The future of digital assets is bigger than the first encryption

Although the change is guaranteed, the scale and scope of the change are not. For the financial industry, blockchain-the technology that supports Bitcoin (Bitcoin), ether (Ethereum), Irreplaceable tokens (NFT) and other digital assets—bring us to a crossroads.

What will the future of currency look like?

For the past 10 years, we have been operating at the forefront of cryptocurrency, protecting investors, large and small, while allowing them to invest in this exciting new area of ​​finance. The experience we have gained here helps us understand the future direction of development.

In this historical period, countless results are possible, but one thing is certain: the efficacy and innovation of technology will far exceed the influence of the traditional financial sector.

The mature digital asset industry is here

Compared with the current contracts, transactions, and records that define our economic, legal, and political systems, blockchain provides a faster, more effective, and safer structure for financial transactions.Harvard Business Review put To put it succinctly using this metaphor: “[The old financial structures] It’s like trapping the peak-hour stalemate of a Formula One car. In the digital world, the way we supervise and maintain administrative control must change. “

Generation after generation, technology has updated the way we complete financial transactions. Modern credit cards have existed since the late 1950s. The first official sale via the Internet was completed in 1994. PayPal was established in 1998 and went public in 2002 and sold to eBay in 2002. Satoshi Nakamoto started the district in 2008. The blockchain revolution. Nowadays, financial giants no longer stand idly by.55 of the 100 largest banks in the world Have some form of exposure For this new technology.

The first international regulation was promulgated in 2016 in Japan for hacking attacks against cryptocurrency exchanges, which included the theft of 850,000 BTC against Mt. Gox. Because the success of any financial market is based on predictability, security, and general market efficiency, regulators continue to consider the direction and feasibility of their participation in cryptocurrencies.

related: Will regulation adapt to cryptocurrency or will cryptocurrency adapt to regulation?Expert answers

Regulators and companies want to ensure that investors enjoy certain protections in any market (digital or other markets) to stimulate participation. Think of Bank of America’s Federal Deposit Insurance Corporation (FDIC) or eBay’s money-back guarantee. Without supervision, market participants may face long-term and short-term risks.

Regulators also ensure that the market follows a set of equal rules. As a member of the Commodity Futures Trading Commission (CFTC) Dan Berkovitz said in June:

“It is untenable to have an unregulated and unlicensed derivatives market compete side by side with a fully regulated and licensed derivatives market.”

And, importantly, it’s not just regulators and governments that determine the future—it’s about us, investors, leaders, and ordinary consumers—deciding how we use digital assets in the future.

The evolutionary language of useful digital assets

As the market matures, the cryptocurrency industry will also experience language evolution. Regulation and widespread adoption will change the way the media and the public view and talk about digital assets.

As encryption technology matures, cryptocurrencies will retain their unique characteristics-don’t expect HODL, FUD, and “moon landing” conversations to disappear-but it is vital that broader blockchain investors feel comfortable in the field of.

This may seem like a trivial matter, but the focus on the integration of cryptocurrency and institutional financial language has allowed us to work with a range of institutions in the past 10 years, from new banks, fintech and brokers to banks, hedge funds and family offices.

The evolution of language and more large investors see that the long-term value of blockchain is confirmed over time as they begin to diversify their main assets to include cryptocurrencies, thus adding to these new assets with historical value The link between the legacy assets of the country-such as gold, bonds, or fiat currencies backed by the central bank.

In business, you are judged by the company you own, so if the language of financial services and regulators is not adopted more widely, we will not get that kind of “heartfelt embrace.”

Nevertheless, it is not unreasonable to treat encryption as a commodity rather than a digital currency-Chairman of the Federal Reserve Board of the United States Jerome Powell told Congress in 2019 Bitcoin is a “speculative store of value” like gold. But Bitcoin is not the whole story, it’s just the most talked about. The industry must stop focusing on a specific use case of the technology and start talking more about money, investment, financial management, and smart payments.

related: Blockchain technology can change the world, not just through encryption

This industry is bigger than any kind of token

In the past 10 years, we have found that more and more customers are attracted by assets that are practical and can solve complex problems.

Different digital currencies have different use cases. E.g:

  • Tether (USDT) Can pay wages very well because it is pegged to the U.S. dollar, thus avoiding the fluctuation of Bitcoin.
  • Brave’s Basic Attention Token (BAT) is charting a course for the future of online content, using BAT to pay its browser users to watch ads. These users can then use the BAT in their digital wallet to tip anyone on the Internet.
  • The Audius Governance Token (AUDIO) provides a compelling case for cryptocurrency to play a greater role in the future of the music industry, providing artists and fans with security, exclusive feature access, and community governance.

Blockchain is about solving problems, not taking over the world and replacing legal currencies or banks. This is a common misunderstanding among the public. Although BTC may be the most recognized digital asset because of its popularity and first appearance, it is only one of many asset classes.

So what will the future look like?

Earlier this year, Congress opened its doors to regulators. The Senate passes the infrastructure bill It contains an amendment that introduces a new review of the encryption industry.

Investors, digital asset exchanges, smart technicians, government officials, regulators, and everyone in between will benefit from a more mature market that protects its consumers and values ​​transparency and predictability Communicate honestly. Likewise, most people benefit from knowing which digital assets have actual value and which exist as manipulation tools to make the rich get richer.

We have been there since the beginning, and we have seen the ebb and flow of trends. But we also see that what survives at the end of the day is always a brilliant idea to solve the urgent problems of our time.

Yes, the change is here. The mature digital asset industry has begun to emerge in the past few years, and with it comes the synergy of language, which has become more complex and invites a wider audience. In turn, the assets and insights brought by these new audiences will provide a wealth of confidence in all walks of life. This confidence will lead to the adoption of blockchain technology to solve problems that people have never dreamed of using blockchain to solve.

This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should research on their own when making a decision.

The views, thoughts, and opinions expressed here are only those of the author, and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Julian Sawyer He is the CEO of Bitstamp, responsible for the company’s overall strategy and vision. Julian has 30 years of experience in financial services and consulting, as well as practical experience in establishing a financial company from the ground up.