The innovation of blockchain technology is similar to that of the internet in the early 90s, with one basic, but fundamental difference. The internet is an information machine, while the blockchain is a data integrity machine. In a climate where social justice and transparency are becoming a demand rather than a privilege, we find ourselves at a very important time in technological history.
Over the past few years, and certainly, in 2021, blockchain and digital assets took a centre stage position and are firmly part of the general business conversation. No longer a fringe topic, blockchain is undoubtedly one of the most transformative technologies that has yet to be fully understood or implemented.
Predicting the future is a tricky business, especially when dealing with a technology undergoing rapid change and adoption. But we are taking a guess, and these are our 5 predictions for blockchain technology in 2022.
- Digital Asset Management
- Blockchain for Social Impact
- CBDC Pilot using a Public Blockchain
- Enhanced Responsible iGaming
- Increased Clarity through Regulation
2022 and beyond
1. Digital Asset Management
2021 saw the emergence of new use cases related to digital asset ownership and NFT’s. This year is poised to create real utility by using public blockchains to link the physical and digital representations of assets. One of nChain’s Senior Researchers Dr Michaella Pettit agrees:
“There has been an increase in NFTs on BSV, with applications such as in the Metaverse or tokenising artwork, and many wallets now enabling the exchange of NFTs. This will continue into 2022 and I’m excited to see the new applications.”
Pettit also expects to see further efforts in developing security industry standards. Recent developments in threshold signatures by nChain will “enable more secure transacting on the blockchain in the coming year, improving the user experience of BSV.”
Read more on nChain’s Threshold Signature Invention here.
2. Blockchain for Social Impact
Since the blockchain is a distributed global network it allows the creation of a circular economy of products and resources. This can enable different actors from different industries to talk to one another to ensure they are using resources in the most efficient way. When implemented at a large scale, this demonstrates blockchain’s potential to transform various industries and entire sections of our economy. Here is what nChain’s Sustainability Scientist Dr Chloe Tartan had to say:
“There has been a lot of talk around the need for renewable energy, so the energy industry is a very exciting place to start implementing this technology. It has fantastic potential to ensure that energy is distributed to anyone through the peer-to-peer network, for instance, if my neighbour has excess solar energy, I can trade with them directly without the intermediary. This opens up so many opportunities for a lot of people.” Dr Chloe Tartan.
Watch Chloe talk more about Blockchain and Sustainability.
3. CBDC Pilot using a Public Blockchain
Countries of all sizes and economic development realise the benefits of blockchain technology and setting up national digital currencies. We have yet to see a full-scale implementation, rather authorities are seeking to understand how they can implement a new technology without disrupting their economy. Simit Naik, nChain’s Director of Commercial & Strategy shared his insights:
“Central Banks have more clarity around their requirements and the advantages in using a public blockchain to deliver a CBDC that most closely resembles cash. Furthermore, I believe that Africa will become the leader in using emerging technology to provide the foundations for socio-economic transformation programmes, with CBDC being one of the first programmes to improve financial inclusion and education.”
Read more on the collaboration with the Government of Tuvalu.
4. Enhanced Responsible iGaming
With over £40 million in fines issued by Gambling Regulators across the globe in 2021, the implementation of blockchain can reduce risk for operators, enhance regulatory oversight and ultimately support more responsible gaming practices. Nick Hill, Head of Sales at nChain says that:
“Blockchain products such as Kensei are an efficient method to create and maintain the perfect audit trail for irrefutable proof. Ultimately, the switch to greater reliance on blockchain technology across the iGaming sector means greater protection for operators and players alike. At every level of a transaction, the technology eliminates any issues surrounding legitimacy by providing a real-time ledger. In an environment of escalating compliance requirements, increasing fines and tighter restrictions, products such as Kensei offer a solution for operators to tackle this issue.”
Learn more about Kensei.
5. Increased Clarity through Regulation
In 2022 we will see international regulatory and legal bodies vying to be the blockchain jurisdiction of choice. Jasmin Black, Legal Operations Manager at nChain says:
“The UK is no different, 2022 will see the UK’s legal bodies continue to develop the legal principle of the “reasonable coder” to position itself as the jurisdiction of choice for contracts governing commercial blockchain solutions.”
Increased and more aligned regulatory boundaries will “spark focused creativity in blockchain-backed digital money and digital cash,” says Dale Evans, Senior Project Counsel at nChain, as he predicts that such boundaries will allow market participants more certainty around investment in their product suite, which in turn results in greater innovation.
As we peek into the crystal ball, this biggest prediction we see is that more than ever, users are showing interest in the technology as complementing traditional areas of the economy and business like banks and financial services. We expect more sectors and industries to understand the potential of having data integrity and the value it will bring. This echoes an opinion that blockchain should not be viewed as disruptive, but a complementary enhancement to the work of modern enterprises.
While we presented five specific predictions, looking ahead more generally, we are excited to see how enterprises, entrepreneurs and governments harness the power of blockchain and data integrity as more people understand the potential.