From its beginning to its development until this time, Cryptocurrency has undergone massive changes that have got both positive and negative effects on the sector. As time passes by, new trends are emerging and it is very much important to stay up to date with all these current trends. These trends play an important role in determining the success of your investments and also help us to predict the changes that may happen in future. It is also helpful in getting insight into certain cryptocurrency aspects that will help in countering the effects during times of volatility in the crypto market.
To have a basic understanding is very much important and knowing and adopting current trends and patterns are also very important. For a successful investment, these two aspects must come together and must have counterfeiting power to face any difficulties that may arise in the investment path. These trends will get modified or get completely changed and will pave way for future trends. Having a clear-cut understanding of the current trends will make you a keener crypto investor with future insights and future possibilities. Understanding its importance, the following article will discuss some of the current trends in cryptocurrency and their effects on the investment sector.
Popular trends in cryptocurrency in 2022
Following are some of the popular trends in cryptocurrency in 2022;
- Decentralized finance on Bitcoin
Decentralized finance projects (DeFi) are usually developed on smart contract blockchain. Ethereum is the most common smart contract used for decentralized finance projects. Apart from Ethereum, one of the finest and most efficient smart contract blockchains, DeFi is also executed on Binance Smart Chain, Solana and many others. It was Ethereum which was the first blockchain developed with smart contract capabilities. Because of the lack of alternatives, in the beginning, it is through Ethereum, that all smart contracts were launched. As one of the pioneers and foremost runner in this race, for Decentralized finance, every newly formed developer teams were eager to deploy their projects on the Ethereum Blockchain. Consequently, because of this high demand and popularity of Ethereum, it holds the topmost position in the ICOs in 2017 and is still the forerunner and pioneer in DeFi even until this moment.
Even though Bitcoin is more popular than Ethereum, it remains a silent watcher of the ICO and DeFi boom and its subsequent dependency on the Ethereum chain. Irrespective of its massive popularity, Bitcoin was left out of the Decentralized Finance developments due to its limitations in technology. The creation of the Bitcoin SegWit Upgrade that happened in 2017 made it possible the creation of Bitcoin side chains for the first time. These Bitcoin side chains have got smart capabilities just like Ethereum. These side chains of Bitcoin also inherit the security, settlement assurances, and network effect of Bitcoin.
DeFi projects are made possible on Blockchain with the creation of these smart side chains, which allows the developers to offer sane financial services on Bitcoin as projects are done using the Ethereum chain. An example of one of the side chains is the Sovryn protocol which is a decentralized financial operating system built on the Rootstock smart contract sidechain. Bitcoin is considered to be the hardest money because of its high security and this top encryption used in the Bitcoin Blockchain prompts the developers to launch DeFi projects on the Bitcoin blockchain.
- The need for interoperability is getting much attention
There are many complications and difficulties in using multiple blockchains which makes the experience of the users very problematic. Investors, need many crypto wallets and need to bridge funds from one blockchain to the other which needs in-depth knowledge. The same thing happens with the funds that need to be moved from one layer to another. For an instance, moving funds from Ethereum to a second layer currently costs approximately fifty to one hundred dollars in transaction fees which is independent of the amount that has been transferred.
These problems have created unpleasant user experiences as different applications are used for the spreading of funds. These problems have called for urgent action to be taken to facilitate interoperability among chains which will create a friendly user experience.
- Metaverse, NFTs, and GameFi are soon going to be the replacement for internet
The movement in virtual and augmented reality is what makes the metaverse one of the popular futuristic innovations. It can be seen as a vision for the future internet, combined with some current trends in online infrastructure. This vision is greatly connected with the crypto space, especially to NFTs. The NFT has witnessed a market capitalization of over forty billion US Dollars. NFTs, give every creator an innovative and modern way to monetize their creations which makes possible the participation of creators in the future apprehensions of their creations.
With the rise of the popularity of metaverse, the use case of NFTs is rising rapidly. Since they allow ownership in the virtual world, this popularity is increasing day by day. There is an influx of this metaverse in the crypto universe also and it has got massive demand and popularity. This combination of metaverse and blockchain can be envisioned as the future of cryptocurrency.