3 Crypto predictions for 2023
(1) The continuing decline of most L1 Blockchains (2) The rise of Privacy-enhanced Cryptocurrencies (3) The rise of real-world asset-backed Tokens.
2022 has been a disastrous year for Crypto. It's not just a Crypto Winter. It's a bloodbath!
The overall crypto market capitalization has crashed from $2.19 trillion to $860 billion. That’s a loss of over $1.3 trillion!
Scammers & hackers have looted billions. In fact, they seem to be the only ones who have profited from crypto this year!
Almost every project is massively down from its all-time high (ATH).
3 things I predict for Crypto 2023
The continuing decline of many L1 Blockchains
The rise of Privacy-enhanced Cryptocurrencies
The rise of real-world asset-backed Tokens
1. The continuing decline of many L1 Blockchains
We have far too many public permissionless blockchains. I expect to see consolidation around 3 Blockchain ecosystems:
Bitcoin - Lightning Network, Liquid Network, Omni Layer, Stacks.
Ethereum - Arbitrum One, Optimism, Loopring, Polygon, and more.
Binance - BNB Beacon Chain, BNB Smart Chain, BNB Sidechain, and BNB ZkRolllup.
I predict the continued decline of Cardano, Polkadot, Solana, Tron, Avalanche, Ethereum Classic, Algorand, EOS, and Flow. Some of them will probably not live to see 2025.
2. The rise of Privacy-enhanced Cryptocurrencies
Privacy-enhanced cryptocurrencies provide increased privacy and anonymity e.g. Monero, Zcash, and Dash.
These cryptos use technologies like zero-knowledge proofs & ring signatures, to enable transactions without revealing user identities or transaction details.
Naturally, this makes life very difficult for investigators and regulators.
As expected, privacy-enhanced cryptocurrencies are heavily used for money laundering, tax evasion, and several other criminal activities.
Interestingly, privacy-enhanced Currencies are prohibited by the Dubai Financial Services Authority (DFSA) - the independent regulator of financial services conducted in or from the Dubai International Finance Centre (DIFC).
3. The rise of real-world asset-backed tokens
I am extremely bullish on real-world asset-backed tokens, especially:
Subscription Tokens
Loyalty Tokens
Security Tokens
Intellectual Property NFTs
Collectible-backed NFTs
Physical asset-backed Tokens
Subscription tokens
Subscription tokens represent a subscription to a service or product. These will become a simple, efficient, and flexible way for software-as-a-service (SaaS) platforms to raise funds from potential customers.
Loyalty Tokens
Conventional loyalty points are expensive for businesses to maintain as they require investment in technology and staff to manage the program, track points, and handle customer inquiries.
Customers also find it difficult to handle multiple loyalty accounts with different retailers, each with its own set of rules and expiration dates for points.
Loyalty Tokens represent loyalty points & rewards on a blockchain.
They can be easily transferred and traded and offer increased flexibility and liquidity for customers. They can also be tracked and managed using tamper-evident smart contracts. This can reduce the risk of fraud and abuse, and can provide greater transparency and accountability for the loyalty points program.
Security Tokens
Security tokens represent shares, bonds, debentures, and derivatives. Since they are built on blockchain technology, security tokens can be easily and securely traded and managed using smart contracts. This reduces the need for intermediaries, such as stock exchanges and brokerages, and can make the process of buying and selling securities faster and more efficient.
Security tokens also provide greater liquidity and accessibility than traditional securities as they can be easily transferred and traded.
Intellectual Property NFTs
Intellectual property-backed NFTs include blockchain tokens representing:
Copyright licenses of art, books, movies, and music
Trademarks
Patents
Collectible-backed NFTs
Collectibles like stamps, coins, comics, books, sneakers, and historical documents are valued for their rarity, historical significance, or aesthetic appeal.
Blockchain tokens backed by physical collectibles enable price discovery, fake detection, and an immutable chain of ownership.
Physical asset-backed Tokens
These are tokens that represent a physical asset and their transfer results in a legally enforceable transfer of the underlying assets such as precious metals, and agricultural commodities.
HI Rohas, Can we have one token for the customers where the brands can align with this? Loyalty tokens if the customer has to keep track by brand for e.g. Life Style, Shopperstop, Jio, etc., it is going to be difficult. This brand integration will be much easier for adoption.