The Latest Blockchain Technology Trends in 2022 and How they Can Help Emerging Economies
Not too long ago, a lot of us were associated with cryptocurrencies. But this is not the case anymore because industries have adopted this innovation with applications of it in finance, e-commerce, healthcare, transportation, and supply chain.
Blockchain technology has a wide range of applications that would catalyze innovation. It also experiences exponential growth, and it is always a good idea to take advantage of it.
It is no surprise the blockchain market is showing unprecedented growth. Statistics from Fortune Business Insights show that this growth could reach $165 billion by 2029. Part of this is contributed by the new sensation of the internet called Web 3.0, which uses blockchain technology. It offers data security and decentralization and is well-supported by blockchain enthusiasts around the globe.
The Global Blockchain Market Share and Growth by Industry
The industry with the largest market share in 2021 is BSFI, followed by Energy and Utilities, the government sector, and the healthcare industry.
Recent reports from Statista show that global spending on blockchain technology amounted to $6 billion in 2021. The amount of investments is expected to rise even higher, with hundreds of billions of dollars to be poured into this technology over the years.
The European Union, for example, is planning for multi-billion dollar investments in technological advancements, and blockchain is at the epicenter.
This article will explore the most recent trends in blockchain technology and how this growing industry can help emerging economies.
1. The Growth of NFTs
NFTs or non-fungible tokens started gaining popularity last year, and it is only fair to say that they will stay relevant for years. Non-fungible tokens are a new and easy way for artists to monetize their art and for cash. They provide their digital works at auctions and earn a ton of money.
Two industries like fashion and gaming, are now using this blockchain trend to their advantage. The New York Times shows that Dolce and Gabbana sold their exclusive NFT collection consisting of nine items for a record-breaking $6 million.
2. Central Bank Digital Currencies
One of the early adopters of blockchain technology has to be the financial sector, and the trend is changing the traditional financial system. The Central Banks of various nations across the globe adopt digital currencies. This trend implies that banks are creating digital coins similar to fiat currencies. So yes, it looks like fiat money might be old news in the future.
Recent statistics from Atlantic Council show that 87 countries have shown genuine interest in CBDC. The reason is digital currencies are more cost-effective than actual cash and offer lower transaction fees. This virtual money or CBDCs can help to foster financial inclusions across countries.
3. The Metaverse
I’m sure you’ve heard of this because it is what everyone is talking about these days and is one of the new trends in 2022. If you haven’t, just know that it is easy to understand what it is and how it works. A metaverse is what would be a virtual world that will provide its users with unforgettable digital experiences.
Picture this: a VR headset for an immersive gaming experience. But instead of games, it creates a world similar to the real one and interacts with everything.
Of course, this trend and innovation are powered by blockchain technology. So blockchain technology remains relevant as long as the metaverse increases in popularity.
4. Blockchain-as-a-Service (BaaS)
One of the leading trends in blockchain technology is SaaS. A few tech companies, like Microsoft, have already started implementing this with great success. Baas will act as a cloud service where anyone can create digital products using blockchain tools.
An example of a Blockchain-as-a-service project is a company called Hyperledger. It is a platform that provides tools so users or content creators can easily create digital products using blockchain technology.
5. Blockchain in E-Commerce
Over the years, the e-commerce industry has been actively participating in and promoting blockchain technology. This trend helps protect the data of users and greatly improves supply-chain management. Another spectacular trend for blockchain technology is the ease of digital identification of users.
Tim Draper, a billionaire venture capitalist and founder of Draper VC Associates, is a huge fan of blockchain technology and cryptocurrencies. He loves the vast potential of this innovation and explores how it can be used to bring economic prosperity.
I asked him what he thinks are some of the biggest trends with blockchain that will make the biggest impact in the world. This is what he has to say about it:
“I think the biggest trends around Bitcoin and blockchain haven’t happened yet. When I can run my business entirely in bitcoin with automatic accounting and tax and smart contracts driving the relationships, that will be significant. When the retailers recognize that they can accept bitcoin and the extra 2% can go straight to their bottom line, that will be significant too. And when customers can get their food, clothing, and shelter all in bitcoin, and they decide to no longer accept or use fiat currency, that will be significant”.
How Can Blockchain Help Emerging Economies
Technology like blockchain isn’t a perfect system for anonymity, but it can also provide freedom, security, and privacy.
1. The Potential for Technological Advancements in Developing Nations
Over the past 2 decades, first-world countries have experienced the digital revolution and subsequent economic growth while other countries remained behind in economic prosperity due to a lack of infrastructures and innovations. But with blockchain technology, that is all about to change.
Many developing nations don’t benefit from global digital transformation because they do not have the vast electronic, internet, and banking systems needed. But with the advent of blockchain and cryptocurrencies, these developing nations would be able to experience leapfrog — a term used to describe the applications of new technologies to bypass the traditional system of development in infrastructure and be able to close gaps.
Bitcoin would be of great benefit in developing nations with low levels of infrastructure in their financial system. The potential of this technology is vast. It is so great that PWC suggests that in 10 years, this technology would boost global economic growth by $1.85 trillion.
2. Global Regulation and Trade
Globalization has brought global interdependence of economies, technologies, and populations. Over the years, nations around the globe have created economic partnerships to promote globalization. But challenges still exist in the system.
The African continent alone has over 50 countries with different currencies, exchange rates, and legal systems, making digital transactions across borders almost impossible. This means transaction costs carried across borders are very steep.
Blockchain technology and cryptocurrencies will help increase the efficiency, convenience, and speed of international transactions in developing countries while cutting down costs. Due to financial inclusion, blockchain will help traders in developing nations participate fully in the global economy by providing affordable and safe transactions between international borders across the globe.
Blockchain improves supply chain management because it promotes better collaboration between the banking and financial services industry.
3. A Database that Shows Proof of Identity
The UNHCR suggests that over 80 million people were forced to leave their nations and homes worldwide. The problem here is that refugees often flee from their countries without formal proof of identity. It shows who they are, where they’ve been, and how to help them. Without proof of identity, refugees won’t be able to access basic healthcare needs, making it difficult to obtain legal documents. They also can’t open a bank account or even vote in the country that welcomes them.
The United Nations Refugee Agency suggests at least 1 billion people live without valid proof of identification. The United Nations is working to make sure everyone in the world has a legal identity by 2030.
Blockchain technology can help speed up this process and make it completely decentralized.
I don’t know about you, but the question I keep asking myself is:
How much of a shift in economic prosperity do you expect to see with countries that accept Bitcoin and decentralization?
I expect that Bitcoin adaption by countries will generate 40 years of prosperity for those countries, and countries that live in fear of Bitcoin will founder for the same 40 years. This is more fundamental than the internet for countries.
Imagine if the US decided to overregulate the internet or even outlaw it, it would have sent us back 40 years. This will be a more pronounced differential. The best leaders will encourage the freedom and trust that comes with the adoption of bitcoin. The control freaks will set their people forty years back — says Tim.
Blockchain, as a decentralized technology, will create prosperity for any nation that adopts it, but some government institutions hate that because they like their control.
So I asked Tim:
How can we make these governments and/or nations accept Bitcoin and Blockchain technology?
I think some leaders are selfish. Some are looking out for the good of their people. The selfish leaders (and those with the weak character) will keep their own aggrandizement by clinging desperately to their own fiat currencies. The great leaders who are looking out for the good of their people will embrace the change, trust their people, and set them free to innovate and progress, he adds.
Another application of bitcoin and blockchain is that supporters of this technology believe their adoption would improve the quality distribution of government services. It would also foster the freedom of speech and prevent corruption in nations.