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7 Top Blockchain Trends for 2022
One of the most critical developments in digital computing in this century has been the use of blockchain technology across an increasingly wide range of applications. Especially following the growth in data theft and breaches of cybersecurity fences, blockchain has been recognised as probably the single most viable solution because it is a proactive mechanism that prevents these, instead of the reactive traditional cybersecurity tools that have to play catch-up with hackers and phishers.
Understanding Blockchain fundamentals
Blockchain is defined as consisting of an open (sometimes referred to as a decentralised, distributed) ledger that multiple parties can access at once. Each new block of data is unique, with an identifying hash. It can only be changed with the agreement of all the parties involved.
By linking the blocks, it forms a blockchain. Each block in the chain is added in chronological order making an irreversible timeline of data, and once in the chain, it cannot be dropped or changed.
The most significant benefit lies in the trust that comes from the verification of each block, which builds into the security of multi-step transactions. Instead of having to protect data all through every step from creation through storage to use and then to validate the entire chain as a whole, validity is inherent in a blockchain since each individual block in the chain is secure.
Blockchain speeds up data transfer and reduces compliance costs, validates the content of the data and proves ownership.
Why is blockchain so attractive?
There is no practical limit to the applicability of blockchain technology for anything related to digital data processes. Because the distributed open ledger guarantees many people access to secure and trusted data, it has direct benefits not only for large corporations and governments but also for individuals.
From the beginning, blockchain has been associated most closely with cryptocurrencies due to the phenomenal success of the thousands of digital currencies. It can probably be attributed to the fact that fraud and theft (two things that blockchain prevents proactively, rather than detecting it retroactively as other measures have done) is a perennial and growing aspect of banking and finance. This has given blockchain a jumpstart in the whole area of finance – more about that later.
Apart from monetary applications for blockchain technology, some of the other components of the digital revolution have also become targets of theft and fraud, and this has added them to the list of beneficiaries of the technology. In the following few paragraphs, we will highlight the seven sectors that are likely to be the significant areas of innovation in blockchain technology in 2022.
1. Production, distribution and dispensing of medicines
Two major changes in the pharmaceutical sector are separately in need of high-level data management technology of the kind that blockchain proved.
- The pandemic has emphasised the worldwide dependence on vaccines being produced, distributed and dispensed effectively and efficiently. The sheer volume of data, and the fact that margins for error must be brought as close to zero as possible, has made the extra levels of security provided by blockchain an essential tool for every computer system that provides services across the whole chain of activity from manufacturer to patients. As we have learned with the spread of new variants, there is unlikely to be any reduction in the need for further roll-outs of new vaccines. So the call for more and more sophisticated and comprehensive data management systems will grow substantially. Undoubtedly, blockchain will be a significant component in many of these.
- Another revolution in the field of medicine has been the rapid adoption of cannabis Here, blockchain is not simply a helpful tool but is in fact essential. Without it, cannabis cannot evolve from being a casual drug into the properly controlled scientific medication it will become.
The chain of supply in cannabis medication is far more complex than for typical pharmaceuticals because it needs to be linked all the way back to single plants inside individual growers’ orchards who must be able to identify individual harvests. This data must be carried right through the production and supply chains, along with the added processes, so that end-users can safely identify the individual components of what they are buying. Blockchain is the only technology that can provide the required levels of transparency and authenticity.
2. Creation of national cryptocurrencies
Although at first official monetary authorities in most countries were both suspicious and skeptical about the whole concept of cryptocurrency, there have been two significant trends that are causing a rethink in some of the more advanced countries, and the spread of national digital currencies is likely to accelerate in 2022.
On the one hand, the problems and challenges presented by the phenomenal growth of unregulated cryptocurrencies has created the need for a rethink by central authorities. The opportunity it presents for bad actors such as terrorist organizations, criminal groups and rogue states to anonymously make use of cryptocurrencies make them a major headache not only in terms of financial control but also in public security and policing.
Some governments are permitting the use of cryptocurrencies, but others are banning them outright. The main challenge for any regulatory approach is the inherent anonymity of blockchain technology, making enforcement of any bans or restrictions extremely difficult. So far, the emphasis has been on trying to control cryptocurrency exchanges rather than enforcing any form of regulation on the issuers of the currencies themselves.
Another approach in some countries has been to go full-force into digital currencies themselves to supersede the unofficial currencies. This will require introducing their own central bank digital currency (CBDC, or digital cash). CBDCs can deliver the same benefits of cryptocurrency without the associated risks.
Many countries that, in combination, make up more than 90%of the global economy are already at the very least investigating CBDC. China piloted a CBDC in the form of the digital yuan in 2019. In the US, there is some fear that this will be used as a mechanism to expand China’s control of the global economy and threaten the US $’s position as the favored currency reserve. Learn How to start a Cryptocurrency Exchange?
Integration into the government agencies
In one instance of how blockchain can become a feature of government data management in 2022, there is the case where building on the concept of the central bank digital currency (CBDC), a country can issue its own digital cash. This will allow individual citizens to hold digital wallets directly with the central bank, through which the government gains powerful tools for managing the economy. In this form, monetary transactions between the government and citizens would flow entirely outside the banking system without compromising privacy and security.
Now, most government agencies hold their data about citizens in individual databases, requiring numerous interfaces with other government bodies and outside agencies in all interactions. By adopting blockchain technology across the board, the integrity of the data in all of the agencies will be improved at the same time as the visibility enabling sharing of information and reduction in duplication or mismatching.
A decentralised digital ledger with the information about citizens can safely be shared both inside the government and between them with the security of common practises like 2FA (two-factor authentication) facilitating collection and sharing of the data.
Introduction of digital asset archives and NFTs
One of the major outgrowths from the introduction of blockchain technology for cryptocurrencies has been the addition of non-monetary assets that also can be represented by tokens. In the same way that a token represents an individual cryptocurrency unit, any piece of digital data can be secured with blockchain technology.
Over the course of the coming year, we expect the use of Non-fungible Tokens (NFTs) representing digital assets to grow at the same pace as for digital currencies over recent years. Such assets as the digital title to a parcel of land, a piece of music, a video clip or piece of digital art, documents, sound recordings and any other digital block can allow users to own a digital asset and the right to trade it.
Blockchain technology allows for the tracking of ownership from the point of creation, which can strongly influence market value. In comparison with current slow and cumbersome methods for proving ownership, an NFT represents an immediate proof of this, as well as the path followed all the way through.
Leveraging blockchain for the political and social objectives
In 2022, the combination of widespread use of digital cash and the growing popularity of NFTs for investment will place the whole subject more firmly in the focus of the public eye. Governments and social agencies will need to draw up and implement policies that include proper regulations and controls for the many activities being built with blockchain capabilities. There will also be increasing steps for governments to make use of the data being created and stored in these chains, which allows them to record activities with the assistance of the built-in metadata.
The utilisation of blockchain in retail
In the years leading up to 2021, there has been significant growth in the use of blockchain technology for essential aspects of the retail sector, such as loyalty and rewards management, inventory control and supply chain management. This is expected to accelerate in 2022 and beyond.
Even more traditional aspects such as payments systems and transport are likely to be increasingly moved under the blockchain umbrella as retailers become more dependent in other areas for global integration. Starting from a minimal base, by 2020 the software sales had already reached about $3.5 billion, which is projected to almost double every year until 2026.
Major software development companies and retail chains are already cooperating on designing and implementing blockchain-based applications for supply chain and inventory management. Loyalty rewards programs are taking up the highest demand due to their complex nature, making them ideal for blockchain.
Further advancements are expected in specific areas like product control. By utilising the historical tracking built in to block change, if a product is found to be defective, it can be traced back through the entire chain, both internally and back to the source. This
Impact on the general economy
The COVID-19 pandemic has accelerated some of the already disruptive trends brought about by the phenomenal growth of blockchain technology. On the positive side, blockchain has the potential to support governments and organisations to rebuild and reconfigure their operations. It supports improvements in trust, transparency and efficiency.
We can point to four key areas of blockchain applications contributing to global economic activity in 2022.
- Provenance (tracking and tracing of products and services)
- Payments and financial services
- Identity management
- Customer engagement and loyalty programmes
Regionally, APAC is expected to glean the most significant benefit, mainly coming for China, which leads the field in many aspects of blockchain technology. Followed by the USA, the other primary beneficiaries are likely to be Germany, Japan, UK, India, and France.
For each country, the sources of the benefits will be different. For example, for China and Germany, it will come more from provenance, while for the US, it is in payments as well as identity management.
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