A Reflection Of Blockchain Advancements To Come In 2023

06 January 2023

Blockchain Use cases by Industry, DeFi Blockchain Use Cases, Blockchain Applications and use cases

As we usher in a new year, it’s time to gear up for another exciting year of breakthroughs and advancements in the blockchain space. Looking back at 2022, the year was packed with numerous developments for both public and permissioned blockchains alike. On one end, there was greater adoption of enterprise blockchain solutions as companies and businesses realised the benefits it had over conventional solutions. On the other end, recent events in the Decentralised Finance (DeFi) space led to improvements in blockchain analytics and tracking of transactions as well.

We take a look at the achievements that the blockchain space has attained in 2022.

Advancements Made in Permissioned and Enterprise Blockchains

Enterprise blockchains had much to cheer about with a series of positive developments in 2022 last year. While public blockchains dominated news headlines with institutional investments, permissioned chains were demonstrating real blockchain use cases, and the technology was steadily being recognised and adopted by large corporations and businesses to improve their operational efficiencies.

According to the State of Enterprise Blockchain 2022 report by Blockdata, more businesses are allocating budgets for enterprise solutions, and the total investments into enterprise blockchains could hit US$16 billion by 2023. Permissioned blockchains are mostly closed ecosystems, and you may be forgiven for thinking that they are less vibrant than public blockchains. But that could not be further from the truth; 77 out of the top 100 listed companies globally have started integrating blockchain technology in their operations, with some even using multiple enterprise blockchains for different business functions.

These corporations include the likes of Microsoft, Visa, and Nestlé which recognise that enterprise blockchain solutions come with improved security and efficiency, while reducing the cost needed to maintain the same solutions which are more expensive with centralised infrastructures. Moreover, companies such as Meta and Mastercard are hopping onboard and creating their own enterprise chains as well.

What are the key focal points to keep in mind when integrating enterprise blockchains into a business operation? First, decision makers should pinpoint the problems that they want to solve with blockchain implementation. It is tempting to view blockchain as a panacea to current operation issues, but the technology works well with data-intensive processes that need transparency and security. By cutting through the hype around blockchain technology and pairing the problem with the solution, it grounds the implementation process in reality; this is one of the key focuses in ParallelChain Lab’s recent ISBA2022 symposium.

Next, business owners should consider how this new technology can be integrated seamlessly with existing infrastructure when opting for an enterprise blockchain solution. The inclusion of decentralised infrastructure should not be disruptive and blockchain solutions should ideally complement current processes so that legacy systems continue to run without a hitch.

How have enterprise solutions expanded to fill different blockchain use cases by industry? First, the integration of Internet of Things (IoT) with blockchain technology has enabled data monitoring in real-time while keeping data accessible to all participants within the network. Adding blockchain technology into the mix essentially fills the gap between data provided by IoT sensors and the reliability of large amounts of data, and solutions such as ParallelChain Lab’s ApprovalChain which operates on the same premise has improved supply chain transparency.

DeFi blockchain use cases are another area that is becoming a rapid interest for companies and institutions. Also known as decentralised finance, the DeFi space is often associated with public blockchains which these protocols build upon, but the benefit of operating without intermediaries while keeping data transactions reliable and immutable is a huge draw for participants on permissioned blockchains.

Current efforts by other blockchain companies try to bridge this gap but the proposed solutions often compromise on security or reliability. True native interoperability is needed for permissioned chain users to access DeFi platforms, and ParallelChain is currently making headway into this untapped potential with its Inter-ParallelChain Communication (IPC) feature which allows enterprises to access DeFi solutions in a safe and secure manner.

Advancements Made in Public Blockchains

While permissioned blockchains have developed better enterprise solutions, public blockchains have also been expanding their utility based on community consensus and current events. This includes the idea of creating sustainable blockchains as green investing and environmental, social, and governance (ESG) concerns permeate investors’ considerations when they invest in digital assets.

Projects like peer-to-peer energy trading on blockchain networks have been proposed and blockchain development teams are opting for consensus mechanisms like Proof-of-Stake (PoS) that are deemed greener in energy usage than Proof-of-Work (PoW) due to the high energy consumption of the latter. Existing blockchains have also been urged to transition away from PoW especially after the Ethereum Merge was hailed as a positive development for blockchains going green.

Smart contracts have also improved to accommodate newer types of non-fungible tokens (NFTs) as well. While NFTs were a hype-fuelled phenomenon in 2021, 2022 was the year that the digital asset explored real-world blockchain applications and use cases. For example, NFT tokenisation has progressed to tokenising real estate assets which are sold on NFT marketplaces like OpenSea, and new NFTs like Soulbound tokens and Proof of Attendance tokens are gaining popularity in creating a trusted digital identity on the blockchain.

Last but not least, the recent events surrounding controversial centralised exchanges have also led to improved transparency and accountability on the blockchain. Proof-of-Reserves is one such concept that accounts for a centralised exchange’s holdings and it is fast gaining popularity. Moreover, analytics platforms in the Web3 space are also creating better tracking tools to monitor these proofs and transactions in real-time, and this would eventually lead to better security and accountability for the blockchain space.

Blockchain Advancements that ParallelChain Lab Has Achieved

ParallelChain Lab kicked off a series of testnets throughout the year to simulate the performance of ParallelChain Mainnet and improve implemented features during its development. The third and latest testnet, Testnet 3, upgraded current smart contract functionality, streamlined code development and toolkits for developers, and simulated staking on the blockchain to test ParallelChain Mainnet’s Delegated Proof-of-Stake consensus mechanism.

Moreover, the team proposed two token standards, PRFC-1 and PRFC-2, which supports fungible and non-fungible token assets on ParallelChain Mainnet respectively. The proposed standards aimed to define a solid interface, simplify the API surface, and reduce the size plus cost of deploying smart contracts.

Lastly, ParallelChain Lab also organised the International Symposium of Blockchain Advancements 2022 (ISBA2022) for the first time in Singapore, which brought blockchain experts and investors from around the world together in a two-day conference event. In doing so, ParallelChain Lab aimed to motivate essential questions about the development of Web3 and create a guiding principle for blockchain advancement.

Read about ParallelChain’s development recap for 2022 here.

Let’s shift our focus back to the future of blockchains and ask ourselves - where does the future of blockchain advancements lie? To answer this, we speak to five key members at ParallelChain Lab to share their opinions about the future.

Ian Huang, Founder, CEO & Chief Architect

The future of blockchain development points to one that encompasses different types of blockchains, public and private interacting with one another, to open a wide variety of new use cases beyond our current imagination.

This hybrid multi-chain ecosystem will allow both centralised and decentralised applications to proliferate and fill different niches of the financial system.The idea that only one type of blockchain will rise above the rest is passé, and only those that see through the hype and understand how blockchain technology can power more utility-scale applications in the established ‘system’ will see success in 2023.

The pressing issue that the blockchain industry faces at the moment is the loss of trust. Digital asset consumers and financial regulators have mixed the terms ‘digital assets’ and ‘blockchain’ together without discrimination, and this has damaged the faith in blockchain technology with the market events of 2022. Web3 and blockchain companies must impose greater transparency and work with the existing regimes to regain trust of consumers and regulators in the blockchain space.

Ho-Leung Cheung, Board Director

The success of any new technology, even that of blockchains, stems from the fundamental balance of supply and demand. If the technology meets the self-fulfillment that individuals seek, it will naturally create more demand for it.

As blockchain and Web3 developments permeate different levels of societal interaction, the notion of transaction will go beyond the exchange of assets of value to one that encompasses other forms of social transactions such as interpersonal communication and event participation. The next generation of blockchains will play a crucial role in enabling such exchanges with new innovations, and pave the way for some truly ground-breaking use cases in 2023.

Panagiotis Simatis, Director of Data Science Engineering

Blockchain and data science met an incredible popularity boom in recent years, with blockchain becoming a billion-dollar market and data scientist being called the sexiest job in the 21st century. While both technologies are data-driven, they are two distinct fields, and comparing them is an apples-to-oranges comparison. Blockchain provides a transparent transaction framework while ensuring data integrity. On the other hand, data science derives useful insights from large volumes of data (i.e., big data). Nonetheless, the two technologies can seamlessly complement each other, but this research area remains in its infant state.

ParallelChain aims to combine the benefits of blockchain and data science to provide top-notch and straightforward solutions to our users. The benefits of this combination are multifaceted. For example, due to its data-hungry nature, data science requires large volumes of potentially sensitive information. Thus, ParallelChain's transparent nature gives the users full control over their data, avoiding misuse by bad actors. On the other hand, data science (either algorithmic or machine learning based) can help automate blockchain procedures (e.g., fraud detection). Last but not least, the two technologies can coexist in a feedback loop in which the blockchain creates and handles data, and the data science models perform real-time data analysis. Thus, users stay up to date with meaningful insights, empowering informed decisions and enhancing transparency.

Alice Lim, Distinguished Engineer

The hot thing in the blockchain space in 2022 was L2 scaling, and I have not seen any indication that the focus is going to shift away from this in 2023. There’s still a lot more work to be done on bringing the developer experience and user experience of using some of these L2 networks on par with the developer and user experiences of even the L1 networks they are built on, for example.

I have lamented how virtually all extant blockchain applications today have something to do with financial speculation, so I hope that once this work (making L2s more usable) is complete, more dApp (decentralised application) developers will realise the performance and cost benefits of building on an L2 (or generally outside a busy mainnet) and start coming up with creative new blockchain applications that were not economically viable before.

Jessie Chan, Chief of Staff

The chain of events in 2022 has led to a loss of confidence in Decentralised Finance (DeFi), and it has subjected the space to heavier regulatory scrutiny. Despite that, I am optimistic about what we, as builders, can achieve together in 2023 and beyond.

Ups and downs in the environment are unavoidable, but as the technology matures and the ecosystem becomes more robust, adoption will become more widespread and we will grow more resistant – even agnostic – to external factors such as fluctuations in the cryptocurrency market. Blockchains will take root in the infrastructures powering the digital economy, and its advancement will be driven by use cases that go beyond financial services.

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