Blockchain Development Trends to watch out for in 2023!

Blockchain is a ground-breaking technology that is already disrupting the market. In addition to banking and finance, it has an impact on the retail, automotive, media & entertainment, healthcare, insurance, travel, telecommunications, and transportation sectors. According to a  report by Statista, blockchain is predicted to experience extraordinary growth, with a prediction of rising to $162.84 billion by 2027  from $11.54 billion in 2022. Blockchain is a perfect platform for companies and customers to protect data privacy and security while democratizing services. 

Blockchain Overview

Blockchain is a decentralized, irreversible ledger that is shared digitally and enables organizations to track assets and log transactions across their network. Over a blockchain network, any transaction can be monitored. It essentially offers a sophisticated database technique that permits transparency while disseminating information through a network. Blockchain is made up of an ever-growing list of records, or blocks, that are connected in a chain using encryption. The blocks in this network contain a timestamp, a cryptographic hash, and transactional information. Additionally, a blockchain network’s data is always consistent in time.

• According to a Statista analysis, the global blockchain market was worth $1.2 billion in 2018, is now worth $12.7 billion, and is projected to be worth more than $39.7 billion by 2025.
• The blockchain market will grow at a 56.3% CAGR, reaching 163.83 billion USD between 2022 and 2029, according to a report by Globe Newswire.
• According to CBInsights, the amount of venture capital funding for blockchain startup companies reportedly exceeded $25 billion last year.

Upcoming Blockchain Trends

Blockchain-as-a-service (BaaS)

The ”as a service” business model for blockchain networks is supported by the accessibility and adaptability of cloud-based services. Blockchain developers can quickly build and host blockchain applications and smart contracts, decreasing the time-to-market. Blockchain as a service will spare businesses the expense of hiring programmers for internal network development. Businesses can concentrate on improving features and products for their business while still maintaining an adaptable and effective network with the help of service providers.

Blockchain-as-a-service (BaaS) is anticipated to have a 24.94 billion USD global market by 2027, growing at a CAGR of 39.5%. This widespread development of BaaS platforms and businesses is undoubtedly paving a futuristic way.

Central Bank Digital Currencies (CBDC)

Central Bank Digital Currencies are the opportunity to bring about the most impactful innovations in the fintech sector that will impact the majority of the industry’s stakeholders. CBDCs are digital tokens similar to cryptocurrencies that will be backed by the value of a nation’s fiat currency and are issued by central banks. While the pricing of cryptocurrencies is decentralized and connected to fiat money like the U.S. dollar, CDBC will have the potential to replace fiat money as the electronic equivalent of paper money that the central bank prints. 50 nations, including India, Jamaica, South Korea, Japan, Nigeria, Russia, etc., which account for over 95% of the world’s GDP,  are in the advanced stages of either pilot, development, or launch of digital currency.

Advanced Cryptography

To ensure the immutability and verifiability of transactions, blockchain networks use cryptography to encrypt communication between nodes. For this, symmetric and asymmetric cryptographic techniques are used by blockchain developers. As opposed to the asymmetric approach, which uses public and private keys for message encryption and decryption, symmetric cryptography provides the same key for the communicating nodes. Multi-signature algorithms, for instance, produce digital signatures with the help of numerous parties. Another method for proving information without disseminating it across the network is zero-knowledge proof (ZKP). These methods let blockchain developers maintain security while increasing user and transaction privacy. 

Canada-based startup Ruby Protocol creates a decentralized Web3 protocol that prioritizes privacy. It makes use of functional encryption (FE), which enables users to encrypt data on-chain that can only be decrypted by owners of authorized private keys. The protocol implements a privacy layer that communicates with the multi-chain ecosystem and functions as a private data management framework and data access control gateway. This makes it possible for NFT-gated access, regulatory asset ownership, confidential know-your-customer (KYC) authentication, and anonymous cloud computing.

Evolving dApps

Blockchain networks with peer-to-peer nodes and smart contracts make it possible to create and execute decentralized applications. The Ethereum blockchain, for instance, provides specialized tools for developing decentralized apps. dApps provide privacy and development flexibility by removing the oversight and interference of centralized authorities. Additionally, it makes it possible for all stakeholders to pay a fair price for applications and services, increasing transparency and monetization possibilities. As dApps use decentralized computing and open-source licensing to provide a secure development landscape, they never go offline. The rapid Web3 integration is promoting the use and implementation of a wide variety of decentralized applications backed by blockchain. 

An Indian startup called Cube has initiated the staking of dApp tokens. The startup’s API enables integration of staking access for web developers. Additionally, Cube uses asymmetric cryptography and transport layer security (TLS) to encrypt all its API calls. This allows for automatic yield tactics like leverage staking and auto-compounding allowing developers to speed up the time to market and cut down on the development time.

Green Blockchain

Blockchain’s biggest criticism was the enormous use of energy, which raised carbon emissions. Blockchain developers are now concentrating on providing environmentally friendly blockchain solutions by utilizing novel strategies like carbon offsetting, and corrective action for the elimination of carbon dioxide emissions. Lowering the energy usage of blockchain models has contributed to the development of what is called a green blockchain. By switching from the Proof-of-Work consensus model to the Proof-of-Stake consensus model, businesses are moving in this direction, just like the ETH merge. In other words, the development of green or environmentally friendly blockchain is one of the key trends that will shape the ecosystem.

From Smart to Ricardian Contracts

Ian Grigg first proposed the Ricardian Contract in 1995. It is currently a crucial development in the blockchain space. These contracts are signed between two or more parties and take the form of digital papers that specify the terms and conditions of transactions. The parties to a Ricardian Contract define their intents and actions in a human-readable legal document that, after being accepted and signed by all parties, becomes a machine-readable contract. For signature and verification, a cryptography hash is used. The major distinction between smart contracts and Ricardian contracts is the type of agreement they correspond to; the former (Smart) implements the actions specified in the contract, whereas the latter (Ricardian) records the multi-party agreement as a binding legal contract. Ricardian contracts will likely take the place of smart contracts in the future. Because the Ricardian contract binds the parties participating in a contract legally and carries out the agreed-upon acts, blockchain transactions are safer and more transparent.

Private Blockchain

Companies and organizations typically hold permissioned blockchains known as private blockchains. Private blockchain networks. In contrast to public blockchain networks, they have centralized authorities that control network user access. Private blockchains also allow for the reversal or deletion of transactions, and each node stores a copy of the complete blockchain. This gives organizations more control over enterprise data while maintaining the ability to validate and verify transactions. Private blockchains have a lot fewer nodes than public networks, therefore they can scale much more easily and have higher transaction throughput.

A Turkish startup Dafecs is creating a platform for the deployment of virtual organizations. It mixes the InterPlanetary File System (IPFS), tokenization, the internet of things (IoT), a private blockchain network, and front-end libraries for securing stakeholder data sharing, and for enhancing organizational governance and decision-making.

To Wrap It Up

Unquestionably, one of the most cutting-edge technologies, blockchain provides superior data security, transparency, accessibility, and immutability. Advanced encryption standards and data processing innovations will improve the functionality of smart contracts, which will benefit blockchain networks as a whole. The energy required for blockchain transactions will decrease even further when blockchain-developing enterprises start to lessen their carbon footprint. These remedies will hasten the spread of blockchain applications across sectors and fuel Web 3. The blockchain sector will keep developing at a staggering rate. Also, it is currently being used by several businesses for a wide variety of use cases, moving beyond its original use case of cryptocurrencies. The continued development of DeFi, the expansion of environmentally friendly (green) blockchain, the empowerment of the metaverse, and the rise in demand for BaaS, NFTs, and Ricardian contracts are just a few of the most recent trends in blockchain technology that we will see.