How Blockchain is taking over the world [2021]

How Blockchain is taking over the world [2021] 1

Blockchain technology has to be one of the biggest innovations of the past decade. Considering it’s something that began with mere cryptocurrency, now  – it has a ripple effect on several important sectors, from manufacturing, supply chain to Fintech, Art, and education.
Many predict it is going to transform the nature of transactions, trading across the world, as well as transform the way we manage data, both internally and externally between parties, and most importantly build trust, transparency and change our worldview. 

But what makes blockchain so attractive to businesses and different industries? How is still continuing to be so hyped and controversial? And most importantly, why are there so many applications being developed on the Blockchain?

The answer is simple – It’s because of its benefits. Blockchain offers indisputable traceability, distributed collaboration capabilities, trust, and rapid updates to support managing data.

This trend is evidenced by ever-growing global investment in blockchain solutions, which is forecast to reach US$15.9 billion in 2023, ten times more than the $1.5 billion invested in 2018.

In Southeast Asia, businesses are feeling optimistic too, with 45% of companies believing that blockchain technology growth will accelerate with more applications and opportunities over the next three to five years.

But let’s look at more recent events – PayPal’s adoption of Bitcoin late last year is not only heralding mainstream adoption of cryptocurrencies but of blockchain’s utility in an era in which remote collaboration is prized.

This year has been off to a notable start for crypto and blockchain. On Jan. 7 the total cryptocurrency market hit an all-time high exceeding $1 trillion for the first time. Renewed interest in and conversations around, blockchain technology and digital currencies from industry and government leaders have accompanied the rise.

What’s new is that blockchain interoperability has gotten better, the technology itself has matured, and vendors have significantly stepped up their efforts in this area, making it more accessible and ready to take over the world for good.

Here we made a list of  some trends blockchain is most likely to follow in 2021:

Supply Chain Optimization

Optimizing supply chains is crucial especially in the area of goods flow and logistics as the industries are known for their paper-heavy processes and struggle with many challenges in day-to-day business.

In the case of international goods traffic, it is often a wide variety of systems, manual work, and cross-border specifications that make the work of logisticians and partners more difficult.

Optimized supply chains do not just refer to the cost-optimized shipment of good or raw materials from A to B.

Long distances, many partners, large volumes of documents and data, and mutual trust can be optimally mapped digitally with blockchains and various applications. As a distributed ledger, the technology is ideally suited to managing large volumes of data raw materials that can be tracked from their origin and grant digital certificates the authenticity or accuracy of information.

The integration of DLT in supply chain management is one of the top blockchain trends in 2021 because, on the one hand, the consumer’s need for transparency is growing and on the other hand, the barrier-free supply of goods across all borders ensures greater security, trust and economic stability.

DeFi Adoption

Decentralized finance (DeFi) is experiencing a new wave of excitement and adoption since mid-December(2020) after the DeFi summer blossom. The value of DeFi tokens hit new highs, bolstering awareness of DeFi within the crypto community while attracting new users from traditional finance (TraFi), enabling private small investors to enter the financial world, turning millions of people into investors.

Blockchain provides numerous approaches for DeFi adoption in different fields, ranging from trading, lending, derivatives, to the introduction of automated market makers. These clear winners of DeFi’s adoption have become prime targets for everyone who’s trying to take advantage of their innovation.

Certificate verification via the blockchain

The validity and timeliness of certificates are the basis for trust between business partners. Certificates using blockchain technology are tamper-proof and can be viewed transparently by every participant in the network. Providers of these solutions thus ensure that audits and certification, for example, can be carried out successfully. However, the digital certificates can also be proof of ownership or proof of origin. Once stored, anyone can access the relevant information with a QR code, ensuring efficient processes and user convenience during audits.

Digital certificates are a blockchain trend 2021, as they prevent misuse and provide consumers and partners with security and trust for future business relationships.

DEXes (Decentralized Exchanges)

When it comes to exchanging crypto, many have long been focused on centralized players like Binance or Coinbase largely due to their fiat onramps and ease of use. Despite these notions, many have been quick to point out that centralized exchanges come with their own inherent risks – namely those of custody.

Famously highlighted by hacks on once-prominent exchanges, many traders have come to recognize the value of non-custodial solutions offered by decentralized exchanges.

In the past year alone, DEXs have made serious improvements in both usability and liquidity – signaling that they are ready to compete with their goliath counterparts. Here are some of the DEXes’s characteristics:

  • Non-custodial – Ownership of the underlying assets is never revoked.
  • Automated – With no intermediaries, DEX trading is instantaneous so long as there is sufficient liquidity.
  • Cost-Efficient – Many DEXs have minimal trading fees, allowing users to swap assets at little to no cost
  • Globally Accessible – Most DEXs do not require any sign-ups, and largely come with no counterparty risk.
  • Intuitive – Newer trends have evolved DEX trading from order books to simple point and click swaps.

DEXes are definitely one of the blockchain trends in 2021, as the traffic and trading volume of existing providers is increasing month by month and people are starting to look for new options for trading.

NFTs — Non-Fungible Tokens

How Blockchain is taking over the world [2021] 2

Non-Fungible Tokens are on the rise and quickly gaining popularity across games, art, and music digital asset exchanges, and blockchain platforms. NFTs enable digital scarcity, meaning a single copy of a unique digital asset can be stored within an NFT and can’t be replicated. NFTs were originally popularized by the game Crypto Kitties but since then many digital art projects and startups have established themselves in the NFTs world. In-game assets can be digitized and exchanged using NFTs, the same applies to music and audio.

Digital rights management is definitely another space which is set for disruption using non fungible tokens.

Tokenization of bonds — STOs

STOs are a type of public offering in which tokenized digital securities, known as security tokens, are sold in cryptocurrency exchanges, or security token exchanges. Tokens can be used to trade real financial assets such as equities and fixed income. After crypto-tokens, security tokens are something to look at in 2021 because they are fully regulated and represent digital assets that comply with securities regulators’ basic regulations. The offerings are securities that have been approved by the authorities and are therefore also subject to the prospectus requirement, which must clearly state the funding objective. This is because they involve financing rounds in which equity or debt capital is to be generated. They may be carried out by any company that complies with securities regulations. STOs, give the buyers a share of the company’s profits in return for the loan they extend.

Compared to traditional investments, however, STOs offer significantly higher returns and interest rates, making them particularly attractive to investors.

The immense potential for the next few years is likely to lie in the fact that STOs do not require intermediaries’ assistance. The much leaner structure, therefore, offers greater profits.

CBDCs (Central Bank Digital Currencies)

Central bank digital currencies (CBDCs) have recently emerged as a hot topic in the financial space. Banks, Institutions, and governments are performing research and analysis on the economic and technical feasibility of introducing a new form of digital money and its impact on monetary and fiscal policy.

A Bank of International Settlements report states that over 80% of central banks are already researching CBDC.

There are even countries that experimenting with CBDCs.:

The People’s Bank of China is one of the first central banks to develop a CBDC. They deployed a special task force in 2014 to research and implement a digital Yuan.

In 2017, the world’s oldest bank, Swedish Riksbank, began its CBDC project called e-krona. In 2019, the Bahamas also began their CBDC project called “Sand Dollar” — it was fully deployed in October 2020.

In 2018, the Republic of the Marshall Islands shared plans for launching a CBDC called Sovereign (SOV).

While there are still many uncertainties concerning control, liquidity, and more, central bank money is definitely one of the Blockchain Trends in 2021 because it is only a matter of time before digital money becomes mass adoption.

Conclusion

These are some of the important trends one can watch out for in the coming years. From making a food supply chain safer and smarter to transforming legacy processes, blockchain leaders are leading the business world into a new era.

The future of distributed ledger technology and blockchain is rapidly changing. Mainstream adoption of blockchain is surely coming and we will see continued interest from, both the consumer and enterprise levels around the globe.

Regardless of what happens in 2021,  be sure to hold on tight because it is going to be a wild year and one for the books.

About the author

Marketing expert

Silvia

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