What 2024 Holds for Blockchain and Digital Assets

Already this year, there has been landmark movement in the digital assets ecosystem, namely with the SEC approving Bitcoin ETF for numerous institutions. As a futurist, I’m especially interested in the potential impacts of this and other market disruptions and momentum, and leverage educated predictions about where the market is headed to guide clients into innovative uses of technology proactively.  

From that standpoint, there are several critical trends organizations should anticipate and prepare for as 2024 progresses. These include the following.

Artificial intelligence helps drive blockchain adoption

AI has been intertwined with numerous enterprise systems and workflows for decades, but recent disruptions and innovations have driven this technology to the foreground. Many traditionally manual and time-consuming processes are being transformed with a new level of efficiency that was previously unattainable.

Layering AI over blockchain technology is an exciting area of opportunity for this. Together, these two innovations can reciprocate trust in the data being processed, and can connect datasets with the ability to streamline transactions and processing across multiple data layers. As blockchain and AI are increasingly leveraged in tandem, organizations are likely to see:

• AI-based blockchain tokens open the door to mainstream blockchain in production.
• AI used to detect blockchain fraud by analyzing transaction patterns and behaviors, enhancing integrity and trust while reducing fraud on blockchain networks.
• Smart contract optimization powered by AI, wherein the creation of smart contracts is automated, reducing errors and increasing efficiency. This improves accuracy, speeds up contract creation, and allows for handling of more complex conditions — supporting wider adoption of real-world asset tokenization and DeFi and reinforcing credibility in the digital asset space.

Meaningful momentum in financial services 

Now that the U.S. Federal Trade Commission has approved Bitcoin ETFs, more “TradFi” (traditional finance) organizations are expected to continue experimenting with blockchain technologies to streamline current processes. Likely outcomes include continued adoption in line with regulatory standards and more applications using DeFi from institutional providers. Additional expectations include:

• Central bank digital currency experiments will gain traction as a go-to-route for value conversion.
• Real-world tokenization of assets will accelerate adoption as a relied-upon method for financial transactions. 
• A push to secure and standardize DeFi applications after disruption with centralized exchanges, with the potential to drive more adoption and create decentralized alternatives to traditional financial services like lending, borrowing and trading.

To participate in and drive this momentum, organizations will need to understand the regulatory requirements, and take steps to build effective programs that ensure compliance for today’s regulatory landscape and changes on the horizon.

Web4 emergence through rapid innovation

The era of web3 currently rules, though many in the industry have already been discussing the next iteration of the internet: the symbiotic web, or web4. Connecting the disparate data sources and data layers through trusted blockchain data using AI, will begin shape a more connected, yet decentralized internet.  

Many of the applications driving this vision already exist, but need maturation and more adoption to become realized. With more use cases being uncovered across all industries, there will likely be a continued push to create systems, tools and connections supporting the future version of the internet, including:

• Metaverse 2.0  innovation will be driven by new connected device capabilities and utilities combined with the augmented reality layer building on the vision of metaverse 1.0.
• NFTs will evolve beyond digital art collections and find real-world applications in various industries like finance, gaming, real estate, retail and entertainment.
• NFTs will continue to introduce opportunities for organizations to build innovative, interactive and engaging customer experiences. This will include the use of NFTs as a foundation for customer loyalty and rewards, transforming outdated models into immersive customer engagement programs.  

In addition to these advancements in AI, financial services and the web, there’s also likely to be meaningful movement towards sustainable blockchain infrastructure. Driven by geopolitical priorities, ESG reporting requirements and consumer demand for ethical business, sustainable blockchain will become a priority by companies and governments. Similar to the reciprocal relationship between AI and blockchain, ESG and blockchain can become mutually reinforcing, with ESG priorities leading to innovation in more sustainable infrastructure, and blockchain technology enabling improved transparency and monitoring of ESG benchmarks.

Since the dawn of blockchain, each year has brought a flurry of excitement, unfulfilled hype, disruption, setback and innovation. The coming year will be no exception. Organizations have an opportunity to engage in emerging opportunities by watching developments closely and implementing risk-conscious strategies for pilot projects and investments in blockchain and digital assets.

Organizations looking explore the next frontier in this space can reach out to the team at FTI Technology  to engage blockchain and digital assets experts and futurists to evaluate business opportunities and program development.  
 

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The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.