Can crypto regulations foster global blockchain businesses?

The latest “buzzword” in the business industry “Blockchain” has made a significant impact around the world. Originally known as the underpinned architecture behind cryptocurrency, has recently revealed its true potential among several industries. Blockchain is the next-gen technology and is popularly a part of the upcoming Web 3.0.

The technology has been adopted by several large businesses, and startups to optimize their business, and create an effective and transparent environment. The idea behind blockchain technology is still a blur to many people, which has constrained the worldwide adoption of cryptocurrencies and blockchain technology. Here, we have discussed the basic understanding of blockchain technology, cryptocurrencies, and their adoption among various federations.

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What is Blockchain Technology? How Does it Work?

Blockchain is a digital list of growing data records, that are arranged in chronological order, and organized in chronological order, linked and protected by cryptographic proofs. In the early 1990s, to keep digital documents safe from tampering, physicist W. Scott Stornetta, and computer scientist Stuart Haber applied the cryptographic technology on a chain of blocks which today is recognized as the prototype of Blockchain.

This inspired several cryptographic enthusiasts and computer scientists such as Hal Finney, Dave Bayer, and others which led to the development of Bitcoin, which was the first digital, decentralized cash system. The world’s first cryptocurrency, “Bitcoin” white paper was published in 2008 under the sobriquet, “Satoshi Nakamoto”. Here is how proper crypto regulation helps blockchain adoption in business.

Blockchain technology is a distributed ledger system that provides a shared ledger among several parties that are partnered with the business network. The technology eliminates the need for any central authority to validate the transactions and is entirely decentralized. The architecture is a combination of several technologies such as cryptography, distributed systems, etc.

The data added to the network is stored in the form of blocks and are secured using cryptographic hash algorithms, which eliminates any chance of data tampering. The algorithmic hash function securely connects the blocks. Each block contains information or has an added stamp that determines the date and time of the transaction. Since the data is instantly stored and recorded, it is not possible to change the data at any point, making it more secure than the majority of the transactions conducted on a centralized network.

Important Terms

To understand blockchain regulatory frameworks, it is important to have a basic understanding of some points.

Crypto Assets

Crypto assets are a representation of value or any ownership or privacy rights issued by an organization that depends on distributed ledger technology, and cryptography as a part of its value. Moreover, Ethereum and Bitcoin are the two popular crypto assets in the world.

Stablecoins

Stablecoins are a type of crypto asset that tends to hold similar value or maintain the same value. One can achieve this by adding value to assets with a single fiat currency or other assets. One such example is TERRA USD, which was a stablecoin, yet drastically failed at the beginning of 2022.

Distributed Ledger Technology

The underlying architecture of cryptocurrencies is known as distributed ledger technology. Thereafter, the DLT refers to procedures and technologies that give access to participants on any network to safely process, validate, and record the transactions conducted on the network. Moreover, depending on the architecture, and design, the DLT systems can be different.

Also Read: Members of European Parliament Vote For Blockchain to Counter Tax Evasion

What are the Advantages of Blockchain Technology?

Blockchain is a decentralized network, which makes it permissionless as well. However, what does it exactly mean, Let’s find out.

Decentralized

Decentralized means that there is no centralized authority governing the network. The various network participants and validators utilize proper consensus to govern the blockchain network. Therefore, no government or central bank can change how it functions and shut down the network.

Permissionless

The blockchain network is permissionless. This means that the users in the network are free to conduct any activities. Moreover, one cannot shun it by any other party. Anyone can use these networks from any part of the world, and at any hour. There is only a need for a crypto wallet and a stable internet connection.

Any asset developed on the blockchain network provides its full control to the individual. No third-party intermediaries like banks have the authority to confiscate them or access the funds.

Top 5 Countries For Global Crypto Adoption & Their Role in the Crypto Market

The fact that the wide adoption since the second quarter of 2022 is undeniable. Almost everyone today has heard the word “cryptocurrency”, especially after the crypto crash of 2022. Here are the top five countries for crypto adoption around the world, and their role in the crypto industry.

Vietnam

Vietnam is among the top crypto users around the world. Moreover, Vietnamese consumers are the biggest crypto adopters with the highest use of crypto products, tools, and services. Since 2019, Vietnam is on the list of the ten biggest crypto adopters. Between July 2021 to June 2022, Vietnam made $112.6 billion in selling and buying cryptocurrencies. Vietnamese consumers have also developed an interest in NFTs, and gaming on blockchain technology which as of 2021, added up to 2.19 million users. 

Philippines

The Philippines holds second place in the global crypto adoption index for 2022. It ranks the highest in the use of crypto services like DeFi tools and exchange platforms. According to Finder’s crypto adoption in September, the Philippines stands at 15% crypto penetration in 2022. The study that polled more than twelve thousand people found that 11.1 million people in the country own cryptocurrencies. Data from the Central Bank of the Philippines reveals that crypto trading is booming in the country. By the first quarter of 2021, the crypto transactions increased by 362% annually up to 20 million. There has been a surge in crypto adoption among retailers after the government explored the use cases of cryptocurrencies and blockchain technology. 

Ukraine

Ukraine has secured the third position in the global crypto index 2022 probably because of the war and the invasion of Russian troops since February. The country has already acknowledged the value of adopting cryptocurrencies and holds the fourth position in 2021. However, with the war with Russia, the government decided to use cryptocurrencies and expand their utility to support the economy. On the very second day of the war, Mykhailo Fedorov, the digital transformation minister of Ukraine, asked the deputy to develop official government wallets that would accept payment in cryptocurrencies. Since the Russian invasion, Kyiv has managed to raise more than 120 million euros to support its military troops, and buy equipment.

India

India has racked fourth on the list of global crypto adoption 2022 prepared by Chainalaysis. The country has been particularly active in the crypto world. According to several studies, India bags the highest number of crypto owners in the world and ranks fourth in terms of crypto adoption rate. Moreover, more than 60% of the Indian states are emerging as CryptoTech adopters with around fifteen million investors from the retail industry. With around 230+ startups in the country, and a strong institutional presence the country has huge growth potential in the said industry. If the crypto sector grows in the same direction as it has been developing in the past few years, India might achieve the position of a global leader in the crypto industry. 

United States

The perspective of Americans to take crypto as an investment has drastically shifted over the years. While the use of crypto is increasing rapidly, the people of the US are now well aware of crypto, and its uses. Moreover, in November of 2021, bitcoin reached its all-time high making huge profits for the Americans that invested in Bitcoin. At present, the country leads in bitcoin trading and currently stands at a volume of 1.5 billion dollars. Around 23.3 million Americans own bitcoins today. Around 16% of Americans invested and traded in cryptocurrencies. 15% of the people between 15 to 34 years old have invested in crypto, 11% of the people between 35 to 65 have traded with cryptocurrencies. Thereafter, 4% of the people above 65% traded in crypto. 

In Conclusion

With each passing day, and the economic recession there has been a continued proliferation of crypto use among people worldwide. Therefore, while the concept of cryptocurrency is fascinating, without a proper regulatory framework, the goal to gain global acceptance, and adoption is still a blur. Therefore, institutions and regulators must take the necessary steps to educate people about the use of crypto, and the benefits that people can reap. Several blockchain institutions have taken the necessary steps and are making rapid progress.