How cryptocurrency answers the future economy of the digital era is a key point that all enthusiasts should think about. What will crypto look like in future years?
The cryptocurrency market cap is about 341 Billion USD, and Bitcoin has more than 50% of that total. The growth of cryptocurrency users is very fast. Satoshi Nakamoto’s vision is accepted by independent communities under the flag of decentralization.
Although some countries’ regulations are very strict in using cryptocurrency, developers, traders, and investors do not stop. They find other ways to outwit the law and regulation. It is proved from the growth of cryptocurrency community. New applications are being created based on blockchain technology. Defi is one of the booming dapps in blockchain development. It takes over some banking services like lending, borrowing, interest, and investment platforms. Defi is just a new born. There are many weaknesses and bugs in the protocol but in the coming years defi will reach its maturity. How will banks and authorities respond to that area of growth in cryptocurrency? Emerging technology like blockchain may be the solution to banking problems such as bail outs, corruption and bribery.
Regulation should get adapted to cryptocurrency not vice versa
“In summary, the state does not prohibit Bitcoin’s activities as virtual commodities, except for the activities that Bitcoin is engaged in as
legal tender,” the report adds”
China is one of the most strict countries for cryptocurrency regulation. The authorities in China do not ban Bitcoin entirely. They still accept Bitcoin and cryptocurrency as virtual commodities. From the case in China , we can take conclusion that cryptocurrency can not be banned because this technology is anonymous, borderless and decentralized. Everyone can access cryptocurrency wallets, exchanges, and mining from dapps. Like or not, authorities and regulators should adapt to cryptocurrency in the future years.
Will cryptocurrency replace fiat?
“By 2030, the demand for alternative currencies will rise, with digital currencies eventually replacing cash, according to recent research from Deutsche
Deutsche bank research has predicted that there will be mass adoption of cryptocurrency by 2030. Launching of CBDCs (Central Bank Digital Currencies) will be the first path for crypto developers to apply dapps in some sectors to support the global economic ecosystem in global trade. Some companies will start to accept cryptocurrency payments because of low fees. Volatility issues will be answered with stable coins. CBDCs will enable exchange between cryptocurrency and fiat in simple ways. These features will remove some red tape in exchanging money by companies with banks. Banks will be left by their customers if they do not adopt dapps from cryptocurrency developers. They still can try to make profit by providing integrated dapps between banks and cryptocurrency exchanges directly. CDBDs are key ways how banks should try to test the effectiveness, security, and profit strategy of collaborating with cryptocurrency developers. Banks can gain more customers when they also integrate Defi in their business model.
How about regulation? Until now, there has not been a single bank that permits swap exchange directly between cryptocurrency and fiat. Digital currency users still use third party services for that service. Economists, bankers, cryptocurrency developers, authorities and some parties that involve in economic development should sit together to discuss the future development of cryptocurrency to develop and increase economic development of a country. Without a deal, cryptocurrency mass adoption is still far away from reality.
KYC should protect privacy, not expose data to the public
KYC stands for Know Your Customer. Some cryptocurrency users still see that KYC is exposing data ‘ privacy to other parties. They don’t trust fully to the KYC security from the institutions that store the data. Data leaking is a serious matter for some cryptocurrency enthusiasts; that is why they still do not want to submit their data. The authorities should confirm that KYC data storing is safe and secure. Governments and banks need KYC. They need all the data privacy of the customers or users. Storing data privacy in accessible servers have risks to be attacked by hackers. The authorities need to collaborate with blockchain developers to store the KYC in cryptography protection system so the probability to get stolen is minimum. Current system in economic activities, all people should submit data privacy to government when they do some business activities like sending and receiving money, trading, and exchanging goods and services. Data privacy is a way to protect from illegal activities like smuggling, and money laundering. Though, cryptocurrency is not created to support illegal activities, there are few cryptocurrency users exploit the anonymity of crypto money to do illegal activities like exortion, smuggling, money laundering and hacking to steal money from exchangers or personal wallets. By submitting KYC, those illegal activities will be easier to be traced down.
Cryptocurrency infrastructures are still maturing
Cryptocurrency mass adoption is just a matter of time. Defi projects are newborn platforms that still need refining. There are some weakness in Defi protocols but in the nearest years, Defi will reach the status of trusted financial services in blockchain. Payment gateways, swap exchanges, smart contracts, dapps, cooperation with merchants, and development of hardware wallets are indicators that cryptocurrencies are evolving. These processes take time, however. Cryptocurrency developers have worked since the invention of Bitcoin. Those infrastructures became the foundation of the cryptocurrency economic ecosystem. There are many merchants that accept cryptocurrencies like Bitcoin, Dash, Litecoin, Ethereum and Dogecoin. Hundreds of exchanges serve millions of users around the world. This proves that the cryptocurrency economy is growing. So, even though there are some weakness in the growth of the digital economy, its developers are rising to the challenge to overcome the critical issues that appear. Cryptocurrency is based on blockchain tech that enables anyone to create useful applications. This an advantage that can not be overstated. Blockchain technology has given a lot of people opportunities to access the world economic ecosystem from their gadgets. Therefore, the growth of cryptocurrency communities can not be stopped.
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