The blockchain was created for Bitcoin, it is used as a basic technology for all money to do certain operations. If we talk about the negative aspects of using such a technology, firstly, we can say about rather small energy costs for the PoW consensus. Secondly, there is not a high speed when we increase the size of the network. Scalability is one of the big issues right now, which in turn is directly related to Bitcoin.
Top directions of blockchain development
If we talk about 2018, the amount of spending on various blockchain solutions was approximately $1.5 billion. For 4 years (until 2022), the growth rate was expected to be 76% on average per hour. As a result, the market size for 2022 was about $12 billion, and by 2023 it may increase to $23.3 billion.
Nowadays, one of the top niches, if we talk about blockchain technologies, is in the first place. Of course, all this corresponds to reality, if we do not take into account cryptocurrency assets.
The main sources of growth very soon will be:
- Significant increase in investments and venture financing.
- The number of operating expenses can be significantly reduced. They, in turn, are needed by completely different business niches, in order to facilitate the simplification of various processes.
Of course, the demand for blockchain in the field of logistics and trade is high today.
Experts, in turn, gave such an assessment of why this is happening. Since 2020, large capital has been actively investing in new projects, which, in turn, can provide an opportunity for businesses to work with the blockchain. If we talk about large companies, then many have had their own blockchain laboratories for a long time.
Also today there is a small problem in the use of such technology today, which stands in the way of blockchain development. Such a problem now, firstly, is the uncertainty of the regulatory framework. Secondly, a small amount of experience, little information, and knowledge among employees who work with the blockchain now.
Today, there is a kind of analytical group Reportlinker, which has identified several countries that today are quite often able to apply blockchain technologies.
- North America – maximum use.
- The Asia-Pacific region is the largest area of application for blockchain development.
- Investment in innovation is mostly in the US, followed by Europe, according to IDC.
- There is no public data on investments in blockchain development in the Russian Federation. Many refuse to work with innovations due to the lack of a regulator on the market.
Development of technologies and standards
The first blockchain development, as well as DLT, was able to demonstrate the effectiveness of programs, including clearing, trading in digital assets, and quick settlements. However, along with efficiency, there was insufficient speed and energy consumption, and poor scalability.
In the early stages, this sector contained many different protocols and platforms, and there were no defined standards. Maybe that’s why many companies were not able to have good compatibility immediately on different platforms. One of the main challenges now is the ability to transfer data from one user to another. All this without any possibility of agreeing on any conditions. Another problem today is the Proof-of-Work consensus mechanism. The settlement processes were complex, and in turn, could take a lot of time, the energy was also not so cheap for each transaction made. In terms of time, it took approximately 10 minutes. These are the problems of early blockchains.
As 2022 approaches, technology has improved a lot. Also, certain standards and delivery models began to exist. All this, in turn, attracted the attention of various enterprises in every possible way:
- Private networks – only verified participants can participate in transactions.
- Trusted networks – allow any verified person to connect, and all actions are controlled by separate technologies.
- Technological advances – modern blockchain networks allow for self-executing contracts, protecting against unforeseen circumstances. New cryptographic methods for verifying transactions consume less power than PoW consensus, speeding up data transfers and lowering fees. For example, the Proof of Authority blockchain uses a large number of trusted and private networks in business.
- Compatibility – successfully demonstrated projects for corporate use, and DLT platforms. Polkadot, Cosmos, Wanchain, and other protocols provide a fast connection of various blockchains with their seamless interaction.
New ecosystems are innovations that have evolved along with the increase in DLT resources, creating separate ecosystems. Inside it, developers make applications of a decentralized type with identity management functions.
Blockchain is a modern, rapidly developing technology with a wide range of possibilities, but due to legal aspects, individual projects require a personal approach to development and implementation.
Blockchain usage, trends, and development prospects
Since we can now implement blockchain in various areas, the development trend will continue for many years. If we talk about the field of finance, payment systems, as well as various trade, then this technology is very often implemented in work. We also need to know about the most important trends and the field of activity that it is used in 2023.
If we talk about comparisons, then today, according to visual data and initial expectations, now we can equate it to the Internet. Now, this technology is in its infancy. We can also imagine what development and what trends will await the technology in the future, and what products will appear.
Cryptocurrencies and online payment systems
One of the most popular blockchain applications today is the creation of new digital assets and online payment systems that have very fast transfers, also include very small commissions, and have excellent protection of transactions from various banks and other intermediaries.
Very quickly, immediately after the decision on the status of digital assets, most banking institutions are able to quickly switch to the blockchain, and the mayor will be forced to do so. Of course, there is a certain transition perspective, which is approximately 10-15 years. But we must understand that there are already some big companies that have already started this process. Many companies are now testing the implementation of the blockchain for various financial transactions and other digital assets of the central bank.
Working with smart contracts can greatly facilitate the customs clearance of invoices, licenses, certificates, and many other documents. Therefore, all this can only be achieved with the help of something that has a fast transaction speed and good process automation. Of course, when such a direction was developed, this in turn significantly reduced the overall costs, as well as the time to clear the goods and significantly reduced corruption.
Today, quite often, many companies and states of different countries are able to create separate alliances by implementing blockchain. The shipping business is already able to apply various developments to its work, thereby significantly increasing efficiency. The most famous companies that exist today, as well as some of the maritime industry, are able to very successfully test electronic bills of lading.
Additional transparency is now possible on the blockchain. Therefore, we are able to implement various operations. We can also track data chains while ensuring reliability. All this is capable of creating large value chains of goods. If this technology is improved in every
Also, in addition to cryptocurrencies, this includes utility tokens, digital shares, natural asset tokens, stablecoins, etc. At the end of 2020, there were about 1000 different cryptocurrencies. In 2022, there were slightly more than 20 thousand units.
Decentralized Finance and Banking
This sector, in turn, is included in the category of advanced development, all this is primarily due to innovative developments. Decentralized finance is capable of having various tools. All of them are created on the basis of the blockchain and are able to work using smart contracts.
Consequently, many customers have shown confidence in this development. Therefore, they are able to invest a lot of money in smart contracts every month. All this in turn speaks to the acceptance of such a financial system by many people.
As 2021 rolled around, more than $11 billion had been invested in innovation. The best part, 94% of the investments came from the US.
Today, very often they use blockchain in their work, namely banks. They are one of the largest users now. Of course, in theory, blockchain technology allows two parties to do the work without any intermediaries. Therefore, they may not even know each other. Today, it is banks that can be trusted intermediaries. They, in turn, are able to make transactions with their ready-made solutions, as well as work with contracts without 3 parties. Consequently, very soon few people will study credit history. This is because certain information is able to be displayed through the ledger in the blockchain.
There are 2 promising directions:
The ability to fully control various goods from production to some deliveries. All of this can provide some control over how fake the quality of the product is.
Automation of the control of all norms and requirements, primarily those directly related to trade and cargo transportation.
Walmart is using blockchain based on IBM Hyperledger Fabric in every possible way. In turn, this implementation is able to provide a short period for the implementation of certain batches of fruits from 7 days to 2.2 seconds.
Blockchain implementation not including finance
The sphere of finance today is a kind of leader in the use of blockchain platforms and developments. This is because certain transactions can be complemented by security and efficiency. Of course, all this is far from the only direction where we can introduce such technology. In particular, if we have some sort of corporate solutions. In this case, several organizations are able to access the same data and it is necessary to obtain data on the history of transactions. Also, among the possible blockchain implementation environments, we are able to identify the following:
- telecommunications and mass media;
- the science;
- trade in retail goods and consumer goods;
- public administration.
Closer to 2021 to become more famous implementation of technologies that can shift to the following niches:
- Information exchange.
Very often, when we receive certain information, the exchange is limited by various technologies, as well as certain confidentiality principles. Already now, programs such as Blockchain and DLT can easily provide various companies with great opportunities when working with information. In turn, share it and be sure that it will be available only to them, and will not be able to spread further. Also, only trusted people will work with this kind of information.
- Personal information and digital identification.
Blockchain today is able to provide assistance, it is also safe enough to store various data, manage them, and the users themselves are recognized as the true owners of this or that information. Clients, in turn, are able to be able to create and control digital identity cards in every possible way. This is because the blockchain is able to achieve a sufficiently high degree of protection and security of data storage with the ability to identify an individual, in every possible way to exclude false or stolen information.
- Grant funding.
With the help of the blockchain, the burden of control and reporting on financial results and other reports is reduced. Studies have shown that working with new technology for efficient grant payments has improved the quality and transparency of all transactions, making payments more efficient.
- Operational accounting.
Hovewer, this parameter is very important for large companies. Very often they are able to include various planning tools, spreadsheets, and other processes. Therefore, the blockchain is able to improve the control of transactions in every possible way. This is good because in this way it provides transparency and the possibility of auditing many translations within the company.
- Transparent supply chains.
Without any doubt, if we talk now about such a topic as blockchain logistics, it can control how goods are able to move in various ways. In turn, we should not forget that quite often it minimizes counterfeit deliveries and various illegal activities, as well as works with low-quality products.
Such technology, in turn, can significantly help in verifying the origin of certain meat products. Also, in this way, they are able to check certain jewelry, drinks, etc. Equally important today is that, by applying the development, the government, in turn, is able to adhere to many rules of trade and tariffs and is also able to take control of many supplies.
- Work with the client base.
It’s great that there are now non-fungible tokens (NFTs). This is because there are many popular companies in the form of collectibles, and many people now have a very good opportunity to create communities, which in turn can attract the attention of new customers and fans, thereby promoting services or products. NFT is today a completely new, modern method of protection and diversification of income, excluding the possibility of speculation or fraud.
- Content monetization, creative.
Without any doubt, we are already capable of absolutely any kind of art, ranging from the creation of paintings, poems, and stories to scientific inventions. We can very easily benefit from the blockchain alone. If we talk about users, they, in turn, will not need to prove ownership as well as file some patent applications and subsequently receive other documents for their products. Let’s see how it works.
First, today, smart contracts embedded in intellectual property are automatically able to confirm the existence of copyright. Secondly, we can see how the so-called monetization of such a product takes place in the digital world. It is already becoming somewhat more accessible, and in turn, is able to be more valuable.
Blockchain technology is being introduced into trading step by step. There are difficulties associated with the legal norms of different countries. Since information is stored in a decentralized database, and processing is carried out in different places at once, the biggest legal problem is the regulation and taxation of cryptocurrencies. Malta is the first country to introduce fintech rules.
Blockchain Benefits and Governance Perspectives
As experts from Whidegroup say blockchain is a modern technology that is actively used in the fields of finance and trade.
There are many positives:
- Immutability and stability.
- Ability to use reliable information.
- Ability to meet the needs of today’s customers.
- Ability to control the entire trading process.
- Сompany transparency.
- Greater brand loyalty and building trust in a particular company.
- Counterfeit protection.
Without a doubt, we must define the prospects for managerial development with the help of blockchain. First, we must focus all our attention on strategy. This is very important because, with the help of this company, leaders are able to quickly find a common language with the heads of the IT sector. When we use blockchain in our work, we are already better than other companies. The second angle is everything related to finance. Today, many leaders are afraid of the full implementation of the development in real business. Finance leaders, in turn, will be flexible in the implementation of technology, and any regulatory and financial risks will become easier to analyze and control.
Corporate implementation of technologies today is not fully understood, and it is difficult to say something. However, cryptographic applications can significantly increase the efficiency and reliability of transaction verification, and a digital identifier will be responsible for confidentiality.
Blockchain has been working for many years, constantly improving. Today, many countries perceive it as a novelty. In terms of functionality and a large number of blockchain programs in various industries, in 2023 and beyond, the regulatory framework and technologies that will be implemented by many will soon begin to exist.