Blockchain Industry Status - Still An Emerging Market, Still Early

Blockchain Industry

Welcome back to the Tribe! In this post we dive into some of the reasons that the Blockchain industry is still an emerging market in 2022!

Nothing should be considered investment or financial advice. Enjoy the ride!

Blockchain Industry

The blockchain space may look like an established market due to the commonly reached 2 trillion dollar market cap, but the industry is still very much in its infancy. Reasons being are the lack of regulation, lack of uniformity and development of Web3, and delay in interoperability between chains.

Blockchain Regulation

If you have been following the news around this space, then you will know that recently the Biden administration put to plan an executive order to help regulate cryptocurrency.

This was sparked and propelled by the Russian invasion and speculation that the country might try to avoid sanctions similar to Iran and Venezuela by utilizing digital assets. Although, experts have all agreed that the crypto market is not large enough to support such claims.

What this truly shows is the lack of understanding and knowledge the government has on the space. Not to mention it highlights the lack of already existing regulation on the space leading to the fear of Russia utilizing it for gain.

On the contrary, it seems blockchain and crypto in general has served a greater purpose in the defense of Ukraine over the past few weeks. In total, the country raised more than $50 million from crypto donations alone leading it to even lean towards doing an airdrop for its citizens post war.

The lack of regulation only continues to further the gap between the U.S and other honed in countries giving this space the attention it deserves and the figurative fuel it needs to feed the developmental fire that is raging.

WEb3

The other huge figurative wall standing in the way of the industries’ success is Web3.

While the average person will have no idea what we are talking about, Web3 is the tool or package that developers use to connect to the blockchain. Especially for the Ethereum world, it is utilized in just about everything in the space including your MetaMask wallet on your browser. In fact, MetaMask sneakily injects it into every page you visit on the web, allowing you to use the wallet and interact with platforms or the blockchain itself.

While this is impressive, the tool is constantly going through overhauls. Not to mention is has huge gaps in multiple areas leading developers to constantly look for work arounds or loop holes.

What this ultimately does is bring everyone two steps back for every three steps they take forward with updates. The industry is going to continue to struggle until these issues are fully flushed out, Eth 2.0 is delivered, and there is uniformity around building and deploying smart contracts in a safe and secure environment other than just writing the standard Mocha test.

Interoperability

The last piece to this oddly shaped puzzle is the lack of interoperability still in the space.

While this seemed to be the path that the industry would take beforehand, we are not sure anymore. Obviously, there will need to be a dex or atomic swap that will allow smart contracts to make settlements without friction down the line, but in the mean time it seems that layer 2 solutions are winning out over the push for interoperability.

This is because platforms and game developers can easily run their systems on top of a layer 2 solution like Polygon, have minimized to $0 in transaction fees, sell NFTs to fund the project, and encounter little in resistance from the SEC or any governing body.

The industry has gone from “token sales” are bad to “NFT sales” are just fine. When in reality it is hardly a difference. Tokens with utility represent a majority of NFTs with proposed utility, but no one is really complaining.

Maybe this is a good middle ground that the industry can land on, and one that will continue to give NFTs more and more exposure to propel the rest of the market to move forward.

Other News – Andre Cronje Departure

Following the departure of star Defi and crypto developer Andre Cronje, the Fantom Foundation released a statement to address what they believe to be misinformation surrounding Cronje’s departure.