5 Blockchain Trends Shaping 2024: From Account Abstraction to Zero-Knowledge Proofs

Allinfra uses blockchain technology because it’s one of the best technologies for addressing various data challenges in ESG reporting and the creation and use of environmental financial products. A digital ledger that is resistant to modification and secure by design is very helpful where transparent and traceable information is important.

As blockchain technology continues to evolve, 2024 so far has brought several transformative trends to the forefront. These advancements are shaping how businesses leverage blockchain for improved efficiency, security and scalability.

This article explores five key trends driving the industry forward: interoperability, modularity, zero-knowledge proofs and the DePIN framework.

1. Interoperability

One of the most noteworthy recent trends has been cross-chain (blockchain-to blockchain) interoperability. This is a thoroughly examined issue because the industry today is made up of siloed, incompatible blockchain networks – each with their own community with differing methods for connecting. This means that the ability to transfer data or assets from one blockchain to another is severely limited.

Interoperability will allow the exchange of data and transfer of assets across networks to be seamless and efficient. In other words, any economic activity that takes place on one blockchain can be represented on another blockchain. This is a crucial step toward realising the full potential of blockchain technology.

There are currently numerous projects underway to support interoperability and find solutions to this issue. We may have a ways to go before the industry functions as a unified ecosystem, but the future of blockchain technology is certainly headed in this direction.

2. Account Abstraction Services

Interacting with blockchain networks typically requires users to manage private keys and can be complicated, risky and inflexible – especially for those unfamiliar with the technology. Account abstraction is a growing trend that simplifies managing user accounts on the blockchain, and could be a key to unlocking more widespread adoption.

From a user perspective, account abstraction means certain technical details about interacting with the blockchain are concealed behind higher-level interfaces. This significantly reduces the complexity of using web3 applications.

Allinfra, for example, is developing an account abstraction solution for the Allinfra Climate dapp. This means our clients can simply register with their email credentials, with an on-chain user wallet being created seamlessly on their behalf. Furthermore, individual user wallets can be mapped to an organisation-level wallet where each is assigned different permissions and roles, recreating enterprise-style identity and access management on-chain.

Essentially, logging in to use the platform will feel a lot like the web2 process most people are familiar with. This is pivotal for Allinfra Climate because it allows organisations to leverage web3 technology for contributing to positive climate action, but also minimise training time, simplify onboarding of new users and eliminate other hurdles to adopting web3 in an enterprise setting.

3. Modularity

Blockchains were originally intended to be monolithic, meaning they operated on a single layer where nodes handle all core blockchain functions in a linear fashion, e.g. Bitcoin. Monolithic blockchains often face challenges in scalability, upgradability and hardware requirements for validator nodes.

In response to these challenges, modular blockchains (e.g. Ethereum) emerged as an alternative. Modular blockchains consist of interconnected components that provide expertise in specific functionalities, such as execution, settlement, data availability and consensus. They are scalable and interoperable, they support application development and they allow for customisable tech stacks.

A widely discussed application of this is Data Availability Sampling (DAS) – a technique allowing clients to check if the data on a blockchain is complete and available without checking every single piece of data. Instead, they can sample random pieces of data. Celestia and, more recently, EigenDA are examples of projects that are utilising modular blockchain designs to enhance data availability and scalability in innovative ways.

While monolithic blockchains have their advantages and will continue to remain important, projects exploring the flexibility of modular blockchains are growing in 2024, and they could help unlock the full potential of blockchain technology.

4. Zero-Knowledge Proofs

A zero-knowledge proof (ZKP) is a way of proving the validity of a statement without revealing the statement itself. One party can validate to another party that something is true without revealing any information except from the fact that this specific statement is true.

While applying this cryptographic method to blockchain technology isn’t new, ZKPs are increasingly relevant and we’ve continued to see more innovation in this space in 2024. This is because it allows parties to execute transactions or prove knowledge without exposing any underlying data – addressing the challenges of privacy and scalability in blockchain technology in an era where digital privacy concerns are increasing.

Allinfra’s application of ZKP can be seen in Allinfra Climate’s ZK Private Data Rollups. This aggregates granular private data, so that our clients can provide proof of data provenance to third parties without exposing any of their private data. This is important when clients are aggregating granular data for reporting purposes or for environmental financial product creation, such as renewable energy certificates or carbon credits.

5. DePIN

In 2024, DePIN has emerged as another significant blockchain application. It utilises the technology to manage decentralised networks of physical infrastructure, such as sensors, wireless systems, energy grids, etc.

By leveraging cryptocurrency rewards, DePIN incentivises individuals to contribute to and maintain these networks, allowing for peer-to-peer development rather than relying on top-down approaches led by large corporations or governments. Participants use their own or specialised hardware – including hard drives, network nodes, and tracking devices – to support and expand these decentralised networks.

One of the reasons DePIN has been especially prominent this year is the growing demand for GPUs in AI. DePIN is addressing this by leveraging decentralised networks to expand access to hardware resources. Through DePIN, individuals and organisations can contribute their idle GPUs to a collective network, which could provide a scalable solution to the GPU shortage.

Blockchain technology is continuing to develop rapidly and is changing the business landscape. Understanding the latest blockchain trends is essential for unlocking opportunities and solving issues in the climate market and beyond. Allinfra remains at the forefront of innovation and has already integrated some of these technological advancements so that we can better help organisations achieve their sustainability goals.