Reputation Institute. What will happen to blockchain in 30 years
The emergence and spread of decentralized solutions have marked a new stage in the development of the Internet and a renewed approach to user interaction online. Here's a look at how this technology may evolve
As the world moves towards a digital future, decentralized blockchain and Web3 technologies will play an increasingly important role. The current landscape of cryptocurrencies and decentralized applications is rapidly evolving, this is just the tip of the iceberg compared to the future potential of these technologies. With advances in artificial intelligence, quantum computing, and internet infrastructure, the next three decades could usher in an era of decentralized innovation, changing the state of industries and societal institutions around the world.
Blockchain, the technology behind cryptocurrencies such as bitcoin, has come a long way since its inception more than a decade ago. What started as a transparent system for recording financial transactions has now evolved into a versatile platform for a multitude of applications. From supply chain management and decentralized finance (DeFi) to digital identity and voting systems, blockchain has demonstrated the potential to fundamentally change the way things work for familiar solutions in business or private transactions.
The broader concept of Web3 as a designation for a new era of Internet development represents a paradigm shift from the traditional centralized architecture of the Web to a decentralized and user-centric experience. The Web3 concept relies on blockchain and other decentralized technologies that allow users to control their own data, interact directly with applications, and participate in governance through decentralized autonomous organizations (DAOs).
Building on existing concepts and trends, it is possible to chart the potential trajectories of blockchain and the more global Web3 sphere over the next 30 years. Experts told RBC about possible use cases and implications of these technologies in the future.
"Universal profile or cryptocurrency wallet."
According to experts, the market of the Web3 sphere will grow to $678 billion by 2026, and in another 30 years may already be trillions of dollars. There are several directions and trends that will continue to develop in the face of uncertainty and may become part of the economy of the future.
- Transition to decentralized identity
Web3 will see the emergence of decentralized identity systems. This form of identity can not only simplify the way personal data is validated but also remove the need to share it with intermediary services. For example, users will no longer need to create an account for each provider to receive services - just connect a universal profile or cryptocurrency wallet.
Such a wallet with support for assets in blockchains can contain tokens confirming participation in an event or the level of qualification for a job. At the same time, the number of wallets a user has is not limited - it will be possible to use several profiles for different purposes.
- Changing business models
The current model of the Internet (what can be called Web 2.0) has helped authors to create and share content, to quickly gain popularity by gaining access to audiences around the world. However, this has a downside - now users don't own their content, and a significant portion of their earnings go to centralized platforms.
The Web3 era will make the creator economy fairer and give people the freedom of choice to control their ideas and earn a higher income. Decentralized services will offer users alternative models of interaction with the audience, thereby reducing the influence of intermediary tech giants in the chain of content creation.
- Democratization of finance
The tokenization of assets continues to gain popularity, and the market already offers various examples of transferring familiar financial instruments (securities, futures contracts) and physical assets (precious metals, real estate) into digital form. The development of blockchain technologies will help simplify retail investors' access to non-public assets by tokenizing shares of private companies.
Whereas now investments in high-growth companies are only available to institutional investors, in the Web3 economy of the future, new financial products will emerge that will lower the thresholds of entry for more people.
"The development of reputation institutions will accelerate."
Despite its relatively recent emergence, blockchain has firmly entered the lives of not only ordinary people but also businesses and entire countries, which apply elements of this technology in various activities and spheres of life. We can already identify key areas where blockchain and decentralized solutions will bring significant changes in the next 20-30 years.
- Financial industry
Blockchain as a technology at the intersection of IT and economics will bring changes to the current global financial system. The role of financial intermediaries, for example in making payments, will be significantly reduced, which will have a positive impact on the cost and speed of money transfers.
There will also be global changes in the banking industry: standard services related to lending, deposits, storage, and asset growth will be taken over by decentralized finance projects (DeFi), and the payment function of banks will be monopolized by the state through digital national currencies (CBDC).
The development and distribution of software smart contracts will significantly automate processes related to the activities of business entities. This will reduce business costs, as well as increase the transparency of collected statistics, and improve the quality of macroeconomic assessment of the situation in the country.
- Socio-economic sphere
Public administration processes will also be improved by blockchain technology. For example, the concept of "open voting", where elections in the country will be held using decentralized, single-edit secure solutions with transparent vote counting, will make the process more democratic and reliable.
In the socio-economic sphere, blockchain technology will be used in social policy, particularly in government support measures: the processes of lump-sum or regular payments will be transparent and automated, and the technology itself will simplify access to public services and financial support measures for different segments of the population.
- Decentralization of the global economy
With the advent of blockchain technology and distributed ledgers, the centralized world economy, based on reserve currencies and existing economic linkages, will evolve towards decentralization. Instead of "reserve currencies" owned by individual states, alternative world financial systems are likely to emerge. These may be built on decentralized principles, where system stability, issuance, funds circulation, and other aspects will be controlled by the "code" and architecture of the network, rather than by one particular bank or government.
International trade, logistics, and currency markets will be transformed away from leading nations in favor of a large number of actors with equal influence, and blockchain technology will enable new, more robust, reliable, and transparent forms of interaction between nations and economies. They will be based on common, agreed, and accepted principles, without a bias towards a large center or a large economy. This could lead to developing and third-world countries being able to increase the growth rate of their economies.
- Real economy
Businesses, entrepreneurs, and companies operating in the real sector will also see significant improvements in their processes through the adoption of blockchain. And not only in terms of cost reduction but also in terms of optimizing business processes. From quality control to logistics, from enterprise accounting to applying for loans or financing, blockchain technology will be used as a tool to simplify the usual complex bureaucratic processes.
- The development of the Internet. Web3
Blockchain technology will make a significant contribution to the evolution of the Internet in future decades towards the concept of Web3. In the current centralized model of user experience on the Web, the data, information, and information that users store on servers of IT companies can be lost (and not only the information itself, but also the rights to it).
The Web3 concept implies that ownership and rights to information on the Internet will belong directly to the user, whose identity will be confirmed by a unique identifier. This will significantly increase control over information and the security of its use and will reduce the influence of IT companies and social networks as usual on the individual in terms of rules, conditions, and prohibitions.
In the coming years, the development of the institution of reputation, which will act as an important element within Web3, will accelerate significantly: the reputation system of an identified user based on blockchain technology will be formed and controlled by the decentralized system and its activities. This will significantly optimize human behavioral patterns on the Internet and improve the quality of information on the Web.
Cybersecurity will also increase significantly. Hashing technology will evolve rapidly over the coming decades, and as a consequence, new forms of blockchains will be based on increasingly advanced and secure ways of encrypting data. This will greatly reduce the risk of theft of an individual's data or assets when using the web.
- Tokenization of assets
Blockchain will bring significant changes to the realm of financial markets. The vast amount of assets that are currently traded in global markets will be tokenized - given their digital form. This will make it easier for traders to access these assets and significantly reduce trading costs and expenses. When investing in these assets, the use of blockchain will improve the principles of exchange trading.
In particular, new digital exchanges will appear. Instead of the usual stock and commodity exchanges, digital asset exchanges will be able to trade various types of assets, from tokenized stocks to tokenized industrial metals. As a consequence, the mutual settlement of transactions involving these assets both on exchanges and in the real world will be automated and simplified, and the transparency of exchange trading will only increase, reducing the number of price manipulations in the markets.
At the same time, it will also be much easier for businesses to raise finance: the classic principles of IPOs will be transformed into the tokenization of company shares or bonds on digital exchanges, making it easier for small and medium-sized companies to list. This will inevitably lead to a better economic situation for businesses around the world and will have a positive impact on the growth of the global economy.
"It is true decentralization"
In my opinion, the prospects for the application and implementation of blockchain technologies in real, everyday life are quite high and extensive. We are now in a kind of tipping point, when existing systems show failure, being unable to absorb the need for expansion that exists in the world.
Yes, at the current level, the application of such solutions may seem to some like an unnecessary complication, but if we go back in time, something similar was said about online business, which has already become familiar to everyone.
Transferring bureaucratic infrastructure and various government databases into a cross-platform system would be ideal both for the structures themselves and for the users. Because the time for query processing and data compilation would be significantly reduced.
Similarly, solutions based on smart contracts could be used in the conclusion of insurance or mortgage lending contracts, and so on. By the way, steps in this direction are already underway and the first solutions are already reducing the time to review and conclude a transaction from a month to a few hours.
Even if these solutions are organized on so-called private blockchains (i.e. with a high level of centralization), the competent use of cryptographic solutions will at least increase the level of data protection. Not to mention digital currencies, which will help create an alternative to the current payment network, which will allow outsider countries to fully conduct foreign economic activity.
At the same time, of course, decentralized solutions, both commercial and spontaneous-authored, will also develop.
The sphere of entertainment and social networks will undoubtedly absorb innovations much earlier. It is more interesting to the youth segment and lacks the limitations inherent in large state and corporate structures. And it is there that real decentralization will be possible. Although, of course, there will still be attempts to limit it to certain frameworks. But I believe that enthusiasts will still find ways to circumvent them because, in fact, this is also one of the most important opportunities that the Web3 sphere offers.
Perhaps my colleagues may find me overly idealistic, insisting that digitizing every step will lead to total control and restrictions. But I can't stop reminding you that all attempts to realize this usually end in a bad way, leading to the emergence of new directions opposing rigid restrictions.