The digital industry is evolving at a rapid pace. In 2024, blockchain is one of the most promising technologies with exciting potential and a wide range of use cases: cryptocurrencies, meta-universes, NFT, decentralized applications. These and other solutions are at the heart of Web3, a new Internet where users will create, manage and share content through decentralized services. In 2023, developers are emphasizing green mining, the development of NFT and metavillages, and the integration of blockchain with the Internet of Things. The production, distribution and tracking of vaccines is also an important area.
Green blockchain
Since bitcoin’s inception, the Proof-of-Work (PoW) consensus mechanism has been the fundamental basis of the network’s security. The necessary conditions were achieved at the expense of computing power. As cryptocurrencies grew in popularity, the power consumption of digital networks increased. The University of Cambridge estimates that in 2023, BTC mining consumes about 130 tWh per year. This represents 0.1% of global electricity consumption.
Transactions on the etherium network also do a lot of damage to the environment. In 2023, it is the largest PoW ecosystem with thousands of dApp projects of various sizes. A transaction on the Ethereum blockchain consumes 238 kWh, which is equivalent to the energy consumption of one person in developing countries in 20 days. Over the course of a year, the network consumes about 87 tWh.
However, the true cost of dApp transactions is much higher. For example, the life cycle of NFT is not limited to the minting and sale of an asset. There will be many more transactions between investors and traders. As a result, the carbon footprint of each NFT will be about 2.38 mWh (almost 1,477 kg of CO2). That’s the same amount consumed by a citizen of a developed country in a month.
In 2023, developers are focusing on less energy-intensive grid models. Some projects may move to a Proof-of-Stake (PoS) algorithm. This mechanism uses staked coins provided by validators rather than computing power to validate blocks. Notably, Ethereum plans to complete the transition to PoS by the end of the year. Other successful examples of algorithm implementations:
- Polkadot
- Solana
- Binance Smart Chain.
Emergence of new NFT strategies
Non-fungible tokens have been one of the drivers of the cryptocurrency market in 2021. Ever since digital artist Beeple sold a collage of images for $69 million, the world hasn’t stopped discussing NFT. Tokenized artwork is sold at auctions for huge sums of money, and developers are offering new ways to use the technology.
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Many famous musicians have released tracks in the form of NFT (Grimes, Snoop Dogg, Lindsay Lohan). Quentin Tarantino auctioned off 7 tokenized scenes from Pulp Fiction. The first of these, Royale with Cheese, sold in early 2022 for $1.1 million.
However, NFT’s potential goes far beyond the initial strategies. William Grant and Son, for example, sold 46-year-old Glenfiddich whisky with a digital token to identify each bottle. Fashion brands Nike, Dolce&Gabbana created virtual shoes and clothing in the form of NFTs.
The Play-to-Earn gaming trend continues to evolve in 2023.
In popular blockchain games (Ember Sword, Crabada), users can mint characters and gear. Digital items are used to upgrade accounts and sold on marketplaces. In addition, it is worth waiting for the appearance of new options for using NFT in the meta universe.
Blockchain integration with the internet of things
Decentralized technology is compatible with the concept of IoT. Blockchain is great for capturing interactions between machines. This integration will solve IoT’s security and scalability issues through an encrypted and immutable data registry.
Blockchain can be used for machine-to-machine transactions, allowing one device to buy the service of another using cryptocurrency micropayments. The synergy of NFT and the Internet of Things will be able to connect reality and the meta-universe, offering ownership of physical assets.
Innovation in this area is linked to the ongoing deployment of 5G networks. The table shows examples of blockchain and IoT integration in 2023.
| Project | Scope | What they do |
|---|---|---|
| Filament! | Software Development | They are creating a software and hardware system that will allow any connected devices to take advantage of blockchain technology. In the current implementation, encryption of financial documents is available. |
| HYPR | Cybersecurity | Use decentralized solutions to protect devices from hacking. Make IoT projects invisible to hackers. |
| Xage Security | Cybersecurity | Create a comprehensive blockchain platform for IoT. The service is capable of managing billions of devices in logistics, energy, and industrial manufacturing. |
For years, virtual worlds were only available in science fiction novels. Blockchain has turned the concept of a meta-universe into a real phenomenon.
In a virtual world, users can interact with each other, create objects and landscapes by applying digital avatars.
The most popular projects in 2023 attract a huge audience of users. Settlements within platforms are made in native cryptocurrencies. The table shows the largest meta tokens by capitalization in June 2022.
| Cryptocurrency | Current rate ($) | Trading volume per day ($) | Capitalization ($) |
|---|---|---|---|
| The Sandbox (SAND) | 1,33 | 238.86 mln | 1.63 bln |
| Axie Infinity (AXS) | 20,45 | 221.99 million | 1.63 billion |
| Decentraland (MANA) | 1,01 | 193.61 million | 1.5 bln |
| Enjin Coin (ENJ) | 0,64 | 74.05 mln | 598.39 million |
Blockchain opens up great opportunities for the development of meta universes:
- Provides transparency and seamless access to virtual worlds.
- Creates management privileges for users.
- Provides verifiable provenance of ownership.
- Links the platform economy to the cryptocurrency market.
Major technology companies are actively interested in the concept of metavillages. Microsoft, Epic Game and other giants are developing their projects. According to experts, in 2023, the meta-universe is far from becoming a fully functional digital parallel to the real world. However, it already has promising applications that are popular.
Vaccine distribution and tracking
Delivering medical supplies to remote regions remains a priority in 2023. Blockchain technology can offer several ways to distribute and track vaccines:
- Confirms the authenticity of shipments to prevent the sale of counterfeit drugs.
- Controls transportation to the intended locations.
- Ensures security at every point in the supply chain.
One of the leaders in the use of digital solutions for vaccines is IBM. In 2023, the company coordinates the interaction between health authorities and organizations responsible for distributing drugs. The Blockchain-based system integrates documented vaccination data from different platforms.
The pilot project demonstrated the potential of decentralized technology for rapid medication identification and product recalls. Such applications will be useful for identifying a batch of vaccine that causes an unreasonably high rate of side effects.
Summary
In 2023, blockchain is finding applications in many areas: economics, healthcare, automotive, and more. As digital projects prove their usefulness, new solutions are emerging to help adapt the technology. To push blockchain to ubiquity, we need to address current challenges – reducing energy consumption, creating regulations, and improving usability for developers. We must recognize that this technology is still in its early stages. The market is just beginning to reach a point where blockchain will become a necessity for everyone.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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