Are crypto exchanges poised for a growth explosion?

What will the financial sector look like in 2030 after spending the decade challenging the incumbent financial services? Leeor Shimron, a Forbes Contributor, believes that crypto exchanges are poised to capture the growth in this space.

To date, crypto exchanges have provided users with a first contact point with an ever-increasing range of crypto assets. Lets’ not forget that the first crypto enthusiasts were retail investors who for the first time were able to access a new asset class before the institutional investors. As a result, most exchanges, such as Coinbase and Binance, were set up to service demand from the retail investor. For example, as Shimron remarks, “In just 8 years, Coinbase propelled crypto to the mainstream serving over 30 million users.”

Follow the Internet’s history

There have been several commentators who have suggested that the crypto story is very similar to the emergence of the Internet. The Internet was a fundamentally disruptive and paradigm shifting technology, and crypto very well may exhibit similar changes, mimicking the growth in Internet usage.

Illustrating this claim, Shimron cites the statistics: “User adoption of the internet reached 10% of American households in 1995, five years after the first web browser was launched. User adoption reached 50% in the U.S. by the year 2000.” Currently, US adoption of crypto is at around 5%, and hasn’t seen the same rate of adoption as the Internet. This is caused by “issues of scalability, privacy, and ease of use,” something that the Internet also had to overcome.

However, if Bitcoin’s growth story follows that of the Internet, it should achieve user adoption of between 20–50% by the year 2030.

Crypto exchange growth

Shimron applies a similar metric to exchange growth. He writes, “To project future exchange growth in the U.S., I assumed 5% user adoption of crypto in the US currently and calculated revenue growth if user adoption reaches 10% (conservative case), 20% (base case), and 50% (optimistic case) in the year 2029.”

The resulting scenarios for 2029 in terms of exchange revenues are: “$1.9 billion in the conservative case, $3.8 billion in the base case, and $9.6 billion in the optimistic case.”

He also remarks that although the 50% adoption may seem far-fetched, there are indicators supporting it, including ample growth potential amongst retail investors and demographic changes over the next decade, with more 18–39 year olds living in cities and being more familiar with digital technologies and virtual goods. These millennials will also inherit $68 trillion from the baby boomer generation by 2030, and they are looking for new ways to generate yield and store their wealth.

So, the future for crypto exchanges is bright, “as new use cases and killer apps emerge,” alongside retail users flooding the market and exchanges capture this growth.

The Ugly Exploitation of 5G Fears

The Covid-19 pandemic has proved to be a fertile breeding ground that has brought together disparate groups, including anti-vaxxers and the anti-5G movement, on any platform they can find to share their conspiracy-based views. One of the most prominent claims is that 5G technology spread the coronovirus, even though 5G is not available ‘everywhere’.

Before that became a widely shared theory, we already knew that those who don’t want to see 5G launched had been pushing out information about the alleged dangers of 5G. We were all about to be ‘wi-fried’ by it, and children would be particularly vulnerable. I’m not here to debate the claims of the anti-5G movement, but I would like to alert people to one of the dangers that this kind of scaremongering can produce: the opportunity to be scared into buying into a health scam.

A Forbes story by John Koetsier illustrates it perfectly. It concerns a ‘5G Bioshield’ that is being sold for $350 per unit. The USB stick boasts features such as “quantum oscillation” and “restoring coherence of atoms” as well as “emitting life force frequencies.”

This is what the company selling it claims on its the website:

“Through a process of quantum oscillation the 5G BioShield USB Key balances and reharmonizes the disturbing frequencies arising from the electric fog induced by devices, such as laptops, cordless phones, wifi, tablets, etc., The 5G BioShield USB Key restores the coherence of the geometry of the atoms, which allows a perfect induction for life forces, by (re-)creating a cardiac coherence, via plasmic support and interactivity.”

It sounds like the answer to all those fears about the health damage that 5G is purported to inflict. It must be a very special USB stick to do all the above, must it not? You’d like to think so for $350.

The expert analysis

But when Pen Test Partners reviewed the stick’s properties, it “revealed nothing more that what you’d expect from a regular 128MB USB key,” states its blog. And they went on to say: “Usually with USB devices, one can look at the properties and it will list the manufacturer and extra information about the device. However, we found that all the default values remained. This is often an indication of cheap, unbranded devices.”

So, basically it is a $6 USB stick being sold for $350. Furthermore, the founders of the 5G Bioshield don’t appear to exist. Koetsier says, “A search for “Dr. Ilija Lakicevic,” listed on the website as one of the founders of the company, turns up nothing on LinkedIn. A search for him on the Max Planck Institute for Plasma Physics, where the 5G BioShield website says he worked, also turns up no results.”

Have they sold any? Yes. To the city of Glastonbury in the UK, which issued a statement saying, ““We use this device and find it helpful.” It is also worth mentioning that other health protection used in Glastonbury include Shungite, a mineral which is said to have healing powers that one “healing crystal” company says “span the board from purity to protection.”

Whether you agree with the theory that 5G is a health danger or not, I expect you can agree that paying $350 for a $6 product is quite simply — exploitation!

Blockchain solutions to surge by 2023

According to a new study by CB Insights blockchain tech has gone far beyond its beginnings in banking and cryptocurrency, with annual global spending on blockchain applications having almost tripled since 2017. Furthermore, CB Insights’ Market Sizing Tool predicts this annual spend could shoot up to $16 billion by 2023.

As the report says, everything from insurance and gaming to cannabis and industries are seeing the potential power of blockchain. The big companies, such as Facebook, Amazon, Samsung and LG have already dipped their toes in the water, and LG has introduced it using a “Facial recognition service that combines AI and blockchain to make payments in digital currencies,” according to Luke Fitzpatrick in Forbes.

What does blockhain give to industries? According to Ilker Koksal it provides:

Greater transparency

Increased efficiency

Better security

Improved traceability

And which industries will benefit the most and see the biggest changes by using blockchain applications? Here are the four most likely to make the most of blockchain.

Digital banking

Digital banking has made great progress over the last decade and decentralized finance (DeFi) could be a catalyst for taking banking fully digital. Atul Khekade, cofounder of XinFin said, “The FinTech industry is growing at the rate of 23% year-on-year and blockchain is about to make finance more efficient.” He expects to see traditional finance firms and governments understanding the advantages in the near future, and it is almost certainly the case that countries with large numbers of unbanked people will take advantage of blockchain solutions. If they aren’t already, they should be.

Supply chains and logistics

While banking has been the most prominent user of blockchain, industries that rely on the supply chain sector are also embracing blockchain with good reason. As Fitzpatrick says, “The technology by its very design offers an unprecedented level of efficiency in the recording and tracking of goods,” and this didn’t go unnoticed by IBM for tracking goods. Carrefour, a French supermarket, has also used the technology for the tracking of food products from farms to stores.

Fitness and wearables

Wearable technology had already made big consumer inroads, and the Covid-19 pandemic has increased interest in wearables that monitor steps, heartbeat and calories consumed amongst other things. Herbert Sim, an advisor to BeFaster said, “The fitness is gaining momentum over the past 10 years. According to forecasts, in the US alone, the income of the fitness industry by 2023 will exceed 20 million.” The need for social distancing has also led to new app creations for tracking. Allan Zhang, the founder of DxChain said, “Post-lockdown, the technology could be fully embedded into the wearables industry and this will provide immense value to customers in the long run.”

Asset management

Fitzpatrick says, “According to a recent study, artificial intelligence, distributed ledger technology (DLT) and the blockchain technology will have the biggest impact on asset investments in the upcoming years.” The industry is already valued at $74 trillion. Ernst and Young (EY) said, “Asset managers need to proactively consider valuation challenges arising from the COVID-19 pandemic’s effect on financial markets.” Yubo Ruan, a 23-year-old venture capitalist, said, “Pragmatically, this means financial products like ETFs and mortgage-backed securities can be synthesized on blockchain platforms at significantly lower costs,” adding, “ blockchain-based asset management platforms tend to require lower minimum balances to invest, which is a major positive for adoption.”