Although there is currently a great deal of uncertainty about the state of the markets, what is undeniable is that the past couple of years have been tremendous for cryptocurrency.
After the great crash of 2018, crypto appeared to be out for the count, or barely conscious as it hauled itself through the multiple-year crypto winter. Far from shivering slowly into an icy grave, though, crypto was proceeding through a period of patience and construction, as bitcoiners stacked sats and developers kept building.
All of which led to 2021’s explosive price action and a resurgence in mainstream interest towards everything from Bitcoin, to smart contract platforms, to NFTs and DeFi. This has been accompanied by, for the first time, open enthusiasm from institutional figures, and acknowledgement from politicians that crypto was something government agencies should be paying attention to. Not to mention that a nation-state, El Salvador, adopted bitcoin as legal tender.
An observer might suggest that nothing could demonstrate mainstream adoption more emphatically than a country utilizing bitcoin as a currency, and yet, we still cannot truly say that crypto has gone mainstream.
All the talk is of crypto adoption coming down the line, perhaps incrementally over the course of the decade, but it’s not always clear what that prediction means. And, as all this goes on, the crypto environment is becoming more splintered, with widening distinctions between the various factions.
What, then, would mainstream crypto adoption actually look like, and what signs would indicate that we were on that path?
Bitcoin in Every Portfolio
It’s rare that retail gets a clear head start on the institutions, but that’s where we’ve been since bitcoin’s inception, except that now it’s looking as though that atypical period might not last much longer (certainly not for another decade, anyway).
Big money comes in when it’s safe to do so, and it looks likely that some kind of regulatory proceedings will be the catalyst to make that happen.
As it goes, governments are taking a real interest, and if regulatory nods are given then it wouldn’t take a huge portion of institutional-scale allocation to significantly shift the price of bitcoin, at which point every portfolio wants exposure, and bitcoin becomes a more expensive, but less volatile asset.
Cryptocurrency as Common Currency
Sometimes the currency part of cryptocurrency seems to get forgotten, as, depending on the protocol, cryptocurrencies are talked about as stores of value, application platforms, or simply vehicles for quick speculation. But, mainstream adoption is likely to entail a situation in which it’s not unusual for goods and services to be paid for in crypto.
There may be a variety of blockchains serving this purpose, and a growing number of third parties will offer consumer-friendly means of facilitating such transactions. What’s crucial is that crypto transactions will not require a deep technical understanding of how crypto works, any more than using an ATM requires you to understand COBOL.
NFTs, Web3 and the Metaverse
The great attention-grabber of the past year or so has been NFTs. Although they take a lot of criticism, NFTs have linked up crypto with areas that usually have little explicit association with either tech or finance, such as illustration and music.
NFTs introduce previously unrecognized, newly evolving kinds of utility, as developers, artists and crypto-thinkers explore the possibilities unlocked by verifiable ownership of unique digital tokens.
Relatedly, there is web3, which will provide an online experience in which, via your crypto wallets, you connect to sites and apps you can transact with through blockchains, retaining ownership of your content as you go.
It’s this environment, in which you navigate as an individual, and not a subordinate within someone else’s walled territory, that will become what some people are calling the metaverse.
A Culture of Decentralization
Ultimately, core to the point and purpose of crypto, there should be decentralization. Without this, crypto is just a distraction, and blockchains that are not sufficiently decentralized cannot lead to adoption in a meaningful sense.
In the event that any changes taking place created only newer forms of centralization, then it would be reasonable to say that crypto had not fulfilled its aims, and more work would need to be done.
Optimistically though, through crypto adoption, a culture of decentralization can permeate and become the favored way of thinking. The models that set this in motion will be decentralized assets, decentralized currencies and a decentralized web.
One more thing to note is that currently, there are over 10,000 cryptocurrencies, while there were just around 500 back in 2015, and of course, there was only one in 2009.
Mainstream crypto adoption might occur through a large number of blockchains serving multiple purposes. On the other hand, the path to adoption could feature shake-outs and consolidation, resulting in there being just a small number of active blockchains, comprising those that are the most efficient, robust and developed-on while excluding the possibility of centralization.
When crypto goes fully mainstream, we might no longer talk about crypto at all, since it will be embedded everywhere, operate always smoothly and often out-of-sight, and have branched out and fragmented into multiple unique disciplines.
