is financial integrity of greater importance? In addition, conventional financial rules aren’t easily applied to the current range of crypto actors, such as miners, validators and protocol developers. Regulation, although welcome, remains a Gordian Knot of unprecedented complexity. The sector will therefore have to couple compliance with conviction if sense is to prevail. It’s all beginning to merge Even before 2022, a major issue with crypto mining was the amount of energy required to verify transactions on blockchains. Ethereum, the second largest cryptocurrency after Bitcoin (based on market cap), therefore decided to shift from the energy-intensive proof-of-work (PoW) to the more environmentally sustainable proof-of-stake (PoS) system. This move from Ethereum last September was revolutionary for the industry - reducing Ethereum’s energy consumption by 99.95%. This could make the currency attractive to environmentallyaware investors during 2023, vastly expanding the potential we can expect from it in the years to come. Also, Ethereum will begin the year as a near-deflationary PoS currency [a positive], although its gas fees/blockchain charges remain high [a negative]. That said, the emergence of solutions like Polygon, a stack of protocols designed to fix Ethereum’s scalability issues, may well go some way to fixing these issues. Polygon addresses a network’s challenges by handling transactions on a separate Ethereum-compatible blockchain and then returns transactions to the main Ethereum blockchain post-processing - lowering the network load on Ethereum, speeding up transactions and lower transaction costs to less than a cent. Along with this various wallet solutions that implement transaction batching and nonnative token payments for gas can help lower the cost of transacting on Ethereum. Bitcoin – crypto’s poster child – is well positioned for 2023, with start-ups such as Lightening, and protocols such as Taro (Taproot Asset Representation Overlay), making the currency more attractive and cost-effective to trade. Bitcoin’s positive outlook is also based on the growth of its adoption by diverse communities around the world, including El Salvador, although, as with Fiat currencies, global uncertainties and recessionary pressures could dampen performance in the short term. Empowering users’ control with self-custody Self-custody wallets, also known as non-custodial wallets eliminate the growing risks associated with having data stored online and can give the Web3 world more control over privacy and personal F i nanc i a l Innov a t i on & F i nTech 62 Finance Monthly.
RkJQdWJsaXNoZXIy Mjk3Mzkz