In a crypto bear market, it is easy to think the sky is falling.
"Crypto will go to zero, this time for real!"
"I knew it's all a scam!"
"The industry will never recover from the collapse of FTX!"
We even reviewed the book of crypto-hater, Stephen Diehl
. And yet, in Q1 2023, crypto is still here. Bitcoin is still here, and it bounced 50% off its lows. Ethereum is gearing up for a major upgrade — the Shanghai hard fork
Crypto is here to stay!
put it: "despite setbacks, crypto is inevitable."
This article examines Messari's six crypto innovations that cannot be "uninvented" and how they have changed the world.
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Let's start with the obvious one.
The Big Daddy.
Heck, Bitcoin is already so normal that you can't even list it by itself anymore. So let's point out the fact that Bitcoin is effin' legal tender in, not one, but two countries!
Yes. The good ol' orange coin will pay for your McDonald's meal in El Salvador and the Central African Republic (they have McD, right?).
Nowadays, even the Swiss city of Lugano accepts Bitcoin for burgers:
McDonald's may be able to take away Bitcoin as a payment option, but nobody can take away the network anymore. Bitcoin can be considered money at this point; it's just not equally accepted across different places.
CoinMarketCap Academy has covered Bitcoin as an innovation in many articles:
And that’s before we start talking about Bitcoin’s benefits for the energy grid
or the environment. It’s easy to forget that none of this existed two decades ago. What would we be doing with flare gas
if there was no Bitcoin to mine it with?
In an era where central banks buy gold in record quantities
, hard assets are king (cue Bretton Woods III
). This appeal of “outside money” could be the catalyst that Bitcoin needs for a strong push in the coming years. But even if that doesn’t materialize, Bitcoin is here to stay. And the world is better for it.
Stablecoins are unsexy and easily forgotten.
Because they are so normal and useful that you don't even notice them anymore!
volume of stablecoin
settlements has exploded over recent years. It barely budged in the bear market
; quite the opposite. Last November holds the record for stablecoin settlements:
Is it any surprise that Messari says, "stablecoins should be our leading export"? Because they are already well on their way without the government even doing anything (or maybe because of).
Countries like Argentina,
plagued by hyperinflation
, are already adopting stablecoins
autonomously. Argentines are exiting en masse to stablecoins
. 17% of the population bought cryptocurrency and half of that are stablecoins. The province of San Luis realized what was going on and even allowed the issuance of its own stablecoin
pegged to the USD.
in some not-too-distant future looks highly likely. The Stablecoin Transparency Act
would regulate how stablecoin issuers are licensed, if they receive banking licenses, and what kind of reserves they need.
Ironically, stablecoins would help the dollar
a great deal. With the right regulation, they could accelerate the Dollar Milkshake Theory
and allow the dollar to crowd out other currencies. The political and economic benefits for the US would be enormous. The US would extend its economic and financial power at almost no marginal cost. People in developing countries would opt in voluntarily to stablecoins.
Americans may not realize it but saving your money in a (fairly) stable fiat currency is a big deal for the better part of the world. Stablecoins fix this:
If you told an Argentine ten years ago that there would be a way to safely buy and store dollars without running the risk of being (physically) robbed, they almost certainly would have been all ears…
And what about ICQ?
Ahh, good ol' times. Simpler times. More decentralized times.
Gen Z won't understand, but there was a time, a short time, when the internet was decentralized. Actually decentralized. Those programs are a testament to that.
And maybe, just maybe, blockchains fix that and bring back a decentralized internet.
Of course, the new and centralized internet has its perks. Google logins are convenient. And auto-logins across 295 websites that save you the hassle of remembering 47 different passwords are nice too.
But it also has a ton of downsides:
Now if only there was a way to re-decentralize the internet again...
*over to you, Ethereum network*
Signing in with Ethereum
, though still far away, would be a great step to taking back control of the internet and user data. As Ethereum scaling
progresses and the network grows, so will its bandwidth
and its usability for ordinary internet users.
could help decentralize domains and web registrars
. Decentralized physical infrastructure, like file storage and sharing services
, can help build a more open internet. Both hardware and software can and should become more decentralized in the future. That’s before considering the possibilities of decentralized content creation, thanks to AI programs.
The reason there is even a chance to pull this off is that we have blockchains. No uninventing of that one.
If someone told you five years ago, you’d be able to get a loan on a dog-themed exchange with cryptocurrency as collateral, would you have believed them?
And yet, here we are.
is another sector that seems so familiar, so intimate as if it’s always been there. But it’s easy to forget that DeFi summer actually only kicked off in 2020. Before that, there were no money markets
, no flash loans
, and no algorithmic stablecoins
. That last one may actually have been for the better…
DeFi in 2023 seems stuck in a rut after the recent bear market. But the state of DeFi in 2023
is much better than you might initially think. The innovations we take for granted, such as decentralized token swaps
markets are not going anywhere. And new utility is already on the horizon.
could become DeFi’s bridge into the real world. Klima DAO
already tried bringing carbon emissions trading to the blockchain. It didn’t go so well, but the next generation is gearing up to do it better.
And then there are real-world assets
and the potential to tokenize them. Imagine if you could buy your next house on the blockchain. Heck, you can already buy NFTs and get real-world fashion
, so this does not seem that far-fetched at all.
Or think about getting real loans in crypto. Real as in loans, which you can use for real-world use cases.
First experiments like Goldfinch
already exist, and more is on the way.
No, DeFi is not nearly as “normal” as you may think it is. But it’s going to become normal because it isn’t going anywhere.
NFTs have possibly had the single biggest cultural impact of the entire crypto revolution.
Yes, Bitcoin is cool and all, but has Bitcoin featured at award shows? The Bored Apes have
. The most popular NFT collections have replaced Disney as the “cool youthful brand.”
Ok, fair enough, there has been a massive bubble in NFT speculation. And the NFT market is in pretty bad shape
. But that doesn’t take away from the fact that there’s a tool that can prove something is unique on the internet.
Does it work flawlessly?
Is there a whole lot of room to improve?
Oh, you bet!
Will the tech be more or less used in the future?
Ahem, more. A lot more.
Just look at real-world luxury and fashion brands getting into NFTs
. If one company can make a profit with NFTs, all the others will want the same. NFTs don’t even have to be front and center to be used. Companies can stealth-introduce them without users even noticing. Even Reddit is on board with NFTs
And the crypto-native use cases of NFTs aren’t going away completely. NFT marketplaces
are booming. Generative art
could be a future trend that is still on almost anybody’s radar.
And let’s not even talk about crypto and AI
. In a world where content is abundant, proving its uniqueness and authenticity will become highly valuable.
NFTs are a lot more than just jpegs, and the world is about to find out…
If NFTs are the culturally most impactful thing crypto has invented…
…then DAOs could become the politically and socially most impactful ones.
Ok, DAOs haven’t achieved that much yet. Sure, they tried to buy a copy of the constitution
. There are a couple of social DAOs
dedicated to “good causes.” But few people, even in crypto, know of them.
Heck, many people would even struggle to explain what a DAO is
. So here’s a good analogy:
DAOs can help overcome social challenges because they are good at aligning interests and rewarding contributors for their effort. Let’s compare them to corporations, shall we?
- DAOs are truly owned by their contributors, corporations are beholden to shareholders.
- DAOs can be formed and dissolved quickly and can act just as fast.
- You can easily join or quit a DAO, which makes them decentralized and, paradoxically, so well-aligned.
Yea, DAOs haven’t made the big splash that NFTs or DeFi have. But that’s because they are the most complex and most socially relevant crypto innovation. You can even spin off a digital country
from a DAO. And the use cases don’t end there:
- DAOs can be investment clubs for on-chain assets.
- DAOs can advance the building of public goods on the blockchain like Gitcoin does.
- DAOs can stand for social or environmental causes like Klima DAO.
People spend more time online than offline. They laugh, love, and eat online. Is social and political coordination going to be the one thing that stays offline?
Nope. You will see and hear much more about DAOs in the future.
This list should give you a good idea of the six crypto innovations that are here to stay:
- Bitcoin, the pristine digital collateral that combines ownership with possession.
- Stablecoins, which will probably revolutionize savings for people in developing countries.
- Decentralization, which we had, then lost, and are now about to regain in a better way.
- DeFi, which puts a bank in your pocket, where you own the assets and make the rules.
- NFTs, which have gone from strange jpegs to a cultural phenomenon and consumer technology.
- DAOs, which are revolutionizing the way we coordinate decision-making.
Don’t get lost in the noise, doom talk, and price volatility of everyday crypto. There is a lot of technology that is here to stay. And a lot more that is still coming.
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