THE FUTURE OF BLOCKCHAIN

IS BLOCKCHAIN FINALLY BEGINNING TO DELIVER ON ITS PROMISE?

Most people think of blockchain as the platform behind Bitcoin or cryptocurrencies. Having reached a crescendo of hype, this transformative technology has failed to fulfill its promise of transforming businesses. Industry experts attribute this to the fact that most enterprises lack the expertise and clear roadmap to harness the power of this disruptive technology.

Gartner says 90 percent of blockchain projects fail because of the budding nature of the technology, which makes it hard for enterprises to identify high-value use cases. Additionally, the vendor ecosystem is fragmented and off-the-shelf blockchain solutions are almost non-existent.

What are some of the top blockchain trends to watch out for this year?

“High energy consumption is one of the key hindrances to adopting blockchain technology,” says Ola Lind, director of FTFT Capital. “The primary blockchain trend in 2022 will be greener blockchains and the use of less energy-intensive blockchain network architecture. In addition, many new solutions like carbon offsetting are being developed, and the plan to switch to proof-of-stake consensus by Ethereum in 2022 is in the pipeline.”

He adds blockchain applications in Metaverse are another top blockchain trend in 2022. The Metaverse is a shared, virtual world that offers immersive experiences. Blockchain is projected to operate several platforms on Metaverse with NFTs and cryptocurrencies to fuel the new digital economy in 2022.

In 2022, experts also expect a surge in the development of standards and interoperability capabilities, which should facilitate the communication

Bas Lemmens

of several blockchains. Cross-chain technology is one such new technology that aims to enable the movement of value and information across multiple blockchain networks.

Waleed Rassuli, Head of Tezos Gulf, says to increase adoption, especially at the institutional level, blockchains will need to increase their scalability. “So we need to reach faster transaction and lower cost. It will certainly be one of the avenues where we will see blockchain development. This along with gaming and DAOs (decentralised autonomous organisation) is going to drive the blockchain trends this year.”

According to Forbes, DAOs is a collective organisation owned and managed by its members, with all of them having a voice. Many analysts and industry insiders affirm that this type of organisation is becoming prominent, potentially replacing some traditional companies.

Bas Lemmens, GM EMEA at Chainalysis, believes more countries will endorse crypto over the next year. “In the UAE, we have already seen free zones in Abu Dhabi and Dubai introduce frameworks that promote entrepreneurship in the crypto space and Ahmed bin Sulayem, executive chairman and chief of the DMCC, has even projected that there will be “well over” 1,000 crypto businesses in the UAE by the end of this year. Undoubtedly, this will have a positive because they are able to break down the investment sizes and thus mitigating risks or providing access to a newer type of investor.”

Lind from FTFT Capital says the retail industry has embraced blockchain technology. Blockchain technology facilitates supply chain monitoring and offers merchants and customers more detailed information about purchasing products. Retail banking uses blockchain technology to control fraud, identify customers, cross-border payment security (especially for online retailers), and evaluate risk based on consumer data. Additionally, retailers adopting this technology accept cryptocurrency payments from their customers.

Blockchain technology is being applied in transactions in exchanges. As a result, money transfers through blockchain technology are affordable and fast. It is particularly true for international transactions.

“Furthermore, blockchain technology is utilised to check medicines’ legitimacy, expiration dates, and other critical information in the healthcare industry. Medical insurance companies may validate healthcare services directly from patients using blockchainenabled electronic medical records. The possibility of advancing personalised medicine through artificial intelligence and blockchain is being researched,” he sums up.

Ola Lind

effect on job creation and other forms of value for regional economies.”

He says we can also expect to see a diversification of products and content on blockchains. NFTs are perhaps the best example of this, given how much attention and investment they attracted through 2021. In fact, in the UAE, ownership of NFTs has been found to be twice the global average, according to finder.com. Through 2022, we can expect NFTs to show even greater potential, from enabling the purchase of digital art to trading positions, physical property, tickets, and a slew of additional digital entitlements.

Though interest is growing in this distributed ledger technology, there is still some confusion around what blockchain can and can’t do.

Blockchain can be applied to any industry, says Rassuli from Tezos. “But the two areas we have seen the most traction in the Middle East has been the payments/remittance sector and the tokenisation segment.

“Tokenisation of assets is the second most popular use of blockchain. The projects we are currently working with will enable more people around the world to invest in local real estate in smaller chunks or digitise preferred equity in a hotel and residential complex from anywhere in the world. Tokenisation not only provides investors wider access but gives fundraisers access to a wider audience

Waleed Rassuli