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Home»News»The Rise of Crypto: Is it the Future of Money?
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The Rise of Crypto: Is it the Future of Money?

Saheel KhirodkarBy Saheel KhirodkarDecember 28, 2022Updated:December 28, 20221 Comment4 Mins Read
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It’s difficult to say exactly why cryptocurrency may be perceived as similar to other financial instruments without more context. Cryptocurrency can be used as a store of value, similar to traditional assets such as gold, and it can also be traded on various exchanges in a way that is similar to traditional securities.

However, it’s important to note that cryptocurrency is a relatively new and rapidly evolving asset class, and it has unique characteristics that differentiate it from traditional financial instruments. For example, most cryptocurrencies are based on decentralized, blockchain-based technologies, which makes them resistant to tampering and censorship. Additionally, the supply of many cryptocurrencies is capped, which can make them attractive as an inflation hedge.

It’s likely that the perception of cryptocurrency as a financial instrument will continue to evolve as the asset class matures and becomes more widely understood and adopted.

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There were two main narratives about the revolutionary potential of cryptocurrencies at the start of the year. The first was that cryptocurrency was a revolutionary new form of money and that you could use it to become wealthy. This turned out to be true, at least initially. The second theory, that the technology underlying crypto lends itself to becoming the architecture of a better, fairer internet, has not come to pass and has failed to materialize.

At the beginning of the year, there were primarily two narratives about the revolutionary potential of cryptocurrencies. The first was that cryptocurrencies were a ground-breaking new form of money that could be used to make you rich. This proved to be accurate, at least at first. The second theory, which proposed that the technology underlying crypto lends itself to developing into the architecture of a better, fairer internet, has not materialized.

The concept of a crypto internet, or web3, is predicated on the idea that ledgers known as blockchains, which are used to verify ownership of cryptocurrencies, are also effective at tracking the data required to run social networks and online games. Web3 proponents envision a world free of the negative aspects of the internet that big tech dominates because these ledgers are distributed across many computers rather than centralized in a server network controlled by, say, Amazon.com Inc. or Microsoft Corp.

The environment was favorable for web3 to take off. Starting in 2021, a few web3 projects gained traction, most of which relied on users buying non-fungible tokens to play games or join a group of others who share their optimism about NFTs. People are unhappy with Apple Inc. and Google, Meta Platforms Inc. continued to flounder into 2022, and it’s understandable that some might see Elon Musk’s acquisition of Twitter Inc. as a performance art piece highlighting the risks of having centralized control over crucial internet services.

All of these services’ worth was intimately entwined with the maniacal financial speculation surrounding cryptocurrency. Because of this, it was difficult to determine whether the products were valued for their own sake or merely as a means of financial gain. The most forgiving view of web3, which I frequently heard from web3 developers and their investors, was that the speculative fervor was just a diversion that would eventually wear off, leaving useful services in its wake.

Web3 was a mirage, according to a more pessimistic perspective. The expectation of a fully blockchain-based internet served a purpose by giving the impression that cryptocurrencies were more than just a means of gambling. In turn, this might be appealing to non-gamblers.

The cynic’s argument is strengthened by the fact that the value of most cryptocurrencies decreased along with the degree to which web3 services did as well. In 2022, those who were closely following the cryptocurrency industry immersed themselves in the specifics of bizarre financial instruments and tracked the spread of the epidemic as it spread from one failing cryptocurrency company to another. There weren’t many brand-new web3 services that were big hits. All the way down, it was financial speculation.

This kind of skepticism is common among those in the crypto community. It’s a common response to say that while there have been many dubious endeavors motivated by get-rich-quick fantasies, the real work is now moving forward. (This might sound like, OK, but nobody has actually tried a pure form of communism.)

There has been at least one notable NFT release this month, so perhaps crypto’s future as the foundation of novel technology products is still to come. However, it will be difficult for anyone attempting to build web3 today to persuade people that crypto isn’t exactly what it seems to be.

Based on Joshua Brustein’s article

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Saheel Khirodkar
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Saheel works as a content writer for Bitnewstoday. He has always been interested in journalism and enjoys writing. Furthermore, His interest lies in cryptocurrency, and is continuously seeking for new techniques to invest. In his free time, he enjoys staying up to date on the latest industry news and spending time with his family.

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