From crypto world to real world
2022 may be memorable for many things. Rises, falls and failed projects are consequences of the circumstances of a living ecosystem that is developing by leaps and bounds, and the next few years we will understand how extensive the consequences will be for investors and for the financial sector in general, both in the field of cryptocurrencies and in traditional finance.
What is beyond doubt is that recent events within the crypto world have shaken its value and advantages. However, it’s crucial to differentiate between digital assets as an asset class exchanged on a particular centralized platform, and the technology that underpins cryptocurrencies; specifically, Blockchain and Web3. Both are separate concepts we should never confuse.
When we talk about trading, especially in the cryptocurrency space, it is impossible to ignore factors such as speculation, hype and influencers, and least of all its fundamentals or worth. In contrast, Blockchain technology has steadily gained consistency, creating new applications and valuable use cases that can benefit the global economy and the whole society.
The long-awaited (and long-delayed) Ethereum merger occurred earlier this year. This is the second phase of ETH2’s multi-phase upgrade, which aims to improve the scalability and security of the network through modifications to the infrastructure, specifically moving from the Proof-of-Work (PoW) to the Proof-of-Stake (PoS) consensus mechanism. This change will allow the Ethereum blockchain to be more scalable, more robust and more sustainable.
Vitalik Buterin is founder and mastermind behind Ethereum, and arguably one of the most influential people in the crypto world. Out of the many applications that excite him inside and outside the finance sector, Vitalik has outlined in a recent interview what he considers to be the biggest use cases for the Blockchain in the future:
- Payment means: the use of cryptocurrencies as a payment method, especially in countries with hyperinflation and for underserved communities. Decentralized blockchain-based applications (dApps) cut out the middlemen, offering users to enjoy lower fees, as well as allowing them to send and receive digital money.
- DAO: Decentralized Autonomous Organizations are more than just moody programs and investment groups. They serve to build more democratic, resilient and efficient forms of governance.
- Intellectual Property: The Web Identity Ecosystem3. The privacy and security of digital identity is a crucial and especially important component for applications built for the metaverse and immersive interactions.
For BBVA Switzerland, right direction is more important than speed. We started a year ago in the two most important protocols in the market, which are also complementary, and our mission is to gradually incorporate new services by adapting to the technology advances, with the utmost responsibility, always looking for a solid justification for our clients.
Large banks like BBVA must guarantee a solid and realistic transition, in which technology acts as a catalyst to achieve the new challenges of the financial industry and a more equitable society for all.
What business use cases do you most likely see blockchain technology useful for?