Major Venture Capital Firm a16z Announces "9 Cryptocurrency Trends to Watch in 2024"

Explore the insightful predictions by major VC firm a16z on the future of cryptocurrency, covering decentralization, AI, user experience, and NFTs.

Get an in-depth look at how these trends are set to transform the crypto landscape in 2024, offering insights into the latest technologies and their potential impact on the market.

a16z's Insightful Forecast on Cryptocurrency Trends for the Coming Year

Leading American venture capital firm Andreessen Horowitz (a16z) released a list on the 6th, outlining nine expected trends in the cryptocurrency space for the upcoming year.

The announcement highlighted several areas including decentralization, artificial intelligence (AI), and improving customer experience.

Miles Jennings, a16z's Legal Counsel and Decentralization Officer, emphasized the significance of decentralization, calling it a "tool enabling the democratization of systems," offering "users more choices and ownership."

He pointed out that while achieving large-scale decentralization has been challenging, recent years have seen an emergence of best practices in decentralization thanks to the "real-time experimental lab" of Web3.

Jennings explained that these advancements include "decentralization models capable of supporting applications with extensive features" and "methods of Decentralized Autonomous Organizations (DAOs) utilizing Machiavellian principles for more effective decentralized governance."

Talk about a significant change in user experience.

Eddie Lazzarin, Chief Technical Officer at a16z Crypto, noted that the user experience (UX) in cryptocurrency has fundamentally not changed much since 2016, posing a complexity issue for mass adoption.

However, he mentioned the possibility of "resetting the front-end UX of cryptocurrencies in the next year," as developers are actively testing and deploying new tools.

One such tool is the "passkey," simplifying logins to apps and websites on user devices.

Unlike passwords, which are vulnerable, passkeys are automatically encrypted when generated.

Lazzarin also highlighted other tools such as programmable and easy-to-manage smart accounts, wallets embedded in apps, Multi-Party Computation (MPC) enabling signature support without third-party key management, and advanced PRC (Remote Procedure Call) predicting and filling user needs.

Democratizing AI Innovation with Blockchain Technology

Currently, AI model training and operation are limited to major tech companies, but a16z argues that utilizing blockchain technology could democratize AI innovation.

By leveraging cryptographic technology, a "multi-sided and global, permissionless market" can be formed where "anyone can contribute computational resources or new datasets to the network for those in need and receive compensation."

As AI-generated information floods society, concerns such as deepfakes arise. However, blockchain technology can track and address the origin of online content.

In games where AI generates elements, blockchain can ensure the game maker's neutrality and contribute by providing the ability to understand, diagnose, and penalize issues arising from AI, as argued by a16z Investment Partner Kara Woo.

Increasing role of NFTs in digital brand assets

a16z predicts that Non-Fungible Tokens (NFTs) will become widely adopted as digital brand assets across different enterprises and communities.

The past year's development of storage wallets and L2 blockchain has significantly improved the NFT trading environment.

The firm has observed the deployment of NFT-based loyalty programs and collectible NFT collections, with future prospects including personalized experiences for customers and NFTs acting as a bridge to physical products.

Cryptographic Technology SNARK Enhancing Blockchain Usability

Sam Ragsdale, an investment engineer at a16z, stated that recent advancements have made SNARK (Succinct Non-interactive ARguments of Knowledge), a type of cryptographic technology, more user-friendly.

This improvement is expected to mitigate the cost and scalability challenges associated with using blockchain.

Potential use cases include upgrading Internet of Things (IoT) edge devices and embedding trust and transformation data in media editing software.

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