
The idea of blockchain is known to almost everyone who is interested in digital technologies. You may remember Bitcoin and Ethereum as famous examples of blockchains, but they are just two of many networks that are already out there.
You might be interested in the blockchain trend that looks the most hopeful for 2023. Let’s look more closely at this year’s ten biggest bitcoin trends.
Blockchain gaming is becoming more popular
dApps can be made to do many different things, but a poll of the 20 blockchain companies that are growing the fastest shows that most of them fall into one of three main groups:
– Games that use blockchain technology
– Decentralized banking and insurance (DeFi)
– The NFT markets
But it’s amazing to see how much faster blockchain gaming has grown than DeFi systems.
In the same way, seven of the top ten Apps (based on the number of users) are blockchain games.
The number of people playing the blockchain-based game “Mobox” has grown by 400% in the past five years.
On the other hand, DeFi has been struggling as a Web3 niche.
According to Similar Web, the popularity of top DeFi protocols like Lido has dropped a lot since November 2021, when the crypto market as a whole entered a correction zone.
Most people use DAOs
As the Web3 movement grows, less common business structures like limited liability companies (LLCs) are being replaced by Decentralized Autonomous Organizations (DAOs).
This is because of several things. A few of them are not as harsh as the rest.
Many people, on the other hand, think that because DAOs are autonomous, they won’t have to pay taxes or be sued.
For now, DAOs get rid of the red tape that usually comes with setting up a global company or hiring people from other countries, which gets in the way of international cooperation.
In response, a lot of the most well-known dApp developers today use DAOs as their main legal body.
In fact, DeepDAO says that 3.1 million DAO participants are directly involved in running the project(s) they are a part of.
As DAOs become more famous, more and more businesses are starting to offer services just for people who make DAOs.
Based in Singapore For example, Poko helps entrepreneurs start DAOs, raise capital, and put them to use in a lot less time than it would take in a developing country.
The DeFi Apps Have an Integrated Know Your Customer System
Decentralized finance’s (DeFi) anonymity has traditionally been one of its main selling points.
On the one hand, those who support DeFi argue that the government should have no say over people’s personal financial decisions.
Money laundering, tax evasion, and the financing of terrorism are all illegal activities that the government has an interest in stopping.
As a result, many professionals in the field believe regulation is inevitable.
The question, then, is not if crypto will be regulated, but rather, which country will do it first.
The European Parliament announced severe limitations on anonymous cryptocurrency transactions in March of 2022.
Not the first government to do so, but the first Western government (as of this writing, neither the United States nor the United Kingdom nor Australia have any legislation in place).
All crypto transfers between EU nationals “will have to include information on the source of the asset and its [recipient],” per the March judgment.
It’s important to note that this law does not include a low-value transfer exception.
Instead, both the individual making the transfer and the person receiving it will need to provide some sort of identification, even if it’s just for $0.01.
The question now is how blockchain-based dApp creators will implement identity verification.
Most centralized exchanges still require users to verify their identities by submitting a photo of their driver’s license or passport in addition to using face recognition software.
However, in the Web3 universe, a decentralized financial system is at odds with the idea of storing such sensitive data in a centralized database.
That’s why the DeFi team is hard at work on Tokenized Identity, a novel blockchain-based (and privacy-oriented) solution.
Tokenized Identity (and related competing technologies) will likely become increasingly commonplace in Bitcoin wallets as the industry matures and more nations adopt rules.
DApps Launch Backend “Products”
Recurring income is the lifeblood of businesses that provide services like SaaS.
The main reason for this is the high expense of obtaining a new customer compared to the low cost of selling additional products or services to an existing customer base.
Because of this, SaaS and fintech businesses put a premium on finding new ways to make money off of their current customer base.
However, the vast majority of blockchain enterprises are in their formative years right now.
As the explosive rise of their revenues levels off (or even slows down) though, established blockchain companies are focusing more on building back-end services.
While the blockchain community is expanding rapidly, it still pales in comparison to that of social media.
The number of blockchain wallet users, for instance, has risen to 85 million. Although this is a significant increase from March 2015’s 3 million, it still pales in comparison to Facebook’s 3 billion members.
As a result, many dApps now depend critically on their ability to monetize the consumers they do have.
One of the most blatant examples of a backend is the launchpad services that NFT marketplaces like Magic Eden are providing.
Of course, not everyone who purchases an NFT will go on to create their own line.
However, some people will.
In addition, a purchaser probably has some familiarity with the technology underpinning NFTs.
This, in turn, makes it easier to bring new purchasers on board and turn them into sellers.
To the same aim, TraderJoe and other decentralized exchange providers have begun introducing new borrowing and lending services to supplement their primary token swap offerings.
Blockchain Companies Expand To New Chains
The blockchain a developer chooses to build on is crucial when creating a decentralized application (dApp).
Choosing the correct blockchain can bring an almost instant influx of users, like opening a café in the heart of Manhattan.
Why? Because it’s easy for people who already use the chain to start experimenting with a new dApp if they see value in doing so, provided that the value proposition is present.
However, creating a new wallet and transferring (or bridging) assets to a different blockchain is a time-consuming and sometimes unsafe procedure.
However, as many franchises have discovered over the years, regional dominance isn’t enough to ensure long-term success.
Because once that region has been conquered, growth can only occur by venturing into unconquered regions.
The same rule holds true when choosing which blockchain to use.
OpenSea, the market leader for NFTs, only accepted Ethereum ($ETH) as payment from 2017 until 2021.
This wasn’t an issue in the beginning because the costs of using the Ethereum blockchain were competitive with those of competing solutions.
The fees associated with using the chain, however, soared in 2021 as its popularity grew (with some transactions costing as much as $500 or more).
As a result, it became unfeasible for most businesses to use OpenSea’s infrastructure.
Solana and Polygon, two new blockchains with a reputation for having exceptionally cheap transaction fees, are being integrated into OpenSea’s product suite to remedy this issue.
This cross-chain connectivity not only resolves the fees problem but also helps OpenSea compete with Solana-based rivals like Magic Eden, which began recruiting users in droves as a result of OpenSea’s increasing price.
Cross-chain development is not limited to NFT marketplaces.
Sixty percent of the top 10 dApps in the realm of decentralized finance support several blockchains.
Decentralized Gaming on the Blockchain
Compared to specialized DeFi protocols, blockchain games appear to be more successful in bringing in new users.
However, many dApp developers borrowed a page from the DeFi playbook to accomplish such quick expansion.
You may or may not be aware that the widespread adoption of many of today’s top blockchain games (like Axie Infinity) can be directly attributed to the fact that players are rewarded with highly valuable cryptocurrency tokens for participating.
Some of these games use the “Play to Earn” premise, in which players are rewarded with tokens for their time and effort. In other games, developers have taken the concept of yield farming and built it from the ground up.
The ultimate goal, whether monetary or otherwise, was the same: to increase the number of users.
Interestingly, this is the exact same tactic that many of the best DeFi protocols utilized to explode in popularity during the memorable DeFi Summer of 2020.
GameFi refers to the technique of incorporating DeFi incentives into blockchain games, which allows dApp developers to rapidly grow their user bases.
In reality, in March of 2022, the top 20 dApp DeFi Kingdoms breathed new life into a doomed project (more than tripling its market cap in less than 30 days) by integrating a new DeFi mechanism into their existing game.
The Specialization of Blockchains
To be successful in the realm of software as a service (SaaS), businesses must first determine what problems they solve and for whom.
Marc Andreessen, co-founder of the prominent venture capital firm a16z, says:
There are two distinct phases in a startup’s existence: before and after they find their ideal product/market fit.
As of late 2010, PMF was largely ignored by dApp developers.
Because mastering new languages (like Solidity) was essential for developing on the blockchain.
Because of this, software engineers had to spend weeks, months, or even years learning a new programming language before they could even consider doing a market test.
However, as the market matures and developers gain expertise in creating dApps, the importance of finding the right product-market fit grows.
Example chains include Solana and Avalanche, which used venture capital (called Grants in Web 3) to finance activities as varied as NFT marketplaces, blockchain gaming, and DeFi protocols.
This is why neither platform has gained prominence as the “Go-To” option for XYZ.
Fantom Opera, a blockchain with over 200 decentralized applications developed on top of it, is dedicated solely to the financial sector.
For this reason, the entire Fantom Opera franchise:
Is one of DeFi’s most robust and lively communities
Among the top 10 projects, it has the lowest Market Cap to TVL ratio (a lower ratio indicates an undervalued project).
Which is the preferred option for App developers who want to support several blockchains.
Fantom and Avalanche, another competing chain, both execute over 500,000 transactions per day, but Avalanche has a larger market valuation.
The Wax blockchain, which is dedicated solely to blockchain gaming and NFTs, has also been rather successful.
Four out of the top five most popular decentralized applications (dApps) are hosted on Wax.
Interchain Operability Becomes Increasingly Important
Since Bitcoin’s inception in 2009, more than a thousand different blockchains have been created.
Most of these initiatives employ comparable (if not identical) programming languages, yet many of the most well-known brands today don’t.
This wasn’t a problem in the dawn of the Bitcoin era.
Mostly because it was pointless to do so due to the dearth of apps, most tokens, however, were bought and kept on exchanges by speculators.
As time has progressed, major blockchains including Ethereum, Binance Smart Chain, and Solana have hosted hundreds of decentralized applications (dApps).
Additionally, the majority of dApps, such as blockchain games, are chain-specific.
For this reason, Interoperability—the capacity to transfer funds between blockchains—is more important than ever.
Some businesses have looked to bridges (which “bridge” tokens from one chain to another) as a possible solution to this problem.
The sad truth is that in 2021 alone, hackers will steal over $1 billion from bridges due to the ease with which they can exploit security flaws.
On the other hand, protocols like Cosmos and Thorchain are designed to work with numerous chains, and the dApps created on top of them are designed to work with multiple protocols.
For this reason, both dApp developers and investors have taken a keener interest in Cosmos’ IBC technology, which prioritizes interoperability, and in Thorchain generally.
More than forty blockchain projects have already been established with Cosmos technology.
User Interface Issues Get Solved
Many software firms have discovered the hard way that user satisfaction is paramount to gaining widespread use.
AOL and MySpace are just two of the many defunct online services that fell victim to rivals with a more user-friendly interface, such as Gmail and Facebook.
And if there’s one thing that experts in the field have to say negatively about Web3, it’s the difficulty of using decentralized cryptocurrency wallets to engage with decentralized applications (dApps).
The creators of MetaMask are probably aware of these problems, given that it has over 30 million users.
In fact, in December of 2021, MetaMask said that some of the $65 million the company had just raised would be used to improve the usability of its interface.
However, some businesses are beginning to take action independently.
DeFi investors, for instance, can utilize the fintech firm Finnt to create simple Bitcoin wallets for their loved ones. They intend to bring in fewer tech-savvy consumers by appealing to the investors’ social circles.
NFTs Focus On Real-World Utility
The Cambridge Dictionaries say that “NFTs” will be the “Word of the Year” in 2021. But by April 2022, people were no longer interested in NFTs at all.
It could be because of two things.
At first, the NFT craze in the summer of 2021 was based only on guesswork, just like the Beanie Baby or Tulip Mania crazes of the past.
Also, there were two bull markets for cryptocurrencies in 2021, the first starting in September 2020 and the second in December 2021. Both of these markets were good for NFTs.
But in November 2021, the market went down, and Bitcoin lost half of its value from its peak to its low.
The result is that people are much less excited about cryptocurrencies in general, including NFTs than they were just six months ago.
But NFT technology could be used for a lot more than just guessing how much an animal picture would sell for.
Instead, NFT technology is being used by dApp makers to solve real-world problems.
Startups like Argo help content creators make more money from their audiences by letting them sell short videos as NFTs and giving them a more fair share of ad revenue than rivals like YouTube.
A company like Curios lets artists sell their albums and songs as NFTs, cutting out middlemen like record labels and streaming services that take money from the sellers.
Conclusion
Our rundown of the most pressing developments in the blockchain industry has come to a conclusion.
There are numerous faults (ranging from security holes to poor interface design) in many dApps currently available.
Nonetheless, as more programmers learn the ins and outs of developing decentralized applications, the rate of innovation and improvement is increasing rapidly.
Given this, it’s reasonable to expect that the organizations and DAOs powering the most popular blockchain apps today will work toward making their products more effective, more secure, and more available to the general public.