The War Against Digital Currencies is Being Lost: What You Need to Know to Take Advantage A marriage between Web3 centralization and Web2 decentralization is just one way in which new-year benefits and tech breakthroughs can fuel digital currency sustainability and growth.
By Jonny Caplan
Opinions expressed by Entrepreneur contributors are their own.
You don't have to be a media professional to notice the barrage of commentary in the press regarding digital currencies like Bitcoin and Ethereum. And at least of late, it certainly appears tilted to the negative. It's human nature to be afraid of change and evolution: We all like to be mollycoddled — warm, undisturbed in our cribs and averse to change and innovation.
The actual market data in the crypto space, however, suggests that trends are anything but negative, with Bloomberg recently publishing an article postulating a $100,000 Bitcoin valuation as the year progresses.
Most of you have heard about the collapse of FTX or LUNA by now — fairly new and multi-billion-dollar enterprises seemingly falling out of the sky. And this is at least partially to be expected in such a new sector: The digital realm is largely unregulated globally at the moment, although that dynamic is in the process of transforming, as major governments assess digital currency and associated legislation.
There are several ways to assess such currencies today: You could consider crypto as too anonymous, unsecured, untrustworthy and unregulated, and therefore unusable. Alternatively, you could consider them as providing sovereignty — allowing anybody, anywhere, to open an account without prejudice. Crypto doesn't discriminate, as you get to be the owner and bearer of your wallet and are responsible for what's done with it — bearing in mind that independence comes with risks.
Currently, there isn't any real authority for accountability and trust in Web3, and over time this will have to be implemented for the ecosystem to have lasting growth. Most digital currencies currently allow establishing an account without any name, address or identification details — users typically wield a 16-word "seed phrase" that opens the wallet and enables them to use it. This comes with pros and cons: Depending on your location around the world, tax laws vary, and even with the anonymity of a crypto wallet, you usually still need to declare funds received, sent, invested and so on to your local government.
Due in part to this anonymity, there's also greater exposure to global scammers trying out schemes to pry funds from unsuspecting victims. This, by the way, provides juicy stories for many in the media bent on critique and negativity — who are more than occasionally blinded to the opportunities here, as well as the general direction of technology and market demand.
Related: How Web3 Is Making Now the Most Exciting Time to Be a Creator
India, as a notable example, is now strongly considering robust regulation of new digital currencies to further transactions in the region and reduce abuse. In the Middle East and North Africa, meanwhile, crypto adoption has skyrocketed.
"Our tribe has always had a decentralized mindset," commented Her Royal Highness, Queen Diambi, of the Democratic Republic of Congo, while being featured on NFTme (my Amazon Prime documentary series dealing with NFTs, cryptocurrencies and the metaverse), who goes on to explain that digital currencies and decentralization have long been part of the mindset of her community, and are, in key ways, transforming her tribe and region.
The UK government, for its part, has set out a plan to make the UK a "Global Cryptoasset Technology Hub," and PayPal, Revolut and many other major payment providers are enabling crypto within their ecosystems. Even Microsoft is building a cryptocurrency wallet into its Edge browser.
In short, the world is becoming increasingly monetarily digital, certainly since the pandemic, and with the recent collapse of major banking institutions such as SVB, Signature Bank and Credit Suisse. More and more people are coming to realize that traditional banking isn't as robust as was once thought.
I have suffered many delays in opening and accessing business accounts globally over my tenure as an aspiring entrepreneur. Different regions have different requirements that stall the entrepreneurial journey and spark. Banking systems are also strangely cumbersome, forcing customers to pay hefty fees and wait unreasonable periods to transfer from account to account, or bank to bank. These are electronic transactions: There is no fair reason for delay. Often, banks hold onto this money for days, earning interest and benefits during transfer time and disadvantaging the customer in the process.
According to Influencer Marketing Hub, as of December 1, 2022, the global crypto market cap is $858.43 billion, and Bitcoin prices have soared more than 27% since the collapse of SVB, surpassing $26,000 per coin — its highest level since last summer.
A few trends are becoming clear:
• The global community craves for increasing control, agility and accessibility in an ever-growing global environment.
• Digital currencies bring more control and access, and less control from banks. (Perhaps why general media coverage isn't so favorable?)
• Bank collapses and depositors' inability to access funds forces users to assess alternative banking options.
• Indictments and other legal proceedings, and resulting regulation in crypto, should bring more stability and credibility, thus enticing more users into the market.
Related: 5 Reasons Why Crypto Projects Need PR in a Bear Market
There is, undoubtedly, a greater need for accountability within the crypto and Web3 spaces, but it needs to evolve without destroying the sovereign nature of the ecosystem and ensure that there is still unilateral access, as well as innovation and evolution in markets and technology.
No matter how much negative chatter is heard in the media, the crypto community is vibrant, highly resilient, motivated and passionate about its future. This is clear by the data and metrics, as well as the relentless nature of the Web3 community to keep building, even during extreme bear market conditions.
That said, this by no means a utopia yet: Much needs to be done to make it a safe, inclusive, and sustainable space, but the opportunity is ripe, and therefore we must work together as a global community to build, innovate and drive a better and stronger digital environment.
With the rise of AI, robotics, 3D interfaces and other seismic technology advances, our lives are becoming more digital. The question becomes whether we will embrace this technological evolution, or fight it.
In my opinion, the only clear path ahead is a marriage between the benefits of centralization (Web3) and decentralization (Web2). Why not take the pros of each, avoid the cons, and enhance resources we already use, while bringing in new benefits and tech?
It should also be noted that digital currencies do have the ability to be manipulated for nefarious ends. With that in mind, we need to ensure that the global community has a voice and is part of both the conversation and this space's continual innovation. The path ahead is going to take cooperation, forward-thinking and right-minded planning to get the market into full swing, so let's get working instead of doubting tech and our inevitable future. (Think about it…when was the last time you used cash?)
The future is ours to build and create, in either the most beautiful, inclusive and advantageous way, or we can sit back, doubt it all and cry doom and gloom over things that aren't immediately perfect.
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Positivity begets positivity, while negativity, fear and uncertainty only engender the same. We should embrace new technologies, not fear them. If they happen to be imperfect, then let's work to perfect them, while being considerate of all. Think about it: We have already achieved huge feats, including flying to the moon, creating machines that can learn and think, and digital metaverses where we can roam and explore different dimensions. Like it or lump it, digital currencies, assets, collectibles, Web3 and the metaverse are already parts of that brave future. Are you going to dive in now, or sit on the sidelines?
