The Future of Cryptocurrency and Blockchain in 2022
Tags: cryptocurrency, blockchain, mobile, innovation
Published: 2022-02-25 08:55:17

In the last few years, we have witnessed a rising interest in cryptocurrency and blockchain as well as [blockchain apps](https://addevice.io/blog/how-to-build-a-blockchain-app/). Are they just buzzwords or do they have an economic backing that will reshape the world economy? What will the [future of cryptocurrency and blockchain](https://addevice.medium.com/fintech-2022-trends-future-of-cryptocurrency-and-blockchain-c383e17dbd85) be? In this article, we will try to outline some of the trends and factors that will affect the future of virtual money that aspires to be the world currency.
**According to FSInsight Bitcoin could reach $200,000 in the second half of 2022.**
Where does this come from? Let’s look at some factors.
In this article, we will study:

- Cryptocurrency regulation;
- How blockchain technology can disrupt financial services;
- The impact of blockchain innovation on business;
- Upcoming trends in cryptocurrency.

## Cryptocurrency Regulation
As of today, cryptocurrency is regulated on two occasions (i) if the sale deals with **securities under state or federal law**, or (ii) if the sale deals with money transmission under state law or if a person becomes a money services business (“MSB”) under Federal law.
Let’s see what this means.
Firstly, we must define what security is. These include the **offer and sale of stock, bonds, debentures, ownership interests in limited liability companies,** and most notes with a maturity date over nine months.
This means if the transaction is made in cryptocurrency in stock, bonds, debentures, ownership interests, or notes with a maturity date over nine months, then the transaction will be regulated.
Next, we must define what money transmission under state law is.
According to [Financial Crimes Enforcement Network (FinCEN)](https://www.fincen.gov/), money transmission is the transmission of currency and other value that substitutes for currency from one person to another location or person. 
There is an interesting nuance that newly is added in the definition. The definition includes the currency, funds, or **other value that substitutes for currency**. This section is added to account for newly adopted “currencies” such as Bitcoin.
The term "money services business" includes any [person ](https://www.fincen.gov/person)doing business on a regular basis or not. Among the agents of the business, like currency dealers or exchanges, check cashiers, there is a mention of a money transmitter.
This means cryptocurrency is currently regulated on two occasions:

- When it deals with security;
- When it concerns money transmission.

## How Blockchain Technology can Disrupt Financial Services
To understand how blockchain technology can disrupt financial services, we must look at the flaws of the current financial system. Currently, all transactions are conducted through intermediaries, such as a bank. They undergo several checks and verification to ensure legality.
Why is this inefficient and dangerous? Firstly, financial intermediaries hold a vast amount of customer data which makes it vulnerable to cyber-attacks. Secondly, customers lose at least a few percent of their money for the time and labor spent on the checks and verification.
How is blockchain technology different? Firstly, blockchain is decentralized and transparent. The merchant does not need to know who the user is. This means that the user does not have to worry about how their data is shared. A confirmation of the payment is simply sent to the seller.
Next comes the issue of inefficiency. With blockchain, large sums of money can be transferred across borders in a minute. The same transaction would take days if done by the intermediaries.
Lastly, blockchain can open up investments and securities trading to anyone in the world. This can facilitate trade and create a new class of investors.

## The Impact of Blockchain Innovation on Business
Blockchain is penetrating almost all aspects of the economy. What impact will this innovation have on business? Let's dive into some details.
**Security**
We all know that global cybercrime damages are reaching an unprecedented extent. The forecast of this damage for 2021 was $6 trillion to rise to $10.5 trillion annually by 2025. Isn't this figure frightening? This means the ordinary consumer is not protected. It affects the pockets of big corporations and regular business dealers. Is there a cure to this?
Experts say that blockchain can largely diminish the damage caused by cybercrime. Due to its decentralized and transparent nature, the technology promises greater transactional security. Let's see how.
The keys to blockchain are sophisticated math and software rules that are hard for attackers to manipulate. The blocks in the blockchain are connected with cryptographic reference that is based on the mathematical complicated problems that must be solved to result in the next block. As a result, a unique encrypted digital fingerprint is created which is highly secure.
To put it in simple language, the algorithms are so complicated that it is hard for attackers to break them.
**Cost-efficiency**
As mentioned earlier, the transaction cost of the middleman is eliminated with blockchain. The mathematical formulas replace the intermediaries. What does this mean in real life? This means fewer bank officers, no transaction fees, and overhead costs. In fact, professionals working in banking, contract, and settlements may be affected by blockchain innovation.
**Supply chain transparency**
Let's take the food industry. Business owners normally don't have a clue who are the roleplayers along the supply chain. Blockchain ensures greater transparency. It saves records that owners can trace for each product. This can largely facilitate the auditing processes as well as create trust and authenticity.
What problem does this solve? We know that the food industry is extremely vulnerable to mistakes that can affect human lives. Consequently, traceability is critical for the food supply chain.
Under the current system, traceability is a time-consuming task as some of the parties are still tracking information on paper.
With blockchain, each step of the transaction is recorded digitally and can be traced back easily and without investing much time or money. Supply chain transparency is a factor that will affect how businesses are managed.

## Upcoming Trends in Cryptocurrency
What to expect in the cryptocurrency market. Here are some trends to watch out for.
**New regulations**
Cryptocurrency firms welcome clear regulations as this will make the system more trustworthy. Talks about how to regulate the new virtual currency are currently ongoing. Lawmakers in Washington D.C. and across the world are trying to understand how to make the guidelines clearer and less appealing to cybercriminals.
Among other things, the new regulations will affect the price of the cryptocurrency. Currently, the market is volatile. Today, many experts recommend keeping cryptocurrency investment to less than 5% of their portfolio due to volatility. This issue will partly be resolved if clear guidelines are in place.
**More institutional reach**
As many companies are adopting bitcoin as a currency of transaction, the institutional reach of cryptocurrency is going to expand. Companies like Facebook, Microsoft, and big brands like Nike and Adidas are making entry into the space. This also concerns big banks like Goldman Sachs and HSBC.
**NFTs**
If you search the internet, you will see this strange word NFT or Non-fungible token. This is another trend that we will witness in 2022, especially in the arts. NFTs can really be anything digital. For example, it can be an audio file or a drawing. In simple words, NFTs are tokens to sell digital art. And if you are an artist, watch out for this trend as NFTs have helped artists and creators get access to decentralized funding options. 
**Web 3.0**
What is it? Web 2.0 is the current version of the internet, while Web 3.0 represents its next phase. As this version of the internet is taking its clear shape in 2022, all that can be said at this point is that it leverages other technologies like AI, blockchain, augmented reality, and virtual reality. The new internet is highly decentralized and will ensure engaging internet experiences.

## Wrapping up
We may continue the talk about the future of cryptocurrency as new and new trends are taking their shape. What can be concluded at this moment? The currency is there and it is taking more tangible forms. We see that at the level of institutions, including financial giants and banks. But can you be sure as of today that your money is secure if invested in cryptocurrency? Is it time [to think about building cryptocurrency](https://addevice.medium.com/how-much-does-it-cost-to-start-a-cryptocurrency-33162ee7fd20)?
As of today, the developments are still ongoing and many experts recommend not to make a bigger investment than 5% of your portfolio. You can then have a touch of the new technology and make bigger investments if you feel more secure.