By Alessandro Albano and Francesco Casarella
Investing.com – “Over the next ten years, the cryptocurrency market will continue to see alternating bull and bear cycles, but investor adoption of digital currencies will continue to increase.” So said Charles Hoskinson, founder of blockchain platforms and , in an interview he gave to Investing.com during Web Summit 2022 in Lisbon.
By 2025, more than a billion people will have dealt with cryptocurrencies in their lifetime, a figure that Hoskinson says could reach “2 billion by 2030”.
Since its peak in November 2021, the market capitalization of non-fiat currencies has shrunk considerably, from over $3 billion to the current billion.
But with the arrival of NFTs, the adoption as legal tender by El Salvador, and the increased use of blockchain by businesses, crypto has taken on extra-financial value, a characteristic that had not been seen over the past decade.
“In the last bull market of 2021, we realized that crypto is no longer just a speculative financial instrument, but also looks outside the financial world”, explains the founder of the two blockchains.
The decentralization of finance and the digital banking revolution will also contribute “tremendously to the adoption of digital currencies”, to which must be added the use by companies of cybersecurity and the digitization of bureaucratic processes.
More complex, however, is the discourse related to ESG issues and the waste of energy used to mine cryptocurrencies. After the merger, considered one of the most significant upgrades ever introduced, the Ethereum blockchain reduced network power consumption by 99.9% by moving from a Proof-of-Work consensus mechanism ( PoW) to a Proof-of-Stake (PoS) mechanism.
For Mr. Hoskinson, however, cryptocurrencies cannot solve the problem of climate change, which is more a matter of “cooperation between nation states”, although an important role can be played within the framework of national sovereignty.
“Blockchain can help emerging and underdeveloped economies to accelerate their national development processes, which are now bound by international constraints and subject to the so-called world order.”
Like El Salvador, according to the founder of Cardano, states can, through the creation of new protocols, create new forms of digital partnerships that go beyond traditional schemes and instead rely on new digital infrastructures.
By contrast, in more financial terms, cryptos can be considered another asset class to balance in a portfolio, although recent volatility has shattered the classic equation that cryptos are inversely proportional to stock market performance.
“Crypto is the first meta-asset, but the question for investors is how they want their portfolio assets represented. All assets have intrinsic value but are asymmetrically liquid.”
“But”, asks the founder of the two main global blockchains in conclusion, “what if all financial instruments had their own form of liquid representation on the international financial markets, equivalent to their real value?”.