Scenarios about the future of Crypto

Scenarios about the future of Crypto?

In the last days all of us have experienced an explosion in publications and articles that condemn the Crypto space. As a Crypto veteran I should say that this is a little frustrating but it is not a surprise.

Is this the 1st time we see a crisis in the Crypto Exchange industry?

Certainly not. Between 2010 to 2014 crypto exchange Mt. Gox accounted for over 70% of all Bitcoin transactions. In 2014 the exchange declared that it lost an amount from 650000 to 850000 Bitcoins due to hacks. Just to understand the size of this in todays value this scandal accounted for 14 billion USD. It took the exchange clients 7 years to get a portion of their Bitcoins back.

In 2019 Quadriga Crypto Exchange was the next scandal in line. The sudden death of its founder left the exchange clients wonder where their crypto went. The estimated loss was around 180M USD at that time.

Can we say for sure that the recent FTX collapse will be the last exchange scandal? No one can say this for sure. Just take a look at Coingecko. There are 606 Exchanges active right now.

But why do we see such extreme reactions to these cases?

This happens because the Crypto Industry is and will be the future of the economy. Nothing else has such a great potential as the Crypto Space but changes must happen in order to claim its position among the top industries in the world.

The miracle of Crypto is that coding and technology gave birth to a new economy, but this also gave the steering wheel of this industry to inexperienced youngsters. So maybe all of these crises were actually inevitable. This is how an ecosystem grows. We learn from our mistakes. ???

So, what needs to change apart from improving security? Let’s take a closer look.

Centralized Exchanges (CEX)

From the moment we need to convert FIAT to Crypto we cannot live without Centralized Exchanges. This is why we need regulation and clarity when it comes to how CEX handle their clients assets. Right now, CEX are a black box. No one knows where the money goes once FIAT is converted to crypto within the exchange. Not until we withdraw our crypto or fiat do we know that everything is ok. The main point is clarity when it comes to where and how are the clients deposits handled. This value does not belong to the exchange. The CEX have multiple sources of income such as trading fees, listing fees, initial exchange offering fees and that should be enough for them to be viable.

Decentralized Exchanges (DEX)

Many Crypto Enthusiasts started cheering for Decentralized Exchanges. Before you agree on this let me just share that Billions have been lost in hot wallet hacks. Unfortunately, in order to trade on a DEX you need a hot wallet. Even the hot wallets of CEX have been hacked. Not to count for the millions that are lost daily because users connect their hot wallets to fake sites. Another great issue are the high gas fees when trading on a DEX. If we also count for the millions lost in DeFi applications hacks and rug pools, then before we can agree that DEX are the future of crypto we must first improve security and user experience. And even if we achieve that, then what about KYC and regulation? This is another great issue because at the end we need to convert FIAT to crypto to fuel the crypto space growth. Inevitably DEX may not be a viable solution.

Stablecoins

This is another great issue for the crypto space. After the LUNA fiasco and the circulating articles about USDT possible skeletons in the closet we need a clear solution. A stablecoin or stablecoins backed by real assets with crystal clear proof that the reserves are there and reachable to anyone that wishes to entrust their money and exchange it for a stablecoin.

Too many Tokens and Coins

Currently at Coingecko we can count 13235 Tokens and Coins. No one can say for sure how many of these tokens and coins are run by real companies and not just a bunch of scammers or kids. Because of the checks large CEX do if these tokens or coins can be found there then the chances that these are real companies are high. If there are only available on DEX then you should deepen your research.

Metaverse and NFT’s crash

With the recent lay offs by Meta, and disclosure of the real users that actually use the metaverse right now we cannot be nothing else but sceptic about where the industry should focus next.

Crypto technology allows us to quickly implement and launch an idea but this does not mean that the trend is viable and realistic.

From the other side Security Token Offerings that may be boring for Crypto Investors can be a viable and promising industry.

Who will lead the next Crypto rally?

Some of you love him others hate him, but Elon Musk might become the savior of crypto.

His alliance with CZ and the acquisition of Twitter may hide a lot of surprises. Imagine the transformation of Twitter to a social media and P2P platform where each verified twitter account will also be connected to a secure hot wallet and users will be able to exchange crypto, stablecoins and NFT’s. Time will tell if i am right.

So my conclusion is that we should focus on security and clarity above all. Anyone who wishes to build a solid company in the Crypto industry must be in position to offer security and clarity. ?

If we do this and make Crypto a safe and viable industry, then we will see this market grow to unprecedent levels. But we must build solid foundations first.?