What Will Happen To Crypto?

It’s been over a decade since the first cryptographically-minted asset was mined. Numerous other virtual coins have been created in the intervening years, registering a collective market value running into the trillions of dollars.

 

But despite all this activity and exposure, it’s still an open question whether blockchain technology has fulfilled its promise. Digital equities remain highly volatile, with wide swings in value from day to day. They’re also largely ignored by central banks, and are not yet widely accepted as legal tender.

 

Besides, many experts claim that digital currencies are merely a speculative asset class with no real value or utility. While some potential applications exist, naysayers contend that this remains largely unproven and untested. As such, the critics of Bitcoin believe it’s unlikely to provide any tangible good in the future.

 

That said, if digital assets are to thrive again, a viable use case must be found to validate their existence outside of just being an alternative form of currency. Luckily, there are a few areas where this appears to be the case.

 

For instance, one of the most exciting trends in cryptocurrency is the growth of smart contracts.

 

Indeed, smart contracts are a kind of digital agreement that can be executed automatically without needing a third party. This means that they’re much faster and more efficient than traditional contracts, which generally have to be processed manually under the guise of a qualified lawyer. On top of that, smart contracts are often more trustworthy because they’re not subject to human error or fraudulent manipulation.

 

This type of trustless execution is made possible through blockchain middleware such as Chainlink (LINK). Chainlink acts as a decentralized network of nodes that securely connects smart contracts to real-world data, and this data can be anything from weather forecasts to the spot price of oil and gas.

 

However, with LINK, smart contracts can be used for a wide variety of applications. For example, they can be used to automate financial transactions, streamline supply chains, or verify randomness for online games. This versatility is one of the main reasons why smart contracts are seen as such a valuable technology.

 

What’s more, this trend is only set to grow in the coming years because many industries are just beginning to explore the potential uses of smart contracts.

 

In fact, non-fungible tokens – or NFTs – have also become extremely popular of late. NFTs are digital assets that are stored on a blockchain and can represent anything from video game items to real estate.

 

Unlike many other cryptocurrencies, NFTs are unique and cannot be duplicated. This makes them ideal for use case scenarios such as smart contracts, where two parties enter into an agreement and have the terms of that agreement stored on the blockchain.

 

Additionally, because NFTs are unique, they can represent rare or one-of-a-kind items. This means they can cryptographically ensure the provenance of real-world artworks, or verify the custody chain of hazardous materials such as biological and nuclear weapons.

 

There are definitely signs that the blockchain bubble may have already burst. Exchanges are going bankrupt, prices are declining, liquidity is falling, and fewer retail investors are buying into the idea that digital tokens are a way to get ridiculously rich.

 

Furthermore, these problems are compounded by the slow adoption of cryptocurrencies by institutions such as banks and hedge funds. As a result, buying and selling cryptocurrencies is becoming increasingly difficult, and their value could continue to decline.

 

And yet, despite the recent setbacks in the industry, many still believe that crypto is far from dead. In fact, it’s very possible that current market conditions are simply a natural correction to the massive bull run witnessed in 2021. And while it’s true that prices have come down significantly from their all-time highs, there are still plenty of reasons to be optimistic about the future of crypto.

 

For example, enough major organizations recognize the potential of blockchain to justify its much-vaunted real-world uses. For example, Microsoft recently announced its plans to launch a decentralized identity network using “blockchain and other distributed ledger technologies.“ This is noteworthy because it demonstrates that serious companies are willing to invest in the technology beyond just Bitcoin and basic tokenization.

 

Another promising development is the increasing adoption of smart contracts and non-fungible tokens (NFTs). Smart contracts have already revolutionized how we conduct transactions online, and NFTs are beginning to change how we think about digital ownership. These two applications alone have huge potential and could lead to the mass adoption of blockchain technology in the coming years.

 

Finally, cross-border payment protocols are another area where crypto has much potential. For instance, traditional payment methods such as wire transfers and money orders often involve high fees and long waiting times.

 

However, with blockchain-based remittances, these issues can be alleviated thanks to the decentralized nature of the transaction. This makes crypto an attractive option for those looking to send money overseas or make other international payments.