Aside from the turmoil of Terra and FTX, review the positive development of Crypto in 2022
Originally written by Dr. Merav Ozair
Compilation of the original text: Bai Ze Research Institute
2022 will likely be remembered for the debacle of cryptocurrency trading platform FTX and the arrest of its founder and former CEO Sam Bankman-Fried (aka SBF) for fraud. SBF was arrested in the Bahamas on December 13 after criminal charges were filed against him in the US District Court for the Southern District of New York (SDNY).
Shortly after his arrest, the SEC said it had authorized separate charges against SBF for "violations of the securities laws," which were publicly filed on Dec. 14. When his company hit a liquidity crisis and filed for bankruptcy, at least a million users were unable to get their funds back.
John Ray III, a lawyer who handled Enron's bankruptcy case and became FTX's new CEO, said that FTX's situation is worse, "a complete failure of corporate control."
Ray said: “Never in my career have I seen such failed corporate management and such a complete lack of trustworthy financial information. From compromised system integrity and faulty foreign regulation, to extreme concentrations of control This situation is unprecedented in the hands of a small number of inexperienced, unsophisticated and potentially intimidated individuals."
The full extent of the circumstances leading up to this disaster, and the extent of the damage to consumers and the industry at large, including cryptocurrencies and traditional finance, will unfold over the next few years. This comes on the heels of other events earlier this year: the $40 billion Terra (LUNA) fiasco, the bankruptcy of Voyager and Celsius, and the risk of contagion extending across the crypto industry.
All of these events cast doubt on blockchain technology, the value of Web3, and the economic use case of cryptocurrencies.
But we must distinguish between cryptocurrencies as an asset class traded on platforms like FTX, and the technologies that underpin cryptocurrencies—blockchain technology and Web3; the two are different concepts and should not be confused.
Trading, especially in the crypto space, is largely based on speculation, hype, and influencers, not value.
Technology is about building applications and implementing them for valuable business use cases that benefit the global economy and society. The development of blockchain and Web3 applications across almost all industries is still going strong!
There is no doubt that the benefits of blockchain technology and Web3 are enormous. Jamie Dimon, chief executive of JPMorgan Chase & Co., who has slammed bitcoin, has been one of the biggest supporters of blockchain technology. JPMorgan Chase is one of the leading traditional companies entering the Web3 space and has been investing heavily in blockchain technology, Web3 and the Metaverse since 2015.
In addition, regarding FTX, we should look at it correctly. FTX is a centralized cryptocurrency trading platform designed to provide trading services to clients, similar to a centralized stock exchange. The difference between FTX (and other centralized cryptocurrency trading platforms) and stock exchanges is that the latter are regulated and follow very strict consumer and investor protection rules, whereas FTX etc. are not regulated. If FTX were regulated, it likely wouldn't be in this predicament.
It is also important to remember that FTX is only a trading platform and does not represent Web3 technology or cryptocurrencies (as we will discuss below). If the FTX debacle is anything to go by, it’s that regulations against centralized cryptocurrency trading platforms are on the horizon, as well as stricter investor protection rules in the cryptocurrency trading space.
It's late - I've been an advocate for regulating them since 2017, but better late than never.
In addition to FTX, other major events took place throughout the year as traditional companies and key institutions continued to invest in Web3 technologies and build Web3 applications. Let us remember some of these events.
Russo-Ukrainian War
The Russo-Ukraine War demonstrated the important benefits of cryptocurrencies and blockchain, the underlying technology of cryptocurrencies, especially for underserved communities around the world. We’ve seen the Ukrainian government ask for donations in cryptocurrencies, and Ukrainians use cryptocurrencies as their primary currency.
When the first blockchain, the Bitcoin network, was launched in January 2009, it brought the blockchain's promise of a distributed, peer-to-peer system accessible to everyone without intermediaries, which could empower ordinary People Power: A system is for the people, by the people.
Without access to banks or any traditional financial services, most Ukrainians turn to cryptocurrencies for all their financial needs, from payments to savings. In fact, this is the main benefit of cryptocurrencies — making financial services accessible to anyone, from anywhere, can democratize society and level the playing field for underserved communities, both nationally and internationally.
Ethereum's successful merger
The long-awaited merger finally happened on September 14-15. This is the second phase of the Ethereum upgrade, which attempts to improve the scalability and security of the Ethereum network by making modifications to the infrastructure, specifically shifting the consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
Moving from PoW to PoS will make the Ethereum blockchain not only more scalable, but also more energy efficient.
Co-founder and the brains behind ethereum, Vitalik Buterin, wrote a blog post in December titled "What Excites Me About the Ethereum App Ecosystem." Some ideas that excite him are:
Use of cryptocurrencies as a method of payment, especially in hyperinflation countries and underserved communities
Decentralized Autonomous Organizations (DAOs) build more democratic, resilient and efficient forms of governance
identity ecosystem
Finally, the privacy and security of digital identities is an important part of Web3, especially for applications built for metaverses and immersive interactions.
2022: The year institutions focus on Web3
Here is a month-by-month review of investments in Web3 technologies:
January
Cash App Now Offers Bitcoin Lightning Network Transfers to Users
Twitter integrates NFT
Robinhood begins testing crypto wallets
February
KPMG (Canada) Adds BTC, ETH to Its Balance Sheet
Twitter Adds ETH Tipping Feature
GameStop partners with Web3 gaming platform ImmutableX to launch $100 million gaming fund
International Energy Company ConocoPhillips Launches Bitcoin Mining Operations
BNY Mellon Partners with Chainalysis to Track and Analyze Crypto Products
Intel launches a cryptocurrency mining program
JPMorgan Unveils Research on Quantum Key Distribution Blockchain Networks
Streaming Company Sling Partners with Bitpay to Integrate Crypto Payments
Rakuten Group Launches NFT Trading Platform
February
Drug store chain CVS files trademark applications for NFT and VR
State Street Partners with Copper, a Cryptocurrency Custody Service, to Offer Custody Services for Digital Assets
JPMorgan partners with blockchain analytics firm TRM to use the latter's compliance analysis technology to secure blockchain transactions
Entertainment magazine Billboard partners with Universal Pictures to launch NFT-based project
Tencent Applies for Metaverse Concert Patent
Shooter Misfit reveals partnership with blockchain Tezos
April
Fidelity Allows 400,000 of Its Clients to Hold Bitcoin
Robinhood integrates Bitcoin Lightning Network
Tesla partners with digital asset infrastructure Blockstream and mobile payment service Block to launch solar-powered bitcoin mining facility in Texas
Leading Payment Services Company Stripe Supports USDC Stablecoin Payments
Precious metals authority LBMA begins using blockchain for supply chain management and fraud prevention
Leading Payment Services Company Mastercard Partners with di Pocket to Launch Crypto Payment Card
Commerzbank Applies for German Encryption Service License
text
May
Meta partners with Polygon to integrate NFTs
Instagram integrates NFT based on Ethereum, Flow and Polygon
Network service and security service provider Cloudflare pledges ETH
LGT Bank Starts Cryptocurrency-Related Services
Diamond Industry Giant De Beers Launches NFT-Based Project
Stripe partners with bitcoin payment provider Opennode to allow users to easily exchange between fiat currencies and bitcoin
Payment Service MoneyGram Partners with Blockchain Stellar to Allow Users to Transfer Stablecoins
June
PayPal Starts Allowing Users to Withdraw BTC, ETH, and LTC to External Wallets
Financial services firm Citadel partners with Virtu financial to build cryptocurrency trading marketplace
American Express Launches Product That Allows Users to Earn Cryptocurrency Rewards
Mexican restaurant chain Chipotle has partnered with digital payment service Flexa to allow restaurants in the US to accept cryptocurrency payments
Apple partners with Block and Square to integrate tap-to-pay on iPhone
Binance Pay Partners with Mobility Platform Splyt to Help Binance Users Book Ride-Hailing Travel and Shopping Experiences in Over 70 Countries
Shell partners with Accenture, American Express to launch Avelia, a blockchain-powered sustainable aviation fuel SAF booking and claims solution
July
Christie's Launches Web3 Venture Fund
GameStop Releases Public Beta of Homegrown NFT Marketplace
Dubai Crown Prince lays out the most ambitious Metaverse strategy in the region
BNP Paribas Partners with Metaco to Custody Clients' Cryptocurrencies
SMBC Bank partners with Hashpyrt for Web3 project
Barclays acquires $2 billion crypto stake from crypto custody service Copper
August
BlackRock begins offering cryptocurrency business to its institutional clients
Meta rolls out NFT integration with multiple wallets
Mastercard Partners with Binance to Launch Crypto Payment Card in Argentina
Jewelry company Tiffany launches CryptoPunk NFT-themed pendant
September
Nasdaq Announces Crypto Custody Service
Nova Labs and Deutsche Telekom T-Mobile Sign an Exclusive 5-Year Agreement to Launch Helium Mobile Business Services Using T-Mobile's Macro Network and Nova Labs' CBRS Network
Citadel, Charles Schwab and Fidelity Announce Joint Development of Cryptocurrency Trading Platform EDX Markets
SWIFT Partners with Blockchain Technology Company Symbiont and Announces Enterprise Data Blockchain Pilot
Bank of China Extends Digital Yuan e-CNY Pilot
Norges Bank, Riksbank, and Bank of Israel join forces to explore retail CBDC
October
Google Cloud Partners with Crypto Exchange Coinbase to Allow Web3 Firms to Make Crypto Payments
McDonald's Starts Accepting Tezos and BTC in Swiss Town of Lugano
Mastercard partners with Paxos to provide banks with cryptocurrency trading solutions
Mastercard Deepens Its Business into Digital Assets with the Acquisition of CipherTrace, a Leading Cryptocurrency Intelligence Firm with In-Depth Research on Over 900 Cryptocurrencies
Fidelity Launches Ethereum Index Fund
JPMorgan and Visa Team Up to Simplify Cross-Border Payments Using LINK and B2B Connect
BNY Mellon begins custody of customers' BTC and ETH
Rio de Janeiro accepts cryptocurrencies for property tax payments
Google Launches Cloud-Based Node Service for Ethereum Developers
November
Meta Partners with Decentralized Storage Network Arweave to Store NFTs for Instagram
Sony Begins Exploring NFTs and Blockchain for Gaming
Nike has launched a new Web3 platform called .Swoosh that will issue Polygon-based NFT products
December is still underway and we just saw exciting news from Warner Music and Starbucks as they dive deeper into the Web3 space.
E-commerce and interactive platform builder LGND announced in December a multi-year partnership with blockchain network developer Polygon and global entertainment company Warner Music Group to create a Web3 music platform called LGND Music. Scheduled to launch in January 2023, LGND Music aims to be a music collection platform that supports "playing music NFTs from any blockchain," allowing users to play their digital collections anytime, anywhere. Creators can also engage with their fanbase by hosting exclusive events on the platform.
Starbucks launched a beta version of the rewards event Odyssey to the first batch of Starbucks members and partners (including employees) in the United States, powered by Web3 technology, to unlock new benefits and experiences for members. The experience allows members to engage in a series of interactive activities called "journeys." Once the "journey" is complete, members will receive a collectible "journey stamp" (NFT) and points to experience new benefits they can't get anywhere else.
The Web3 projects of Starbucks and Warner Music, using NFTs and rewards to engage the community, is a growing trend in Web3 and lays the foundation for a complete experience when the Metaverse is fully developed.
Speaking of the metaverse...
Times Square and Piccadilly Circus transform into live stages on 17 December and 18 December for groundbreaking shows that will revolutionize the concept of music performance. The two locations became the first immersive stages for award-winning virtual band Gorillaz to perform their new track, Skinny Ape.
Now the virtual world will take place in the real world too!
A lot happened in 2022, not just FTX's debacle. Most events don't make headlines because the media tends to chase drama rather than steady progress in innovative technologies.
According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any operation and investment behavior. Participate in any illegal financial practice.
risk warning:
According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any operation and investment behavior. Participate in any illegal financial practice.
