Urko Larrañaga Piedra Blockchain Consultant

What does this 2022 hold for Blockchain?

In the following article we share our vision of what we expect to happen in 2022 in the Blockchain ecosystem. In summary, there are 3 pillars in which we expect progress: performance and scalability, application and adoption of technology, and standardization and regulation.

With the new year it is usually typical to make promises. The beginning of a new year is also usually a time to share forecasts and impressions about what is going to happen during the year in different areas. As far as we are concerned, this year we would not like to miss this appointment in our specialty, which is none other than Blockchain and everything that surrounds it.

Now, what are the advances we expect? What is our prediction based on? Below, we share the reflections on which our forecasts are based.

Application and adoption

Expecting and predicting that the application of this technology will continue to grow in the financial environment is not new. Probably, this has been happening in recent years. However, our prediction goes further. What we hope is that the application of this technology will prosper in other sectors. Now, why should this happen?

Basically, because the technology is in a state of high maturity. We have been experimenting with market-focused implementations for a few years now, such as Hyperledger Besu and Hyperledger Fabric. Likewise, the projects, initiatives and alliances that demonstrate the maturity of the mentioned implementations are various. As an example, here are those we know best: the LACChain alliance, the Allfunds Blockchain and Consensys agreement, and the Telefónica offer.

Once the foundation is in place, it is expected that the use of technology will continue to grow. On the one hand, in its daily application, as a guarantee of trust both in the information shared and, in the processes, carried out. On the other hand, in larger projects that have been working on in recent years. Along these lines, it should be noted that the use of digital identity and the application of verifiable credentials also seem to be taking hold, so it is to be expected that in 2022 we will also see more far-reaching initiatives in their application.

Performance and scalability

The need to advance in solutions with greater capacity is a requirement shared by the entire ecosystem

The maturity mentioned above does not mean that there are no challenges to overcome. Moreover, the need to advance in solutions with greater capacity is a requirement shared by the entire ecosystem. Which has been increased by everything that surrounds the DeFi ecosystem, NFTs, GameFi, etc. Although for many it may seem like a new hype, what we are experiencing is an acceleration of the application of technology, as happened a few years ago with ICOs. ICOs were probably a hype, but thanks to this, the different types of tokens were defined and their use and application grew, among others.

If we take NFTs as a reference, what could we say we are learning? On the one hand, NFTs have shown us that there is a different way of managing assets. However, its massive application has once again exposed the limitations that technology has, subordinating the activity of the networks, conditioning the most financial part. Which, reveals the need to provide solutions that allow overcoming these limitations.

However, we are not talking about something new. Moreover, probably motivated by this and based on this need, many of the DeFi projects and others are based on Layer 2 solutions that allow a greater capacity to process transactions, thus improving performance. Therefore, it seems clear that this 2022 will also bring us new solutions in this line.

However, beyond general solutions, what we expect is to have solutions focused on specific or vertical uses, such as NFTs themselves or verifiable credentials (VC). In the case of verifiable credentials, what we see is that it is one of the main uses that are intended to be given to Blockchain technology from the markets and administrations. Therefore, it is to be expected that we will also see progress in this line.

Standardization, regulation and governance

Last but not least, we have the field of standardization and regulation. Regulation is an issue that has been worked on in recent years and, although we will probably not see the final results in 2022, but rather in 2023, this year will be the year of defining what is to be regulated, especially everything in the institutional field. Regulations related to the use of tokens such as the CBDC, the MiCA regulation and others, will be on everyone's lips in the coming months, as well as the new eIDAS2 electronic identity regulation.

On the other hand, if we focus on standardization, it is to be expected that this year we will also see new initiatives, but, above all, community-driven. Just as tokens or NFTs have their standard, it is expected that the definition of standards will become a common practice that allows the definition of de facto working models. In this sense, in addition to solid progress in the field of DAO (Decentralized Autonomous Organization), we hope that work will continue on new standards for the management of digital identity operations and verifiable credentials.

In summary and, as a conclusion, we could say that we are in a year in which this technology that seemed and, on occasions, is branded as hype-fashion, will continue to take firm steps to settle down and take hold.