Cryptocurrency made headlines in 2021. Its proponents described it as a technology that could change the world, create new economies, and empower people without access to bank accounts. Their critics decried their massive environmental footprint as well as their popularity with cybercriminals. An ideological gap is difficult to bridge.
Much of the crypto industry is fueling the hype that is playing on fake hip codes relayed by tech experts. But it also has massive financial backing from powerful investors and real technology innovations that could fundamentally change the way we interact with money. Our colleagues from CNET.com interviewed experts to shed light on the prospects and challenges of cryptocurrency in 2022. Here are their predictions.
1- Cryptocurrencies will continue to democratize
When cryptocurrencies grabbed the headlines, it was often about Tesla CEO Elon Musk’s tweets about overnight millionaires, expensive digital arts, and hacks. However, the larger and more substantial changes are often less flashy and attract little attention. Hence, most large companies are integrating cryptocurrencies into their businesses. From hedge fund managers to CEOs of large retail chains, everyone is taking steps that could affect digital currency use this year.
“We hope to see more focus on utility,” commented Denil Dixon, CEO of the Stellar Development Foundation. ” Instead of just focusing on a few use cases that create a lot of noise, we’ll see more attention to use cases that create real value. And more discussions about financial inclusion. »
2-NFTs create new ownership opportunities and redefine tenure
NFT (Non-replaceable code, a non-fungible token), is a ringing term that many of us first heard in 2021. NFT is a virtual object whose authenticity and traceability are guaranteed by the blockchain. Currently, this type of crypto token is very popular among collectors and art lovers. One of the highlights of the 2021 NFT kits is called Bored Ape Yacht Club.
But the potential of NFTs goes far beyond exotic digital artworks. It is also used to purchase digital land in virtual worlds and to own, license and publish music. Some observers see a future where NFTs provide access to special sales or limited-edition products. How about using NFT as a party ticket? Or when you go online with your favorite video game? This is what we should see happen in 2022.
” The possibilities of NFTs are endless, as they can be used to record ownership of any unique asset Alex Atallah, co-founder of OpenSea, explains. ” We’re already seeing first use cases for NFTs such as show tickets, software licenses, fan club memberships, or other interactive experiences. »
Some of the biggest US brands, including Nike, are already working to expand the use of NFTs. But their use in consumer products may be just the tip of the iceberg. How about using NFT to prove your identity?
” We’ve seen some shift from NFTs that focus on art to NFTs that focus on access or delegation Denelle Dixon Analytics. “ There was a party recently in New York where patrons can access it by purchasing an NFT. So I’m wondering if we’ll be interested in using NFTs for digital identity. »
The $85 billion video game industry is perhaps one of the most promising sectors for NFTs. Some of the biggest studios are already giving it a try. And with all the talk about the metaverse, NFT could serve as the foundation for a next-generation digital world. ” We’re seeing some exciting developments when it comes to the intersection of NFTs, games, and the metaverse Alex Atallah sees.
3- The biggest breaches and ransoms
Cryptocurrencies have characteristics that make them attractive to cybercriminals. They are difficult to keep track of, they know no bounds, and once payments are made, it is almost impossible to reverse them. This is how cryptocurrencies were used to facilitate the payment of millions of dollars in ransomware in 2021.
” We should expect to see more criminals turning to cryptocurrencies and services that promise to withdraw illicit funds due to the misunderstanding of complete anonymity. says Gurvais Grigg, Senior Technical Director at Chainalysis. Bitcoin appeals to criminals for the same reasons it does for those who use it for legitimate purposes: it is cross-border, instant, and liquid. »
This expert and others anticipate that decentralized finance, an emerging but burgeoning industry on the frontier of cryptocurrency, will be a prime target for cybercriminals in 2022. Decentralized finance, or DeFi, operates independently of an authority or a central institution. Instead of relying on a network of banks or credit cards, users can connect directly to DeFi products on a distributed network. Although the sector is still in its infancy, DeFi is a rapidly developing sector with high technology and huge potential. It has attracted a lot of attention and investment, which makes it conducive to criminal activities.
According to Jorvis Gregg, ” DeFi is likely to be explored by criminals as a target for hacking and as a means to attempt money laundering. Due to the novelty and explosion of adoption in developed markets, DeFi platforms are easy targets for experienced criminals who have conducted similar hacks before. »
4- Rise of stablecoins
Bitcoin and other cryptocurrencies made headlines due to their volatility. You can become a millionaire or lose everything due to excessive internet speed. This is where stablecoins, or stablecoins, come into play. This sub-category of cryptocurrencies, which is linked to an underlying asset (fiat currency or an exchange-traded product), greatly mitigates this volatility. Stablecoins can play a vital role in turning cryptocurrencies into a means of payment that can be used to conduct everyday transactions.
” We should start paying attention to stablecoins as a means of payment and as a digital dollar currency. Use cases for cross-border payments, relief and instant settlement payments are starting to boom in 2021 and we’ll see more of them in 2022 ‘,” says Rachel Meyer, vice president of fintech firm Circle.
One of the core values of a stable currency is the more efficient transfer of assets. It is a powerful asset for businesses that need to move digital assets and cash quickly and efficiently. “ More industries will start adopting stablecoins as a more efficient way to make payments Omid Malkan, author of The Blockchain Story and Professor at Columbia Business School believes. ” Stablecoin volumes will continue to grow, but the portion of that volume that is only involved in cryptocurrency exchanges will decline. »
5- New Cryptocurrency Regulations Looming
Lawmakers are still struggling to understand the phenomenon of cryptocurrency to determine how to frame it. Should stablecoin issuers be considered banks? When should cryptocurrency be taxed? How can functional rules be developed in a high-tech and complex industry? These are all sensitive issues for which it will take time to develop appropriate standards.
Denelle Dixon,” There will be a lot of controversy around cryptocurrency and blockchain This would advance the exchanges between policy makers, legislators and companies involved.
” It is important to understand that the cryptocurrency industry wants to be regulated, but it wants to make sure that the proposed regulatory frameworks are applicable. ”, confirms Gurvais Grigg. ” Governments around the world work with industry actors to put in place legislation that protects consumers and fosters innovation. »
It is still difficult to predict how the cryptocurrency industry will develop. But one thing is for sure: it will be part of our future.
CNET.com article adapted from CNETFrance / Photo: Robert Rodriguez / CNET