In the final part of her series examining the current state and future direction of cryptocurrencies, our General Manager, Amanda Liu, sets out her vision of the future.
My previous articles in this series looked at how the macroeconomic situation is currently impacting the digital asset industry, and how commitment to a clear goal is needed for a project to survive in this environment. Today I’d like to set out how I see this situation evolving in the future. What will be the shape of the industry in twelve months’ time? What will be its defining characteristics?
While twelve months doesn’t seem too far in the future, a year is a long time in crypto space where new developments transform things all the time. Given the dramatically shifting social and political conditions around the world, the context in which the industry will operate is also likely to be very different one year from now.
Some things, however, will stay the same. I believe the industry will still be challenged by regulatory compliance with Anti Money Laundering/Know Your Customer requirements, and it will still be experimenting with the best security measures to prevent centralized exchanges being hacked. These have been major issues all along with digital asset trading, and will remain an issue so long as a traditional, centralized approach is maintained.
One new challenge for the industry that will emerge in the coming months, however, is market consolidation. So far, we’ve seen multiple exchange projects launch and other crypto ventures be announced. As I’ve mentioned previously, developing a successful project requires a pretty special combination of skills and not all will survive. There have been over 800 ICOs since 2014, and simply applying the 80/20 rule here suggests that only 20% will thrive while the remaining 80% struggle. So it’s inevitable that some of these projects will be taken over and merged with others, creating a much smaller playing field.
The industry landscape this leaves behind will be dominated by a handful of large exchanges who benefit from strong liquidity. This situation will also be a sign of the maturing of the industry, as it moves away from being highly fragmented with poor trading volumes to being a much more established part of the financial ecosystem. Of course, various technological issues still have to be overcome to achieve this vision of scale, but we are fast moving in that direction.
In fact, before too long I believe we will see a mature, fully fledged industry offering consumers important alternative investment opportunities that help remove unnecessary and inefficient intermediaries. With speed and liquidity challenges solved, user experience and ease of use will become the focus for development, further establishing the role of crypto trading in everyday life.
Throughout all this change, OAX Foundation will continue to promote the values of decentralization and scalability within an open source framework. Our clear focus on building a platform that combines strict governance standards with liquidity and speed is perfectly attuned to this vision of the future. We’re confident that we will be playing a central role in the digital asset industry of tomorrow.
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