It has been happening for the past few years but I am confident that it will happen in this year.
I am talking about
The fight between Ethereum and other layer-one blockchains
Do you know that the last time Bitcoin, Ethereum, and other cryptocurrencies reached an all-time high was in the year 2021? But since then, the crypto market has been consistently falling for the past six months. And so is the Ethereum.
One thing you already know about Ethereum is that it is the first and most widely used decentralized application platform in the whole crypto world. This is true, no doubt about that.
But what you don't know is that it has become a victim of its own success.
Right now, its network has become too large to manage, and the applications that operate on it are getting slow with high transaction costs. This problem of Ethereum has encouraged other blockchains to rise, and over time we saw a huge rise in blockchains like Binance smart chain, Solana, and Avalanche in 2021 itself.
Now to counter that, Ethereum has planned to launch its own Ethereum 2.0, which, according to Vitalik Buterin, will revolutionize Ethereum and improve its performance.
The goal of Ethereum 2.0 is to upgrade the performance by moving from a Proof of Work to a Proof of Stake consensus algorithm. But it will be impressive to see how well it will be able to keep up with other blockchains, though. Now, if you ask me, I believe that Ethereum and its other competitors will be fighting hard in the next few months to get ahead of each other in terms of scalability.
Now, the second most important thing that should happen in 2022 will be the
The boom of second-layer applications
As you see, blockchains are generally divided into two main layers. Layer 1 and layer 2.
Layer one is the blockchain that contains the main architecture of the blockchain, for example, Bitcoin. And layer two blockchains are secondary blockchains that operate on top of layer one. For example, the lightning network.
Because of this system, all the transactions that are happening on layer one now will be processed on layer two. This system not only cuts the cost of transactions on the blockchain by a lot, but it also lets more transactions happen per second. And we do all of this just to solve the problem of scalability.
So, whoever solves the scalability issue will shine brightly in the crypto realm.
Polygon, Solana, Algorand, Cardano, and other similar technologies are addressing this issue as a priority. So, in my view, the second main trend will be to layer two blockchains, which will solve the problem of scalability.
Now, in my opinion, the third trend which tends to explode will be the explosion of
New crypto applications
Let me tell you something interesting.
Defi came in 2019 and it exploded in 2020. NFT came in 2020, and it exploded in 2021. The metaverse and gaming cryptocurrency arrived in 2021. I don't think it makes sense if there isn't an explosion of metaverse and gaming crypto in 2022.
If you look around, the global gaming industry is now worth 300 billion dollars and I've learned over the past year that crypto gaming has the potential to turn the whole gaming industry into a truly open and interoperable economy.
The same is true for the metaverse. According to Fortune Business Insight's forecast, titled "Metaverse Market 2022-2029". The metaverse's size is estimated to be around 63 billion dollars in 2021, rising to roughly 100 billion dollars in 2022, and around 2029, it has the capability to go around 1500 billion dollars at a 47.6% CAGR.
Now you do the math. I hope you get my point.
The fourth trend, in my view, should be the
Continued use of NFT-related applications
We have seen NFTs sold for millions and millions of dollars in 2021. But what I think is that 2021 was the year of general population implantation of the notion of NFTs. And Eminem, Snoop Dogg, and Paris Hilton have further cemented this notion by releasing their own sets of NFTs. But with the development of METAVERSE and GAMING CRYPTO, I believe NFTs will be used for things other than the collection of monkey and punk images.
In the future, it could be a place, an object, or a weapon that gives you certain benefits in the metaverse. It could be anything. So, NFT will come into full swing in the next few months, in my opinion.
The last but not least trend that may have an impact on us is,
Now, what I think is, in the future, we are more likely to see a vast ecosystem that is made of multiple blockchains, where each blockchain has its own specific work, All of the blockchains will be connected with each other and allow the transmission of value and information between different blockchain networks.
And why am I so optimistic about this? For example, Polkadot, Polkadot has taken interoperability to another level. It has made different parachains with different characteristics, and their transactions can be spread over a wide area given the number of chains in the network. Polkadot is doing all this by ensuring a high level of security on all transactions.
Then there is Blocknet. It is creating strategies that can change the way we see blockchain at the moment. And there is also AION online that seeks to address unresolved questions around scalability and interoperability in the blockchain network. And finally, there are WANchain, Cosmos, Nervous, and many more blockchains that are working in this direction.
So it is very much possible that in 2022 or in the coming few years, they will get a mega multi-blockchain network. So these are some of the trends that I believe will occur throughout the rest of 2022.