Crypto has expanded its reach beyond finance at Investing.com

By Alessandro Albano and Francesco Casarella

Investing.com – “Over the next 10 years, the crypto market will continue to experience alternating bull/bear market cycles, but investor adoption of digital currencies will continue to increase.” That’s what Charles Hoskinson, founder or co-founder of blockchain platforms and , said in an interview he gave to Investing.com this week during the Web Summit 2022 in Lisbon.

By 2025, there will be more than 1 billion people who have worked with crypto in their lifetime, a number that Hoskinson says could increase to “2 billion by 2030.”

And yet, from the peak in November 2021 to today, the market capitalization of non-fiat currencies has shrunk dramatically, from more than $3 billion to the current $1 billion.

But with arrival of NFTs, adoption as legal tender by El Salvador, and increased use of blockchain by companies, crypto has taken more than economic value, a feature not seen in the last decade.

“In the last bull market of 2021, we realized that crypto is no longer just a speculative financial instrument, but also has reach beyond the financial world,” explains the founder of the two blockchains.

The decentralization of finance and the digital banking revolution will also contribute, “hugely in the adoption of digital currencies,” as will the use of cybersecurity companies and the digitization of bureaucratic processes, according to Hoskinson.

The climate costs of crypto

More complex, however, is the discourse related to ESG issues and the energy waste used to mine cryptocurrencies. After the Ethereum Merger, considered one of the most significant upgrades ever introduced to the crypto ecosystem, the Ethereum blockchain reduced network energy consumption by 99.9 percent when migrating from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) ) consensus mechanism.

However, for Hoskinson, crypto cannot solve climate change, a task instead to be done “with the cooperation of nation-states”, but can play an important role in helping emerging economies accelerate their development.

“Blockchain can help emerging and undeveloped economies to accelerate their domestic development processes, which instead are now bound by international constraints and subject to the so-called world order.”

Cardano’s founder claims that El Salvador provides an example of how states, through the creation of new protocols, can create new forms of digital partnerships that go beyond traditional systems and instead rely on new digital infrastructure.

In more financial terms, however, Hoskinson sees cryptocurrencies as another asset class to round out a balanced portfolio, although recent volatility has blown away the previously established inverse relationship between cryptocurrency and stock performance.

“Crypto is the first meta-asset, but the question for investors is how they want the assets in their portfolio to be represented. All assets have intrinsic value but are asymmetrically liquid.”

“But,” the founder of the world’s top two blockchains asks in conclusion, “what if all financial instruments, even those that are not traded, had their own form of liquid representation in international financial markets corresponding to their real value?”