The closely watched Web 3.0 is closely knitted with crypto technologies. With the development of Web 3.0, how will it shape the future of cryptocurrencies?
Ownership Spur Web 3.0 Development
Web 3.0 boasts several vital features in terms of ownership and censorship resistance. Ownership of content generated on the internet falls on the user, not hosted on platform servers which operate based on trust, giving the users greater autonomy. Possession can be made clear with NFT technology which facilitates trading.
An emerging technology, NFT is becoming widespread in Hong Kong and the rest of the world. NFTs don’t take complicated techniques to handle; that’s why more and more individuals and businesses are forging their own NFTs as merchandise and souvenirs.
The world of gaming sees the wide adoption of the NFT model. In-game items can be traded through the game store or any platform that supports transactions of the NFT forging technology.
Even though the NFT market has recently cooled down along with “the cold winter of cryptocurrencies,” trading volume remains sizeable. According to Cryptoslam, US$300 million to US$400 million worth of NFTs changed hands weekly at the beginning of the year before reaching US$ 1.1 billion in May. Although it has fallen back, transactions were as much as US$55 million to $80 million.
It is worth mentioning that although the popularity of cryptocurrencies and NFTs have fallen sharply in recent months, some fared better than others. The floor price of many well-known items, such as the Bored Ape Yacht Club, is relatively more resilient, reflecting the market’s recognition of the cryptocurrency’s value. NFT being just a technology, the value of a particular NFT relies on its backing assets.
Cryptocurrency trading function to be popularized
Payment and decentralized finance (DeFi) are the other important concepts of Web 3.0. Old-school fund transfers involve complicated processes, are expensive and rely on trust in banks. Banking coverage can be scarce in underdeveloped regions, resulting in people being barred from essential financial services. With Web 3.0, the DeFi feature employs crypto technology in payment, saving time and raising efficiency. The peer-to-peer transaction is nearly real-time and requires no third party.
Bitcoin remains the top dog in the cryptocurrency field, reflected in its price resilience amidst the recent “cold winter.” It earns the status not only because it has the longest history but also the most widely used as the preferred crypto payment from online businesses to brick-and-mortar stores. Bitcoin transaction volume has risen significantly from a few years ago. Furthermore, Bitcoin is one of the few cryptos with a strict issuance cap, which adds to its predictability.
Backed by their proprietary blockchains, Bitcoin and Ethereum are considered “native” cryptocurrencies and are referred to as “coins.” On the other hand, many other cryptocurrencies are based on other blockchain technologies and are called “tokens” instead, for example, USDT, which is developed based on the Ethereum blockchain.
Speaking from the history of financial and technological development, the best stuff isn’t something that comes the latest, but that is most widely used. Bitcoin the Ethereum (the latter is undergoing an upgrade) are taking the lead at the application level, and they are set to continue to have an important role in Web 3.0, which is still in its infancy. As for whether other cryptocurrencies or tokens can achieve bigger market shares and values, it remains to see whether they will be widely adopted at the application level. Without that, skyrocketing prices only mean superficial strength.
At the Yahoo! Finance All Markets Summit Extra Asia 2022, we will bring together the pioneers, creators and industry forerunners from across Asia to further investigate hot topics like digital assets, NFTs, Metaverse and Web3. Live at Yahoo Hong Kong on August 10, 10:00-12:00!