Who would have expected that when the first iPhone hit the market, years later we’d be navigating more with Google Maps, listening to music on Spotify, and editing and sharing photos on Instagram? Let alone that we spend an average of 4 hours a day on it? I now have the same with cryptocurrencies. When I started with it in 2015, everyone was mainly focused on Bitcoin. There are now countless developments such as NFTs, stablecoins and CBDCs. In this article I look ahead at the 5 most important developments.
1. Not so stable after all
Last week, many cryptocurrency traders and owners watched with concern as the market suddenly collapsed completely. If you zoom out, you will see that this does not only concern cryptocurrencies. The war, high inflation, interest rate hikes and shattered supply chains have left all financial markets in limbo. During the recent salami crash, established tech companies also lost $1 trillion in value in 3 days.
In addition to the volatile crypto, there are also all kinds of so-called ‘stablecoins’, which I wrote about in 2019. This is a cryptocurrency that always retains its value. For example, the most widely used stablecoin, Tether, always equals $1. A safe haven for cryptocurrency traders, but nowadays also for residents of countries where their own currency is far from stable, such as Venezuela, Turkey and Nigeria.
Most stablecoins always have a 1–1 cover with “fiat” money, such as dollars and euros. For example, for every Tether, USDC, PAX dollar, etcetera, the issuing party has one dollar in a safe account, if you want to exchange it. Stablecoins also continue to develop, and so-called ‘algorithmic stablecoins’ have been working for years, which automatically adapt to supply and demand on the basis of algorithms.
Shockwave among cryptocurrencies
One of the most bizarre and extraordinary events in the crypto world happened last week when one of those algorithmic stablecoins Luna lost its peg (1–1 peg) against the dollar. At that time, this coin was no longer worth $1 dollars, but in the end it was only worth 10 cents. The project was one of the top 10 cryptocurrencies in the world, and the shock wave generated by this flaw caused $1.25 trillion of cryptocurrency market cap to evaporate.
This is not only because the organization behind Luna dumped 80,000 Bitcoin on the market, but also the reactions that follow standard with this kind of violent price swings. The beauty of the underlying blockchain technology is that you can analyze all transactions worldwide. This shows that often the youngest crypto investors (the people who have been in it the shortest) are already selling their crypto. Buy high, sell low. In addition, you see that traders who ‘short’ (anticipate a fall in a price) further amplify this falling effect.
Governments such as the American and European were quick to announce laws and regulations to regulate stablecoins much better. Something they announced much earlier and, for example, will already be addressed in the upcoming European ‘MICAR’ (crypto) legislation that will come into effect next year. Yet the ECB indicated that there is now much faster action on stablecoins should be undertaken because of fears of the major impact of cryptocurrencies on the mainstream financial system.
2. Making money dancing, playing sports and walking
Instead of buying cryptocurrencies, you can also ‘mine’ them. This is validating transactions on the blockchain. But instead of using regular power for the computer to mine, the most special other models have been developed to generate energy, for example. For example, there are: people who try to do this with pen and paper, companies that make it possible to mine Bitcoins by sweating enough, and the Dutch startup Institute of Human Obsolescence does this with excess body heat.
Indeed, get rich while sleeping.
But in the meantime countless other models have also been developed ‘to earn’. The best known is ‘Play to Earn’, with which you earn cryptocurrencies by playing games. This is already billions of dollars worldwide.
But you can also earn cryptocurrency by walking. STEPN is a good example of this. By buying a pair of sneakers from STEPN (they are already worth $7500 per pair on marketplaces) and running, your activity is tracked in an app via GPS and you earn GST tokens. You can then use these tokens to buy new sneakers and exchange them for ‘fiat’ money such as euros. I myself am involved in a project to earn cryptocurrencies by partying in clubs: party to earn. Make your steps count and cash!
3. More and more adoption
Both large companies and governments are developing their own digital currency or implementing an existing one in all kinds of ways. Writing off Meta’s Libra project hasn’t stopped the Telegram chat app from introducing its own TON coin. This coin can be used by users within the app without transaction costs. Something that the other chat app Signal did before with a privacy-friendly crypto and Meta wants to do again.
In addition to many platforms introducing their own token to use within their own platform, there are also more and more large companies that accept cryptocurrencies, such as Gucci, Emirates and Starbucks. I personally find the different discussions within countries interesting. More than 90% of central banks worldwide are working on their own ‘Central Bank Digital Currency’, which I wrote about earlier.
But there are also many countries that are looking at a possible adoption of existing cryptocurrencies, such as Bitcoin. The most famous example is El Salvador. This country has turned crypto into legal tender, is mining Bitcoin using geothermal energy from volcanoes and even wants to set up an entire Bitcoin city. Recently, the Central African Republic was also added. Here too, Bitcoin is now legal tender. And many more countries may be added soon. Last week, 44 developing countries had coffee with the president of El Salvador to explore the possibilities of Bitcoin adoption. While they were in the country for a conference.
4. Are monkeys going to take over the world?
It started with a collection of 10,000 monkey pictures created by artificial intelligence. This collection of ‘Bored Apes’ has become so popular that they sell for an average of $400,000 each. Much more interesting is the whole economy that has developed around it. From the Bored Ape Yacht Club (an exclusive online community, only accessible to owners of a Bored Ape) to the Apecoin (the own currency) and Otherside: a metaverse under construction, where 55,000 lots were sold as ‘Apeland’.
Often when I talk about this, people think I’m crazy. I personally find these developments incredibly interesting, because all kinds of developments come together. From the rapid rise of NFTs, to the building of powerful online communities, the reward for your efforts within this community, new ways of contact between companies and consumers and of course the metaverse developments, which are happening at lightning speed.
5. There is no end to new coins
Every week new digital coins come onto the market. Sometimes with very special, new functions. I was a bit shocked by the company’s ‘black mirror’ idea, which is researching ‘reputation tokens’. Earn coins with “meaningful contributions” on Facebook or Instagram.
No shortage of tokens. No shortage of cool developments. It promises to be an interesting summer for cryptocurrencies, which I will follow with enthusiasm.
Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.
