HOW BLOCKCHAIN EMERGED IN 2021 AND HOW IS IT EXPECTED TO LOOK IN 2024?
Blockchain emerged as a revolutionary innovation, potentially disrupting almost every industry, from financial institutes to healthcare organizations and supply chain and logistics firms. Just two to three years back, blockchain startups were gaining a lot of public attention. After that, many enterprises started showing an interest in blockchain technology. But, most of the organizations soon abandoned the technology as it looked overhyped.
However, fast forward to 2021, blockchain is no longer an experiment and has become more grounded and mature. The distributed ledger technology now seeks to offer practical solutions for established businesses and startups while exploring new use cases such as asset tokenization and blockchain-as-a-service.
Here’s how blockchain looked like in 2021
1. Listed by Gartner as one of the top technology trends
One of the popular research and advisory firms, Gartner, has listed blockchain as one of the top ten strategic technologies for 2021. Gartner says that the blockchain can remodel industries by providing transparency, enabling trust and allowing value exchange across businesses. Other benefits of the technology include reducing settlement times and transaction costs and improvements in cash flow.
While listing the blockchain as a strategic technology trend, Gartner has also mentioned eleven potential use cases of blockchain. Blockchain applications are related to data, for example, asset tracking, shared and internal record-keeping and provenance. Various blockchain cases revolve around banking and finance, including settlement/payment, trading, and insurance claims. Other blockchain use cases include broader applications, including IoT and smart cities, loyalty and rewards and identity and know your client.
2. More opportunity to research on blockchain in 2021 from home
For the last five years, enterprises worldwide have analyzed the potential of blockchain technology with thousands of proof of concept. Due to the COVID-19 pandemic, innovators and researchers got a lot of time experimenting with the blockchain’s capabilities when they were at home due to lockdown. The coronavirus has exposed weaknesses in our supply chains, difficulties in collecting and sharing the data required to make quick decisions and the inability to deploy resources where they are needed the most to address the pandemic.
Blockchain solutions under development for many years have now been unleashed and repurposed to address these issues.
For example, consider the work of Colonel James Allen Regenor, USAF, who has been developing a blockchain-based platform for selling and buying traceable 3-D printed parts and printing instructions for them and manufactured parts that are scanned and given unique tracking identifiers. Regenor developed a platform to enable a decentralized manufacturing process where customers can order and print parts. The blockchain ensures tamper-proof printing instructions and design.
He realized that his platform could help with medical devices required to fight against Covid-19. He established a new company, Rapid Medical Parts, in March 2021. He led a global network of partners and within 12 days, the Pentagon awarded his company a contract for converting the plentiful supply of sleep apnea machines into ventilators. The conversion requires extra parts that Rapid Medical Parts will print and a new ventilator at a tenth of the cost.
It’s not only the small startups that are leveraging blockchain technology to fight the virus. So, more and more organizations got a chance to experiment with the potential of blockchain technology while staying at home due to the pandemic in 2021.
3. Blockchain as a service by big tech companies
Blockchain as a service (BaaS) saw a huge significance in 2021 and is being used by many startups and enterprises. BaaS is a cloud-based service that allows users to develop their own digital products on the blockchain.
Digital products can be smart contracts, dApps (decentralized applications), or other services that can work without setup requirements of the blockchain-based infrastructure.
4. Stablecoins became more visible
The development of a patient engagement platform requires practical knowledge of the technology stack required. The Software Development Environment (SDE), Cloud frameworks, Databases, and OS involved are listed below.
It was the introduction of Facebook’s cryptocurrency, Libra that came up with the concept of stablecoins in 2021. Since then, enterprises and startups have been looking forward to stablecoin development.
5. Demand for Blockchain Experts
Since blockchain is a new technology that came into existence a few years back, only a few percent of individuals are skilled in this technology. As blockchain became a wide-spreading and fast-increasing technology, it creates a situation for many to learn about technology.
The demand for developing blockchain products has created a demand for blockchain experts that grew exponentially in 2021. Software development companies train their developers on blockchain and provide blockchain developers for hire to enterprises and startups looking to build a blockchain solution.
6. Regulatory Clarification
Regulation has always been a complex subject for blockchain, especially when it comes to cryptocurrency. The regulatory landscape is a complicated mess with different interpretations coming from US regulatory agencies and international bodies.
Steps have been taken in the right direction. In late 2019, the IRS gave an update, the IRS Ruling 2019-24 and modified their FAQs. Meanwhile, the state of Wyoming became a pioneer in the US, passing legislation aimed at encouraging innovation in the cryptocurrency space while setting clear regulatory guidelines and oversight.
Blockchain trends to watch out for in 2024
The year 2021 is over now, and it has been challenging for many. The COVID-19 not only intensified trends that were underway but also introduced new trends. We will now look at some of the top blockchain trends that we may expect to watch out for in 2024 and beyond.
1. 30% of projects will go into production
Though this number does not reflect the realistic approach to projects, it is expected that around 30% of the blockchain projects will move into production due to the increasing maturity of the technology.
“The global blockchain market size is expected to grow from USD 3.0 billion in 2020 to USD 39.7 billion by 2025, at a CAGR (Compound Annual Growth Rate) of 67.3% during 2020-2025.”
The majority of networks that move from pilot to production will execute on enterprise blockchain platforms.
2. Permissioned Blockchain will dominate
Another trend that we witness is that permissioned blockchains will become a significant contributor to the blockchain market growth and is assumed to retain the largest market size in 2023. Enterprise blockchain solutions are customized as per the corporate’s business needs. Private blockchain offers more opportunities to corporates in terms of leveraging the blockchain technology for business-business use cases..
Blockchain delivers higher efficiency, reliability, and transparency while security is via a private blockchain using private keys only known to authorized persons in the organization.
3. The financial and banking sector will dominate the market
Amongst all the industries impacted by the Covid-19 pandemic, the financial sector is one area that has witnessed a lot of growth in the last few years. Tightening margins and falling profits have forced financial institutes to adapt and meet their customers’ demands in a growing digital world. The adoption of blockchain and fintech enables them to simplify their operations and modernize those operations.
It may result in contactless transactions and remodeled financial services. The financial and banking sector is expected to experience exponential growth in blockchain adoption in the coming years. As a result, the financial sector will be holding the largest market size in the global blockchain market in 2020 and the next 2-3 years.
One of the disrupting trends in the blockchain fintech space is DeFi (Decentralized Finance). DeFi illustrates the process of smart contracts for financial services and can bring transparency and security to the financial ecosystem.
Conclusion
The future of distributed ledger technology and blockchain is rapidly changing. Predicting what trends will come to the forefront is a complicated task. However, we are sure that blockchain technology is poised to transform various industries in many ways.
Consult our team of blockchain experts if you are looking to implement the technology into your business ecosystem.
Author’s Bio
Akash's ability to build enterprise-grade technology solutions has garnered the trust of over 30 Fortune 500 companies, including Siemens, 3M, P&G, and Hershey's. Akash is an early adopter of new technology, a passionate technology enthusiast, and an investor in AI and IoT startups.
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