WHY IT MATTERS: Digital Transformation

In Santiment’s end-of-year digest, we look back at some of 2021’s most important market trends and what they tell us about the year ahead - all from the prism of on-chain, social and development activity.

You’re surrounded by disruption and rapid change. Maybe you’re looking for solutions. A way to seize opportunities. We all are. It’s a sprint to stay ahead of technology. Blockchain. Automation. AI. Cybersecurity. It will forever change the way accounting is done. And forever change those who do it. It’s time to reset, redefine and reskill. The way we learn. The way we work. And the way we move forward. Here, you’ll find what you need to not just survive, but adapt and thrive. And disrupt disruption.

I argue that the four killer apps of cryptocurrencies are 1) dark web and black market payments, 2) digital gold, 3) macro/micro payments, and 4) tokenization. If the recent surge of cryptocurrency market cap to 170B+ struck you as unbelievable, I hope after reading this, it will make more sense.

CRYPTO20 is an autonomous token-as-a-fund allowing you to invest in cryptocurrencies like bitcoin and ethereum in a diversified index fund.

Kon is taking me to see one of the vaults where Xapo, the company he works for, stores its customers’ bitcoins. It’s no ordinary vault: I’ve been told it’s inside a decommissioned Swiss military bunker dug into a granite mountain. Its precise location is secret, and access is limited by security measures that would put a Bond villain to shame.
A bitcoin vault doesn’t store actual bitcoin units. Technically, what’s being stored are private, cryptographic keys. These keys form a pair with particular, public-facing, keys and provide access to the balance of coins stored on the bitcoin network. Gaining unauthorized access to someone’s private keys is akin to making off with a gold bar.

As optimistic as Loyyal and myself, in particular, are about the future potential of ICOs, we remain concerned that current accounting approaches towards ICOs are creating a potentially disastrous bubble for companies issuing them. If we are to avoid this disaster at all, we as an industry need to immediately start a more robust dialog around the accounting principles involved and engage the rest of the financial services industry.

In a remarkably frank talk at a Bank of England conference, the Managing Director of the International Monetary Fund has speculated that Bitcoin and cryptocurrency have as much of a future as the Internet itself. It could displace central banks, conventional banking, and challenge the monopoly of national monies.

Venture capitalists are in a pickle. Companies have raised more than $1.7 billion through initial coin offerings, or ICOs, this year by selling their own customized virtual currencies. For the companies, the trend is a godsend. They can raise the money and use it to fuel new projects without having to give away a piece of their company to venture capitalists. Meanwhile, both accredited and non-accredited investors are buying the tokens on the assumption that once these these projects are completed, their tokens will balloon in value.

Bitcoin-like money may emerge in countries where cash is in decline or financial networks need updating.