In the last five years, crypto has turned from an underground currency into a mainstream one. Banks, venture capitalists (VCs), and enterprises all want to have a piece of the crypto pie resulting in a booming industry with multiple cryptocurrencies. Even some governments have decided to jump on board for fear of missing out!
Despite much speculation around who invented the first cryptocurrency Bitcoin in 2009, its purpose was to create a decentralised system whereby control was taken back from the financial institutions and governments and given back to the people.
Fast forward twelve plus years and today some coins are decentralised, some are centralised, some are there to anonymise things, and some are there to be a bit more exposed. Even Bitcoin, which is still described as decentralised, has become less so as it has scaled. So is it okay to compromise on decentralisation?
Based on my crypto experience…
I first got into crypto in the very early days, around ten years ago, when there were no readily available exchanges so the only way to obtain coins was to mine for them. Yet even when you had some there were few options when it came to spending them. What started as a hobby in my living room, soon became a full time job which at one point saw me operating out of eight shipping containers in a rural location as a registered business, employing staff and working 19 hour days.
It’s the idea of a decentralised system, with computer processing power fuelling the mining process, and blockchain acting as bank ledger recording transactions and processes, that has appealed to so many crypto advocates like myself. With no need for banks to validate transactions – with anonymity and privacy at the forefront – it’s no wonder the value of digital currency has skyrocketed in recent years with the price of Bitcoin valued at $60,000 in 2021.
Community is key
Crypto communities are very much the force behind the success of cryptocurrencies like Bitcoin and Ethereum, with everyone within the crypto community working together to help drive profits and increase speed of transactions to share a reward with those within their communities. The communities can consist of many different types of people – those who have never had the option of making vast sums of money, those in poverty, and those with limited funds.
It’s the idea of taking control away from the banks and centralised units like gold and oil reserves, and governments, and instead empowering the masses regardless of their background, education or beliefs.
The same is true when it comes to non-fungible tokens (NFTs) which like crypto are built on blockchain and are decentralised. NFT communities focus is on education, curation of ideas, and of course monetisation of creativity – with notable success already in the digital art world. Both sets of communities bring together like-minded people who are fuelling the rise of these digital industries – with NFT sales surging to $10.7 billion in the third quarter of 2021, with cryptocurrency price gains often cited as a driver behind NFT market growth.
Digital currencies offer new ways to earn
What stands out about cryptocurrencies is a sense of equality that has never been seen before in fiat currency. Those behind cryptocurrencies not only have belief in them, but are happy to give away some of their value in return for people buying into them and helping to increase their value and then sharing this with the community.
Take Coinbase for example. Their mission is to help educate people about new coins. If you open a wallet with them and spend $10, they’ll credit that back to you as a thank you for trusting them, which of course acts as an incentive to encourage more spending.
There’s also other avenues like ‘learn to earn’ where you can earn $1-2 coin reward for watching an educational video about crypto and answering some multiple choice questions. Or staking where crypto is invested long-term into a ‘staking pool’ alongside other crypto owners, with each individuals’ computer powering transactions contributing to the pool to create crypto funds. At the end of the agreed investment period, for example one year, the currency generated is given back as a thank you to the community. I’m not talking a measly one percent which you may receive from a similar style investment with a traditional bank. I’m talking about a 37% return because it’s all about sharing the wealth and giving back to the community in a way that has never financially been done before.
Web3 will grow digital currencies further still
Web3 will revolutionise the way we transact in the virtual world. Let me clear up any confusion about Web3 and Web3.0. Web3 has decentralisation at its very core, built entirely on blockchain with a focus on removing centralised third parties, with emphasis on transparency and peer-to-peer transactions. Web3.0 on the other hand, is a total internal upgrade of the World Wide Web, with more intelligent processes (AI) and more immersive experiences (VR).
Perhaps the biggest stumbling block has been what people can do with their cryptos.
Up until now, the only way people could spend their earnt cryptos was through liquidation – cashing out funds usually via a third party broker into a real-world currency.
Web3 has been hailed as the saviour – a decentralised internet offering a solution to the over-centralisation of the world wide web. Harnessing the power of blockchain, it opens up a whole new virtual world – the metaverse – which has that sense of community at its heart.
Based on my ten year experience in the world of blockchain – from building crypto mines, watching crypto evolve, and the invention of NFTs – I can confidently say that blockchain is here to stay. Why? Because the products that come from it are community driven, and Web3 connects the digital world in the way that the internet promised it would, but failed to achieve.
The metaverse is the biggest jump forward in digital tech since the internet began – a 3D digital world where cryptocurrencies and NFTs are the tools to make this new decentralised ecosystem a success. Communities truly benefit from a sense of connection and belonging, driving this new digital future.
