FUTURE TRENDS IN BLOCK CHAIN AND CRYPTO

Introduction

A Blockchain is a digital record of transactions. The name comes from its structure, in which
individual records, called blocks, are linked together in a single list, called a sequence. They
are used for maintaining the record of transactions made with crypto currencies, like Bitcoin,
and have many other applications. It is essentially a ledger that is in a digital form which is
distributed and duplicated across whole of the network of the computer systems. This is
necessarily understood as Distributed Ledger Technology.

In such a model that is distributed, storage and computation are shared between member
users, or nodes, connected to a peer-to-peer network. It’s been proposed that distributed
models, support blockchain-based ledgers, also called distributed ledger technology (DLT) or
system (DLS), could offer higher service availability at much lower costs for a few sorts of
business and enterprise applications.

For example, the property transfers ownership ledgers, trading ledgers, ledger of digital
currency and among others. DLT, within suitable conditions provide increased availability of
services and resilience for various digital services. This nature that is distributed offers some
advantages and creates many opportunities.

However, this very distributed nature also creates major challenges and major research
questions. It’s important to carefully investigate the benefits, disadvantages and risks of a
DLS, which the system is implemented correctly before it’s employed by the general public,
commerce, and industry. It’s also important that DLS designers, implementer, and users
understand the benefits and limitations of the technology behind these systems.

Defination and meaning

Cryptocurrency, sometimes called crypto-currency or crypto, is any form of currency that

exists digitally or virtually and uses cryptography to secure transactions. Cryptocurrencies
don't have a central issuing or regulating authority, instead using a decentralized system to
record transactions and issue new units.

Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions.
It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments.
Instead of being physical money carried around and exchanged in the real world,
cryptocurrency payments exist purely as digital entries to an online database describing
specific transactions. When you transfer cryptocurrency funds, the transactions are recorded
in a public ledger. Cryptocurrency is stored in digital wallets.

There are thousands of cryptocurrencies. Some of the best known include:

Bitcoin: Founded in 2009, Bitcoin was the first cryptocurrency and is still the most
commonly traded. The currency was developed by Satoshi Nakamoto – widely believed to be
a pseudonym for an individual or group of people whose precise identity remains unknown.
Ripple: Ripple is a distributed ledger system that was founded in 2012. Ripple can be used to
track different kinds of transactions, not just cryptocurrency. The company behind it has
worked with various banks and financial institutions.

Blockchain is a decentralized digital ledger that securely stores records across a network of
computers in a way that is transparent, immutable, and resistant to tampering. Each "block"
contains data, and blocks are linked in a chronological "chain."
A blockchain is a distributed database or ledger shared across a computer network's nodes.
They are best known for their crucial role in cryptocurrency systems, maintaining a secure
and decentralized record of transactions, but they are not limited to cryptocurrency uses.
Blockchains can be used to make data in any industry immutable—meaning it cannot be
altered.Since a block can’t be changed, the only trust needed is at the point where a user or
program enters data. This reduces the need for trusted third parties, such as auditors or other
humans, who add costs and can make mistakes.

Review of the literature

Blockchain is a distributed digital ledger technology that has revolutionized

businesses, industries, and commerce by eliminating the need for a central storage and
control authority. Blockchain presents time-stamped and immutable blocks of data that are
not owned by any single entity but rather managed by a group of nodes or computers where
each block is secured and linked using cryptographic principles. The immutable and
decentralized nature of blockchain has redefined trust, ownership, identity, and financial
systems by providing a secure, fast, transparent, and pseudo-anonymous solution. This paper
provides a comprehensive review of blockchain technology focusing on the historical
background, underlying principles, and the sudden rise in the popularity of blockchain
technology.

Objectives of the study

Enhanced security :Your data is sensitive and crucial, and blockchain can significantly
change how you view your critical information. By creating a record that can’t be altered and
is encrypted end-to-end, the blockchain helps prevent fraud and unauthorized activity.

Greater transparency :Without blockchain, each organization has to keep a separate

database. Because blockchain uses a distributed ledger, it records transactions and data
identically in multiple locations.

Instant traceability :Blockchain creates an audit trail that documents the provenance of an
asset at every step on its journey. In industries where consumers are concerned about
environmental or human rights issues surrounding a product—or an industry troubled by
counterfeiting and fraud—this helps provide the proof.

Increased efficiency and speed :Traditional paper-heavy processes are time-consuming,

prone to human error, and often requires third-party mediation. By streamlining these
processes with blockchain, you can complete transactions faster and more efficiently.

Automation :“Smart contracts” can automate transactions, further increasing your efficiency
and speeding up the process. After the pre-specified conditions are met, it automatically
triggers the next step in the transaction or process.
Future trends in block chain and crypto

1. Interoperability
Recently, new and new blockchains have been created for various purposes – blockchains for
payments, data storage, smart contracts, etc. These blockchains are separate systems with
their own rules, working independently. So it's rather difficult to implement connections
between them.

Ensuring communication between existing and new blockchains is one of the key trends in
blockchain technology. Such cooperation helps create an interconnected ecosystem with the
benefits of each separate blockchain, enabling software engineers to build complex
applications with unique features.

For example, the Interchain Foundation created Cosmos Network as its own way to reach
interoperability in the blockchain environment (source ). Cosmos uses Interblockchain
Communication Protocol (IBC), which allows chains to communicate with each other by
creating certificates. If one of the chains in potential connection cannot create a certificate,
the interoperability won't be achieved.
Yet IBC is not the only way of reaching the communication between blockchains. There is
also Parachain technology by Polkadot, the concept of bridges by Cardano, Cross-Chain
Messages by Lisk, and so on. Data exchange between different chains is a new way of using
the blockchain environment.

2. IoT with blockchain infrastructure

The Internet of Things (IoT) is experiencing its prime, constantly growing and developing.
IoT makes a unique environment with interoperability of hardware, software, and cloud
solutions. It generates and transmits significant amounts of data, but its traditional system is
centralized and not secure enough.

That is why one of the blockchain technology trends in merging with IoT is creating
decentralized architecture and cryptographic encryption tools. Such blockchain-based IoT
systems open up new opportunities and scope of application.

By establishing transparent and automated work, IoT systems with blockchain support can
help manage smart cities. It keeps tracking numerous indicators and ensures real-time
communication between governments, citizens, and organizations. Some cities have already
adopted this technology and received outstanding results. In 2022, Copenhagen was one of
the leading smart cities, and now it aims to become the first carbon-neutral city by 2025
(source ).

3. Tokenization of assets
Asset tokenization is a way of creating digital tokens that embody certain physical assets.
They can have different values and properties, like real estate, commodities, art pieces, etc.
But all of them may be divided into little units and tokens and become digitized. These
tokens represent ownership and can be traded on different blockchain platforms.

Ethereum is one of the most popular blockchain platforms. Tokens built on the Ethereum
blockchain are usually secured by the ERC-20 protocol, which allows users to claim a share
or total ownership of these tokens.

The great advantage of digital assets is the opportunity to buy a share of an asset without
buying the entire one. That is why asset tokenization is one of the current trends in
blockchain technology among investors. For example, it works in real estate, and it is
expected to change the industry in the future. Therefore, the real estate industry can be
available to a broader range of investors through the absence of expensive real estate
investment procedures.

4. Increased Market Share of Crypto ETFs

Crypto ETFs have seen significant developments, particularly with the approval of spot
Bitcoin and Ethereum ETFs by the SEC in January 2024. This marked a transformative
moment for the cryptocurrency market, paving the way for traditional financial players to
include these products in their portfolios without the need for navigating crypto exchanges
and wallets. This approval already provided a massive inflow of institutional capital, with
Bitcoin’s price seeing a notable boost above $100.000, following the announcement of
Trump’s presidential victory.

The emergence and growth of Bitcoin and Ethereum ETFs could continue through 2025,
significantly accelerating institutional adoption. Bitcoin ETFs would get more inflows than
ever before and maybe reach $40–50 billion this year. The popularity of these ETFs might
greatly improve the situation of Bitcoin on the market.

Building on the success of Bitcoin and Ethereum ETFs and the more crypto friendly Trump
administration, this year could mark a turning point for other cryptocurrency ETFs. There are
currently over 10 ETF applications, including Solana (SOL) and XRP, pending review by the
SEC for assets signalling the potential for expanded institutional interest in a broader range of
digital assets. Such ETFs and other ETPs may continue to increase liquidity and stability in
the blockchain and digital asset market.

5. Metaverse
Metaverse looks like a virtual world where people can work, relax, socialize, and do multiple
digital interactions. The Metaverse concept is still being developed, and it's supposed to be
very different from all the virtual experiences we have already had.

It has some common characteristics with the gaming world, Augmented Reality (AR), and
Virtual Reality (VR), but its final form is yet to be determined. Currently, we know some
core attributes of the metaverse, and most of them can be real thanks to new blockchain
technology.
Blockchain-based environment for the metaverse lets build secure architecture and set rules
this universe would work. It also enhances interoperability between different worlds to
communicate and exchange content.

The ownership of this content is also provided by digital assets secured by blockchain’s
ledger. The purchasing of these assets can be only possible with cryptocurrency. That is why
blockchain technology plays a crucial and inseparable role in the implementation of the
metaverse.

6. Blockchain-as-a-Service (BaaS)

Blockchain-as-a-Service (BaaS) is a cloud-based infrastructure that allows the deployment

and leverage of blockchain solutions. BaaS sets trends in blockchain technology by its
practical usage. This technology simplifies the adoption of blockchain to businesses.
Any company can develop and deploy its blockchain application without managing
complicated infrastructure. This makes the given application more available and adaptable,
reducing resource consumption and bringing innovation. BaaS also allows businesses to
select the most suitable blockchain protocol to meet their requirements.

BaaS is supposed to be one of the key blockchain trends in 2024. Technical giants like
Microsoft and Amazon are already offering blockchain services. They work like web hosting
providers and take care of infrastructure and maintenance.
Hyperledger Fabric by Amazon is such a provider, where the BaaS operator offers usual
support activities for the users. It allows businesses to concentrate on their functions because
there would be no need to create an entire blockchain environment from scratch.

7.Tokenised RWAs reshaping finance

One of the most significant trends in 2024 reshaping finance is the tokenisation of real-world
assets, like property, commodities, real estate and securities, attracting both investors and
companies from of a range of industries. This is transforming traditional finance, enhancing
liquidity, transparency, and accessibility in the financial markets to various assets classes.

By converting real world assets into digital tokens on a blockchain, tokenisation is unlocking
new investment opportunities and making traditionally illiquid assets, such as real estate,
more accessible.to a wider range of investors. Tokenization enables fractional ownership,
making them tradable even in small fractions, allowing investors to buy and sell portions of
assets, thereby unlocking liquidity for traditionally nonliquid assets

The trend of tokenizing real-world assets (RWA) is expected to take off in an accelerated
way in 2025 hitting critical mass, revolutionizing how traditional finance interacts with
blockchain technology. 2025 will push the boundaries of what can be tokenized. From
medical data to personal biometrics, tokenizing assets once deemed untouchable will unlock
new markets and create unprecedented opportunities for digital value.

8.Decentralized Finance (DeFi): reaching all-time highs

Decentralized finance (DeFi) that refers to financial services built on blockchain networks
that operate without traditional intermediaries like banks, has exploded over the past few
years. They provide decentralized alternatives to banking, lending, and trading. But this is
just the beginning.

DeFi is projected to expand significantly in 2025 and beyond, remaining a dominant force in
the crypto space. Tokenized securities and high-value assets will thereby catalyse DeFi’s
growth, attracting both retail and institutional investors, adding new liquidity and utility. The
DeFi sector could benefit from further integration with traditional financial systems, allowing
for seamless transactions between fiat and cryptocurrencies.
As the DeFi ecosystem matures, and DeFi platforms such as automated market makers
(AMM's) and decentralised exchanges (DEX's) become more mature and more user-friendly,
it is likely that a growing number of investors will turn to these services for flexible lending
and borrowing solutions. This year the DeFi market could reach a $100 billion valuation as
more platforms solidify their roles within the ecosystem, more than double compared to
2024.

References

https://www.kaspersky.com/resource-center/definitions/what-is-cryptocurrency

https://lnct.ac.in/future-of-blockchain-technology-by-2025/

https://www.ibm.com/think/topics/benefits-of-blockchain

https://binariks.com/blog/emerging-blockchain-technology-trends/