The 6 most important trends in Web3, blockchain and cryptocurrencies in 2024
As we move forward into the AI era, many questions surrounding data privacy and control remain unanswered. By now, most of us are fully aware that everything we do online involves the generation and sharing of personal data. The centralized nature of the companies and government agencies they pass through means they have complete control over who sees them and what can be done with them. While we trust their privacy policies and compliance with regulations like GDPR, that doesn’t eliminate concerns about data breaches and theft.
Some say Web3, with its decentralized databases and blockchain-based applications, offers solutions. It promises improved privacy and security, giving us back control and ownership of our data. In theory, at least, Web3 tools and technologies, secured by encryption, are beyond the control or censorship of any entity, including tech giants and governments.
Although overshadowed by the buzz around generative AI in 2023, work on the next generation of web3 applications and technologies continues. Could 2024 be the year these innovations become widespread? Let’s explore the trends that will shape its trajectory over the next 12 months and beyond.
Sustainability in Blockchain and Web3
At the top of the list of concerns must be the fact that blockchain and web3 technologies clearly have a sustainability problem. Computing using distributed and encrypted resources simply consumes a lot of energy. At its peak in 2022, it is estimated that the Bitcoin network alone consumed the same amount of energy as Finland. In response, more efficient technologies, such as the Ethereum networks’ proof-of-stake algorithms, have been developed and green Web3 initiatives have emerged. Regenerative financefor example, has emerged as a way to leverage technology for environmental and sustainable initiatives.
Social web3
Web3 promises decentralized social tools that its champions say will lead to more private, censorship-free communications and networks, with users remaining in control of their content and data. Transparent, open-source algorithms could help track and block attempts to spread disinformation, with policies administered democratically via blockchain-based voting mechanisms. We’ll probably have to look beyond 2024 to see something like this challenge Facebook or TikTok. But social tools like Mastodon that are based on decentralized principles are already emerging and gaining popularity, so I expect to see continued innovation in this space.
A Bitcoin bull run?
Cryptocurrency plays an important role in web3. It is no coincidence that many Web3 projects fail when the price of Bitcoin collapses, causing funding to dry up. In 2024, another Bitcoin reduce by half will take place, which has traditionally led to an increase in the value of the number one cryptocurrency. Of course I don’t want to make financial predictions, but if this happens it will inevitably lead to an injection of funding and enthusiasm into web3.
Decentralized Finance (DeFi)
Decentralized finance (DeFi) is a term used to refer to an emerging breed of financial services products based on blockchain and web3 technologies. Often, they are built around Web3 capabilities enabling peer-to-peer commerce and lending while bypassing “middleman” banks and financial institutions with their high fees. In recent years, these products have attracted investment, meaning that in 2024 they are more accessible than ever.
Web3 and immersive Internet
Call it “metaverse,” if you must. However, many Web3 ideas are intrinsically linked to the concepts of immersive online environments that reflect the real world. Web3 and blockchain technology have applications in online identity (like avatars) and the creation of unique digital assets via NFTs. It can also be used to govern and administer online entities, since from community groups to businesses, allowing members to democratically elect representatives and vote on the adoption of rules and regulations. An easy prediction to make is that the web will continue to evolve to become more immersive in 2024, but we will also have a better idea of what web3 will bring.
Central Bank Digital Currencies (CBDCs)
These are essentially cryptocurrencies issued by central banks. Obviously, as they are under the control of the banks that issue them, they are not decentralized. And they’re not supposed to be! Instead, CBDCs can be seen as attempts to move the technology used to administer financial services onto blockchain infrastructure, where it can be managed more efficiently and transparently. China will continue testing its digital yuan in 2024, joining other countries like the United Kingdom, the Bahamas, Nigeria and Sweden that have launched or discussed plans for CBDCs.
High-profile fraud and other crimes
There is no denying that many fraudsters and criminals have made themselves famous (and often made a lot of money) in the crypto world that underpins Web3. The collapse of FTX and the sanctions imposed on Binance This year could be just the tip of the iceberg if the industry continues to grow at the rate some are predicting. While lawmakers drag their feet, this is still a Wild West industry. So if you’re going to get involved, be careful.