7 Blockchain Development Predictions for 2024 from Leading Experts

In 2024, blockchain technology continues to astonish with its rapid pace of new developments and the speed of innovation adoption. Continuous launches, announcements, integrations, partnerships, new product rollouts, fundraisings, transitions, migrations, and more make it challenging to keep up with the trends, especially considering the technical complexity of some aspects of blockchain operations.

Overall, several key trends in blockchain development were accurately predicted by experts a year ago, but some have surprised even the most experienced crypto enthusiasts. No one can say with 100% certainty how blockchain technologies will evolve next year or where it will all ultimately lead.

However, despite the inaccuracy of forecasts, it is always worth listening to the insights from experts who have earned a reputation in this market and are at the forefront of blockchain development, shaping the business and financial infrastructure of the future.

In this article, I've compiled seven notable predictions from leading blockchain technology experts that are technically substantiated and deserve attention.

1. Modularity

Abdelhamid Bakhta, core/lead Ethereum developer at Starknet ecosystem:

“In 2024, we may witness the exciting development of two narratives supporting the modular future of blockchain:

1. On the one hand, more hybrid solutions using Celestia for data availability are entering the market, with Ethereum rollups being the best example.
2. On the other hand, we have blockchains like Solana , which persistently follow a monolithic development approach and avoid Layer-2s, considering them harmful to user experience and liquidity.

As some Ethereum rollups begin to use SVM (Solana Virtual Machine), it will become even more interesting to watch.”

2. Interoperability

David Schwartz, CTO at Ripple Labs:

"We expect further development of blockchain interoperability protocols , which will be a significant shift in overcoming existing barriers between different blockchains. Blockchain platforms will finally be able to exchange data and transfer assets seamlessly and efficiently, functioning as a unified ecosystem. Interoperability protocols play a crucial role in fostering further innovation and expanding crypto use cases in DeFi and other areas."

3. Zero-Knowledge Proofs

Sam Ragsdale, investment engineer at a16z:

"In the past, compared to the original computations, it required 10^9 work costs to compute cryptographic receipts of computational load that cannot be forged, using an untrusted 'Prover.' zk-SNARKs reduce this number to 10^6, opening up many use cases where clients cannot store or re-execute original data, and providers of original computations can bear costs of 10^6:

• verification of updates by edge devices in the Internet of Things;
• inclusion of authenticity information by LLM outputs;
• embedding transformation and authenticity data in media editing software;
• obtaining non-verifiable bank audits;
• obtaining self-verifying tax forms, etc.”

4. Bitcoin Fees

David Duong, head of institutional research at Coinbase:

"The last major Bitcoin update, Taproot , was in November 2021, making it one of the relatively stable protocols. With the reduction of fixed rewards for miners, variable rewards for transaction fees will play an increasing role. Catalysts within the current protocol could include::

• increased activity on Layer-2s, such as the Lightning Network (LN);
• increased use of blob data , such as Atomicals and Ordinals;
• common smart contract environments on the Bitcoin network (RGB, Stacks, Rootstock, future BitVM), and so on."

5. User Interfaces & Key Management

Friederike Ernst, co-founder of Gnosis:

"Thanks to account abstraction, 2024 should be the year when technical difficulties related to self-custody of keys are overcome. The idea of 12 secret words for asset security is not just outdated – it has been holding back progress. Inclusive finance has been at the core of our values from the start, and blockchain will be able to realize this."

6. Layer-2 Flows & Consolidation

From the CryptoCompare CCData outlook report :

"By mid-2023, activity on Layer-2 chains began to wane, and much of the liquidity from DeFi level 2 protocols settled on the Ethereum mainnet. However, as gas fees rise with activity surges, part of the new capital will still find its home in second-layer chains."

Mathew Sigel, head of digital assets research at VanEck:

"The implementation of EIP-4844 (proto-danksharding) will improve the scalability of Layer-2s (Polygon, Optimism, Arbitrum) in Ethereum and reduce transaction fees. Following this update, we will see the consolidation of Ethereum Layer-2 to 2-3 dominant players in usage and value over the year."

7. Censorship

Ryan Selkis, CEO and founder of Messari:

"Centralization issues can be boiled down to two main questions:

1. Will this vector lead to performance issues?
2. Will it create censorship problems?

Ethereum clearly separates these between the three levels of transaction processing stack. Remember how last summer, the US OFAC sanctioned Tornado Cash? All major relayers started censoring transactions. Only when Flashbots made their relayer open access, the problem was resolved. Therefore, I expect that mempool encryption, which protects transactions from censorship before they are included in the blockchain, may become one of the biggest breakthroughs in 2024."

Conclusion

After a lull, this and the next year promise to be pivotal for blockchain technologies, and expert forecasts highlight important trends that businesses and crypto enthusiasts should consider.

We see that blockchain ecosystems may become more monolithic and flexible in terms of integrations. Reduced costs for system building will make many processes more efficient, simplify partnerships, and expand interaction opportunities. However, technical complexities remain a challenge for businesses, requiring additional investments.

Attention should also be paid to simplifying interfaces. The question of educating the wider audience becomes more acute, necessitating obvious improvements in usability.

?

It is also predicted that computational costs will decrease, and transactions will become more secure. While security issues have been addressed at the B2G level for quite some time, I believe this market remains complex for regulation. However, the implementation of more advanced technologies for transaction scoring and source evaluation is an important step that will impact trust in blockchain.

However, the resources to implement and train people seem so substantial to me that this transformation will obviously take more than one year.

Investors should consider the increasing entry threshold for many networks. Businesses working with cryptocurrencies need to be prepared for changes in fee structures and potential increases in transaction costs. This could create additional barriers for new market entrants but also stimulate the development of innovative solutions. Speculating on Bitcoin will become more challenging, to put it plainly ;)

I see two sides of the trend toward Layer-2 chain consolidation:?

• on one hand, retaining the most stable players will increase ecosystem security and predictability,?
• on the other hand, it poses a risk of monopoly, impacting decentralization, entry thresholds, and market competition.??

For businesses and crypto enthusiasts, it is crucial to closely monitor these trends to adapt their strategies and be prepared for the challenges and opportunities that this year will bring. Analyzing and evaluating each of these aspects will help make informed decisions and effectively utilize blockchain's innovative capabilities while minimizing risks and maximizing value for users.