaction speed. It will work together with the layer two rollups to split a load of the transaction into a shard validator to increase speed.

Green and environmentally friendly blockchain solution

For years, blockchain was called a carbon-emitting and non-environmentally friendly solution. It uses a large amount of energy to operate and extract, which is not suitable for any business.

However, Blockchain is going green with many new sustainable solutions to reduce power consumption or try a new way of renewable energy.

The first step is to use renewable energy sources such as solar or wind power to replace and reduce dependence on fossil fuels.

Blockchain companies can invest in carbon credits or trade or incentivize blockchain users. They can also use consensus as proof-of-stake, proof-of-authority or federated byzantine agreement, which uses less energy for computation.

Conclusion

Blockchain can revolutionize any industry with its iron-clad security and transparency. The possibilities are endless with blockchain technology, from secure transactions to creating new models for digital identity.

In this article, we have shared some of the blockchain trends that will change the world in the coming years – froom DeFi 2.0, BaaS to CBDCs and NFTs as digital identity.

With more companies and businesses implementing blockchain and introducing their own blockchain-based apps, the future of blockchain has never been brighter.

Kinjal Patel is the CMO of Vrinsoft Technology, a leading blockchain development company in India. With over ten years of experience in the industry, she has played a decisive role for the company’s success in the market.

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