Introduction
The blockchain technology had a breakthrough in 2008 when it was introduced as the backbone of the world’s first decentralized digital currency- Bitcoin. Over the years, it has proved to be a versatile technology that has the potential to revolutionize several industries, not limited to finance. As the technology is continually evolving, there are specific blockchain trends that you should expect in 2023 and start preparing for.
Consensus Algorithms
The consensus algorithm used in blockchains is essential because it determines the validity of a transaction and how it is validated. In 2023, the use of Proof-of-Stake (PoS) consensus algorithms is likely to become widespread because it consumes less energy, and the process of block validation is faster. As the use of PoS algorithms increases, the use of Energy-efficient consensus algorithms will become popular, cutting on energy wastage in traditional Proof-of-Work (PoW) consensus algorithms.
Decentralized Finance
Decentralized Finance (DeFi) is a blockchain-based financial system that allows decentralization of traditional financial instruments. The DeFi ecosystem is fast-growing, with the market capitalization hitting $100 billion in May 2021. DeFi will continue enhancing crypto adoption due to its ability to facilitate borrowing, lending, and trading without a centralized authority. In the next few years, we anticipate DeFi to become more accessible to users and continue solving issues related to traditional financial systems.
Blockchain as a Service (BaaS)
Blockchain as a Service (BaaS) is a cloud-based service that allows users to develop, host, and use blockchain applications, smart contracts, and other digital ledger technologies. This trend is likely to continue expanding, with big tech companies such as IBM, Amazon, and Microsoft providing blockchain solutions for their customers. The BaaS model is cost-effective for companies that don’t want to invest in maintaining the blockchain infrastructure.
Non-Fungible Tokens (NFTs)
Non-fungible Tokens (NFTs) are unique digital assets that represent ownership of a specific digital asset such as music, video, or art. The NFT market has exploded in the past few years, with over $2.5 billion in sales in the first six months of 2021. We expect the NFT market to continue growing as more industries adopt it, such as gaming, sports, and fashion.
Conclusion
In conclusion, blockchain technology has come a long way since the introduction of Bitcoin in 2008. Several blockchain trends that will gain traction in 2023 include PoS consensus algorithms, DeFi, BaaS, and NFTs. It’s essential to start preparing for the trends to stay ahead of the game in the ever-evolving blockchain technology industry. As blockchain technology continues to develop, it’s exciting to see the potential it holds in changing the world.
