We can all agree that cryptocurrency is not going anywhere. Over the years, we have watched crypto pierce new industries, disrupt governments, and blow our minds entirely. 2022 was no exception. Here are four ways cryptocurrency has evolved in 2022 and why you should evolve with it.
Pressure to Create Regulations
In June 2022, the EU became the first to hammer out cryptocurrency laws that aim to take effect in 2024. Several other countries will likely follow in their footsteps as the need and pressure for regulation increases. These regulations will provide trust to major institutions, such as banks, that have been holding back from the crypto industry.
While some banks invest in computer systems that use blockchain technology – a decentralized ledger for storing data about monetary transactions – they are less enthusiastic about directly investing in cryptocurrencies because they are unregulated.
We’ll see how the regulations in the EU play out and ultimately affect the bank’s confidence in cryptocurrency.
Ethereum has vowed to replace crypto-mining, an energy-intensive form of validation, with crypto-staking, a more energy-efficient process.
With crypto mining, “miners” set up specialized computers that solve cryptographic puzzles in order to validate a transaction. The first miner to validate a transaction gets a reward in the form of a percentage. This validated transaction then becomes part of the blockchain.
However, these specialized computers use so much power that they negatively impact the environment. These impacts, including pollution of air and drinking water that harm wildlife and natural landscapes, are well-known and will not be overlooked, especially by younger generations.
To combat this issue, Ethereum has introduced crypto-staking. “Validators” stake their coins on the network as collateral to add transactions to the blockchain. The more you stake, the more transactions you can validate. The more transactions you validate, the more transaction fees you receive.
This process will reduce all the excess power being generated by miners, which will positively impact an already sinking ship known as Earth.
Increased Company Adoption
It is no surprise that several prominent companies decided to hop on the cryptocurrency bandwagon in the past couple of years.
Over 2,300 US businesses currently accept Bitcoin, either directly or through a third-party app. Starbucks, for example, allows its app users to upload Bitcoin from their crypto wallet onto the Starbucks app, which can then be used to make purchases.
Common reasons why companies decide to use crypto are:
Targeting a high-end demographic – Clients that pay with cryptocurrency typically spend almost double the amount spent by clients using a credit card or other forms of fiat.
Publicity – If a company starts accepting cryptocurrency as a form of payment, it drastically increases the chances of getting publicity for it.
Market positioning – Adopting cryptocurrency shows that a company is future-focused which positions them in the market in a very attractive space to new, high-end clients.
Advanced Uses of the Blockchain
Most cryptocurrencies operate on blockchain technology, but blockchain technology is not just used for crypto.
It can be used for any kind of transaction, such as:
- Secure sharing of medical data
- Voting mechanism
- Real estate processing platform
- Anti-money laundering tracking system
- NFT marketplaces
- Government benefits
- Logistics and supply chain tracking
Even the automobile industry can benefit from blockchain technology. For example, Alfa Romeo’s new Tonale SUV became the first car on the market to come with an NFT. This NFT uses the blockchain to record services performed on the car so that the car’s residual value can be verified.
Cryptocurrency is probably the most exciting thing since the Internet, and its evolution will be just as fast and groundbreaking. In the following years, you can expect the crypto industry to gain the trust of many countries and industries, leaving them to wish they had hopped on the crypto train earlier.