How Will Blockchain Evolve in 2023?

The past 12 months have been unsettling at best and out of control at worst for the crypto and blockchain world. A large number of crypto projects, both decentralized and centralized, have collapsed or are about to go under, making it one of the most turbulent years in the industry’s history. 

It was as if the ecosystem was going through massive birth pains, shaking out all the bad actors and outdated methods in a dramatic, but hopefully successful, process of maturation. With that, growth remains apparent, as some changes look to be looming. Here is a blockchain forecast for businesses and enthusiasts to take note of for this year.  

Educational institutions and governments to study scalable blockchain models

Blockchain technology shows a lot of promise for making management systems within the academic and public sectors more efficient. However, criticisms about blockchain’s Proof-of-Work (PoW) mechanism consuming a massive amount of energy have derailed its adoption. The key to blockchain being energy efficient actually lies in scaling its block sizes and transaction capacity.

Imagine it takes 1,000 megawatts (MW) to be able to add a 1MB data block containing about 2,000 transactions at a throughput of just seven transactions per second (TPS). With these numbers, it is definitely consuming too much energy. However, if the same amount of electricity is used to process a 4GB block containing over 3 million transactions at a throughput of about 50,000 TPS, then it can justify the energy consumption.

Achieving 4GB blocks at over 50,000 TPS is only made possible through scaling. The BSV Blockchain, for instance, has enabled limitless scaling, which means that it can continuously increase its block sizes and throughput—at the same time lowering its transaction fees to $0.005—according to market needs. With this solution, institutions of higher learning and national governments will be pushed to further investigate scalable blockchain models.

Meanwhile, researchers will find that the Blockchain Trilemma, which describes the challenge of making blockchains ideal for decentralization, scalability and security, is a flawed hypothesis. Because developers of ETH and BTC have been unable to solve the problem of scaling, the blockchain trilemma implies that no one will be able to. However, the BSV Blockchain has already solved this trilemma, and it proves that scalable blockchains using PoW can achieve security and decentralization.

“With regulators, politicians and law enforcement finally awake to the scammers preying on consumers, the downfall of these long-running frauds is nigh. Better still, the thinning of this herd will allow the market to see BSV for what it is: a regulatory friendly and legally compliant blockchain that can serve as both the backbone of the Web3 revolution and an environmentally friendly data storehouse without peer. A little late, in my opinion, but better late than never,” Calvin Ayre, founder of capital investment firm Ayre Group and media outlet Coin Geek, wrote in his 2023 blockchain forecast.

Closure of crypto-related businesses

Due to fraud scandals and the FTX collapse that happened in the past year, doubtful exchanges and unregulated platforms will likely be investigated and shut down as a result of a confluence of regulatory scrutiny, a restricting financial global economy and widespread exit frauds and hacks. Because of this, people may expect to see a surge in funding for programs and platforms that make the most of blockchain’s actual potential, instead of it being used mainly for crypto trading. 

There has also been widespread agreement among policymakers that cryptos fall under the purview of the Howey Test, which determines whether or not a transaction can be considered as an investment contract. Consequently, ongoing crypto and blockchain initiatives may be faced with additional legal challenges. 

In the same vein, consumers may witness overzealous authorities continuing to confuse crypto and blockchain, thus, stifling blockchain innovation in general. The crypto world is full of technical jargon that people may understandably be perplexed by. Untangling these closely related topics for authorities and lawmakers to decipher may have a crucial effect for blockchain adoption and regulation.  

The past year was a difficult one for the crypto industry. However, this may be a blessing in disguise for blockchain development and adoption. As the events of 2022 showed the world the real dangers of crypto trading on a centralized exchange, attention will be shifted, not only towards decentralization, but also towards the real utility of blockchain. 

“The days of ‘number go up’ seem well and truly behind us. The 2022 exposure of so much criminality at the heart of this grifter economy has virtually guaranteed there won’t be another influx of public (i.e., sucker) money anytime soon. And without a steady stream of fresh funds, Ponzi schemes can’t—and won’t—survive. Good riddance,” Ayre stated.

It is about time to weed out the bad, and people understand that blockchain is a technology that can be used not only for crypto trading fraught with fraudulent activities. 2023 may just be the year when stakeholders recognize the real value of enterprise blockchain, paving the way for a boost in its development and adoption.