The future of money: Where blockchain and cryptocurrency will take us next


Marc Wojno

Written by

Marc Wojno, Senior Editor

Marc Wojno

Marc Wojno
Senior Editor

Marc Wojno has been a writer and editor in the financial field for more than two decades.

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on January 18, 2022

| Topic: The Future of Money

Developers: Here’s what they really think about the blockchain

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We are on the precipice of a new form of finance that will use a range of technologies to change the way we use and manage one of our most fundamental tools: money.

Upcoming trends in cryptocurrency

Avivah Litan, distinguished analyst and VP at Gartner, who also co-authored its report, Predicts 2022: Prepare for Blockchain-Based Digital Disruption, told ZDNet that you’ll see cryptocurrencies being used for retail payments in about three to five years. Now and in the next couple of years, you’ll see a lot of interest and adoption of cryptocurrency by investors as an investment tool, namely as a hedge against inflation and as an alternative to gold. However, it remains an extremely volatile investment, currently a bitcoin is valued at around $31,187 well below its all-time high of $68,223 on November 10, 2021. 

Despite this, there’s little sign that investors or companies are backing down from the potential reward crypto has to offer.

That’s not just down to speculating on the price of cryptocurrencies. Some investors and companies are also interested in crypto as a means of getting into decentralized finance, or DeFi. “Companies want to get in on the action, even the hedge funds are putting more money into cryptocurrency,” says Litan. 

Banks have to serve these companies, becoming digital asset custodians, and it’s a global phenomenon, not just in the US. “DeFi’s starting to attract institutional finance; cryptocurrency is about 0.08% of assets held and some surveys say, for example, that hedge funds will hold 7% of their assets in crypto currency in five years,” Litan said.

Governments throughout the world are also opening up to blockchain and crypto now. So far, 83 countries are experimenting with or implementing so-called Central Bank Digital Currencies, or CBDCs, which represent 90% of global GDP, according to the Gartner study. China, which recently banished miners from mining all forms of decentralized cryptocurrency in favor of implementing its own – the ‘digital yuan’ – has distributed more than $5 billion of digital yuan to its people as of June 2021, and India’s government is scratching its head over how to tax cryptocurrencies as its central bank develops its own CBDC.

SEE: Cryptocurrency scams pose largest threat to investors

Clamping down on crypto scams and misuse will be key if it wants to gain mainstream legitimacy. By 2024, Gartner predicts that successful cryptocurrency thefts and ransomware payments will actually decrease by 30% due to criminals’ inability to move and spend funds off of blockchain networks. That’s welcome news today as cryptocurrency-related crimes – primarily scams and stolen funds – hit an all-time high of $14 billion in 2021, up from $7.8 billion the previous year, according to research from Chainalysis. Among the more recent types of scams are so-called ‘rug pulls’ in which developers build crypto projects that appear legitimate only to then abscond with investors’ money never to be seen again. Meanwhile, cybercriminals in North Korea extracted close to $400 million of digital assets in 2021 after it issued at least seven attacks on crypto platforms, targeting investment firms and centralized exchanges. 

But with the dramatic growth of cryptocurrency use in 2021, there is encouraging news: illicit activity is at its all-time low. Only 0.15% of cryptocurrency transaction volume in 2021 involved illicit addresses, down from 0.62% in 2020, Chainalysis says.

Another benefit blockchain is having with regards to the future of money is in customer loyalty rewards programs. For years, loyalty and rewards programs were met with hostility by customers for being inflexible with customers’ needs. Sign up thinking you can redeem points for a product or a discount on a service, and you’re met with conditions and constraints about how and when to spend those points. The frustration and disappointment ultimately leads to loss of revenue and customers. As online shopping becomes the preferred choice for consumers, retail businesses are adopting blockchain technology to help them track and manage transactions in hopes of elevating the user experience by providing more dimension, flexibility, clarity and transparency.

Perhaps the most technically innovative, financially lucrative, and most misunderstood blockchain-based crypto asset is the Non-Fungible Token, or NFT. Like a one-of-a-kind piece of artwork valued for a large amount of money, such as a painting in the analog world, NFTs are their digital counterpart, and can be anything – from a tweet to a video clip to physical property, such as real estate. It all comes down to tokenizing the asset in the digital landscape, be it an algorithm or code for a video or JPEG, to the digitized paperwork of the deed to a piece of land. Whatever it is, it’s unique and can be identified as such in the virtual world. (Cryptocurrencies, however, are fungible in that they can be replaced by another cryptocurrency of equal value.)

NFTs are one of the more creative waves of the future of money. Although most people still see very little value in the existence of NFTs, by 2026 Gartner predicts that NFT gamification, or GameFi – which takes video game elements such as point scoring and applies blockchain tech, so users can trade or swap game assets – will have the ability to propel an enterprise into the top 10 of highest value companies. What’s more, NFTs are expected to become a more powerful digital marketing tool in the coming years and that more traditional enterprises may ‘auction’ limited digital use rights for some of their unique intellectual digital property, according to Gartner’s report. And this is not just in video games, but also in sports, financial services, social media and manufacturing.

Here comes the metaverse

There’s plenty of debate about what the ‘metaverse’, the next-generation virtual reality-powered version of the web, might look like. Yet despite the uncertainty of this hybrid physical/virtual landscape, the metaverse is inevitably going to be a fully functioning marketplace – among other things – where users can dart around from one place to another as digital replicas of themselves, purchasing products in virtual stores.

Although not owned by any one company – Google, Microsoft and Samsung are also participating with Facebook with their involvement in the XR Association – Facebook has placed the biggest stake in this virtual land with an elaborate marketing campaign, which included renaming itself Meta. It claims that its concept of this digital marketplace will be “a set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you.” Hang out with friends, work, play, learn, shop, create, and much more.

SEE: CIO priorities: 10 challenges to tackle in 2022

Where there is plenty of skepticism, fear and downright hostility toward the metaverse concept, many argue that it will be the place where retail shopping and cryptocurrency converge. Gartner’s Litan believes that while businesses start making money in DeFi, consumers in a few years will notice the effects of spending digital currencies through the metaverse. “Facebook is taking us there, NFTs are there, so we’re going to have to start paying for things with virtual, digital cryptocurrency. I think consumers will start feeling the crypto world through Facebook, the metaverse and play-to-earn games,” Litan said.

“I think what we’ll see in the metaverse in the next couple of years is going to be confusing to a lot of people because there’s going to be a lot of talk, a lot of hype and initially very little to see,” says Tal Elyashiv, founder and managing partner of blockchain-focused venture capital firm SPiCE VC. Elyashiv equates the metaverse of today with where we were with the Web in the 1990s, when it took seemingly forever to download an email attachment. Elyashiv believes the issue with the metaverse is that a lot of technology needs to evolve to make it smooth and accessible for everybody and it will evolve exponentially, so that the early years will feel very slow. “I think we’ll look back then years from now and will not understand how we lived before it,” he says.


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