This year was an exciting one for all who participated in the crypto market. The sector hit some major milestones over the last few market cycles. For example, cryptocurrencies broke into the trillion-dollar market cap. Additionally, many coins hit new all-time highs, including the world’s first crypto, Bitcoin, before the recent market corrections and recession.
Around the world, these digital assets are seeing more adoption. From the business to the governmental sectors, everyone is getting in on the decentralization of the economy. This year saw areas of the market experience record expansion and it’s safe to assume that these sectors will continue this trend into 2023. Here’s a glimpse of what to expect next year from the crypto industry.
One of the biggest expectations for 2023 is the introduction of more DeFi (Decentralized Finance) platforms and services. DeFi began with a focus on providing a more open and transparent financial system to the world. DeFi networks remove centralization from common financial services like lending or saving. The network replaces these entities with smart contracts.
The result of these actions is a financial system that provides real wealth generation services to all users. DeFi networks take the profits that were once exclusive to the bank and share them with the community. Additionally, DeFi services require less skill to profit from when compared to trading. As such, more traders have ventured into this sector over the last year.
Next year will see all your favorite DeFi features such as staking, farming, and DEXs continue to increase in popularity. You can also expect some innovative developments in terms of onboarding and integration. Already, networks like META 1 support fiat onboarding. Uniquely, the network partnered with Onboarder to add support for the conversion of +50 fiat currencies into META 1 Coins.
The network improves crypto integration for the average user as well. The introduction of a VISA crypto debit card ensures that you can spend your META 1 coins at all of your favorite retailers. The system converts your crypto to fiat at the point of sale. The results are an easy-to-enter-and-use DeFi system that has set the pace for the next generation of platforms.
Another major development you could see in 2023 is the introduction of new stablecoin types. The stablecoin concept has been around since the earliest days of crypto. At that time, developers sought to avoid volatility by pegging their coins to fiat currency by keeping cash reserves equal to the number of tokens in circulation.
These tokens were effective at reducing volatility but they lacked one of the core characteristics of early cryptos like Bitcoin, appreciation. Traders found fiat-pegged coins helpful but savers could see their buying power diminish as these tokens were subject to the same inflation as fiat currencies.
This year saw the introduction of more advanced stablecoins into the market. The META 1 coin derives value from a basket of gold-related assets. As such, it appreciates alongside its base assets. The developers took the stablecoin concept even further with the integration of value-locking smart contracts.
The META1 Coin’s value locking mechanism ensures that all coins are sold at a minimum of market value. This smart contract works with the network’s anti-whale mechanisms that verify all token holders are human and not corporations. Together, these systems prevent sudden market value drops brought on by users dumping their bags.
You can expect to see regulators attempt to become more active in the market. Around the globe, there has been continued discussion on how to tax and regulate cryptocurrencies. Some countries are calling for international regulations on these assets while others are courting blockchain firms to their soil to become industry leaders. Reversely, countries like China continue to crack down on the public sector’s blockchain ambitions while still promoting their government projects.
Central Bank Digital Currencies are already in pilot programs around the world. This year, China launched its Digital Yen to millions of people across multiple cities. CBDCs are similar to cryptocurrencies except for the fact that they are centralized. These networks are meant to supplement fiat currencies.
The introduction of CBDCs will result in more government control in all aspects of life for people in these regions. Unlike Bitcoin, META 1, or even fiat currency, bankers will be able to monitor all spending in real-time using blockchain explorers. Central bankers and regulators claim that the added monitoring capabilities will help prevent money laundering and illegal funding. However, the real threat is government abuse as your transactions can be tracked, blocked, and confiscated by CBDC issuers.
In response to CBDCs and the introduction of more regulations, analysts predict a push for more privacy services. Privacy continues to remain a critical topic in the market. Regulators want to do away with privacy coins and private transactions. Reversely, crypto users continue to seek out more private options in the market.
Developers are doing their part to introduce more privacy features. For example, the integration of DEXs (decentralized exchanges) into the market brought traders a chance to swap assets without the need to register like CEXs (centralized exchanges). Most DeFi DEXs only require you to connect your wallet to begin trading and earning rewards from staking or farming services.
This year already saw the introduction of gift card Bitcoin services such as CardCoins. These networks allow users to purchase VISA and MASTERCARD pre-paid cards and convert them to Bitcoin anonymously. The protocol enables users to convert up to $500 a week without undergoing KYC (know your customer) requirements. However, if you want to convert more than $500, you will need to prove your identity.
Social Media Coin
The last two years have seen every major social network crypto project halted. Regulators have been very wary of these programs as they have often stated that large social media networks such as Facebook already have too much control over society. Last year saw Facebook, in particular, put forth an advantageous plan to get its Libra Coin into the market. However, regulators were not too keen on Facebook’s CEO, Mark Zuckerberg’s, explanation of the product and protections.
One of the main reasons regulators are very touchy about these networks is because they have continued to grow and influence. Notably, networks like Facebook took a lot of criticism for false information peddled to users during the last presidential elections. The problem was so bad that it resulted in CEOs being called to testify in front of congress. Additionally, the fact that many of these networks have billions of users has made regulators worry about the potential for abuse.
Libra Scares Regulators
Libra was a small component of Facebook’s latest venture which includes converting the network’s name over to META (not related to META 1 Coin). According to META documentation, LIBRA was to be the main utility token and cryptocurrency for the network. The coin would integrate directly into Facebook features such as its marketplace. Users could also use LIBRA to complete transactions directly and internationally.
Currently, the LIBRA project is paused but not abandoned. Perhaps another social network will be able to accomplish a similar task. Many ask if Facebook would have been better off incorporating an already existing cryptocurrency into its network. Notably, this was never an option for the FB project as they require complete control over the cryptocurrency of the network to accomplish their multi-faceted approach.
More Countries Legalizing Crypto as Tender
This year saw El Salvador lead the charge in terms of Bitcoin legalization. In the past, countries like Japan have recognized cryptocurrencies like Bitcoin but El Salvador marked the first time it was adopted as legal currency within a country. This adoption means that vendors and all government services need to accept Bitcoin payments.
El Salvador has already seen a 20% increase in value from when they approved Bitcoin as a legal tender. Notably, the price of Bitcoin has fluctuated which has made the decision come under question by anti crypto politicians. The government of El Salvador has already purchased hundreds of Bitcoin for its reserve. Most notably, during the recent price drop, the country added another 100 BTC to its reserves.
More Lightning Network
The Lightning Network is an off-chain, second-layer protocol that was built to help Bitcoin scale better. The system uses private payment channels that enable users to send and receive unlimited transactions with far fewer fees compared to Bitcoin mainnet transactions. The system successfully removes congestion from the Bitcoin network by not posting these transactions until the payment channel closes.
The Lightning Network has been in Beta testing for over two years. Over that time the network has seen some impressive growth. This last year saw a host of new payment processors, CEXs, and Dapps integrate the protocol as a way to save users on fees and transaction delays. In addition to the cost savings and added scalability, the Lightning Network provides Bitcoin with more functionality.
Recent developments within the Lighting Network provide Bitcoin with a host of new options. For one, users will soon be able to issue tokens on the Bitcoin blockchain. These tokens can include traditional tokens and NFTs (non-fungible tokens). Bitcoiners can also begin to develop Dapps as the protocol will enable smart contract executions to occur off-chain but registered on-chain. This approach will enable more applications to enter the market that leverage Bitcoin’s proven security features.
NFTs are one of the fastest-growing areas in the market. They have found a home in the art world, business sector, and collector’s corners. NFTs enable developers to represent unique assets. You could have an NFT that represents ownership of a house, a piece of art, and more. The cool thing about NFTs is that because they are blockchain verifiable, their scarcity is provable.
The NFT market continues to expand at a record pace. Last year saw some NFT art pieces sell for millions. In one sale, in particular, the NFT artist Beeple sold a collection of his works built into a collage for over +$60 million. These occurrences and the introduction of more NFT marketplaces have helped to drive a thriving NFT art sector.
NFTs have also found a home in the gaming market. Recently NFT games have gone from simple collector titles to more advanced projects like Decentraland. These metaverses enable users to venture through a digital landscape and collect and create unique NFTs. These NFTs have helped to drive the GameFi revolution in multiple ways.
GameFi is the melding of gaming and finance. The play-to-earn gaming sector is on fire at the moment. The introduction of NFTs has created an entirely new momentum in this sector. Play-to-earn games are different than regular games in that they enable users to take digital assets from the gaming ecosystem and trade them for other assets.
NFT gaming has created entirely new in-game markets as well. Users can now secure real profits while playing the games they love. Best of all, the GameFi revolution has helped gamers to unlock lost value.
In the past, it was common for a gamer to lose all of their hard work when they left the gaming ecosystem. GameFi changes everything and creates an entirely new career for savvy gamers willing to take the initiative and secure rewards. For one, the introduction of user-relevant NFTs has helped drive profits for gamers.
User-relevant NFTs are different than game-relevant NFTs because they can see their value rise based on the gamer’s actions. You can think of user-relevant NFTs like avatars and other in-game items that improve with your actions.
2023 is Crypto’s Year
After over a decade of growing adoption, it appears that the crypto market is on the verge of major adoption from all sectors. More users than ever are participating in the blockchain economy. Additionally, the legalization of Bitcoin by countries suffering crushing inflation will help to further Bitcoin and other cryptocurrencies’ purposes. For now, users should be prepared for an exciting adventure in 2023.