The entire world of cryptocurrencies has only become more compelling and interesting. What was once an esoteric (and now forgotten) experiment with Bitcoin has now evolved into a variegated and vibrant realm that has witnessed endless innovation and disruption. If we are indeed on the path to one day seeing digital assets end up governing the world alongside us – if we are to enter into a new decentralized age – the trends sweeping through the industry today are the ones we must have our eye on to ensure that we are as adequately prepared as we possibly can be. Here are some of the most impactful trends in the world of cryptocurrencies that will most likely shape our collective future.
The Integration of Blockchain Technology in Gaming
Blockchain technology has more novel uses beyond finance, namely in entertainment, such as in games where people play online. For instance, we will start to see crypto casinos and so-called play-to-earn games emerge as a natural new playground for blockchain and crypto. Through blockchain and cryptocurrency, new ownership models and economies are created in the gaming space.
Conventional online casinos and things like online slot games allow players to bet on games and, depending on the game, win virtual goods or casino currency that often just resides on the platform. But blockchain-driven online gaming platforms can allow players to truly own their in-game goods, such as virtual items or currency, using so-called non-fungible tokens (NFTs) – unique digital certificates stored and transferred on the blockchain. This allows players to own what they have earned.
It could even lead to a more tightly-knit community of players because their in-game assets can be traded or sold within the ecosystem or even on secondary markets or NFT marketplaces. Similarly, play-to-earn – where users will receive cryptocurrency for time spent and engagement on a game – will push game developers to create entirely new income streams for gamers and ‘blur’ the line between gaming and earning. However the path to integrating blockchain into games and applications is only just beginning for gamers.
The Maturation of Decentralized Finance (DeFi)
Decentralized Finance (DeFi) ie, the technology taking on legacy centralized finance infrastructure, will be especially relevant this year. DeFi protocols are those automated sets of rules written into a blockchain that performs peer-to-peer financial transactions between two participants on a blockchain.
DeFi financial services include lending products, such as ‘decentralized shadow banking’ where people receive loans from a liquidity pool, investing – where protocols allow their users to provide capital to another service – and a wide array of products for trading directly with others.
Going way beyond what’s currently being achieved, one of the most exciting new developments in this space is Decentralized Exchanges, or DEXs, which use cryptocurrencies to allow users to trade directly with one another. This cuts out the need for a centralized exchange, and therefore the need for their fees. In this sense, DeFi is still very much in its early days, and still very much an experimental space. But it’s exciting to see that the combination of blockchain and smart contracts technology holds such enormous promise for revolutionizing financial services and offering more individuals even greater power over their finances.
The Growing Focus on Sustainability
Cryptocurrency mining – proof of work (PoW) algorithms such as Bitcoin, in particular – is increasingly of grave concern in terms of its energy footprint. Hello: sustainability is one of the biggest trends of 2024, and it isn’t just hot in finance, it spans almost every industry you could possibly think of.
One particular aspect of sustainability within Blockchain that many companies are quickly addressing is the huge amounts of energy required to verify transactions. It’s one of the most common arguments that casts a little too much doubt over the sustainability of Blockchain networks. As a countermovement, greener blockchain protocols using alternative consensus mechanisms such as proof of stake (PoS) have begun to become popular. These PoS protocols require far less energy to run versus PoW, making them a much more sustainable alternative to closure – which is, ultimately, much better for everyone.
The Future of Cryptocurrency
These have all been just a handful of the most influential trends in cryptocurrency – a space that continues to evolve at a mind-boggling pace.
As this specific technology enters its teenage years, further innovation and disruption seem a given across several sectors. All of these new technologies are something worth knowing about, and many of the concerns that skeptics have are largely being remedied by forward-thinking businesses in space.
From financial inclusion to more robust, efficient and safe transactions, the world of cryptocurrency is a great place to pay attention to. For investors, entrepreneurs and any would-be readers keen on the future of finance, these are the trends that you might want to look into throughout the rest of the year.
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