Put it lightly, 2020 was a kind of a challenge for the whole world. But this didn’t prevent the blockchain and cryptocurrency industry from growth and development. Numerous litigations and increased regulatory scrutiny have only fueled public interest in the decentralized world. Let’s recall the trial against the TON blockchain platform developed by Pavel Durov or the high-profile case of the Ripple project, which literally grabbed the attention of millions of traders. The trend is clear: business in the blockchain and digital asset industry with a capitalization of almost a trillion dollars is gaining momentum!
Let’s take a look at some trends for this dynamic market in the coming year.
Blockchain will change the global economy giants
The COVID-19 pandemic has launched a digital transformation process in many areas. According to Statista, the size of the global blockchain market will grow from $3 billion in 2020 to $39.7 billion by 2025. At the same time, according to ReportLinker experts, in 2021 at least 25% of the largest public companies will implement a distributed ledger in their processes.
Banking and financial sectors will continue to dominate
Among all industries affected by the coronavirus pandemic, the financial sector has suffered the most damage. Falling profit margins and tightened credit policies have forced banks to adapt and meet the needs of already exacting customers.
In 2021, financial institutions will continue to optimize their services by introducing decentralized technologies and blockchain. This could lead to sustained growth in contactless transactions and the update of payment tools. And getting into the game by giants like PayPal will lead to an incredible boost in crypto payments this year.
Cryptocurrency will become an entertainment industry tool
Not only fintech processes will change. Healthcare, transportation, and logistics are some more areas that can benefit from the wider adoption of blockchain and cryptocurrencies. Among them is the entertainment industry.
Authors of music, photo and video content want to receive 100% profit from sales and donations without commission, as well as automatically distribute payments between co-authors of their projects. This is why in 2021 there will be a trend to develop platforms that protect copyright, such as Ujo, Open Music Initiative, IPStock and many others.
The monetization in the gaming space will continue to be a pressing issue. Gamers no longer want to be just pawns in a multibillion-dollar industry and just watch how development companies thrive on them. They want to make profit as well. Now the crypto project IQN is helping to solve the problem of monetizing gaming success. Its main tool is an asset, which is paid for outstanding gaming achievements to all diligent players.
The first transaction with IQN was supported by the PvP gaming platform IQeon.com, which rewards participants for winning PvP matches, participating in contests and interactions. Everyone can receive a free bonus asset for completing the guide with simple tasks and participating in the monthly competition for the best player.
Smart contracts, which guarantee rewards payouts, help to eliminate the need for intermediaries. In 2021 we will see more blockchain solutions for gamers like this.
CBDC will enter the mass market
We will witness the launch of new pilot projects regarding the implementation of national digital currencies, which will continue to be initiated by the central banks in many countries.
According to a recent BIS report, in 2020, 80% of these institutions were researching, experimenting, or developing CBDCs. And due to the cash abandoning and the emergence of private digital currencies, this process will gather momentum in 2021.
DeFi will remain at the forefront
Another trend driven by COVID-19 is the rise in the number of alternative financial institutions and DeFi apps. Corporations and consumers are increasingly moving to the online format in order to conduct transactions or take advantage of blockchain-based financial services. Currently, non-bank lending and peer-to-peer transfers based on smart contracts are coming to the fore. In 2020 alone, revenues from decentralized financial services exceeded $10 billion. It is expected that in 2021 the volume of revenue will only grow.
The impact of security protocols will be bolstered
Another important trend that we can see in 2021 is the emergence of projects based on the Zero Knowledge Proof Protocol (ZKP), which excludes the disclosure of personal data of users. Such protocols allow one party to confirm the truth of a statement to the other party without revealing any additional information.
Recently, great progress has been made in the ZKP area. This protocol is used in areas where it is necessary to ensure data protection (for example, personal information) or conduct financial transactions. For security reasons, corporations are expected to gradually move from DApps to ZApps.
Governments will try to steamroll over the crypto sphere
The last trend that we saw in 2020 and that will continue to be observed in 2021 is states’ attempts to either totally verify and control the crypto industry, or to prohibit it, as it was with the Ripple project.
The growing digitalization of the economy has become a real challenge for regulators around the world. As more and more financial transactions take place outside of traditional institutions and mechanisms, governments can no longer ignore DeFi.
It is obvious that in 2021 it will be more difficult to own digital assets and launch crypto projects while remaining unnoticed by regulators, but there will also be much less scam maneuvers.
This year promises to be exciting and dynamic for the blockchain community and crypto enthusiasts. And while the future looks bright for the industry growth, 2020 has taught us to always be prepared for the unexpected.
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