Why blockchain will remain a big deal in 2023 and beyond
As 2022 draws to a close, the cryptocurrency market is under great scrutiny. From the crypto winter of 2021 that saw Bitcoin lose almost a third of its value and other cryptocurrencies follow suit to security issues with crypto exchanges, bridges, and web 3.0 apps, and of course, FTX’s dramatic failure, it’s almost impossible to disbelieve tales of gloom. However, looking at the forecasts for 2023, it appears the market may rebound, and now may even be an ideal moment to invest.
Web 3.0 and its emphasis on decentralization, token-based economies, NFTs, and the metaverse, rests on blockchain technology. New cryptocurrencies spring up every day, and crypto trading solutions like Dash 2 Trade promise a reliable algorithm that will help traders decipher what tokens to invest in. While it’s undeniable that cryptocurrency assets are still extremely risky investments and are reeling from some heavy losses, including those based on fraud, the industry isn’t done just yet. And if market cycle theories are anything to go by, we can assume that when assets are bearish (in decline), the most likely direction they will go – at some point in the future – is up. Let’s explore some of the reasons why blockchain will likely still be a big deal in 2023.
Improvement in regulation
Regulation of cryptocurrencies has generally been a significant problem. Numerous regulators were compelled to intervene to fill regulatory gaps surrounding crypto assets due to the rising acceptance and illegitimate usage of these assets and the threat this brings to global financial stability. There have been substantial advancements in the sector in 2022. As an illustration, the Office of Foreign Assets Control (OFAC) in the U.S. has enhanced the penalties against cryptocurrency under the Specially Designated Nationals and Blocked Persons List (SDN). This year, the authorities sanctioned the biggest darknet market, Hydra, and two cryptocurrency mixers, Bitblender and Tornado Cash. Since the FTX crisis, the push for regulatory control of crypto assets has expanded and will probably continue to do so in 2023. Regulators will probably pay greater attention to Web 3.0 in 2023, especially considering the buzz surrounding DeFi and NFTs. For instance, to promote web 3.0, the Japanese government approved plans for a digital transformation strategy and established a Web 3.0 office under the Digital Ministry.
Web 3.0 will play an important role
Since its inception, the internet has continuously developed and now boasts more than 5 billion active users, or around 63% of the world's population. The initial phase of the internet, sometimes known as the static web, in which most online sites were read-only and lacked interactive features, is long past. The dynamic web, also known as web 2.0, has replaced web 1.0.
Through the widespread use of social media sites like Twitter, Facebook, and others, Web 2.0 allowed users to interact with web pages, communicate with each other, and create their own content – although this was dominated by large sites that set the rules and controlled the data.
Web 3.0 is the latest phase; it aims to create a more democratic version of today’s internet. The concept is centered around the idea of democratization and enabling people to control and own their data. Decentralization would allow internet users to transact more business peer-to-peer and remove power from large corporations.
Semantic web, data mining, machine learning, natural language processing, artificial intelligence, the internet of things, and blockchain are just a few technologies that would be integrated into Web 3.0. Undoubtedly, blockchain development is crucial in developing web 3.0, including the Metaverse, NFTs, decentralized finance (DeFi), and decentralized autonomous organizations.
As projected to digital worlds, protecting our unique identity and authentication becomes even more crucial, especially as more businesses and communications shift online. At the moment, identification systems have several flaws and may be prone to errors and fraud.
Blockchain proponents argue that these issues can be resolved by using blockchain technology, which also offers a single point of identification and asset verification. Although, as we have seen recently, it is not free from fraud and is also capable of being hacked. Additionally, some argue that blockchain identification can provide a brand-new form of self-sovereignty. In fact, the core of Web 3.0 is this demand for control over one's personal information and digital data across platforms. Blockchain is where Web 3.0 begins, but its ambition and reach will extend far over the internet, metaverses, and shared networks.
Major cooperation signals
Although skeptics have attempted to disprove the viability of cryptocurrencies as investments by arguing that they are much riskier than other types of investments and that there aren't that many applications for the legal use of crypto, big IT businesses and financial institutions are continuously ramping up their use. Approximately 74% of institutional investors plan to invest in cryptocurrencies, according to Fidelity Digital Assets, which surveyed more than 1,000 institutional money managers in North America, Europe, and Asia.
In the first half of 2022, 58% of institutional investors purchased cryptocurrencies. And for 2023's cryptocurrencies, it appears much more hopeful. During its Cloud Next conference, Google revealed that it will rely on Coinbase to allow specific customers to start paying for cloud services using cryptocurrencies early in 2023. According to Coinbase, it will use Google's cloud computing infrastructure. Google anticipates enabling users to deliver using cryptocurrencies, including Bitcoin, Ethereum, and Litecoin, as a result of this agreement. In addition, Google unveiled the Blockchain Node Engine, a node-hosting solution for Web 3.0 developers. The tool's goal is to make it easier to develop and implement blockchain-based platforms and applications.
Growing stablecoin investment
Investors often seek safety in reliable assets during erratic times. Stablecoins were thought to be more stable than volatile cryptocurrencies like Bitcoin and Ethereum. Because of this characteristic, they were considered the perfect choice for those wishing to protect their money during volatile periods. The collapse of the stablecoin TerraUSD in November punctured this bubble. However, other, more stable stablecoins are expected to see a resurgence. In fact, collateralized stablecoins like the USD Coin have proven to be resilient, and this will likely help boost the future stablecoin market.
Additional meme coins will be released
Dogecoin, a crypto coin first introduced in 2013 as a meme based on a Shiba Inu dog image that became popular, has gone a long way to reach its current market valuation of $10.06 billion. With more than 200 meme currencies now in use, this pattern is expected to persist in 2023. Tamadodge is the most current meme cryptocurrency, and users can either earn it by playing games or buy it with fiat money to spend in in-game purchases. This type of cryptocurrency relies on an enthusiastic online trading community to prosper and is an especially risky and volatile asset.
Bitcoin may fall from grace
As the rest of Web 3.0 starts showcasing actual use cases, Bitcoin's lack of everyday utility will start working against it. It may fall victim to the "pet rock" syndrome, where owning the asset will not appear as desirable as investing in tokens and ecosystems with rising commercial and business usage. Businesses, people, and governments will continue to face pressure to reduce wasteful energy use, and cryptocurrency is already under heavy pressure for its prolific waste in this area.
Web 3.0 supports proof-of-stake above other mining options, which may make PoS blockchains more resistant to ESG criticism and regulation. However, it also gives participants with a greater stake more influence over the network. Any remaining proof-of-work (PoW) chains will need to prove their usefulness to justify their continuous energy use. Since Bitcoin likely won't switch to PoS, it will continue to face difficulties over its energy usage. Bitcoin once had an outstanding possibility to serve as a risk-off digital gold-like hedge, but over several years, it fell short of that potential. Instead, it behaved like a high-risk tech beta.
We will move past the "jpeg" age, and NFT usefulness will become more advanced, customized, and commercial. Blue chip "jpeg" NFTs may simultaneously be a multi-billion dollar asset class. We predict that the "jpeg" period of non-fungible tokens, symbolized by 10,000 pfp projects and zero-utility art, will end in 2023 as the Web 3.0 ecosystem advances. Since many other use cases will develop, all of which will employ NFTs as the base technology, the name "NFT" will no longer inherently signify digital art as it currently does. Companies like Starbucks are already looking into different NFT uses. More business executives are keeping an eye on Starbucks' progress in using NFTs for loyalty programs because, if it succeeds, a wave of significant companies could start issuing NFT rewards points.
The term "phygital" will become more common in 2023, and a youngster buying a real pair of Nikes will also receive a digital receipt for those shoes, which they can use to dress their avatar in the Metaverse.
Crypto gods will be no more
The media will stop searching for gods and turn to crypto for sane opinions. As the actual nature of additional "gods" is exposed during 2023, this will happen gradually but inevitably. The media will need to confront its mistaken fixation with its crypto "gods" and look for level-headed, sane opinions in the industry. Fortunately, people interested in reporting on the realities of cryptocurrency won't have trouble finding these reasonable people. These fresh and seasoned voices, which are noticeably more modest than those of the previous two years, are constructing for the long haul and need to be at the forefront of how the media covers the area.
Marked improvement in web 3.0 gaming
Web 3.0 gaming has, for the most part, thus far failed to live up to its potential. Axie Infinity and DeFi Kingdoms are two of the most successful Web 3.0 games. Yet, despite being touted as heralding the future of gaming, they haven't had much impact on the 3 billion gamers worldwide. Web 3.0 gaming will release new projects in 2023 that combine practicality with the beauty of conventional gaming – breaking out from the habits of these early projects. The visuals of the upcoming Web 3.0 games will resemble those of mainstream video games. The studios, businesses, and games that have been developing with a gameplay-first strategy, like Horizon, Animoca, and others, will begin to receive more public notice than token-first initiatives like Axie.
Regardless of professional predictions, it is still unclear how cryptocurrencies will alter in value and where we will be in 2023. Cryptocurrencies, on the other hand, are undoubtedly here to stay. More restrictions and the expansion of crypto exchanges by institutional investors are not the only things we can anticipate. In 2023, things can also get very interesting with the Metaverse, NFTs, and the option of creating a virtual territory.
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