How Crypto Can Reset At Davos 2023

How Crypto Can Reset At Davos 2023

As 2023 gets underway, and as the economic picture begins to come into focus for the year ahead, there is one sector that seems to be in need of a reset, or at least some modifications; crypto. To avoid rehashing the negative events of 2022, there are numerous sources that do so quite well, it is safe to say the crypto space enters the new year with somewhat of a damaged reputation. With recent lawsuits against both Gemini and Genesis, further reinforcing the perception that the Securities and Exchange Commission (SEC) is seemingly more interested in regulation by edict rather than productive dialogue, there seems to be a need for crypto to reset in the coming year. Fraud, scams, lawsuits, and shaken investor confidence are no way to build a healthy, sustainable, and viable marketplace.

The World Economic Forum (WEF), held in Davos Switzerland ever January (among other times in a post COVID world), is a well-known opportunity for individuals and institutions at the highest levels of power and influence around the globe to network, analyze trends, and attempt to predict how the global economy will move going forward. Bitcoin
BTC
, the original cryptocurrency, might have been developed with the aim to disrupt, disintermediate, and render obsolete such centers of gravity like the WEF, the reality has become more nuanced since crypto has become a mainstream topic of conversation and investment.

The real question is, then, how will crypto rebuild, rebound, and re-engage investors, regulators, and policymakers going forward. Let’s take a look at a few of the considerations and ideas that crypto proponents would be advised to focus on during WEF 2023.

Crypto fraud is still just fraud. Much has been made about the apparent high rates of fraud that have permeated many projects in the crypto space, but that misses an important point. Fraud and unethical behavior occur in every industry – not an excuse for crypto fraud – and therefore regulators and policymakers develop tools and rules to help prevent such activity. Crypto, already having an embedded reputation problem in the eyes of many regulators, needs advocates to clearly make this point.

Fraud, loss of trust, and the other indirect effects of having fraudulent operators in a sector, are serious problems that need to be addressed for crypto to regain and earn market confidence. To that end, making sure that all interested parties realize that 1) fraud is always fraud, and 2) that crypto is not fraudulent by default need to be among the leading crypto conversations.

Tokenomics has promise. The concept of tokenomics, the economics of how certain tokens work, operate, and interoperate with other tokens, has also taken a serious reputational and financial hit recently. The (incorrect) overt focus on price and price appreciation driving many projects – notably the non-fungible token (NFT) space – has absorbed much of the conversations about tokenomics. It is important, and crypto advocates need to espouse this view, that many token applications are not price dependent, and some actively discourage increases in the price of tokens.

Governance tokens, the underpinning of many decentralized autonomous organizations (DAOs), and decentralized finance (DeFi) applications, represent a unique way to combine many of the benefits of blockchain-based information while also allowing aspects of traditional finance (clarity, comparability, and understandability), to be integrated within the crypto space. DAOs and DeFi, even with some of the meltdowns and bad actors in the space, have proven use cases, continue to attract capital, and are sources of innovation for blockchain and crypto overall.

Tokenomics, and the personalized direct ownership over information, is here to stay.

Blockchain-based data delivers results. Even during the tumultuous period that has recently sent crypto into another winter, or deep freeze depending on who is asked, the enterprise adoption of blockchain-based solutions continues virtually unabated. Crypto advocates should be sure to mention that having traceable, transparent, and readily accessible records – not to mention immutable ones – represents an invaluable tool for individuals, businesses, and governments alike.

Even one of the most ardent anti-crypto individuals in the world, Jamie Dimon, runs a financial institution that has actively developed and deployed an in-house blockchain solution to facilitate transactions. While there have been notable failures of other projects during 2022, the fact remains that 1) data is the lifeblood of any enterprise, and 2) blockchain-based data storage and management delivers quantifiable benefits that are already being recognized.

Data storage might not deliver the same scintillating discourse as minting new NFTs, but is something that attracts capital, personnel, and (should) not incur the ire of regulators.

Crypto and blockchain-based applications are in need of a reset, and the WEF in Davos is a great opportunity for this to occur; crypto proponents should take note and act accordingly.

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