Once we’ve developed the year’s big moments, let’s look at the challenges we still have to accomplish in order to continue to have a promising ecosystem and build a new version of our company.
Big challenges ahead
First, the challenge of security. Thanks to its encryption mechanism and decentralized infrastructure, blockchain has one of the most secure technological frameworks available. Nevertheless, flaws in the smart contracts’ code, malicious actors or simply poor security practices can lead to undesirable outcomes with negative consequences. Securing one’s tokens with a hardware wallet, doing one’s own research before investing, avoiding clicking on suspicious links, or sharing a private key with others are just a few examples of easy security practices that should be adopted at all times.
Second, the challenge of regulation. Whether it is to protect blockchain users, but also to increase the level of trust within the sector, regulation is the key to a sector in full structuring and professionalization. No doubt neglected at first, regulatory issues are becoming a priority worldwide. This is the case for the SEC in the United States, the European Commission in the EU and also the AMF in France with the development of the PSAN status, for example.
Regulation must help the sector to develop without hindering innovation, and it is in this sense that players such as ADAN in France help projects in the ecosystem to develop.
Other challenges such as the intellectual property of blockchain projects may arise, even if it goes against the open source model, it could help protect the work of developers.
Also, customer loyalty and retention are at the center of projects, even more so with NFTs. If the industry is to grow, the user base must be considered a top priority, and properly maintained. This will also help boost wider public adoption.
Finally, fake news that attempts to corrupt and misrepresent blockchain and its use cases.
It is essential to provide as much educational information to the general public as possible. This will reduce the number of incorrect assumptions that lead to a negative perception of the entire industry.
And in particular, to glimpse differently the last challenge which is the environmental transition for which blockchain and cryptocurrencies may have a role to play as evidenced by the latest announcements of Tezos or Solana in this regard.
Indeed, while it is true that the Proof of Work (PoW) consensus mechanism used in blockchains such as Bitcoin or the first iteration of Ethereum is far from being energy efficient, this consensus mechanism is less and less used because of its operational drawbacks such as its low speed and low scalability. Almost the entire current DApp spectrum relies on other consensus mechanisms such as proof-of-stake and proof-of-authority, among others, which are much more energy efficient. Therefore, it is an exaggeration to say that NFTs, gaming, and other blockchain use cases are harming the environment.
2021 has proven that the blockchain industry is one of the most exciting sectors
Thanks to the euphoria over avatars and NFTs, the general public has finally realized the power of this technology. The increase in demand for NFTs, bolstered by $22 billion in trading volume, is just the tip of the iceberg. The potential of these assets is enormous and goes beyond the monetary impact within the industry.
While all eyes have turned to NFT, gaming and the metaverse, DeFi continues to grow and consolidate. Ethereum is expected to move in the right direction with the arrival of Proof of Stake.
And while there are still many challenges, adoption seems closer than ever, especially given the traditional financial situation and inflation that is causing us to rethink our current monetary system.