The Promise and Threats to Crypto by 2027

Cointelegraph took a shot at predictions for the crypto industry over the next five years:

1. The metaverse will not rise

The metaverse is a hot topic, but most people do not have even the slightest idea of what it actually comprises. The metaverse is a holistic virtual world that exists on an ongoing basis (without pauses or resets), works in real-time, accommodates any number of users, has its own economy, is created by the participants themselves, and is characterized by unprecedented interoperability. A variety of applications could (in theory) be integrated into the metaverse, including games, video-conferencing applications, services for issuing driver’s licenses — anything.

This definition makes it clear the metaverse is not such a novel phenomenon. Games and social networks that include most of the features stated above have been around for quite some time. Granted, interoperability is a problem that needs to be addressed seriously. It would have been a very useful feature to be able to easily transfer digital assets between games — or a digital identity — without being tethered to a specific platform.

But the metaverse will never be able to cater to every need. There is no reason to include some services in the metaverse at all.

This is a good prediction, because it reflects the past into the future. The concept of cyberspace as a globally integrated virtual world was born in 1984 in William Gibson's classic novel, "Neuromancer." Fifteen years later, the Wachowski Brothers would reinvigorate the concept when they named their virtual world, "The Matrix," after the "matrix" in Gibson's novel. The popularity of Neo's "Matrix" world would cement the idea of cyberspace in the popular consciousness.

It's been nearly 40 years since Neuromancer and there have been hundreds of attempts to create a virtual reality environment that was as compelling to people as the imaginary worlds of fiction. Cointelegraph is right to point out that they always fall short for various reasons. Before online games had graphics, users of MUDs had identified interoperability as an issue and developed a simple protocol known as BAMF to permit users to move between virtual text-based worlds and while useful, interoperability didn't make MUDs more popular than Quake in 1994. The basic problem was reiterated by Clay Shirky in his essay, "Playfulness in 3-D Spaces":

The Quake 3-D engine is for something, while VRML is a technology in search of a use. The Quake engine's original use is immaterial; once you have a world-modeling protocol that lets you wade through a subterranean stream, picking up shotgun shells and blowing up other people who are picking up rocket launchers and trying to blow up you, you've got the whole ball of wax -- spaces, movement, objects, avatars, even a simple physics. It would be easier to turn that into a tool for shared corporate meeting spaces than it would be to build the same thing in VRML, because once a tool is good for one thing, it's easy to see how to make it good for another thing.

Cointelegraph continues:

2. Wallets will become ‘super apps’

An active decentralized finance (DeFi) user is forced to deal with dozens of protocols these days. Wallets, interfaces, exchanges, bridges, loan protocols — there are hundreds of them, and they are growing daily. Having to live with such an array of technologies is inconvenient even for advanced users. As for the prospects of mass adoption, such a state of affairs is all the more unacceptable.

For the ordinary user, it is ideal when a maximum number of services can be accessed through a limited number of universal applications. The optimal choice is when they are integrated right into their wallet. Storing, exchanging, transferring to other networks, staking — why bother visiting dozens of different sites for accessing such services if all the necessary operations can be carried out using a single interface?

Users don’t care which exchange or bridge they use. They are only concerned about security, speed and low fees. A significant number of DeFi protocols will eventually turn into back-ends that cater to popular wallets and interfaces.”

This is critical to what we’re doing with Silvermint. Our core strengths are scalability and ease of use. When we first conceptualized Silvermint, we decided that it should be so easy to use that everyone tries it. It should be so fast that everyone can use it. It should be so cheap that users don’t notice it. And, it should be so reliable that there’s no noticeable downtime. At Silvermint, we are reducing the barriers to entry and use and putting a premium on consumer utility.

“5. The crypto market will fragment along geographic lines

“Cryptocurrencies are global by default, but they are not invulnerable to the influence of individual states. The state always has an edge and an extra trick up its sleeve. A number of territories (the U.S., the European Union, China, India, Russia, etc.) have already introduced or are threatening to introduce strict regulation of cryptocurrencies.

…

“It is not difficult to imagine a future in which parts of the crypto market will work in favor of some countries while closing to others. We are living in such a future already, at least to some degree.”

Decentralized cryptocurrencies can really be banned only if all nations come together, which is unlikely. The Internet perceives censorship as damage and routes around it. Nations that try to bring TradFi controls to DeFi technologies will find themselves suffering the flight of both capital and brainpower.

Whether national regulatory policies can really impact cryptocurrency and blockchain remains to be seen. Apple and Google could certainly hurt the spread of cryptocurrency in the US by eliminating from their app stores any mobile app that integrates with cryptos. But, over the last 5 years, BTC has produced an eye popping 470% return while the S&P500 has done only about 60% in the same period. It's unlikely Americans will abandon their gains and the potential for more just because the SEC or CFTC wants them to. Far more likely is that Americans will learn how to use VPNs and side-load applications onto their phones, neither of which is so hard that the Internet-native Zoomers couldn't figure it out.

What drew us to crypto is the virtue of decentralization and the individual freedom it entails. Blockchain technology allows for universal and affordable access to financial systems, markets, and products. It takes control out of the hands of banks that are "too big to fail" and puts it back where it belongs: in the hands of the people. While we agree with Cointelegraph on many points, the prediction we see most clearly is this: Crypto is here to stay.