7 blockchain technologies to look out for in 2023
Blockchain has come a long way since it was introduced over a decade ago. In recent years, we have seen a growing number of applications and use cases for blockchain, including in the gaming, finance, and art industries.
This article will explore top trends in the blockchain space for 2023, including web3 gaming, zero-knowledge proofs, and layer 2 protocols.
Although we have officially entered the bear market, and many gurus on crypto Twitter predict that 2023 will be a “difficult” year for the industry, blockchain technology itself won’t stop growing! It will keep going from strength to strength, and BUIDLers will keep BUIDLing, no matter what!
Web3 gaming
One of the biggest trends in the blockchain space is the rise of web3 gaming. Web3 gaming refers to a new generation of online games built on blockchain technology. This allows for a more decentralized and transparent gaming experience, enabling players to own and trade in-game assets on a blockchain. This trend is not only changing the way people play games, but it is also introducing millions of new users to the world of blockchain technology.
While we saw the rise and fall of Play-to-earn (P2E) gaming in 2021 and 2022, the narrative that shapes the next bull run will be slightly different. While we will still see tournaments and the potential to earn through the games and the in-game assets, the P2E model as it exists will soon go out of favour with gamers! Games coming out next year will have to focus on being fun to play first and foremost and then add elements of blockchain and earning.
Most of the games we see are being built with industry-standard technologies like Unity and Unreal Engine 5, and then these games add a layer of NFTs and web3 — the best examples being Undead Blocks, Monkey Empire and Oxya Origin.
Another interesting fact is that the ImmutableX blockchain is attracting a lot of games, and it may become the blockchain of choice for web3 games. Having said that, we cannot ignore Polygon, which is also eyeing this lucrative market and making inroads through industry partnerships.
Zero Knowledge Proofs
Another trend gaining traction in the blockchain space this year (and more so next year) is the renewed interest in zero-knowledge proofs. Zero-knowledge proofs are cryptographic technique that allows one party to prove to another party that they know a certain piece of information without actually revealing the information itself. This technology has been around for a while, but we now see increased usage for various protocols and applications in the blockchain space.
One area where zero-knowledge proofs are being used extensively is in the realm of privacy-focused cryptocurrencies. These cryptocurrencies use zero-knowledge proofs to verify transactions without revealing the transaction’s details, thus providing users with a higher level of privacy.
Many Layer 2 rollups use zero-knowledge proofs, such as zkSync, Polygon’s zkEVM and more.
Layer 2 — Optimism
Another trend in the blockchain space is the rise of layer 2 protocols. Layer 2 protocols are built on top of layer 1 blockchain networks, providing additional scalability and functionality for blockchain applications. This is important because many blockchain networks, such as the Ethereum network, are currently limited in terms of the number of transactions they can process per second.
Layer 2 protocols help to address this issue by allowing for off-chain transactions, which can be processed much faster and at a lower cost than on-chain transactions. This makes it possible for high-volume decentralized finance (DeFi) and non-fungible token (NFT) applications to run smoothly on blockchain networks.
Optimism is one such leading Layer 2 network, reaching almost 500,000 transactions per day! Along with the number of transactions, it has just crossed 2 million unique addresses on the network.
Optimism might be one of the top choices for people who want to stick with the Ethereum ecosystem in 2023 and beyond.
Layer 2 — Arbitrum
Arbitrum, another leading Layer 2 network on the Ethereum blockchain, is also the biggest competitor for Optimism. While both the Layer 2 networks are neck to neck, Arbitrum has a slight edge with ~575,000 transactions recorded in a single day and 2.25 million unique addresses.
While both Arbitrum and Optimism are Layer 2 rollups, and both use the technology of “fraud proofs” to verify the authenticity of transactions being sent to the L1 Ethereum chain, they also have a few differences. The major differences are in the exact mechanism of the fraud-proof verifications and the execution environment. While Optimism uses the Ethereum Virtual Machine (EVM), Arbitrum has its own environment called Arbitrum Virtual Machine (AVM).
Moreover, Atrbitrum also seems more popular for DeFi, having boasted a lot more Total Value Locked (TVL) for DeFi applications in the last bull market.
DeFi
DeFi, which refers to financial applications built on blockchain technology, is seeing a resurgence in the blockchain space. Recently, there have been concerns about the shady practices of some centralized exchanges (CEXes), which have led to a resurgence in interest in Defi applications. These applications provide a more transparent and decentralized alternative to traditional financial services, and they are becoming increasingly popular among both individual and institutional investors.
NFTs
NFTs have gained traction not only in the crypto industry, but the mainstream audience is also embracing the technology slowly. NFTs, or non-fungible tokens, are unique digital assets built on blockchain technology. They are often used to represent things like in-game items, artwork, or other digital assets that have value. This technology is particularly popular in the gaming, art, and metaverse industries, and we expect to see continued growth and innovation in this space in the coming years. NFTs could very well be one of the catalysts that bring about mainstream adoption of blockchain in the next few years.
Metaverse
Web3 metaverses are often envisioned as immersive, highly interactive virtual environments where users can engage with each other and with virtual objects and experiences in a decentralized and secure manner. These virtual worlds can be accessed through web browsers or specialized apps, allowing users to interact with each other and digital assets in various ways, such as buying and selling virtual property, creating and sharing content, and participating in games and other activities.
While projects like Sandbox and Decentraland are leading the way with the number of use cases and users, others like Voxels, Somnium space and Nifty Island are catching up fast! The cool thing about web3 metaverses is that several metaverses cater to a certain niche audience. There is a chance they will continue to do so, and we will see many more metaverses pop up during the next bull run! Having said that, there won’t be just one metaverse to rule them all, but rather a multiverse! Projects like Metalinq are trying to interconnect the various metaverses, and industry groups like the Metaverse Standards Forum are already laying the foundation for this future.
If you are looking for expert advice for your next blockchain project, or Smart Contract consultants, check out my website.
Disclaimer
This is NOT a Financial Advice!
All the views mentioned in this article are the author’s perspectives. The author does not imply anything, directly or indirectly, about the token value or cryptocurrency prices related to any of these technologies. The author also does not solicit or recommend any cryptocurrency to invest in.
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