Crypto Milestones to Look Forward to before the End of 2022
Some events are shaping the future of crypto on the world trade stage. Some such activities will immediately impact the market influence of the cryptocurrency platforms, while others have long-term effects. The following are notable milestones that cryptocurrencies are likely to experience during the year:
Migration of Transactions to Layer 2
The migration of crypto transactions from the main chain of networks like Ethereum to layer 2 is a move that will increase transaction speeds. The new development aims to ensure that the blockchain networks can handle up to thousands of transactions per second (TPS). Achieving the milestone will increase network reliability, which creates a chance for growth in the number of users.
If the migration is successful, main chains will only have the function of holding final blocks to secure the network. Moving away from transactional activities on the main layer will ensure improved network security. The exclusive role of verifying and recording transaction blocks on the blockchain will reduce the chances of security lapses.
Enactment of Crypto Regulations in Different Countries
There are efforts to provide regulatory laws in different countries to map out the introduction of crypto into the economy. The expected increase in such policies arises from the widespread appreciation of blockchain platforms as an alternative trading system. The regulations will touch on three important aspects of cryptocurrency trading:
Supervision
There are efforts to introduce policies to help regulate the highly decentralized cryptosystems to ensure predictability. Supervising assets on the cryptocurrency platforms helps protect players engaging in securities exchanges using such assets. The assets include e-money and asset-referenced tokens.
Notable discussions happened in the European Union Parliament, where MEPs discussed and voted for the regulatory terms in mid-March. The ESMA received a mandate to oversee asset-referenced tokens' issuance to traders. The EBA also got the mandate to supervise the provision of e-money tokens to users. The efforts provide a benchmark for other trading blocs and countries to adopt similar regulations going into the rest of the year.
Environmental Threat Assessment
There is an increase in the number of countries seeking to monitor the carbon footprint of their crypto market. The need for monitoring prompts the current introduction of regulations to ensure efficient mining strategies. Using systems that carry out transactions over layer 2 of the blockchain will ensure quick and energy-efficient trading.
Network Security
Countries could establish laws that will ensure that the crypto market is a safe ecosystem. The regulations on security will ensure that crypto fraud is punishable by law to improve user belief in the platforms.
Adoption as Legal Tender in some Countries
The discussions in parliaments in countries and trading blocs are an indication that governments are willing to adopt cryptocurrencies as legal tender. Predictably, some countries will roll out infrastructure to support access to and trading in digital assets over this year.
The setback of trading in the conventional currencies of different countries during the crisis between Russia and Ukraine is an eye-opener. It is encouraging for the crypto market to observe countries considering cryptocurrencies as an alternative form of international trade. The decentralized nature of crypto makes it ideal for trading since governments lack control to enforce sanctions against cryptocurrencies trading.
Improved Security of Cryptocurrency Networks
The crypto fraud over the Ronin Network, where a loss of Ether and USD Coin tokens happened, provides a basis for security improvements. The security breaches provide a chance for discovering and sealing potential areas of attack by hackers. Consequently, the network is steadily gaining immunity against future attacks.
Many countries' growing interest in crypto trading will increase security efforts in both in-country laws and blockchain measures. The latter months of the year will see a secure cryptosystem where fraud is limited by technology and punishable by law.
Increased Number of Users Due to Widespread Crypto Knowledge
The current cryptocurrency platforms boast of facilitating a 2 trillion market, which is growing. The availability of reliable knowledge about crypto and digital trading opens the door for many users to join the market. Introducing web browsers with inbuilt crypto wallets will rapidly increase the DeFi ecosystems. The year will experience an increase in cryptocurrency coins in circulation, increasing the market's value.
Author’s Take
The upturn in crypto presence in world trade will increase exponentially due to increased speeds of transacting. The layer two chain offers a unique chance to ensure reliable trading with quick exchanges in digital assets.
The government's efforts to provide regulations will ensure sustainable growth due to user trust in the platforms. The year will see increased market value for crypto-based trading activities with evidence of its value as an alternative to conventional currencies.