Blockchain technology predictions for 2024: Ask 10 experts including Ripple, Coinbase, a16z, and Starknet | CoinDesk JAPAN

Many blockchain developers will feel that they are doing ultimately cutting-edge work, building the financial and business infrastructure of the future. This is nothing short of a “revolution.”

Based on what we’ve seen and reported, that’s correct. The pace of innovation and the speed of new developments, at least in the blockchain space, continues to amaze us.

Although the crypto market was mostly depressed in 2023, there was a constant flow of announcements, new product launches, integrations, partnerships, collaborations, funding, launches, deployments, and migrations.

There’s a lot of change, a lot of information, and it’s all very technical and complex. It’s hard to keep up, but it’s just as hard to stay up to date. Imagine piloting a spacecraft through a dense belt of asteroids and exploring each asteroid in detail. Perhaps AI is our only hope.

Some of the key trends for 2023 were widely predicted by experts. However, there are many cases where this is not the case. In reality, no one knows where crypto assets and blockchain are heading.

We have compiled 10 predictions for 2024 by experts in crypto assets and blockchain technology. Their prophecies are as technical as any other. Take a look.

interoperability

From 2024 onwards, advances in blockchain interoperability protocols will bring about major changes as existing silos between different blockchains are broken down. This shift will allow diverse blockchain platforms to interact seamlessly by sharing data and value transfers, creating a unified and more efficient blockchain ecosystem.

The role of interoperability protocols will be critical in this transformation. Interoperability protocols not only foster innovation, but also foster new applications and use cases, especially in DeFi.

David Schwartz: Ripple Labs CTO

Bitcoin handling fees

We believe that factors that increase variable rewards from transaction fees will become increasingly important in view of the decline in block rewards for miners. Bitcoin’s core protocol has remained largely stable, and the November 2021 Taproot upgrade was the only major protocol upgrade in the past five years, at least in terms of changes that required soft forks.

Therefore, we believe that the factors promoting usage mainly stem from technological innovation within existing networks. That is, the increased use of blob data such as Ordinals and Atomicals, the activation of layer 2 such as the Lightning Network, or the smart contract environment built on the Bitcoin network, such as Rootstock, Stacks, RGB. , or future implementations of BitVM.

David Duong: Head of Institutional Investor Research, Coinbase

Modularity

As more hybrid solutions come to market, like Ethereum’s rollup that uses Celestia as a data availability layer, we’re also seeing modularity-themed integrations and exciting developments in this space. .

Blockchains like Solana, on the other hand, adhere to a monolithic orientation and reject Layer 2, seeing it as having a negative impact on liquidity and user experience.

It will be interesting to see how these two stories play out in 2024, especially as some Ethereum rollups explore the use of the Solana virtual machine.

Abdelhamid Bakhta: Starknet Ecosystem Lead and Core Ethereum Developer

Zero knowledge (zk) proof

The zero-knowledge proof protocol zk-SNARK allows an untrusted ‘prover’ to compute the ‘cryptographic receipt’ of a given computational workload in an unforgeable manner.

Previously, computing such receipts required 10 to the 9th power of power for the original calculation, but recent advances have reduced this number to 10 to the 6th power.

Therefore, SNARKs are a viable option in situations where the provider of the initial computation can shoulder 106 computational power and the client cannot rerun or save the initial data. As a result, many use cases emerge.

Edge devices in the Internet of Things (IoT) can be tested for upgrades. Media editing software can embed content authenticity and transformation data. Remixed memes can pay homage to their original source. Authenticity information can be included in LLM (Large-Scale Language Model) inference. There are many possible applications that could benefit consumers, such as self-verifiable tax forms and bank audits that cannot be faked.

Sam Ragsdale: Investment Engineer, Andreessen Horowitz

Key management/user interface

The advent of account abstraction means that the technical challenges of self-custody may soon be overcome. 2024 will finally be the year when seed phrases will be a thing of the past for most people.

The idea of ​​using 12 words that can never be lost, but cannot be accessed by anyone, to protect assets is outdated and has greatly hindered user adoption. Blockchain is finally in a position to realize the goal of inclusive finance that has been central to its values ​​from the beginning.

Friederike Ernst: Co-founder of Gnosis and Gnosis Pay

censorship

Concerns about centralization essentially boil down to two core issues:

(1) Will centralization vectors lead to network performance issues that put applications at risk of outages?
(2) Does centralization create censorship problems?

One of the interesting things about Ethereum’s separation of block construction, relay, and validation is that it cleanly separates censorship issues between the three different layers of Ethereum’s transaction processing stack.

Last summer, major Ethereum relays began censoring transactions after the US Office of Foreign Assets Control (OFAC) imposed sanctions on Tornado Cash addresses. The problem subsided when Flashbots open sourced market-dominating relays and permissionless relays like Ultra Sound, Agnostic, and bloXroute became competitive.

Now it is the block builders who are increasingly censoring transactions. I predict that some of the biggest development breakthroughs in 2024 will come from areas like mempool encryption, which protects transactions from potentially censoring parties before they are included in a block. are doing.

Ryan Selkis: Founder and CEO of Messari

Security/Privacy

In 2023, there were numerous hacks and scams in the crypto industry, including Euler Finance and Angle Protocol.

Blockchain protocols will create more security solutions and take privacy more seriously.

Ramani Ramachandran, CEO, Router Protocol

Corporate crypto asset utilization

Networks and developer platforms should be prepared to onboard corporate and startup developers as well as independent developers.

Network protocol teams must prepare user experiences that reach millions of end users with a native digital experience. Large companies are moving beyond cryptoassets as an asset class to cryptoassets as products and tools for user engagement.

Cryptoassets need to expand their scope and bring in the next wave of on-chain activity.

Vanessa Pestritto, Director of Partner Programs at Agoric OpCo, a JavaScript-native smart contract platform and proof-of-stake blockchain

Inflow to layer 2

The influx of activity into the Layer 2 chain has slowed down relatively by mid-year, with most liquidity remaining on Ethereum’s mainnet. As a result, DeFi protocols that reside natively on layer 2 chains have experienced a liquidity drain for most of this year.

But as Ethereum’s gas prices rise with the surge in activity, some of the new capital will flow into Layer 2 chains as new hubs next year.

Outlook report for digital asset data and analytics company CCData (formerly CryptoCompare)

Layer 2 integration

Ethereum will implement EIP-4844 (Protodunk Sharding) to reduce transaction fees and improve scalability for layer 2 chains such as Polygon, Arbitrum, and Optimism.

Within a year of the upgrade, Ethereum layer 2 will be consolidated into 2-3 dominant players in terms of value and usage.

Mathew Sigel, Head of Digital Asset Research, VanEck

｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
｜Image: Shutterstock
｜Original text: Blockchain Tech Predictions for 2024, From Experts at Ripple, Coinbase, a16z, Starknet