The troubled months experienced by the tech industry could lead one to believe that we are far from mass-market adoption. However, the momentum of Blockchain technology has not slowed down. Whilst there are still large obstacles preventing full and fast market adoption, these obstacles are on the way to being removed and as market adoption is accelerating.
Although, due to the harsh economic context, funding has slowed down, momentum is still very strong; Blockchain technology is here to stay! Whilst the bear market has helped to cleanse the space, companies are still willing to experiment and looking to harness the power of the technology for the long run. Market adoption will happen with increased awareness and education as well as improved usability and user experience. The other key drivers for adoption are still up for debate….and it will be interesting to see how these unfold during 2023.
The potential of Web3 is enormous. It promises to create a more open, transparent, and democratic internet, where users have greater control over their data and privacy. Blockchain technology promotes greater inclusion and empowerment for individuals and communities around the world; it has the potential to create new business models and revenue streams for content creators, as well as reduce the power and influence of large tech companies. As such, it is important that we continue to invest in the development of Web3 and explore its potential to create a better internet for all.
At True Global Ventures (TGV) we believe in 3 winning trends for 2023 giving the decentralisation principle of Blockchain all its magnitude: self-custody, DeFi and Bitcoin.
Continued uncertainty after the Luna and FTX crashes, and especially the lack of transparency surrounding these crashes, has provoked a flight to self-custody. Companies in the hard wallet sector like Ledger and Trezor, as well as other secure custody solutions, have experienced astonishing 300% growth during Q3 2022. “Not your keys, not your coins” has been a slogan for a long time. We believe that this is not just a short-term trend but a megatrend for the next 5 years. In the long-term, we believe some of these current hard wallets will evolve further in terms of user experience.
The heart of DeFi is Decentralised Autonomous Organizations (DAOs), protocols and projects like MakerDAO. With the collapse of non-transparent, Centralised organisations, real DeFi ventures will shine.
The best use case for Blockchain is by no doubt bitcoin. This oldest use case of decentralisation will be one of the biggest winners of 2023.
Regulation
The recent large crisis (FTX, Luna, Terra, 3AC) have eroded trust in the technology and the need for stronger regulation to prevent fraudulent activities and protect the customer, who is still fighting with a technology that lacks user friendliness and difficult onboarding, has emerged.
As Blockchain technology empowers the user to own his data and to control its use, the need for privacy and security in Web3 arises due to the Decentralised nature of the system, the need to protect personal data, the need for transparency and the need to protect against cyber threats.
However, the role of regulation is a highly debated topic and it will be critical for regulators to strike a balance between protecting consumers and promoting innovation, in order to maximise the potential benefits of Web3 technologies for society as a whole.
The Metaverse: the “Tangible” and Visible Face of Blockchain
The Metaverse is a virtual space where people can interact with each other and digital objects in a fully immersive environment.
Open Metaverses will become mainstream, as their three dimensional perspective will revolutionise the way we shop and interact online. Adoption will be mainly driven by user-generated content in 2023. Different customer experiences will evolve in the Metaverse, which will driving mass adoption.
“Phygital” experiences, where physical and virtual worlds are linked through a single customer experience during cultural and entertainment events, will evolve, Examples of this include cultural-verses in The Sandbox engaging with different communities such as celebrating Lunar New Year in the Hong Kong Mega City or Ramadan in Turkey-Verse.
Fan engagement and event-driven experiences such as FIFA’s collaboration with Upland during the Qatar World Cup 2022.
Events such as these will drive new communities into Metaverses.
Digital Twins
At the B2B level, digital twinning technology is already used in many different industries to test, simulate, analyse, predict, and optimise. Some use cases of digital twins are now widely popular in Real Estate for optimising building operations, in Healthcare for detection and prevention of disease , and in manufacturing for maintenance and workflow optimisation. It is also used in the Space sector to create virtual models of aircrafts to test, optimize designs and improve safety and efficiency and finally it is also used in Smart Cities to simulate urban infrastructure and services like energy, transportation, waste management and optimize the performance of the overall system.
Finally, governments also will play a role to promote investments in Metaverse Ecosystems. Dubai has already announced the creation of 40,000 jobs linked to Web3. South Korea has started with Metaverse Seoul to launch a virtual replica of the capital city with a goal of improving its public services. Japan’s Kishida also laid out the country’s plans in a policy speech to invest in NFTs and Metaverse.
What remains certain is that the convergence of AI and Blockchain technologies will accelerate Blockchain adoption for the following reasons:
- Enhanced Security
Blockchain technology offers a high level of security and immutability by design, which can be further enhanced by AI. AI can be used to detect fraud, cyber-attacks, and other security threats in real-time, thereby making Blockchain-based systems even more secure.
- Better Data Management
AI can analyze large amounts of data quickly and accurately, while Blockchain technology can ensure the integrity and authenticity of that data. Together, AI and Blockchain can provide a more efficient and reliable way to manage data.
- Decentralisation
One of the main benefits of Blockchain technology is its decentralised nature, which promotes transparency and trust. AI can be used to ensure that transactions and interactions on a Blockchain network are fair and unbiased, thereby enhancing decentralisation. Furthermore, similarly Decentralisation in AI means Federated Learning, an AI technology which uses nodes to run models locally to prevent sensitive data being sent to a central server. The convergence of these technologies will speed adoption as it enables data security and privacy.
- Smart Contracts and Business Automation
Smart contracts are self-executing contracts that can be programmed to automatically execute defined actions when certain conditions are met. AI can be used to monitor the conditions and trigger the execution of these smart contracts, making them more efficient and reliable. Together AI and Blockchain technology can automate processes and eliminate the need for intermediaries. This can result in faster and more efficient transactions, lower costs and increased transparency.
This year will be the year of Web3 powered by AI! Watch this space!