As Crypto Becomes More Mainstream, Can It Stay Decentralized? – Tech Crunch


While world markets continue to face downtrends, crypto markets are anticipating greater adoption as people view the digital asset sector as an inflation hedge (even though some prices are currently down from their 52 weeks).

From first-time buyers of cryptocurrency to people learning more about NFTs, Bitcoin, and the general crypto ecosystem, there has been a global increase in awareness about cryptography and, in turn, adoption, indicate the data.

Around half of all crypto owners in the United States, Latin America, Asia-Pacific, Brazil, Hong Kong and India bought digital assets for the first time in 2021, marking a major breakthrough for the emerging industry, according to a Gemini report. Globally, 41% of respondents who did not own crypto said they want to learn more or buy it in 2022, the report adds.


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At the end of 2021, the global crypto market had 295 million users, but that number could reach 1 billion by the end of 2022, based on last year’s growth rate, according to a Crypto report. com. But given the current volatility in the market, with the total market capitalization down 46% since the start of the year, it is not certain that this billion mark will be reached in the next six months.

Widespread adoption in a decentralized spirit

As crypto becomes more mainstream, regulators around the world have watched the space more closely to (they say) protect consumers. Just last week, the Group of Seven, an international political forum with members from the United States, Canada, France, Germany, Italy, Japan and the United Kingdom, called for prompt, consistent and comprehensive regulation of crypto-asset issuers and service providers.

But can crypto really remain decentralized while governments around the world focus on industry?

Decentralization can mean different things to different people, but most members of the Web3 community agree that it’s one of the key factors in what makes crypto, well, crypto. So, as regulators enter the space and begin to develop frameworks and guidelines, decentralization must remain important in the industry if it is to stay true to the fundamental precepts on which it was founded.

“Decentralization is at the core of the web3 ethos, and it must remain at the core as crypto is increasingly adopted,” Wilson Wei, co-founder and CEO of CyberConnect, told TechCrunch. “To keep decentralization at the heart of crypto and web3 as a whole, it starts with infrastructure.”

Decentralization comes down to data ownership, Wei said. The problem with Web 2.0 is that a handful of tech giants like Facebook and Instagram own most user data, but in Web3 the data shouldn’t belong to the platform, he said. said: “To stay decentralized, we must ensure that applications actually create services on top of decentralized infrastructures, which guarantees the sovereignty of user data. »

Rather, it’s an evolution that will run in parallel and complement each other, Jonathan Schemoul, co-founder and CEO of Aleph.im, told TechCrunch. “There already exist and will continue to exist decentralized cryptocurrencies and apps that people are using and supporting because of the advantages they offer over centralized options.”

For example, Aave is a decentralized lending protocol that allows users to take out unauthorized secured loans without the need for personal information or KYC/AML (know your customer/anti-money laundering) documentation, Schemoul noted. . But in contrast, centralized crypto platforms like BlockFi also enable collateralized crypto lending and operate in a permissioned manner that is more intrusive and less transparent than decentralized alternatives, he added.

A world coexisting with Web 2.0 and Web3

In some ways, crypto will remain decentralized while trending toward centralization in others, Schemoul said. “That’s perfectly fine; Web3 is not going to replace Web 2.0.

“The ethos isn’t just decentralization for decentralization’s sake,” said Kurt Hemecker, chief operating officer of the Mina Foundation and former head of business operations at Meta’s Diem Association. “Rather, the underlying decentralized design is what makes cryptocurrency revolutionary.”

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