Blockchain technology was first introduced in 2009; since then, the world has seen an exponential transformation in this remarkable technology. Moreover, 2020 has proven that bitcoin and blockchain are here to stay for longer due to the COVID-19 situation.
The pandemic has made individuals and enterprises go for alternate ways to make transactions and maintain business operations. With distributed ledger technology, blockchain offers practical solutions to individuals, start-ups, and existing businesses.
Blockchain technology is meant to transform the nature of transactions and trade globally and transform several online services. With time, every month, new cases are derived from the technology.
Emerging blockchain trends
The following are some of the top emerging blockchain technology trends of 2021.
Blockchain as a Service (BaaS) –
As a third-party creation and management of a cloud-based network, Blockchain-as-a-service (BaaS) helps create blockchain applications for businesses using blockchain technology.
BaaS is built on the software as a service (SaaS) model to let customers leverage cloud-based solutions for building, hosting, and operating their own blockchain apps along with related functions on the blockchain. Working with BaaS facilitates customers in developing faster applications with low maintenance costs and fast adoption of blockchain technologies.
BaaS enables users to develop their digital products by working with blockchain. Many of these digital products are smart contracts or applications based on blockchain interfaces. These applications can work without any setup requirements of the complete blockchain-based infrastructure.
Microsoft and Amazon are the best examples of companies developing blockchain applications to provide BaaS service.
Decentralized Finance (DeFi) –
Decentralized finance (DeFi) can be defined as a process of shifting from traditional centralized financial systems such as brokerages, exchanges, or banks to utilizing smart contracts on blockchains.
Before 2021, adopting DeFi was a doubtful scenario. But the COVID-19 situation has assured that implementing decentralized financial transactions can help aspiring investors regain the loss. Adopting DeFi has opened the door for millions of people to become investors.
Decentralized financial transaction activity involves purchasing coins and lending them on interest. Decentralized exchange organizations built with blockchain technology carry out these transactions. Such activity turns out to be beneficial for all the participants, as lenders can earn through interest while borrowers can easily access loans for investment.
Decentralized financial transactions have gained mere acceptance this year as compared to their centralized variants. Lending platforms are amongst the most popular forms of DeFi that have gained major attraction.
Federated Blockchain –
Federated blockchain technology is one of the latest trends in the blockchain industry. Federated blockchain technology is an upgraded version of the basic blockchain model, making it the right choice for many specific use cases. The major difference between – basic and federated blockchain is that – regular blockchain works on a single secure and trusted node while the latter functions under different authorities.
Experts have predicted that 2021 will increase the usage of federated blockchain, giving the private blockchain a more customizable look. It can be said that a federated blockchain has a similar concept to a private blockchain, with some additional features.
The private blockchain is usually handled by one organization, while multiple authorities can control the pre-selected nodes of the federated blockchain. This selected group from various nodes can validate the block to process the transactions further.
Impact on social networking
Everyone is aware that social networking has become part and parcel of daily lives. According to Datareportal, there are currently 4.48 billion active social media users worldwide, equivalent to 57% of the total global population.
Merging blockchain with social media can help find a better solution for notorious scandals, data control, privacy violations, and content relevance. Hence, the blockchain blend in the social media domain is another emerging technology trend.
The implementation of blockchain assures that all the social media published data will remain untraceable and cannot be duplicated, even after its deletion. It will also authorize users to store data more securely and maintain its ownership.
Another advantage of blockchain is the power of content relevance. For example, control of data lies in the hands of those who created it and not with the platform owners. Such a function makes the user feel more secure as they can control what they want to see.
As the name suggests, hybrid blockchain can be defined as a technology that uses the most appropriate part of public and private blockchain solutions. This property of hybrid blockchain technology facilitating the use of both public and private solutions makes it the future of blockchain technology.
Hybrid blockchain is still considered emerging technology in the blockchain space. As the name suggests, the technology aims to bring both public and private blockchain together to create a hybrid. Merging the benefits of both public and private blockchain can help create a better solution. Even though the inclusion of public blockchain in the union is more, they still operate in a private ecosystem to ensure security.
Moreover, setting up and running of hybrid blockchain is quite cost-effective. Influential nodes present in the hybrid blockchain allow for quick and simple to verify transactions. Another advantage is that it is a secure form of communication, so hacking is too low.
The current situation shows more emerging cryptocurrencies are planning to adopt the hybrid blockchain in 2021.
The above-mentioned blockchain technology trends suggest that 2021 will bring a remarkable time for all the upcoming technologies in various sectors. The technology of blockchain, for sure, is likely to impact many different industry verticals such as manufacturing, health, transportation, supply chain, etc.
The lower transaction costs, protection from cyberattacks, the option to change the rules, help maintain confidentiality and operate in a closed ecosystem makes blockchain a more promising technology to rely on.
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