Emerging trends in Blockchain

By Staff writer

2020- with its turbulent projections and market performances- has taken the Fintech and DeFi trends on an unpredictable and previously unseen whirlwind. The blockchain industry and its cryptocurrency companion have come pretty far in their quest for a substantial share in international financial markets. It has been 11 years since the genesis block mining on the bitcoin network, and consumers are no longer intimidated by the concepts of virtual money and decentralized finance. This popularization of the blockchain concepts and technologies opens up countless avenues of integration in B2B and B2C as well as C2C products and service industries.

*https://coinmarketcap.com/fr/headlines/news/the-digital-age-is-here-crypto-and-fintech-companies-soar-while-bank-stocks-tank/*

The trek of Blockchain through public acceptance hasn’t always been smooth. The historic rise of Bitcoin and its remarkable fall in popularity and value is an excellent lesson for Ethereum and other blockchain-based Fintechs to scale and amend their offerings for circumstances other than the growth wave. The DeFi ventures who have withstood the test of 2020 until today have tremendous opportunities to evolve from the experimental offerings and start capitalizing on the vacant market space. Practical and genuinely market-ready solutions are on track to receive the lion’s share of investments. So it is imperative that DeFi and Fintech startups take advantage of consumers’ inclinations towards global and more consumer-centric solutions. Taking advantage of precise and bold opportunities is truly the only way forward for what the experts are calling “The beginning of the decade of Blockchain”.

*https://www.i-scoop.eu/internet-of-things-guide/blockchain-iot-distributed-ledger-technology/*

The massive potential of blockchain for improving day-to-day transactions and online services has led to many different innovations being tried in several other markets. This nascent technology’s growth in crucibles of ever-changing markets and shifting consumer attitudes has been a game-changer in many aspects. Facebook’s Libra, as well as the impending launch of a Sovereign Digital Yuan by the People’s Bank of China, are just a few milestones in the global quest for Fintech and DeFi inclusion in mainstream services.

Let’s look at the emerging trends across global finance to gauge what interesting innovation the near future could bring.

The Emergence of BaaS in Fintech Firms

BaaS simply means “Blockchain as a Service.” According to many industry experts, it is one of the trends in 2020 with the most growth potential and a broad innovation scope. The gist of this trend is that DeFi and Fintech startups link their services and interfaces with the latest blockchain technologies. The most intriguing part is that consumers and entrepreneurs can use BaaS to develop their own uses and variation of the services offered by the DeFi and Fintech giants. The basis of BaaS is cloud computing and storage facilities which facilitate the development and use of digital products and services. A few examples of the benefits of BaaS are smarter business legal contracts, services independent of the formalized blockchain setup, and decentralized applications, also known as DApps. Many market leaders in the technology industry are adopting the BaaS philosophy to expand their business divisions and product categories. Microsoft and Amazon are the industry giants currently working on incorporating BaaS in their infrastructure.

*https://www.i-scoop.eu/internet-of-things-guide/blockchain-iot-distributed-ledger-technology/*

The Focus on Federated Blockchain

The concept of federated blockchain is relatively new in the DeFi industry. Today, the experts classify the decentralized networks in these four categories: Private, Public, Federated, or Hybrid. Federated classification is the latest innovation in the industry and has been introduced in almost all Fintech innovations by developers seeking to gain a competitive edge over their contemporaries. There is not much difference between federated technology and its traditional variant. However, it can be called an upgraded form of the primary blockchain functionalities and can be used for more specific functions by advanced level developers. There is one core difference between the two versions. Federated technology uses multiple authorities and points of control to manage the nodes which are pre-selected in the program. On the other hand, the traditional variant only uses one organization for this control. The use of a group of control points for the nodes ensures faster processing and better management of the transactions. 2020 forecasts show a boom in the use of federated blockchain for private networks looking for a customized outlook.

The Introduction of Stablecoins in DeFi

Consumers around the world hear the word “cryptocurrency” and fear for their investments to be as volatile as the infamous Bitcoin. However, experts suggest that using Bitcoin as an example is only bound to alienate the prospective user base. Many investors value stable stocks and reliable currency systems. This is why the concept of stable coins was introduced in the Fintech ecosystem. This currency holds stable value in each coin. Their value does not fluctuate with the ups and downs of the stock market. The market forces calling for these stable digital currencies are also buoyed by the announcement of Facebook cryptocurrency “Libra” despite the turbulent economic situation of 2020 and internal issues. Experts note that 2020 is likely to be the year when these Stablecoins gain investment momentum.

*https://101blockchains.com/stablecoins/*

The Social Networking of Blockchain

Social media has dominated online real estate since the popularization of the internet and web services for personal usage. According to several pieces of research, there were about 2.77 Billion people around the globe using different social media platforms like Facebook, Twitter, Reddit, Twitch, and Quora in 2019. Facebook far surpasses its contemporaries in sheer numbers by quite a bit. Therefore, not utilizing the massive potential of social media in DeFi and Fintech innovations is a huge wasted potential. There are unlimited ways to imagine the merging of these two phenomena and eliminating many problems along the way. The inclusion of decentralized data and payment methods in social media will eliminate privacy breaches, data theft, spam content, and fake data used to clog the channels. It can also be ensured that any and all published data on different social media platforms remain untraceable. Additionally, it cannot be duplicated, even after its deletion. On the other hand, using social media channels will help popularize the otherwise unknown and complex technological platforms such as Ethereum. Therefore, social media is all set to be the next big thing in the Blockchain industry.

Non-fungible Tokens (NFTs) and Eth2 in Ethereum Ecosystem

Digital transformation of finances has led to not only the introduction of digital currency but also digital assets. Judging by the definition of assets, anything that acquires value in the digital world is a digital asset. It could be land, a piece of written or drawn art, digital art, certificates, bonds, and even cash. One can only imagine how many trillions the global trade will grow if digital assets are incorporated into marketplaces. Additionally, the trading and financial industry’s nuances will be more accessible, easier to understand, cheaper, and faster to comprehend for the general public, especially those selling their own digital assets. Ethereum is a non-profit, free-access platform that allows everyone to take advantage of its blockchain resources. This is where the concept of a token economy and fungible and non-fungible tokens comes from. A Non-fungible token is “an asset or commodity which is not interchangeable.”

These unique tokens have seen a rise in popularity in the past two years, and their non-interchangeable values are seen to be a step forward in digital commodity trading. These NTFs are being nurtured in the Ethereum ecosystem and are being developed and incorporated further into the Ethereum 2.0 or Eth2 programs. A few other innovative startups like Zin Finance are also working to propagate digital investment portfolios in the token economy. This venture utilizes a DeFi blockchain platform to globally promote wealth equality with understandable and straightforward investments and simple utility tokens. The burning mechanism is a real innovation in the blockchain market and will lead to the integration of many other valuable financial services for the business and the consumers.