People all around the world are paying close attention to cryptocurrency and its peers in the blockchain ecosystem. This is mainly because of the growing buzz about Bitcoin’s potential to become the most valuable global asset in 2022. Decentralized currencies have evolved from speculative assets into widely acknowledged tokens that are used in everyday life and in investing decisions.
Platforms like Hate Race play-to-earn are also backed by renowned crypto researchers. In this article, we will discuss in-depth the six crypto trends to watch in 2022.
1. Bitcoin’s Institutional Acceptance
El Salvador made headlines in September 2021 when it became the first country to recognize Bitcoin as legal tender. The government has begun work on a ‘Bitcoin City’ near the Conchagua volcano, which would use geothermal energy to power the city and its crypto mining operations.
Australia is poised to reform its cryptocurrency legislation, with a new licensing system and a retail central bank digital currency in the works.
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The Markets in Crypto-Assets (MiCA) framework, which defines digital assets as “digital representations of value or rights that may be transferred and held electronically, utilizing distributed ledger technology or equivalent technologies,” is expected to be implemented.
As more countries and organizations accept and utilize cryptocurrency, the snowball effect will force institutions to investigate how they might integrate this burgeoning industry into their financial system and economy.
2. Bitcoin is Going Green
The rising demand for Bitcoin has become an increasing source of concern for environmentalists around the world, as crypto mining, particularly Bitcoin mining, is energy-intensive by design and relies on the efforts of a distributed network of high-performance computers (known as miners) throughout the world, which demand an excessive amount of energy.
According to Digiconomist’s Bitcoin Energy Consumption Index, Bitcoin has a carbon footprint that is similar to that of New Zealand, producing 36.95 megatons of CO2.
Several prominent cryptocurrencies, such as Bitcoin and Ethereum, will be exploring greener solutions in 2022, with the prospect of switching from proof-of-work blockchains to proof-of-stake blockchains.
Several tech businesses have joined hands in a joint endeavor to develop greener cryptocurrencies and make the blockchain more energy-efficient, which looks promising.
3. Web 3.0 Driven by Crypto
Disruptive technologies such as mobile internet and social networks are currently driving Web 2.0. Web 3.0, on the other hand, forges a new path by incorporating new features such as blockchain and deep web technologies. These are meant to provide people more control over their data while also making the internet more decentralized, transparent, and safe.
Web 3.0’s ethos is in line with what the internet’s creator, Dr. Tim Berners-Lee, envisioned. He felt that no central authority should be required in order to post on the internet, that there should be no central controlling node or single point of failure, and that no one should have a “kill switch.”
Web 3.0 has gotten a lot of buzz. This new internet protocol is based on blockchain technology, and users can control their data and move from social media to email to shopping with a single customized account, producing a public record of all of their activities on the blockchain.
4. The Metaverse of Blockchain
Social media giants Facebook and Microsoft have recently taken to the stage to discuss the Metaverse—an online virtual world that might be driven by augmented and virtual reality technologies.
In his cult science fiction novel ‘Snow Crash,’ Neal Stephenson created the phrase to describe virtual, lifelike avatars congregating in realistic 3D virtual reality worlds.
Crypto, NFTs, and the broader Blockchain technology will be critical to the growth of the metaverse, where identification, utilities, and access to environments will be at its heart. This, intriguingly, will enable like-minded people to form communities that share experiences, construct alternative economies, and collaborate on content creation.
5. Banking Industry Disruption
This year, Bitcoin banking is projected to develop as well. Morgan Stanley (NYSE: MS) became the first significant US bank to provide access to Bitcoin funds to its wealth management clients.
Bitcoin is an asset that has the benefit of having no counterparty or credit risk, making it acceptable for use as collateral. Bitcoin has so far dominated the options market as collateral. The Bitcoin loan business is also expected to expand. BTC now has a lower rate of collateralization, indicating that it could be used as Defi collateral. More Bitcoins will be available for borrowing, lending, liquidity provisioning, and other uses.
6. Crypto Payments Becoming Mainstream
Cryptocurrency companies saw an opportunity rather than a threat in the year 2021. Visa and Mastercard both provided crypto advising services, and WhatsApp began testing payments using the cryptocurrency-friendly Novi wallet.
This could mark the beginning of a global transformation in payments and money transfers, which is expected to accelerate in 2022 as more firms understand that money can be transmitted instantaneously and inexpensively.
Cryptocurrency and blockchain are expected to be used more widely to digitize, track and monitor a wide range of processes, including money transfers. The sky is the limit when it comes to this technology’s applications.