Specialists of the publication Interestingengineering investigated the reasons for blockchain development and predicted the value of cryptocurrencies in 2023. What awaits the crypto sector in 2023? Let’s try to find out!
Better Regulation
The regulation of cryptocurrencies, in general, has been a significant problem. Numerous regulators have been forced to intervene to fill regulatory gaps around crypto assets due to the rise in acceptance and illegitimate use of these assets and the threat they pose to global financial stability.
Significant progress has been made in this regard in 2022. As an example, the Office of Foreign Assets Control (OFAC) in the US has increased penalties against cryptocurrencies under the Specially Designated Nationals and Blocked Persons (SDNs) List. This year, the authorities imposed sanctions against the largest darknet market Hydra and two cryptocurrency mixers, Bitblender and Tornado Cash.
Since the FTX crisis, the push for regulatory control of crypto assets has expanded and is likely to continue into 2023. Regulators will likely pay more attention to Web 3.0 in 2023, especially with the DeFi and NFT hype. For example, to promote Web 3.0, the Japanese government has approved digital transformation strategy plans and set up a Web 3.0 office under the Ministry of Digital Technology.
Role of Web 3.0
Since its inception, the Internet has evolved steadily and now has over 5 billion active users, or about 63% of the world’s population. The original phase of the Internet, sometimes known as the static web, where most online websites were read-only and had no interactive features, is long gone. The dynamic web, also known as Web 2.0, has replaced Web 1.0.
Through the widespread use of social media sites such as Twitter, Facebook, and others, Web 2.0 allowed users to interact with web pages, communicate with each other, and create their own content, although it was dominated by large sites that set rules and controlled data.
Web 3.0 is the last phase. It is focused on creating a more democratic version of the modern web. The concept is centered on the idea of democratization and empowering people to control and own their data. Decentralization will allow Internet users to do more peer-to-peer transactions and deprive large corporations of power.
The semantic web, data mining, machine learning, natural language processing, artificial intelligence, the Internet of things, and blockchain are just some of the technologies that will be integrated into Web 3.0. Undoubtedly, blockchain development is crucial to the development of Web 3.0, including Metaverse, NFTs, decentralized finance (DeFi), and decentralized autonomous organizations (DAO).
Read Next: What Is Web3: Everything You Need to Know in 2023
Identity
As digital worlds predict, protecting our unique identity and authentication becomes even more important, especially as more businesses and communications switch online. At the moment, identification systems have several drawbacks and can be prone to errors and fraud.
Blockchain enthusiasts argue that these problems can be solved with blockchain technology, which also offers a single point of identity and asset verification. Although, as we have seen recently, it is immune from scams and can be hacked.
In addition, some argue that blockchain identity can provide an entirely new form of self-sovereignty. In fact, at the core of Web 3.0 is the requirement to control personal information and digital data across platforms. Blockchain is where Web 3.0 begins, but its ambition and reach will extend far across the Internet, metaworlds, and shared networks.
Key Signals of Cooperation
Although skeptics have attempted to disprove the viability of cryptocurrencies as an investment, arguing that they are much more risky than other types of investments, large IT businesses and financial institutions are constantly increasing their use. Approximately 74% of institutional investors plan to invest in cryptocurrencies, according to Fidelity Digital Assets, which surveyed more than 1,000 institutional wealth managers in North America, Europe, and Asia.
In the first half of 2022, around 58% of institutional investors purchased cryptocurrencies. Thus, it looks much more encouraging for 2023. At the Cloud Next conference, Google revealed that it would be relying on Coinbase in early 2023 to allow specific customers to start paying for cloud services with cryptocurrencies.
According to Coinbase, it will use Google’s cloud computing infrastructure. Google expects that users will be able to use cryptocurrencies, in particular bitcoin, ethereum, and litecoin, as a result of this agreement. In addition, Google introduced the Blockchain Node Engine, a node hosting solution for Web 3.0 developers. The tool’s purpose is to facilitate the development and implementation of blockchain-based platforms and applications.
Growth of Investment in Stablecoins
Investors often seek security in safe assets during volatile times. Stablecoins were thought to be more stable than volatile cryptocurrencies like bitcoin and ethereum. According to this characteristic, they were considered the ideal choice for those wishing to protect their money during unstable periods.
The collapse of the TerraUSD stablecoin in November shook confidence in stablecoins. However, a resurgence of other, more stable stablecoins is expected. De facto, backed stablecoins like USD Coin have proven to be resilient, and this is likely to help boost the future stablecoin market.
Read Next: Why Regulators Are Worried About Stablecoins in 2023?
New Meme Coins to Be Released
Dogecoin, a cryptocurrency first introduced in 2013 as a meme based on an image of the now-popular Shiba Inu dog, has come a long way to reach its current market cap of $10.06 billion. With over 200 meme currencies currently in use, this token is expected to continue its growth in 2023.
Tamadoge is the most modern meme cryptocurrency, and users can earn it by playing games or buying it with fiat money to spend on in-game purchases. The prosperity of this type of cryptocurrency depends on an enthusiastic community of online traders.
Bitcoin May Lose Ground
As most Web 3.0 tools start showing real use cases, Bitcoin’s lack of day-to-day usefulness will start working against it. It may become a ‘pet rock,’ where asset ownership is not as desirable as investing in tokens and ecosystems as commercial, and business use grows. Businesses, individuals, and governments will continue to face pressure to reduce wasteful energy use, and cryptocurrencies are already under severe pressure due to their significant consumption in this area.
Web 3.0 supports Proof of Stake (PoS) on top of other mining options, which could make PoS blockchains more resistant to ESG criticism and regulation. However, it also gives participants with a larger share more influence over the network. Any residual Proof-of-Work (PoW) chains will need to prove their worth to justify the continued use of energy. Since bitcoin will most likely not switch to PoS, it will continue to face energy consumption challenges. Bitcoin once had the extraordinary ability to serve as a digital hedge similar to gold, but within a few years, it did not reach that potential. Instead, it acted like a high-risk tech beta.
NFTs
With the transition to the jpeg era, the usefulness of NFTs will become more advanced, individual, and commercial. Blue-chip jpeg NFTs can simultaneously be an asset class worth many billions of dollars.
The jpeg period, the era of non-fungible tokens symbolizing 10,000 PfP projects and zero utility art, is predicted to end in 2023 as the Web 3.0 ecosystem evolves. As many other use cases will be developed, all of which will use NFT as the underlying technology, the name ‘NFT’ will no longer stand for digital art as it does now. Companies like Starbucks are already considering different ways to use NFTs. More executives are watching Starbucks’ progress in using NFTs for loyalty programs since if it succeeds, a wave of high-profile companies could start issuing NFT reward points.
The term ‘physical’ will become more common in 2023, and a teenager who buys a real pair of Nikes will also receive a digital receipt for those shoes, which they can wear over their metaverse avatar.
Noticeable Improvement in Web 3.0 Games
Web 3.0 games, for the most part, have yet to live up to their potential. Axie Infinity and DeFi Kingdoms are two successful Web 3.0 games. However, despite being touted as predictors of the future of gaming, they didn’t have much of an impact on the 3 billion gamers worldwide. Web 3.0 games will release new products in 2023 that combine the practicality and beauty of regular games, breaking the habits of those early projects.
The visual appearance of future Web 3.0 games will resemble mainstream video games. Studios, businesses, and games that have been developed with a gameplay-centric strategy, such as Horizon, Animoca, and others, will begin to receive more public attention than priority-character-focused initiatives such as Axie Infinity.
Conclusion
Despite professional forecasts, it is still unclear how cryptocurrencies will change in price and what the year 2023 will be like. On the other hand, cryptocurrencies will undoubtedly stay here. Additional restrictions and expansion of cryptocurrency exchanges by institutional investors are not the only things to look forward to. Things could get very interesting in 2023 with metaverse, NFTs, and the ability to create a virtual territory.
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