IIn the depths of the crypto winter, surrounded by fears of contagion, it can be difficult to remain optimistic about the future. Experts like Peter Schiff or Nouriel Roubini now imply that Web3 is facing not just a winter or even an ice age, but an extinction level event. Everyone involved and passionate about the industry this time last year probably lost money – or maybe a significant amount. The pain of these losses does not help to stay bullish.
However, working on the front lines of this new technology movement and speaking to dozens of companies, governments and protocol development teams, I can assure you that the rumors of Web3’s death are greatly exaggerated.
This industry will not be defined by speculative ups and downs, but rather by what it is built on: breakthrough technology that will eventually touch all of our businesses, our governments, and our individual lives. During this downturn, tremendous progress is being made in the quality of technology. Real-world use cases that will define it for the average person are emerging.
Despite all the current negative noise, 2023 will be defined by enterprise adoption. The idea of ownership of our digital lives is not going away because of a speculative crisis. Businesses, institutions and governments know they need to get involved in empowering people in the digital age or they will be left behind.
I’m old enough to remember the “bing-bong-zzzzhhhh” of dial-up internet. I even remember experts saying it was an unnecessary fad. But, of course, the limited use cases of slow internet gave way to the age of broadband that enabled video streaming, smartphones, and the thousands of apps that not only improved our daily lives, but dominated it.
As in the early days of the internet, scalability has prevented blockchain technology from being able to run on many world-changing use cases. In 2023, breakthroughs will begin to unlock the true potential of this technology.
One very promising area is zero-knowledge cryptography. The potential for several zero-knowledge (zk) Ethereum Virtual Machine (EVM) projects – which are currently being built – will be a watershed moment for Web3 as they energize what we can do on a blockchain.
In addition to zero-knowledge cryptography, there are other key breakthroughs, interesting partitioning architectures at L3 and L4 that could enable sufficiently high TPS, finality, and latency. These developments have the potential to open up pipe dreams and bring together new ideas we haven’t even dreamed of yet.
Businesses and governments, even before these leaps in technology allow for more creative applications, are ignoring the short-term distress. They continue to push use cases forward, despite current technology constraints. Recent conversations with executives from many Fortune 500 companies revealed a consistent mandate to build a Web3 strategy in 2023 and deploy capital there.
It’s a similar story for governments, which have expressed continued interest in applying blockchain technology to improve the efficiency of a myriad of processes from land registries to elections. Perhaps most excitingly, we had the opportunity to speak with protocol developers looking to deploy more real-world focused dApps.
There is no doubt that continued speculative capital flows into thousands of speculative tokens are unlikely to occur next year. However, this recent burst of the bubble will instead lead to the start of a much more lasting and significant boom. The next boom will be about real-world functional application of breakthrough technology.
It’s an exciting time to be at the forefront of development which is happening quietly and steadily – and there’s a lot of optimism hinting that this year will be the ‘Year of Web3 for the Enterprise’.
Jordan Calinoff is Vice President, Strategy and Revenue at Horizen Laboratories. Prior to joining the Web3 industry, he worked at TradFi at some of the world’s largest investment banks and elite investment firms. He started his career as a financial journalist. He is now taking the world one enterprise use case at a time and looking forward to what 2023 will bring.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.