If you haven't heard about cryptocurrencies yet, you must be living under a rock. There are currently more than 21,910 cryptocurrencies, valued at an estimated $850 billion, and that number is only anticipated to grow over the next several years, according to a report by CoinMarketCap. Blockchain technology and cryptocurrencies will soon dominate the money transfer market and finance industry. A little over 10% of people on the planet already hold cryptocurrencies as valuable assets.

Let's examine the future of blockchain technology and how it might help the common people.

 

There will be an increase in the number of governments using centralised cryptocurrency

As the digital version of the Bahamian Dollar, the Bahamas will be the first nation to formally test and introduce the Sand Dollar in 2020.

In the first week of January 2022, China, which is taking the lead, tested and introduced the pilot version of the digital Yuan. Currently, 23 large cities provide it, and the government plans to roll it out nationally in the upcoming year. Using the e-CNY app, which is offered in the domestic market on the iOS and Google Play stores, you may purchase and sell digital Yuan.

We anticipate that the US Dollar, British Pound, and Euro will introduce their digital currencies in 2023 which will be traded throughout the globe.

 

More money is being invested in stable assets, or stablecoins

Investors seek safety in reliable assets during erratic times. Stable assets, commonly referred to as stablecoins in the cryptocurrency field, are thought to be more secure than fluctuating cryptocurrencies like Bitcoin and Ethereum.

They are the perfect choice for those wishing to protect their money during volatile periods because of this characteristic.

 

An increased focus on DeFi

You must have encountered the term "DeFi" more frequently than you anticipated as a crypto investor or researcher. The term "Decentralized Finance," or "DeFi," refers to a different financial and investing environment that uses cryptocurrencies and blockchain technology. The search trend for DeFi has increased by more than 5,600% since 2017 to demonstrate this idea.

It is the foundation of cryptocurrencies and the primary driver behind their creation.

Decentralized finance is based on the premise that no organisation controls it and that all transactions take place in a public ledger. Defi employs "smart contracts" to enable transactions without the involvement of middlemen banks.

This is the polar reverse of modern centralised finance, where transactions occur over secure ledgers under the total supervision of banks and financial organisations.

Ethereum effectively created the first cryptocurrency with the potential for smart contracts, giving it the first-mover advantage in the sector. As of now, the Ethereum network is the most popular option for creating smart contracts.

However, DeFi is still in its early stages, similar to the early internet, when chat rooms and vibrant websites ruled the 1990s. The entire premise of the internet, including electronic payments as well as the growth of remote labour, didn't begin to manifest until the 2000s.

 

Stricter Rules Could Follow

As a result of recent developments in the cryptocurrency industry, stronger rules will probably be put in place soon to stop misuse and stop incidents like the FTX crash. Regulating bodies are currently developing stronger rules for the crypto industry, which is now mostly uncontrolled.

The FTX crash brings to light the consumer risks and hazards of the uncontrolled crypto sector. The crypto industry has underlined the need for greater oversight and crystal-clear regulatory frameworks given its inability to self-regulate. 

With greater scrutiny placed on account balances and reserves at centralised crypto exchanges, these regulations will seek to safeguard purchasers of cryptocurrency products and guarantee that crypto firms behave in a compliant and transparent manner. This will have an impact on other cryptocurrency trends as well.

 

Cryptocurrency memes might become common 

With endorsements from celebrities like Elon Musk, Mark Cuban, and Naomi Osaka, Dogecoin rose to prominence this year. Although the currency was initially created as an Internet joke or meme, it has developed into a legitimate player in the cryptocurrency market. The coin gained prominence this year despite being launched in 2013.

What can we infer from this? Even though Dogecoin may have begun as a joke, its value in 2021 served as a reminder for everyone to treat it seriously.

Because of its ongoing development and the impact on the cryptocurrency enthusiast community, the cryptocurrency sector is incredibly fascinating. The widespread use of cryptocurrencies will fundamentally alter the long-standing financial system in the United States and around the world.