Four Key Areas Forward-Thinking Countries Need To Focus On To Grow Blockchain-Aware Populations
While select countries and individuals understand that this kind of technology aids in rapid growth and advancement, others continue to wonder what cryptocurrencies are and why they have value.
The cryptocurrency market cap is well on its way to having a much larger valuation than the gross domestic product (GDP) of today's largest economies. For example, Canada, the largest country in North America, had a gross domestic product of US$2 trillion in 2021, whereas the cryptocurrency market cap was valued at $2.04 trillion in early March 2022, according to crypto tracker CoinGecko. Now, bear in mind that this is still the very early stage of the cryptocurrency market, because blockchain technology will grow even more now that it has built a structure of connectivity that can further limit, or completely remove, the role of intermediaries, further helping to reshape society along the way.
Programmers and software developers will play the most integral role in achieving this future, as they are the ones enabling new industries to emerge on an almost daily basis. While select countries and individuals understand that this kind of technology aids in rapid growth and advancement, others continue to wonder what cryptocurrencies are and why they have value. As such, the journey to growth will need a key step: having a blockchain-aware and educated population, which requires the spotlight to be thrown on four key areas in this respect: education, security, regulation, and infrastructure.
1. Education Blockchain can no longer considered to be a new concept. It is a 13-year-old technology with growing acceptance from big institutions and nation states. It is a combination of three methods that already exist: the peer-to-peer method that is present in the protocol of the internet, cryptography encryption from credit card transactions, and the programming and lines of code that are seen in computer software.
To those looking to get started with blockchain, either as an investor or a contributor, my first suggestion would be to read Bitcoin: A Peer-to-Peer Cash System, a white paper by Satoshi Nakamoto, published in 2008. To date, Nakamoto's invention, Bitcoin, is the first and most widely-used application of blockchain that simultaneously created and kickstarted an entire industry. To be globally competitive, it is your responsibility to be made aware of this, perhaps one of the most important documents of our generation from a position of technology.
Upon educating yourself about the trust that arises from the Bitcoin protocol's immutability feature, the inclusion that is enabled by open-source software, and the accessibility of peer-to-peer transactions, you can better contextualize key utility features of this technology, and thus, what blockchain achieves as an industry. Having said that, Bitcoin has already reached its conclusion as a technology. Its use-case has seen fulfillment by being the most popular digital store of value.
In this regard, other virtual assets with innumerable industrial applications are in further development. The global adoption of blockchain technology has led to advancements in applications that facilitate cross-border transactions, and even provide supplemental layers of trust in asset registries and supply-chain logistics. In addition, within the field of computer programming are the lines of code that solve issues in the industry of blockchain itself.
Unbeknownst to most, these are in turn proposed as tokens that draw support from other programmers, remote investors, and technology enthusiasts. The whole process is akin to a venture capital investment, but within easy reach.
2. Security The first task before buying into any virtual asset is learning about security and network protocols, even at its very basic level. There are but a few who have knowledge of how to securely set up a web 3.0 wallet, purchase a hardware wallet, generate unique passwords, and create new emails for the sole purpose of blockchain. Keep in mind here that when dealing with a virtual investment, your asset is only as good as your own protection. My advice is thus to look into the difference between taking your assets offline versus remaining online.
The risk is high when storing your virtual assets online in the form of hot wallets, as they could be exposed to third-party intrusions, phishing, malicious links, and malware attacks that may come from apps, emails, web, browser extensions, and perhaps other surprising ways currently unknown. For entrepreneurs who are dealing with blockchain as a solution for industrial applications, my recommendation is to put a priority on smart contract audits, to consider generous bug bounties, and to understand privacy algorithms, such as zero-knowledge proofs.
Security audits are important. Bugs within a smart contract do exist and open doors for hackers to steal and navigate through a blockchain infrastructure. Just consider a few examples of such exploits from only the beginning of this year: Wormhole, a popular bridge that links Ethereum and Solana, lost more than $320 million, while NFT marketplace OpenSea had a vulnerability in its code that resulted in $1.7 million in stolen NFTs.
Ultimately, the responsibility of personal security will fall on individuals, with the first line of security layers being on business owners, and consumer protection and clarity in regulation falling on the concerned authorities.
3. Regulation Let me reiterate that blockchain is a GDP-enabler to a nation's economy. According to PwC, between now and 2030, the technology could add $407 billion to the US economy. In 2020, the Switzerland's Department of Finance began a consultation on a new cryptocurrency regulation that would enable its country to take advantage of blockchain, without stifling innovation. For the same reason, there is an influx of blockchain based organizations in the UAE and the MENA region too.
Sadly, there are still countries that have not welcomed crypto yet. I strongly believe that it is important to put the layers of law in place in order to encourage native talent to remain within its economy, to foster innovation locally, protect consumers, and consequently set up a proper tax system in place. In a country where innovation is encouraged, such as the UAE, I am confident that compliance and cooperation will never be an issue. Here, the regulators know that they do not have to look at blockchain contributors as a threat, but instead, as partners to navigate a newer version of the internet together, strengthening the economy in unison.
4. Infrastructure For the first time in human history, innovation is moving at the speed of light, and since we are more connected than ever, each programmer can build upon the most recent innovation by the way of improving upon the previous line of code. It is an innovation in plain sight happening on platforms, such as Discord and Github. However, while blockchain and its technologists move forward fast, it will only grow to the level of its infrastructure. In simpler terms, there has to be enough land available for the technology to keep building itself on.
Without such a foundation, brilliant code and solutions are born continuously but will have to wait until a fair access to sustainable energy, graphics processing units (GPU), compute power, storage, and hardware are established and made readily available. As an example, to enhance the graphics seen in NFT games, a more efficient compute power is needed, but to this day, young programmers have to wait several months for their first GPU order to arrive. This might be the first point that any forward-looking country will want to solve.