Continuing where we left off, we are back with 9 more trends made possible by blockchain. If you haven’t read the introduction and the first 9 trends we covered, we recommend that you read them first to get a better idea of the type of impacts and trends blockchain is making possible for the future.
Key Findings from the World Retail Banking Report 2022:
50% of the respondents say their current banking relationships aren’t rewarding, and 52% think banking is not “fun.”
75% of respondents said fast, low-cost services that are accessible and easy to use motivate them to consider switching to alternatives.
The World Retail Banking Report 2022 shows that the banking industry can benefit from decentralization and blockchain technology by automating its processes and cutting down intermediary costs while improving transaction speeds. Blockchain has the ability to eliminate the hurdles of time in identification and verification (ID&V) and KYC.
Other recent data from Statista indicate that blockchain use in the banking and financial services market size will be 10 times bigger than it currently is by 2026. Decentralized financial technologies are creating a radical change in the banking industry that can benefit banks and their customers.
It was only a matter of time before security markets became influenced by blockchain. A new asset type called synthetic assets has emerged thanks to blockchain technology. Synthetic assets allow price exposure to physical assets such as gold, oil, or major stocks, without the need to own the underlying asset
Synthetic assets are created using smart financial contracts that allow real-world on-balance sheet or off-balance sheet instruments to be consistently represented on blockchain. The current way of tokenization has a lot of shortcomings due to the absence of a common international standard that provides a globally accepted framework for tokenized assets. ACTUS aims to remedy this weakness by creating a global standard.
For more insight into the future of tokenization and smart financial contracts, we highly recommend you watch Casper Association Board Member Ralf Kubli’s presentation.
Nucleus Finance- a financial service provider using ACTUS Standard as a foundation is a prime example of how blockchain can make securities markets more accessible to the masses. Nucleus Finance is building on Casper as Casper blockchain is a truly scalable, future-proof blockchain that is environmentally sustainable and developer-friendly, making it ideal for smart financial contract-based platforms.
Now, let’s take a look at the growth potential of this new asset class. Below are the daily trading volumes of some major real-world assets.
The total current value locked in DeFi stands at $41.8 billion. The addressable market for synthetic assets is even more significant, with the potential to remove the geographical limitations of securities markets.
In the future, anyone will be able to trade and own such assets pegged to real-world assets using a wallet, thanks to blockchain and smart financial contracts. It is not only a market for those interested in the crypto space but rather a market for anyone interested in the finance space, regardless of jurisdiction.
Blockchain gaming has proven to be one of the hottest sectors in the decentralized web. Blockchain technology introduces a new model called play-to-earn (P2E), allowing players to monetize their time, skill, and efforts spent on playing the games. The global gaming industry is currently worth more than $300 billion, and the traditional gaming market is expected to grow at a CAGR of 10.94% on average, according to a report released by Crypto.com.
With leading gaming companies such as Ubisoft, Square Enix, and Epic Games stepping into the blockchain gaming industry and VR gaming becoming more mainstream, the blockchain gaming market is estimated to grow at a CAGR of 100%, from $1.5B in 2021 to $50B in 2025. This is 10 times the forecasted ~10% CAGR for the traditional gaming industry.
Insurance providers are increasingly dependent on emerging technologies and data sources to drive efficiency, enhance security and expand capabilities across organizations.
Deloitte’s 2022 Insurance Industry Outlook research revealed that 58% of the insurance industry professionals expect an increase in insurance providers’ blockchain budgets.
In contrast to traditional insurance, decentralized insurance solutions do not rely on the control and regulation of a single central authority. Enabling premium payments using cryptocurrencies via blockchain technology, decentralized insurance accelerates the payment and claim process significantly compared to clunky and outdated traditional insurance payment methods. Decentralization can change the insurance industry for users’ benefit.
DAOs (Decentralized Autonomous Organizations) are among the biggest use cases introduced by decentralization. Automating the governance of companies, organizations, and even countries with the help of blockchain technology can help avoid conflict of interest, increase bureaucratic efficiency, and prevent corruption.
The blockchain-based DAO system works in a fully decentralized way and is considered highly secure. At the same time, operations of such systems are only controlled by pre-defined rules; thus, the uncertainty and errors caused by human processes are greatly reduced.
In theory, DAOs can improve government productivity and efficiency for information collection, security, and dissemination.
In the foreseeable future, online retailers can optimize their payment processes for consumers’ convenience via blockchain technology. According to Bigcommerce, e-commerce conversion rates are around 2.5%-3%, meaning only 2 or 3 out of 100 website visits end with shopping.
Through crypto wallets, anyone can log in to an e-commerce brand’s dApp and make purchases using their native token without going through complicated registration and payment processes. Making checkouts easier through crypto wallets will result in declined checkout abandonment rates, hence improved customer experience and conversion rates.
Placing an order through a crypto wallet can solve numerous reasons for abandonments during checkout since users will not be required to create an account or go through a complicated checkout process.
Remittance and associated global money services are essential for a global economy. But there are some major issues associated with traditional financial transfers, such as transaction times, security of the transferred funds, and transaction costs.
According to the World Bank, sending remittances costs an average of 6.01 percent of the amount sent in Q2 2022. That means, for every $1000 worth of transfer, a customer had to pay an additional $60 to cover the transaction cost.
When such transactions are made using cryptocurrencies, additional costs are significantly lower as these transactions are peer-to-peer, involving no middlemen. Depending on the network speed and architecture, it is possible to make global transactions in seconds with smaller costs. An example of this is stablecoins. They are widely used for cross-border transactions, and the total value of stablecoins currently stands at $143 billion, according to CoinMarketCap.
Bringing fairs and events to the metaverse opens up new opportunities for companies to host engaging virtual events and fairs. Using existing use cases in the metaverse for virtual events shows that it cuts down transportation, accommodation, and other tangible costs.
In addition to business fairs & smaller scale events, the metaverse can also be used to host large-scale events such as concerts. Rapper Travis Scott’s concert has attracted more than 12 million attendees in the metaverse.
To date, the global metaverse market size is estimated to reach $426.9 billion by 2027 at 47.2% CAGR.
Not only billion-dollar businesses but also small and medium-sized enterprises and businesses can reap the benefits of blockchain which enables them to build, grow, and adapt to the rapid change in today’s business environment.
The global freelancing platform Fiverr’s report revealed that small businesses are investing in blockchain and smart contracts to enable cleaner storage and digitization of documents. The findings indicate a 64% increase in search volume for “smart contracts” and a 3,504% in “NFT art.” This shows that blockchain-based solutions can greatly impact small businesses that aim to grow their operations. Blockchain quickly facilitates international transactions, moves value, and converts them via cryptocurrency wallets.
In conclusion, the future of the internet revolves around users, creators, and customers, hence the enterprises’ interest in blockchain. Blockchain allows businesses and institutions to improve their existing services and discover new revenue models, and makes their services more accessible, transparent, and user-centric.
The shift away from centralized structures will undoubtedly be a long-term change, and a combination of factors will drive this process:
The next iteration of the internet is being built on decentralized blockchain networks such as Casper, and users that will enter this realm via their crypto wallets can finally truly own their data and control their identities.
