In this article, we’re going to explore some of the most popular blockchain trends and what they spell for the industry at large. Also, we’re going to analyze some of the prominent narratives that could shape the industry. Plus, we’ll discuss what the future could look like for the blockchain industry.
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Following various crackdowns on crypto throughout 2021, several analysts predict that 2022 could be a big year for crypto regulations. China, Russia, India, and the US have shown a desire to tighten the industry’s regulations. Whether this comes in the form of tighter scrutiny, clearer guidelines, or a unified regulatory framework is still unclear. However, it appears to be somewhat of an inevitability if the headlines are to be believed.
The push for tighter regulation comes as governments, banks, and institutions join the race to incorporate blockchain into traditional infrastructures. Many believe that greater regulation is a sure-fire way to promote the mass adoption of cryptocurrencies. However, this may prove to be a double-edged sword for some crypto projects that are already under the spotlight for dubious backing, such as Ripple (XRP) and Tether (USDT).
Stablecoins appear to be at the forefront of these conversations. Central banks worldwide appear to show increasing interest in creating central bank digital currencies (CBDCs) on the blockchain. Many investors expect to see a tightening of restrictions in the crypto space to pave the way for institutional adoption. Plus, reports that a group of US banks known as the “USDF Consortium” intend to create a bank-backed stablecoin suggest that tighter regulation may also pave the way for a highly compliant cryptocurrency in the near future.
In September 2021, President Nayib Bukele of El Salvador made mainstream media headlines for declaring Bitcoin legal tender throughout the country and buying it on behalf of citizens. El Salvador is the first country to make the leap and could be a catalyst in the mass adoption of Bitcoin if other nations follow suit.
Further, President Bukele has vowed to build a “tax-free Bitcoin city” and mine Bitcoin using geothermal energy. Another “crypto city” to watch out for in 2022 is “Akon city”. Created by Senegalese pop sensation Akon, Akon city is a crypto-powered “smart city” that aims to bring jobs and prosperity to the region.
Many people expect to see an increase in the use of blockchain and cryptocurrencies on a local level. Furthermore, the use of cryptocurrency as a method of payment looks set to increase throughout the year as several projects in the space are working towards providing equitable solutions to economic disparity in several geographies.
Once pitched as the archnemesis of the crypto world, many commercial and central banks are looking to crypto and blockchain to optimize their practices and keep up with technological advancements. Cross-border payments are painfully slow and expensive. The coming months could see a rise in institutional adoption of blockchain and crypto from major payments processors, corporations, and governments. Also, the decentralized autonomous organization (DAO) may play a prominent role in facilitating decentralized governance for a range of applications.
Supply Chain Management
Blockchain and artificial intelligence (AI) are revolutionizing the supply chain management industry. Blockchain developers and AI practitioners have optimized some of the most complex and expansive supply chain networks worldwide. Following the adoption of blockchain by big-name companies such as Microsoft and Coca-Cola, we can expect to see some significant advancements in this sector throughout 2022.
Blockchain offers an immutable and transparent record of events that can prevent counterfeiting and minimize the environmental impact of each step in the supply chain. Furthermore, the blockchain can be used with AI and smart devices to generate real-time traffic and weather updates that can be shared across supply chain networks. In turn, this could facilitate a mutually-beneficial data economy for all participants.
As these blockchain-based algorithms continue to evolve, we can expect to see some exciting automations occurring to replace outdated and inefficient processes industrywide. Do you want to learn more about blockchain and supply chain management? Check out the Morpheus Network 101 and OriginTrail 101 courses at Moralis Academy!
Non-Fungible Tokens (NFTs)
Non-fungible tokens (NFTs) were one of the hottest blockchain trends of 2021. These unique assets come in all shapes and sizes and are responsible for one of the most significant surges in adoption the blockchain industry has seen. Many popular NFTs have shown incredible resale potential on NFT marketplaces such as OpenSea and Rarible. Plus, NFTs from projects such as Bored Ape Yacht Club and CryptoPunks are selling for significant sums.
The mainstream adoption of NFTs is primarily due to a surge in blockchain-based fan engagement platforms, art, virtual land, and crypto gaming. However, many people expect to see NFTs providing greater utility and functionality beyond these areas in the near future. Moreover, the use of NFTs in music, real estate, and DeFi could establish NFTs as a vital component of the blockchain industry. Save our “What are NFTs?” article for later to find out more!
One of the hottest blockchain trends of them all is crypto gaming. The adoption of NFTs and blockchain-based technologies by major gaming companies suggests the crypto gaming industry could explode in 2022. In particular, play-to-earn gaming platforms have seen a significant increase in active users.
Significant advancements in this field have been made in just a few months. The gaming market has the potential to channel tremendous revenue into the crypto space. Accordingly, blockchain games and game developers are in high demand. Moreover, crypto gaming holds some of the top-performing cryptocurrencies of 2021. As such, it seems likely that we will continue to see rapid development in blockchain-based gaming platforms throughout 2022. Check out our “Top Crypto Games” article to find out more!
Blockchain and the Metaverse: How are they Correlated?
A term that has become synonymous with blockchain is “the metaverse”. The metaverse is one of the biggest blockchain trends to make mainstream media headlines in recent months. It refers to a network of virtual worlds that aims to promote social connection using virtual reality, augmented reality, and Web3 technologies. The metaverse uses blockchain to create an immutable record of transactions for digital assets.
In the metaverse, people use cryptocurrencies to purchase assets such as virtual land, resources, and tools to use in various gaming scenarios. Furthermore, these assets are “tokenized” on the blockchain in the form of non-fungible tokens (NFTs). Fungible cryptocurrencies such as Bitcoin and Ethereum are interchangeable. However, NFTs are often scarce or unique. This lends itself to virtual property ownership in the metaverse.
The success of metaverse gaming platforms such as The Sandbox and Axie Infinity has created an entirely new genre of crypto gaming platforms. However, these technologies will likely evolve to provide real-world utility in the coming months. Save our “What is the Metaverse?” and “What is Web3?” articles for later to learn more about the next iteration of the internet!
Decentralized Finance (DeFi)
The market dominance of Bitcoin has been on somewhat of a decline following the emergence of decentralized finance (DeFi). This has given rise to other blockchain networks such as Ethereum, Solana, Fantom, and Binance Smart Chain (BSC). Consequently, a diverse range of high-utility decentralized applications (dApps) is emerging. In 2022, the DeFi landscape will likely continue to evolve and introduce novel investment strategies and protocols.
Many DeFi users look forward to the introduction of more advanced financial strategies such as yield farming and flash loans. Plus, the evolution of the decentralized autonomous organization (DAO) could extend into various non-financial applications. Moreover, as dApps become increasingly accessible and well made, the likelihood is that DeFi protocols will continue to catch the hearts and minds of investors from all fields. Save our “What are dApps?” article for later if you want to find out more!
Interoperability and cross-chain communications between blockchain networks have become an essential component of the modern DeFi protocol. The rise of layer-2 scaling solutions such as Arbitrum and Polygon have made DeFi accessible to everyday users by reducing transaction fees on Ethereum. Also, smart contract-enabled blockchains such as Solana and Avalanche are diversifying the DeFi space, which until recently has been almost exclusively on Ethereum.
This trend shows no signs of stopping. Over the coming months, scaling solutions and smart contract-enabled blockchains could elevate the DeFi space to new heights. Furthermore, an increase in regulatory scrutiny could be a catalyst for the institutional adoption of DeFi and Web3 technologies.
Bitcoin Price Predictions
Bitcoin price predictions for 2022 vary greatly. Based on technical analysis, a pleasingly round target for many investors is around the $100,000 mark. However, various macro-economic factors could outline a different picture from a fundamental analyst’s perspective. For example, many people believe that the limited supply of Bitcoin coupled with an increase in adoption is likely to cause the price to increase in the long term. This is an idea that is echoed in the charts:
However, despite the technical indicators making sense, several factors could affect the long-term price of Bitcoin. This includes monetary policy, inflation, and regulation. Another factor to consider is the growth of the cryptocurrency market. There are more than 15,000 cryptocurrencies available. Although most of these are unlikely to rival Bitcoin, it’s possible that some of them could take the lead in the long term.
Arguably one of the most significant blockchain trends to look out for is a Bitcoin exchange-traded fund (ETF) in the US. Despite the go-ahead for a Bitcoin futures ETF, many investors look for direct exposure to Bitcoin without using derivatives contracts. Moreover, the first Bitcoin ETF would provide a retail-friendly, low fee offering that could attract substantial investment from many untapped demographics.
A Bitcoin ETF enables investors to gain exposure to the price of Bitcoin without actually holding it. As such, this removes the need for investors to worry about the technical challenges of self-custody and cold wallet storage. Plus, it bypasses some of the security procedures that most crypto exchanges require investors to follow. Accordingly, a significant number of investors are likely looking forward to a Bitcoin ETF.
Blockchain Trends – Summary
With such varied innovation and continued progression in the industry, it can be difficult to predict what the biggest blockchain trends of the coming months will be. However, by considering some of the significant advancements that are taking place, we can predict some of the key narratives that are likely to hold strong throughout the year.
Blockchain has the potential to change the world on many frontiers. From banking the unbanked to serving as a hedge against inflation and economic uncertainty, this technology has the potential to elevate entire populations out of poverty and disadvantage. Furthermore, blockchain can transform businesses and optimize industrial and commercial practices by automating inefficient processes and connecting global supply chains.
Moralis Academy is the ultimate blockchain and Web3 education suite available online. We regularly update our courses to stay up-to-date with the latest blockchain trends to ensure that our students get the highest quality learning experience. Do you want to learn how to manage a team of blockchain developers and take your business into the next era of finance and technology? Check out the Blockchain Business Masterclass course at Moralis Academy! Also, don’t forget to follow us on Twitter @MoralisAcademy! We’d love to hear your thoughts about the top blockchain trends for 2022!