The world of cryptocurrencies (and blockchains in general) is poised to be the next great frontier of digital technology. Since the inception of Bitcoin in 2009, the number of blockchain technologies has skyrocketed – and the future of crypto seems even more exciting. With that in mind, let’s look at the current state of crypto in 2022 and try to glimpse what’s around the corner.
Fixing Global Finance
As most digital technologies tend to be, cryptocurrencies were primarily used by a small number of enthusiasts in the beginning. However, a lot has changed since then – and the real-world impact of crypto is more significant than ever before in 2022, as is its ability to shake up the status quo of the global financial system.
World Bank data suggests that over 1.5 billion people worldwide still don’t have bank accounts. Most of them are in developing third-world countries, where access to financial instruments like credit is still far from a straightforward, everyday thing. That state of affairs has made the demand for DeFi – crypto-based decentralized finance – bigger and more urgent. Even with the recent crypto downturn, the demand for digital currency, in general, is higher than ever among unbanked and underserved populations.
And seeing as most of those people who don’t have access to traditional banking services still use mobile phones or even laptops – crypto is their logical go-to finance product. That’s why plenty of crypto projects are focused on expanding easy access to capital to populations in emerging markets that would otherwise have none. It’s no wonder that trading websites like easymarkets.com have more crypto traffic than ever these days.
Other Real-World Applications
Crypto is currently helping fix plenty of other real-world financial issues and broken marketplaces as well. For instance, projects like Flowcarbon are doing a lot to revamp the concept of carbon credits and make these units of account more easily traceable and transparent. A project called Helium is set to be crypto’s response to traditional telecom giants in the form of a grassroots decentralized wireless network. Many other crypto-based projects are helping people regain control over their data and identities – eliminating the power of data traffickers and intermediaries like Meta and Google.
More and more, crypto is demonstrating how it can do more than revolutionize finance – the underlying blockchain technology has the potential to revamp countless other cultural, technological, and social systems in desperate need of change. Over a decade after the first Bitcoin was mined, we’ve only scratched the surface of crypto possibilities.
Ethereum Is Leading The Way
When it comes to both DeFi and non-financial applications of blockchain technology, it’s clear that Ethereum is pretty dominant as the leader of the pack. Still, that doesn’t mean other blockchains and Ethereum sidechains aren’t in rude health too – Polygon, Solana, Avalanche, etc. are all looking pretty promising in their respective spheres.
However, there’s no denying Ethereum’s leadership position for a couple of extremely important reasons – it had an early start, and it has by far the strongest community. No blockchain can boast with more builders, seeing as Ethereum is worked on by over 4,000 developers. And its blockchain applications are used by more people than any other – for instance, almost 1.5 million smart contracts were created in Q1 2022 alone.
Of course, Ethereum isn’t without its problems – its extremely high gas fees being the biggest one. But the recent updates and strong progress on sidechains like Polygon will probably solve that in the coming years. However, the fact that Ethereum has always valued the concept of decentralization over the need to scale up has led to other blockchains attracting a lot of their potential users; mostly with promises of lower fees and better performance, sometimes at the expense of safety and security.
Challenger blockchains might not be a big issue for Ethereum in the long run, though. A lot of progress has been made in terms of interoperability and layer-2 blockchain technology, allowing people to bridge their assets with increasing ease from one project to another.
The Bottom Line
All of this shows a lot of promise – but there’s no denying that cryptocurrencies are in the throes of a bear market in recent months. So, what does that mean for the future of crypto?
Generally speaking – not much. Even if the currently largest blockchains like Bitcoin and Ethereum fail, others will spring up to take their place. Remember, the bursting of the dot-com bubble didn’t destroy the Internet; it just hurt individual companies. Whether some entrenched finance experts like it or not, cryptocurrencies are the next big thing. And time will tell whether today’s cryptocurrencies are also the cryptocurrencies of the future. But there’s no denying the fact that they show enough promise.
