The current development pace of the crypto space and blockchain technology makes it hard to stay up to date, and even more challenging to make long-term forecasts. BlockchainUA that took place on the 3rd of November, 2021, gave us a perfect opportunity to learn from the industry leaders, communicate with them, and better understand the current trends and future opportunities. We will gladly share our observations and thoughts.
Decentralization as the ultimate goal
The decentralization aspect of crypto and blockchains remained amongst the focal points of discussion. The speakers and participants expressed their concerns regarding the recent tendencies contributing to centralized control over operations globally. In this regard, the importance of maintaining independence and decentralization would be the focal point of future industry development. This message was particularly evident in the presentation of Michael Chobanian, the founder of Kuna, the first public cryptocurrency exchange in Ukraine and CIS region.
The role of Decentralized Finance (DeFi) would be gaining prominence in terms of its reliability and independence. However, the regulatory interventions could limit the rate of its development. Specifically, central governments could be making steps towards market monopolization and limitation. Thus, communicating the value of decentralization should be the priority of the industry participants.
Regulations make a big difference
The regulatory base may serve as a supporting factor by offering simplified conditions to various participants of the crypto markets. At the same time, they could become an obstacle in case of their attempt to limit the industry’s development. The evidence shows that the jurisdictions providing support are experiencing stronger growth in terms of the participant numbers and revenues from transactions, as mentioned by Gordon Einstein, the Chief Legal Officer at Distributed Lab. Furthermore, the jurisdictions acting in support of crypto markets apply pressure on the lagging jurisdictions. The United Arab Emirates, specifically Dubai, and Portugal were the prime destinations mentioned by the industry members for their favorable conditions in regards to taxation and regulations.
When comparing the U.S. and EU jurisdictions, it is possible to note a regulatory lag of the former versus the latter. Such a lag complicates business operations associated with crypto, including business establishment, and its further development. However, the industry participants are confident that the expanding scope of the industry and its penetration of the other markets will stimulate regulatory improvements within the developed markets.
Metaverse versus reality
The ability to ensure cross-blockchain transfer of crypto assets and support of payments for these assets contributes to the development of metaverses. While parachains already ensure communication between various blockchains, metaverses will support their further integration. Such a trend will support cross-platform communication and deeper integration of various industries. In this regard, the gaming industry is amongst the pioneers of this process because of the widespread utilization involving digital assets.
Metaverses represent a long-term trend requiring a sufficient technical and regulatory base. In this context, the capability of the technological assets, as well as the balance between freedoms and controls, will be the main factors defining the development speed and scope. Pavel Kravchenko, the Chief Executive Officer (CEO) at Distributed Lab, stated that the mentioned metaverses supporting interaction and integration of blockchains would facilitate the consolidation of the cryptomarkets with the growing size of the largest market participants.
Winter is coming, but is it?
Several experts expressed concerns related to the quality of projects launched in the cryptomarkets from the standpoint of their fundamentals. The crypto assets focusing on speculative trade could contribute to the inflation within the market, potentially entailing the approaching bearish trends. However, the industry has a sufficiently developed base, consisting of the largest cryptocurrencies, exchanges, and DeFi projects, that is capable of withstanding volatility and generating long-term growth.
We recommend focusing on fundamentally solid projects that are capable of delivering value over time. This value should stem from the utility of these projects rather than the change of the asset’s market price. Furthermore, responsible investing in crypto markets entails limiting the share of the portfolio allocated to crypto assets while considering each specific investor's levels of risk tolerance.
WTFBit Media writes about blockchain and emerging technologies in a simple way, with humor. We also work with diverse clients helping them effectively deliver the message to their audience.