Non fungible token (NFT) was named word of the year in 2021, decentralized finance was trending in mainstream media, and crypto companies made headlines for a variety of announcements. This is undoubtedly due to the effects of COVID-19 on the economy, with many people looking for new ways to diversify their finances and a shift to working from home giving people more time to pursue new interests. Many people have chosen to invest in cryptocurrency.
As discussions shifted away from Bitcoin and toward larger crypto projects such as Ethereum network upgrades and central bank digital currencies, or CBDCs, news coverage would suggest that mainstream crypto adoption is already well underway.
Web3 represents the future of the internet, with an emphasis on community, in which users operate in a decentralized manner rather than relying on large private businesses or centralized government bodies.
Many see this as the next logical step for the internet, with the concept partially based on the shortcomings of Web 1.0 and 2.0, such as the concentration of power within centralized entities and privacy concerns.
We’ve all seen instances of this in the crypto and DeFi spaces, such as the MakerDAO project, which aims to create a fair global financial system run by the community. As the notoriety of DeFi grew in 2021, more projects and protocols appeared on the market, all striving to bring the benefits of DeFi to as many people as possible. Correspondingly, protocols like Nereus have been designed to address issues like fair governance and user experience, which reflects existing Web 2.0 issues.
While cryptocurrency use has increased since the pandemic, the number of new wallet holders has begun to slow. This would imply that something is impeding the next stage of mainstream adoption. While it’s possible that waiting for Web3 to be implemented is the reason, government regulation could also play a role in driving crypto into the mainstream.
Previously, due to its complexity and perceived volatility, crypto was not seen as easily accessible to the mass market. Opinions are beginning to shift as more accessible crypto products, such as stablecoins, crypto-enabled debit cards, and DeFi products, enter the market.
Despite the numerous benefits that crypto and DeFi can provide, some people remain skeptical due to a lack of government oversight, which is understandable. Would crypto enter the mainstream if governments began to establish guidelines?
Given the evidence we’ve seen, the answer is unquestionably yes. Cryptocurrency is arguably already mainstream in countries with comprehensive regulation, such as Singapore, or countries with governments strongly supportive of cryptocurrencies, such as El Salvador and, most lately, Tonga. It is only on the sidelines in countries that are still developing frameworks and deciding on their stances on cryptocurrency.
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