Art Malkov is a Columbia University Blockchain Accelerator Advisor. Former CMO for leading Web3 companies.
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Spring is here in both literal and blockchain development sense. The projects that have survived and continued building are rolling out the next wave of Web3 innovation. As business leaders, we’re beginning to see some of blockchain’s promises realized and limitations addressed. What trends do you need to follow?
• Account abstraction promises greater security, including multi-signature authorization or daily transaction limits. It will also simplify user experience and improve scalability.
• Verified AI output using trusted sources will be increasingly important to safeguard against misinformation biasing LLMs for malicious purposes.
• Tokenized assets, including Decentralized Physical Infrastructure Networks (DePIN) hold incredible promise.
• Digital asset adoption in Africa, where new technologies can leapfrog existing incumbent tech. Examples: peer-to-peer payments, micro-financing, identity management and supply chain tracking.
• Government regulation, if done right, will create an environment where institutional money can more safely encourage investment in blockchain. We’re already seeing this happen with the Bitcoin ETFs (Exchange Traded Funds).
The Bitcoin Halving And Why It Matters
Bitcoin halving took place on April 22 of this year. At that time, the bitcoin rewards paid to businesses mining bitcoin will be reduced by half. This has taken place roughly every four years since 2009. Leaders' income will be reduced, some might go out of business and others, to stay competitive, will need to acquire more efficient equipment and reduce their electricity costs.
NFTs Beyond Collectibles: Utility and Fractionalization
We’re now on a clear path to a day when NFTs are going to be useful. Relatively soon NFTs will be able to act as smart wallets and execute smart contracts. Leaders can expect applications in Identity, community membership and in DeFi, where NFTs will be used as collateral for loans.
NFTs will be used to unlock governance rights in DAOs, referral programs, royalty attribution and distribution as well as educational credentials.
Many of these examples will include a gamification component, which we begin to see in referral programs, Play-to-Earn games, and bitcoin mining. One example of such a fusion is GoMining.
They are fractionalizing the ownership and management of BTC mining power and gamifying the incentive structure. This specific case demonstrates the potential of NFTs, a pathway to accessibility and developing custom functionality for entire industries, such as bitcoin mining.
The Rise of US-Based Crypto ETFs and Digital Assets Adoption
The recent SEC approval of Bitcoin ETFs was a significant event in the world of cryptocurrency. A Bitcoin ETF, or Exchange-Traded Fund, is an investment vehicle that allows investors to gain exposure to the price movements of Bitcoin without needing to own the cryptocurrency directly.
According to Reuters, U.S. Bitcoin ETFs saw $4.6 billion in volume on the first day of trading. That shows a strong retail and institutional interest in having exposure to Bitcoin.
For those businesses who want to use crypto directly, we’re going to see a demand for secure, private payment systems that have the ability to offer KYC/AML options. (Know-Your-Customer/Anti-Money-Laundering) Particularly for businesses, I believe solutions like IronWeave, ZCash, and Dash are going to generate more interest.
What’s the takeaway? There are good reasons to be bullish about digital assets, such as the influx of retail and institutional cash. Digital assets are becoming more useful, and you, as a company, might have many more reasons to accept them as part of your daily business activities.
DePIN: Bridging the Physical and Digital Divide
DePIN is short for Decentralized Physical Network Infrastructure. Centralized networks have offered immense value to people while concentrating power and wealth in the hands of a few. What good is a phone unless there’s a network of people to call? Communications networks, power utilities, cloud storage, supply chains, ride-sharing, and other network-based businesses have undue influence over our lives.
DePIN offers an alternative to today’s centrally owned and controlled networks by tokenizing these networks and allowing ownership and management to be distributed among the token holders. And because DePIN projects have tangible applications to disrupt large incumbents, I believe this sector is here to stay and will gow immensely in the coming years.
The DePIN landscape can be divided roughly between physical and digital resource networks. In the physical camp, keep an eye on Helium, Nodle, WayRu to name just a few. There’s interesting work being done in the Geospatial area, in mobility and energy networks,
AI And Blockchain: A Powerful Combination
Businesses can integrate Artificial Intelligence (AI) with blockchain technology to enhance security, scalability and data analysis.
Security With AI For Anomaly Detection: AI algorithms can analyze blockchain data for suspicious activity in real-time.
AI-Powered Data Management can filter and compress data stored on the blockchain, making it more efficient and scalable.
Data Provenance And Trust: AI can help verify its authenticity and origin. This builds trust in the data used by AI models. Two methods are by establishing provenance over time, and reputational systems that weigh the reliability of the data based on the origin and reputation of that data source.
There’s every reason to be optimistic. Crypto winter is over, and new innovations are emerging: account abstraction, empowered NFTs, AI-enhanced data, tokenized assets and institutional money are entering the space. We’re on the brink of widespread adoption as more people begin to see that there are real benefits to Web3 technologies.
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