While 2021 was quite volatile, it was a successful year for cryptocurrencies. The overall success can be attributed to institutional and retail investors.
In the modern era, the cryptocurrency market has been capitalized from a value of $800 billion to reach $2.2 trillion by the end of the year. It will include some coins performing astronomically in use and price. This increase is distributed evenly across the entire cryptocurrency economy.
Riding the current wave, Ethereum and Bitcoin have advanced to record their highest-ever revenues this year. Within the ecosystem of Ethereum, we are also observing alt-coins, including Polkadot and Solana, powering the indices significantly. With ongoing gossip about the potential of Bitcoin to become the most valuable global asset in 2022, the entire world is watching cryptocurrency and its technology.
Here are some top cryptocurrency technology trends to look out for:
Institutional Adoption of Bitcoin
In September 2021, El Salvador made headlines when it became the first-ever country to accept Bitcoin as legal tender.
Additionally, the nation has managed to develop a dedicated plan for building a separate ‘Bitcoin City’ close to the Colchagua Volcano. Here, geothermal energy will be utilized for powering the city along with its crypto mining operations.
Australia is also in preparation for a significant overhaul of the crypto regulations. It has come up with a new licensing framework and centralized retail bank digital currency. In the banking sector, Morgan Stanley became the first-ever US bank towards offering its wealth management clients dedicated access to Bitcoin funds.
Bitcoin Going Green
The ever-rising demand for Bitcoin has become an increasing concern for environmentalists across the globe. This is because crypto mining – especially bitcoin mining – tends to be energy-intensive in overall design. It depends on the efforts of some decentralized array of top-performance computers (referred to as miners) around the globe, consuming an unsustainable amount of energy.
2022 will observe significant cryptocurrencies, including Bitcoin and Ethereum, and looking for greener solutions. For example, there is the possibility of transitioning to a minimum energy-consuming proof-of-stake consensus algorithm from the ongoing proof-of-work blockchains.
Thankfully, several technology companies have come up together to create greener cryptocurrencies and make the blockchain more energy-efficient in the coming future.
NFTs to Grow Exponentially
NFTs became one of the major game-changers in the blockchain industry in 2021. However, it is still expected to be one of the most disruptive technologies in the world.
Experts say that NFTs and their entire ecosystem are a significant trend to watch for in 2022. The NFT space continues growing into industries that aim at helping individuals to companies to artists and all in between.
This development has led to creating a dedicated marketplace for digital properties and it is estimated that the market for tokenized assets in Europe is expected to grow to reach $1.5 trillion in the span of the next three years.
Tokenization is the process of assigning unique digital tokens for representing ownership to different types of digital assets – whether it is equities or debt, real estate, bonds, collectables, art, or copyrights.
As we look ahead, 2022 will observe the augmented NFT 2.0 model. It will be less about modern art and more about advanced utility and access to desirable and exclusive communities.
Crypto and NFTs Powered by Web 3.0
Currently, Web 2.0 is powered by high-end disruptive technologies like social networks and mobile internet. However, Web 3.0 is expected to break into the all-new frontier by adopting new concepts like deeper web technologies and blockchain.
These technologies are designed to offer users control of the respective data while making the internet more decentralized, secure, and verifiable.
The principles that surround Web 3.0 are in alignment with what has been thought of as third-generation technology. Web 3.0 technology was introduced by Gavin Wood –the Co-founder of Ethereum. As such, the technology has gained an excellent reputation.
Blockchain technology gives the all-new iteration of the internet power and capability. Here, people can control respective data and bounce from social media to shopping, email, and others with the help of a single personalized account. Moreover, it helps create a public record on the dedicated blockchain.
Blockchain in the Metaverse
Recently, the Metaverse has gained a lot of attention. Microsoft and Facebook stake respective claims in the high-end virtual universe. The technology is powered by virtual reality and augmented reality possibilities.
The term ‘Metaverse’ was given an introduction by Neal Stephenson, who envisioned the same in his novel ‘Snow Crash.’ He thought of virtual, life-like avatars congregating in real-life 3D VR-based environments in the novel.
Crypto, NFTs, and the entire blockchain technology will serve as the keys to expanding the metaverse. At the same time, the ownership of utilities, identities, and access to environments will remain at the core of the virtual world. In addition to crypto serving as the possible tender, NFTs will also majorly develop identity, social experiences, and community in the metaverse.
Surprisingly, it will enable like-minded individuals to come up with communities to share experiences, develop parallel economies, and create content together.
In this context, Rod Hall – Senior Equity Analyst at Goldman Sachs – added that metaverse is the only technology capable of uniquely identifying any virtual object independent of the central authority. Therefore, identifying and tracking ownership will be important in understanding how this revolutionary technology works.
The latest trends will improve the value of cryptocurrency and its technology in 2022 and beyond. With new regulations, multiple investment opportunities, advanced technologies, and leading companies launching accurate solutions, investors are pretty excited about trading in digital assets in the coming year.