The arrival of cryptocurrencies in the last couple of decades has changed the world in many ways, but we are left with the sensation that there is still a lot more to come. What are some of the breakthroughs we can look forward to seeing in this area before too long?
1. More Ways of Spending
If you have been a fan of using cryptos since the beginning, you will remember the key moments such as when someone makes the first online purchase. This was in 2010 when Laszlo Hanyecz spent 10,000 BTC to get a couple of pizzas delivered.
Ever since then, enthusiasts have welcomed every new achievement as more and more businesses have started accepting their digital tokens. An example of how far we’ve come can be seen in the fact that it’s now easy to play casino games with Bitcoin Cash and other popular tokens without the casino charging any fees. This allows players to fund their accounts very quickly with the currency of their choice and then choose from a range of slots and table games such as roulette and blackjack. It makes moving money in and out easier than with traditional methods, and that is something other industries can follow.
We have already seen houses bought with Bitcoin and a growing number of transactions for just about every kind of purchase of which you can think. This trend is expected to continue, as more people own these tokens and look for a variety of ways of spending them. It can be a powerful way for a new business to boost its online presence and attract new clients as well.
2. Government Backed Digital Currencies
One of the huge question marks hanging over the crypto world right now is how it will be affected by the launch of Central Bank Digital Currencies (CBDCs). Most countries are looking into creating their own tokens, such as a digital dollar or digital rupee, and some have already brought out a CBDC,
The results of the Sand Dollar in The Bahamas have been mixed, while China and Sweden are among the countries that have been working hard to create and test their own CBDCs. The big question is whether these tokens eventually sit alongside cryptos like Bitcoin and Litecoin, or whether they replace them.
It is important to bear in mind that government-backed digital currencies are different from the cryptocurrencies that we currently use. For a start, the governments will be looking to track their tokens and gain access to vast quantities of information in this way. This means that we may find that we continue using our existing cryptos alongside those issued by the central banks.
3. Solving Major Problems Like the Unbanked Population and World Hunger
You have probably heard at various times that cryptocurrencies and the blockchain can solve many of the most serious problems we face right now. From saving the planet to solving world hunger and helping the unbanked population to improve their finances, a lot of bold claims have been made but how many of them look like coming true?
If we look at the unbanked population firstly, this is one of the issues that cryptos seem perfectly placed to resolve. This is an excellent solution for anyone who cannot get a traditional bank account, which is the case for an estimated 1.7 billion people. For the moment, there is a lack of hard evidence, but local reports from developing regions suggest that cryptos have helped a growing number of people access a form of banking for the first time.
In terms of world hunger, numerous blockchain projects have been created. Major organizations such as the United Nations’ World Food Programme have investigated this extensively, producing benefits such as delivering food and cash to people in trouble-hit areas. A pilot program in Jordanian refugee camps proved successful and this is an area where more progress is to be expected.
The eco-friendly tokens have been less successful to date, with carbon crypto tokens from the likes of KlimaDAO and Toucan struggling to make a significant impact. Nevertheless, the carbon credits and offsetting market seems ideal for the blockchain’s key features such as transparency and immutability.
4. More Cryptos
Every time someone has a great idea for a new blockchain project, this means building a new ecosystem and often producing a new token. While this can make it difficult for us to keep up at times, it is a necessary approach to fulfil the opportunities offered by this technology.
Therefore, if we carry on seeing more tokens launched, this is a good sign that the market is expanding and offering new solutions. The big, established tokens are not going to disappear anytime soon, but there’s still room in the market for new tokens that carry out a valuable function and offer us a token that is worth using.
5. Enhanced Security and Privacy
As cryptocurrencies gain wider adoption, there will be an increasing focus on enhancing security and privacy features. While blockchain technology inherently offers strong security through decentralization and encryption, further advancements will be made to fortify networks against potential threats. Privacy-focused cryptocurrencies and advanced encryption techniques may also gain prominence to ensure the confidentiality of user data and transactions.
6. Integration with Internet of Things (IoT)
The Internet of Things (IoT) is expanding rapidly, with smart devices becoming interconnected. Cryptocurrencies and blockchain technology can play a vital role in facilitating secure data exchange and micropayments between IoT devices. This integration could lead to more efficient and seamless interactions between IoT devices, creating a more connected and automated world.
7. Decentralized Finance (DeFi) Evolution
Decentralized Finance (DeFi) has already gained significant traction, offering financial services without traditional intermediaries. In the future, we can expect further development and expansion of DeFi applications, such as decentralized lending, borrowing, insurance, and asset management. As DeFi becomes more sophisticated, it has the potential to disrupt traditional finance and offer more accessible financial services to a global audience.
8. Regulatory Clarity and Institutional Adoption
As cryptocurrencies mature, regulatory clarity is expected to improve in many countries. Clearer regulations can boost institutional confidence, leading to increased adoption of cryptocurrencies by banks, investment firms, and other financial institutions. Institutional involvement could further legitimize cryptocurrencies as a recognized asset class and bring substantial inflows of capital into the crypto market.
The future of cryptocurrencies looks interesting and there has been enough progress in diverse areas to suggest that we’re going to continue to see exciting new developments from now on.