Financial technology and the blockchain are two interconnected and distinctive parts of 21st-century tech. Each can change the world, and each is already undergoing several key shifts, the results of which we will begin to see with more clarity in the year ahead.
Here are a few of our predictions for how fintech and blockchain will continue to develop in 2022, and beyond.
NFTs
Non-Fungible Tokens (NFTs), a relatively new trending blockchain technology, establishes ownership of digital assets and has most famously (or infamously) been applied to digital art. An NFT is a unique and non-interchangeable unit of data stored on the blockchain that can track a unique digital asset’s transfer, ownership and properties. The term non-fungible distinguishes NFTs from other blockchain entities like cryptocurrencies, which are equal in value and mutually interchangeable or fungible.
In the crypto world, currency units are similarly fungible and interchangeable, but not all digital assets are. That’s where NFTs come in. The digitization of media — including art, music, videos, books and even news or blog posts — has confounded the nature of ownership, copyrights, and intellectual property. This is largely due to the ease with which digital media can be copied and reproduced. Nevertheless, NFTs provide a means for owners of different types of digital content to sell and trade their property using the advantages provided by the decentralized crypto space. And we see this relatively new technology as key new emerging trend for 2022.
Online Gaming
Online gaming is already big business, recently surpassing movies, music and sports in popularity. Many games even already implement blockchain, including NFTs, into their play. Games like Axie Infinity allow players to create digital NFT creatures with unique characteristics that can be traded for real cryptocurrency to other players. In the property-trading game Upland, users participate in a virtual real estate market where NFTs represent parcels mapped to real-world locations.
These games serve as proving grounds for how NFTs could represent assets in a larger-scale, more dynamic virtual environment like a metaverse in the coming months and years.
The Metaverse
In the 1992 science fiction novel Snow Crash, author Neal Stephenson described a virtual world he called the Metaverse — an internet-connected, immersive construct that served as an alternate shared reality for its users. As the internet grew, the metaverse reference gradually made its way into the tech lexicon to describe any large-scale, persistent virtual environment in the online space.
The idea of a metaverse has manifested itself in the gaming world, especially with the recent rise of multiplayer online games and the emergence of affordable virtual reality technology. But these primordial metaverses are limited in scope and self-contained. The vision of the “metaverse of the future” is much more ambitious.
The notion of a metaverse recently hit the news cycle when Facebook CEO Mark Zuckerberg announced his ambitious intention to transform the social media giant into a massive metaverse experience for its users – even going so far as to change the name of Facebook’s parent company to Meta.
Zuckerberg and others see a virtual world that exists in parallel to our own, where people work, buy, sell and interact. In Snow Crash, Stephenson describes the main thoroughfare, called the “Street” off which the inhabitants can build their own neighborhoods, streets, buildings and other features. This prescient description may as well be describing many of the emerging uses of NFTs as well as their potential value in a Web3 on-chain metaverse.
Decentralised Finance Growth
This is a significant prediction for 2022, with ongoing shakeups of traditional finance providing opportunities for decentralised finance almost everywhere.
The financial space has changed dramatically in the last few years, and even twelve months can make a big difference in the way the general population views new methods of payment and transactions. Increased trust in alternative methods of building capital is one of the main takeaways for 2022-23.
In the following year, we believe decentralised finance will continue to challenge traditional financial models, with ongoing growth in the years which follow.
Blockchain Transforms Social Media
The blockchain isn’t only about cryptocurrency. It seems likely the blockchain will become an integral part of social media in the years ahead. With billions of social media users regularly logging on to their favourite apps, the need for enhanced security is at the forefront of their minds.
A series of social media data security scandals have made some users wary, but the blockchain could help change all that forever. Adopting blockchain tech has the chance to prevent published data from being traceable or copyable, leaving social media fans to enjoy their social channels without concern. This process would also leave them with a higher degree of data ownership than has previously been possible through social media.
Crypto Trading Stays Mainstream
Cryptocurrency has been around in some form for years, but with the COVID-19 pandemic and many of us spending more time indoors, it’s seen exponential growth during 2020-21.
Trends seem to suggest that many of the practices adopted during the pandemic will remain for several years to come, including social distancing. What better way to avoid unnecessary interaction than to handle your finances digitally?
Advanced security means consumers don’t need to worry about data loss or see an advisor at the bank – they can handle both everyday and complex tasks with a few clicks.
Easier access and widespread adoption have already made digital finance the norm. We predict an even greater limit on paper finance in 2022.
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