(Mark Tencaten) | The Future of Cryptocurrencies

Mark Tencaten says that 2022 was a dismal year for cryptocurrency by any standard. Millions of consumers and companies lost money, and possibly more detrimental for a young sector and technology, the fundamental faith in the promise of cryptocurrency financing, which was meant to be a remedy to many of the wrongdoings that caused the 2008 financial crisis, is eroding. In total, a mostly speculative market value lost more than $2 trillion.

As a result of not just one but several significant failures, officials who have been raising the alarm about cryptocurrency's excessive dangers and failing to enact effective rules have been vindicated.

The year 2022 seemed more like an ice age to the most ardent crypto ideologists. Perhaps the era of cryptocurrency speculation will stay constant in ice, giving place to a Cambrian period for safe, always-on internet finance along with a general loss of confidence, economic worth, and a market filled with the gravestones of failed businesses and ideas. Perhaps 2022 has seen the transfer of control of cryptocurrency and the blockchain infrastructure to more reliable hands, much as it took the early 2000s dot-com bubble crash to pass over the future of the web to more resilient businesses, business models, and use cases.

The research at the core of financial institutions, among other areas, continues unabatedly, despite the fact that the technology involved in cryptography and blockchain is generally applicable to all businesses and synchronizing activities. Mark Tencaten says that watch what the big banks and established financial services companies do, not what they say, to gauge the viability of digital assets and blockchains at the center of financial services (and other parts of the global economy).

Even though JPMorgan made the most well-known policy U-turn on cryptocurrency and blockchain, they are no more the only large financial firm adopting Web3. It could be argued that embracing crypto technology is equally inevitable, even though the name feels like a dirty word, much as directors and executive teams eventually adopted their cybersecurity and digital transformation mandates. Despite all of its flaws, this technology continues to dominate the world of finance.

The use of otherwise positive or neutral technologies by malicious people and those already human follies of ambition, nescience, hazards of opportunity, or outright criminality has been littered throughout history. Each of these factors is accentuated in growing, weakly regulated areas and expedited by technology. In fact, no industry is risk-free, particularly not one that involves money. On the other hand, cryptocurrency swiftly punishes transgressors and leaves few hiding places for criminals.

Mark Tencaten asks whether you recall how anonymous trading activity on the so-called dark web gave rise to the cryptocurrency industry. Or how dangerous human interest between the keyboard and the chair led to dangerous global ransomware assaults like WannaCry in 2017, which spread throughout the world in a matter of days.

But we didn't outlaw email or the internet. With any novel technologies, it is best to balance off any negative impacts by putting tools (such as technology) in the control of responsible users and promoting responsible usage.

With the monumental crypto failures in 2022, we have the regulatory and policy conundrum. The future will be shaped by the nations that support ethical competitiveness. Mark Tencaten says that irrespective of the significant harm these technologies may have caused when used by the wrong people, crypto and blockchains will still be essential components of the current economic arsenal.