With global markets down, increased adoption is anticipated in crypto markets as people view the digital asset sector as a hedge against inflation, although some prices are currently below their 52-week highs.
Whether they are first-time cryptocurrency buyers or people learning more about NFTs, Bitcoin, and the crypto ecosystem in general, there has been a global surge in cryptocurrency awareness and, in turn, adoption. as indicated by the data.
Around half of all cryptocurrency owners in the US, Latin America, Asia Pacific, Brazil, Hong Kong, and India bought digital assets for the first time in 2021, marking a breakthrough for the nascent industry, according to a gemini report. Globally, 41% of people surveyed who did not own cryptocurrencies said they were interested in learning more about or buying them in 2022, the same report added.
At the end of 2021, the global crypto market had 295 million users, but that number could reach 1.000 billion by the end of 2022, based on last year's growth rate, according to Crypto.com. But given the current volatility of the market, with the total capitalization of the crypto market down 46% so far this year, it's unclear if that billion mark will be reached in the next six months.
Widespread adoption amid a decentralized ethos
As cryptocurrencies become more mainstream, regulators around the world have watched the space more closely to (they say) protect consumers. The Group of Seven, an international political forum of members from the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom, has asked rapid, consistent and comprehensive regulation of crypto asset issuers and service providers.
But can crypto really remain decentralized while governments around the world zero in on the industry?
Decentralization can mean different things to different people, but most in the community web3 is agree that it is one of the key factors of what makes cryptocurrencies, well, crypto. So as regulators are entering the space and beginning to craft frameworks and guidelines, decentralization needs to remain prominent across the industry if it is to stay true to the core precepts on which it was founded.
“Decentralization is at the core of the spirit of web3, and it must remain at the core as cryptocurrencies gain more mainstream adoption,” said Wilson Wei, co-founder and CEO of CyberConnect. "For decentralization to remain central to crypto and web3 as a whole, start with infrastructure."
Decentralization boils down to data ownership, Wei said. The problem with Web 2.0 is that a handful of tech giants like Facebook and Instagram own most of the user data, but in web3, the data shouldn't be owned by the platform, he argued: “To stay decentralized, we need to secure that applications actually build services on top of decentralized infrastructures, ensuring user data sovereignty.”
This is more of an evolution that will run in parallel and build on each other, said Jonathan Schemoul, co-founder and CEO of Aleph.im. “There already are, and will continue to be, cryptocurrencies and decentralized applications that people use and support because of the benefits they provide over centralized options.”
For example, Aave is a decentralized lending protocol that allows users obtain collateral-backed loans without permission, without requiring personal information or KYC/AML (Know Your Customer/Anti Money Laundering) documentation, Schemoul said. But, by contrast, centralized crypto platforms like BlockFi also allow for collateralized crypto lending and operate in a permissioned, more intrusive and less transparent manner than decentralized alternatives, he added.
A world that coexists with Web 2.0 and web3
In some ways, cryptocurrencies will remain decentralized while in others they will tend towards centralization, Schemoul said. "That's fine; web3 is not going to replace Web 2.0”.
“The spirit is not simply decentralization for decentralization's sake,” said Kurt Hemecker, director of operations at Fundación Mina and former head of business operations at Asociación Diem de Meta. "Rather, the underlying decentralized design is what makes cryptocurrencies revolutionary."
The decentralized network of miners and validators is what ensures the integrity of transactions, Hemecker said. "Decentralization is about trust in a world of 'trustless' transactions, which is another way of saying there are no middlemen like we have today with the centralized financial system."
"Decentralization allows users to take control of their own value and data, and this is one of the fundamental changes as the world migrates from Web 2.0 to Web3," said Hemecker.
“As a fundamental ethos of crypto, decentralization will continue to be preserved as we scale into new and existing markets,” said Ryan Berkun, CEO of Teller. “The infrastructure that boost apps The most popular and their use cases have been, and will continue to be, primarily on-chain. By building these solutions with integrations for larger platforms in mind, mainstream audiences will have easier access to cryptocurrency while also benefiting from decentralized systems.”
When discussing the progress of crypto and web3, it is often assumed that decentralized services and products must necessarily be inefficient compared to centralized ones, said the co-founder and CEO of Integral, who goes by the pseudonym 0xDorsal.
“Some of the most important utilities of the Internet age, for example the World Wide Web and its supporting applications, such as Wikipedia, proliferated as decentralized movements,” 0xDorsal said. “These projects have maintained a decentralized essence, with sustained growth in terms of adoption. We can have the same in crypto.”
