Change is inevitable, but the magnitude and scope of it are not. Blockchain, the technology that underpins Bitcoin (BTC), Ether(ETH), nonfungible tokens NFTs and other digital assets has brought us to the crossroads.
How will money change in the future?
Since the beginning of crypto, we have been at the forefront of the industry. We protect large and small investors while allowing them access to this exciting new field of finance. We are able to look ahead with the knowledge we have gained.
This historical period is full of possibilities, but one thing is certain: the efficacy of and innovation in technology will have an impact on many areas beyond traditional financial services.
The digital asset industry is maturing
Blockchain is faster, more efficient, and more secure than the current contracts, transactions, and records that govern our economic, legal, and political systems. Harvard Business Review said it best: “The old financial structures are like gridlock that traps a Formula 1 racecar in rush hour.” The way we regulate and maintain administrative control in a digital world must change.
Technology has changed the way we make financial transactions from generation to generation. Although the modern credit card is a product of the 1950s, it was not created until 1994. PayPal was established in 1998. It was then sold to eBay in 2002. Satoshi Nakamoto, who started the blockchain revolution in 2008, was the first person to sell a credit card online. Financial heavyweights no longer have to be on the sidelines. This technology is used by 55 of the 100 largest banks around the globe.
After hacks against crypto exchanges and a 850,000 BTC theft from Mt. Gox. Regulators continue to consider the viability and direction of their involvement in cryptocurrencies because success is dependent on market efficiency, predictability, and security.
Related: Crypto to regulation or regulation to adapt to crypto? Experts respond
Businesses and regulators want to make sure investors have certain protections on any digital marketplace to encourage participation. Think Federal Deposit Insurance Corporation (FDIC), for United States banks, or eBay’s Money Back Warranty. Market participants could be exposed to short-term and long-term risks if there is no regulation.
Markets must also be governed by the regulators. Dan Berkovitz, Commodity Futures Trading Commission (CFTC) Commissioner, stated that in June:
It is unjust to permit a unregulated, unlicensed derivatives marketplace to compete side-by-side with a fully licensed and regulated derivatives market.
Importantly, regulators and governments are not the only ones that decide the future. It is us, the investors, leaders, and the general public who will decide how digital assets will be used in the future.
Useful digital assets can be created with an evolving language
The cryptocurrency market will evolve as it matures. The media and the public will be able to perceive and discuss digital assets differently if there is regulation and widespread adoption.
As crypto matures, it will keep its unique character — don’t expect FUD, HODL and “to the Moon” talk to disappear. But it is critical that a wider group of blockchain investors feel at home in the space.
Although it may seem small, our ability to fuse the languages of crypto- and institutional finance has allowed us to work over the past ten years with a variety of institutions, from banks, brokers, fintechs, and brokers to banks to hedge funds to family offices.
As more large investors see blockchain’s long-term value, they start to diversify their holdings to include crypto. This increases the link between these assets and legacy assets like gold, bonds, central bank-backed fiat, which has held historical value.
You are judged in business by the people you work with. We won’t be able to get that “hearty embrace”, if we don’t adopt the language of regulators and financial services more broadly.
It’s reasonable to think of crypto as a commodity, rather than a cryptocurrency. In 2019, the U.S. Federal Reserve Chair Jerome Powell stated that Bitcoin was a “speculative store value” just like gold. Bitcoin is just one aspect of the story. It is time for the industry to stop focusing solely on Bitcoin’s use cases and instead talk about money, investments and smart payments.
Related: Blockchain technology can transform the world. And not just through crypto
The entire industry is larger than any single token
Over the past decade, we have seen customers increasingly seek out assets that are useful and solve complex problems.
Different digital currencies can be used for different purposes. Take, for example:
Tether (USDT), which is tied to U.S. Dollars, would be a good option to pay salaries. Brave’s Basic Attention Token, (BAT), is charting a course to improve online content. It issues payments in BAT to users who use its browser to view ads. These users can then tip anyone online using the BAT from their digital wallet. The Audius governance token (AUDIO), which provides security, feature access, and community-owned governance, makes it a compelling argument for crypto to play a larger role in the future music industry.
Blockchain is not about taking over the world or replacing banks and fiat, which is a common misconception. Although BTC is the most well-known digital asset due to its name recognition and arrival first, it’s only one of many asset classes.
What does the future hold?
Congress opened the door to regulators in the spring when it passed an infrastructure bill. It contained an amendment that brought new scrutiny to crypto industry.
A mature market that values transparency, predictability, honesty and communication will be a benefit to investors, digital asset exchanges, smart technologists and government officials as well as regulators and regulators. The majority will also benefit from clear information about digital assets’ actual value and whether they are manipulative tools that make the wealthy richer.
We have been around since the beginning, and we have seen the rise and fall of trends. We’ve also seen the importance of brilliant ideas to solve the emerging problems of our times.
Yes, there is change. Over the past few years, the mature digital assets industry has been emerging. It brings with it a synergy in language that has become more sophisticated and has invited a wider audience to our table. This new audience will bring rich insight and assets to the table, which in turn will increase confidence across all industries. This confidence will encourage the adoption of blockchain technology in order to solve problems that no one thought possible.
This article is not intended to provide investment advice. Every trade and investment involves risk. Readers should do their research before making any decision.
These views, thoughts, and opinions are solely the author’s and do not necessarily reflect the views or opinions of Cointelegraph.
Bitstamp’s CEO is Julian Sawyer. He is responsible for Bitstamp’s overall strategy. Julian has 30 years of financial services and consulting experience, as well as practical experience building finance businesses from the ground up.