Future trends in 2022 within the blockchain and crypto sphere

By Ola Lind, Director at FTFT

Over the past decade, cryptocurrencies and innovations within blockchain technology turned into a stable scaling ecosystem that eventually will replace the traditional financial systems. The adoption of Bitcoin as a legal tender by El Salvador and the introduction of crypto regulations in Canada as the first country to approve a Bitcoin exchange-traded fund (ETF) in 2021, shows that cryptocurrencies are becoming an accepted investment tool around the world. Other aspects of blockchain technology that allow building decentralized financial (DeFi) services using smart contracts consolidate the successful future of this technology by providing freely accessible, autonomous, and transparent software.

The NFT (Non-fungible Token) craze in 2021 reveals the scales at which smart contracts running on Etherum blockchain transform trades and empower autonomy. Considering that smart contracts simplify business and trade between two parties without the need for a middleman, a larger adoption is expected in the coming years. Furthermore, Ethereum, the backend of DeFi, announced that by the end of 2021, Proof of work would be replaced by the Proof of Stake (PoS) method to mitigate the environmental impact of the Ethereum blockchain.

The decentralized applications (dApps) running on blockchain allow anyone in the world to lend, borrow, save, trade using digital assets without the need for permission and irrespective of their geographic location. The centralized monetary service entities such as banks are going to disappear under the shadow of the new encompassing decentralized system provided by innovation in the blockchain ecosystem. Moreover, The future of cryptocurrencies is already characterized by looking at how Gen Z is losing trust in traditional financial institutions and is using digital assets like bitcoin and ethereum, meme coins (tokens) e.g. dogecoin, NFTs, and DeFi .

According to statistics collected by CNBC, currently, more than a third of millennial millionaires have at least half their wealth in crypto and about half own NFTs. It is worth mentioning that the recent hype on the metaverse highlighted the significant role of digital asset ownership such as NFTs in virtual worlds. NFTs can be used as keys to enter virtual clubs e.g. Bored Ape Yacht NFT that enables membership and entrance into a digital room where you can take a “pen” and draw, write, or graffiti on the walls every 15 minutes. Digital avatars made of real-world personalities are another way that the NFTs provide access to the metaverse. NFTs, allow avatars to sell properties in metaverses. This is how the tight relation between metaverses and NFTs will transform our online interactions in near future. While there are many use cases of NFT in the real world as well e.g including VIP access to real conventions and festivals the development of blockchain-based ID systems speeds up the adoption of financial services in the metaverse.

To conclude on this, as the user interaction and accessibility with crypto markets, DeFi , NFT, and metaverse improve a mass adoption worldwide is expected where financial service is accessible to everybody via smartphone and internet connection.