After the 2008 economic crisis, a new digital currency emerged that would affect the whole world. Cryptocurrency and blockchain technologies have started to serve in different areas, creating new investment and project areas, and creating a new economic environment. A new economic order is now available: Crypto Economy. In less than 10 years, the most important financial innovation of the 21st century began to prove itself.
Crypto Economy means Cryptography and Economics. The combination of cryptography, computer networks, and economic incentives saw the emergence of new technologies through the methods of Satoshi Nakamoto. This method enabled the sciences that create new economic cryptosystems to offer much more than they could do alone. Blockchain is just the most well-known of them. Blockchain has many important features such as security and decentralization that it offers to its participants. The popularity of Bitcoin, Web 3, NFTs, Metaverse, De-Fi, mining, and cryptocurrencies owes this to the Crypto Economy.
An economic order began to emerge, in which blockchain changed the traditional financial system and many institutions tried to keep up with this change. Although cryptocurrencies currently make up the largest share of this ecosystem, there are very important blockchain projects implemented by government agencies and private companies. Among these projects, there are projects that are expected to make significant contributions to the future of the world, such as the use of decentralized cryptocurrencies, taxation, data-sharing networks, digital banking, sustainable and renewable clean energy, and organic agricultural products.
Numbers in the Crypto Industry
Cryptocurrencies, which have been used for commercial purposes since 2009, show a significant increase in their use as an investment and commercial resource in 2012. Investments in the cryptocurrency service continued to increase in 2016, 2018 and 2021.
According to The Block, as of 2021, there has been a record amount of investment inflows of $25 billion into crypto investments. The number of Crypto Unicorn companies increased by 491 percent in 2021. These figures are formulating more mutual funds and companies’ crypto-economy strategies and enabling investment for the future. According to data from CoinMarketCap, at the beginning of April 2022, the cryptocurrency market hit its highest level, exceeding $2.1 Trillion.
Which Industries are Affecting the Crypyo Economy?
Centralized Finance (CeFi) and Decentralized Finance (DeFi) applications affect many service such as insurance, real estate, energy, gaming, consumer service, logistics, health, industrial production, social media and government bodies, especially the traditional finance service.
The financial service is a multinational and globally transacted service. It is inevitable that this service will be affected. Traditional financial institutions such as banks exist to verify transactions and store and manage assets. In this system, everyone trusts the bank and investors do their transactions without knowing each other. However, this system has many problems. Blockchain’s decentralized structure eliminates institutions and insecure environments. It provides a transparent and safe environment for all participants. Users are not obliged to share their personal data. We recommend you to read our content “The Impact Of Blockchain Technology in Banking”.
How assets can be managed and stored is a challenge for many of the world’s asset classes, from industry and energy infrastructure to real estate and the arts. This problem is solved through the NFT tokens that come with the blockchain.
Transactions that take place online such as games, entertainment, social media, and e-commerce have been the areas that make up the Metaverse, which covers a significant part of the crypto economy. The game and entertainment industry came together and gave birth to its own economy.
In addition to processing and easy tracking of data, blockchain-based systems are used to prevent fraud and minimize product loss, primarily in health and logistics services.
Efforts are being made to make cryptocurrency production digital and use high rates of clean energy, to reduce the use of raw materials, and reduce high energy costs.