At this stage, we all agree that Blockchain not only powers cryptocurrencies but has the potential to solve underlying problems in many leading industries. Companies such as IBM, UNICEF and American Express are all testing applications of Blockchain in their respective industries to come up with cutting-edge solutions.
Talking about the state of Blockchain in 2021 warrants that we discuss a few common areas where Blockchain may flourish this year. So let’s see where Blockchain stands as an ecosystem and assess areas experiencing wide-scale adoption and expansion.
Areas of Growth for Blockchain
Decentralized apps or DApps run on Blockchain or peer-to-peer networks without a third-party owner or authority. DApps function as a proof of concept for Blockchain’s long-term impact and growth potential.
A good DApp is not necessarily recognizable to be based on Blockchain but is an improvement on what you experience in mobile applications. Therefore, the success of DApp can reinforce the importance of Blockchain in revolutionizing that particular industry.
Enterprises and governments are fueling the rise of enterprise or permissioned Blockchain, which simply refers to deployments of Blockchain that are under the control of a centralized owner.
Both establishments increase their focus on three key areas: provenance, identity and tokenization and entities are busy proving that Blockchain can support all three areas. Blockchain can further drive cost reduction and high efficiency, which is also why it becomes lucrative as a technology for enterprises.
Investments in Blockchain are forecasted to amount to nearly $16 billion by 2023. By contrast, spending was around $2.7 billion back in 2019. Owing to Blockchain’s obvious application in banking and financial services, the industry is expected to pave the path.
More Companies on Blockchain
Companies are no longer dipping a toe in the Blockchain waters for fear of investing a lot in the theoretical aspects of research with little real-world ROI. Today, companies are heavily investing in Blockchain and striving to derive real-world returns from the technology.
For instance, JP Morgan heavily invested in Blockchain, pressuring other investment banks to follow suit. As Blockchain continues to move from ideation to implementation for businesses, C-level executives will become more willing to see projects through.
Additionally, Blockchain’s current success and the need to upgrade most of its applications will expose more companies to the technology, further fueling its growth.
The Rise of NFTs
NFTs or non-fungible tokens are essentially digital assets in the form of pictures, code, contracts, music that sustain on Blockchain and have value due to their uniqueness. That means when someone buys an NFT, the record of their purchase is captured on a digital ledger forever.
These tokens are primarily transforming how artists and creators showcase and sell their work. NFTs came around in October 2017 when CryptoPunks launched. Then in 2020, 30,000 to 80,000 NFTs changed hands weekly.
But in 2021, NFTs saw a boom. A recent report states that over $2 billion were spent on NFTs in the first quarter alone, which is a 2,100% increase from the final quarter of 2020. A day before the writing of this article, someone bought clipart of a rock for 400 ether ($1.3 million).
With giants like Amazon, Microsoft and IBM all developing tools and platforms to enable businesses to leverage Blockchain without the upfront installment and skills expenses, there’s much to look forward to in the as-a-service model of Blockchain.
It’s estimated that the Blockchain-as-a-service industry will witness a CAGR of 15.2% by 2026, more than doubling what it is today.
Beyond operating as a holder of value, advanced Blockchain implementations allow the creation of smart contracts and other decentralized and trustless architectures. For instance, contracts that automatically execute when certain conditions are met.
The as-a-service model will bring these applications to businesses that otherwise wouldn’t be able to afford planning and developing infrastructure to support Blockchain applications.
There’s not a dull moment in the world of cryptocurrencies with the mystery surrounding the creator of Bitcoin, Elon Musk’s market-shifting tweets and price volatility that wipes off billions from market caps in minutes.
This is a unique asset class where Dogecoin, a joke creation, can rise in value by over 100% in under a year. We also saw Bitcoin hit an all-time high, regulatory talks, and institutional buy-in from major companies.
While the industry is still in its infancy, it’s evolving. A lot of focus is placed on stablecoins that eliminate the ebb and flow and uncertainty of most cryptocurrencies. Currently, stablecoins are used to park assets due to high volatility without the need to transfer them back to centralized currencies.
In the future, they could operate as blueprints for digital currencies that anyone can use, secure in the knowledge that no single tweet will wipe out their assets overnight.
There are a lot of promising avenues for Blockchain applications in 2021 and beyond. But for startups, it can be especially lucrative to implement cutting-edge applications based on the technology to either offer a standout product to the market or serve other businesses in serving their customers better.
No matter what your vision is to achieve with Blockchain, KiwiTech has the right consultants and experts to help move the needle for you. Reach out to us today for blockchain development services!