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Cryptocurrency is heading towards surviving its first ice age

The past year has been a challenge around the world. Financial markets plunged deep into the red, affecting millions, if not billions, of people around the world. Inflation has increased. For crypto, it was arguably the worst year since Bitcoin (BTC) creation. It’s been more of an ice age than a crypto winter, and bad actors and weak projects have dominated the headlines – including FTX, Voyager, Celsius, Terra, Hodlnaut, and this week, Nexo​.

In 2023, the purge could continue with projects that – like Tezos, Lisk and EOS – do not develop any new technology, nor innovate. It has been said frequently that 90% of crypto projects will eventually fade or disappear because, among other failures, they do not solve anything.

Dubious players failed to uphold transparency and decentralization and grossly corroded user trust. In the Web2 industry, Big Tech has also continued to abuse user data and privacy, prompting the Federal Trade Commission to take a closer look at how Facebook, Google, Amazon and Apple handle customers’ personal information.

Related: Crypto breaks Google-Amazon-Apple monopoly on user data

And as harsh as that silver statement sounds, many crypto enthusiasts have finally hopefully learned the lesson that if “not your keys, not your crypto.”

In the blockchain space, this has boiled down to the collapse of large centralized crypto companies rather than developers or builders.

Proof of Reserves (PoR) emerged as a critical topic in 2022 to rebuild trust in light of frauds and scams. PoR uses crypto evidence, verification of ownership of public crypto wallets, and third-party audits to attest that a centralized platform contains enough assets to match user assets.

The cryptocurrency market downturn has wiped out over $2 trillion in market capitalization, while many digital assets have lost ​90% or more of their value.​ ​However, guess what? By September, stock market losses had wiped out $9 trillion in wealth from American households alone.

But all is not dark and catastrophic

Despite the turmoil and collapse of several crypto companies, crypto’s risk-adjusted return has actually been in line with US and global equity indices in 2022 and has done much better than US bonds.

Meanwhile, the blockchain market is poised to continue growing. The accounting firm PwC estimates that related to the metaverse the projects alone will be worth $1.5 trillion in value by 2030.

There is a good reason to remain bullish on cryptocurrency. Dec. On September 7, the number of wallet addresses with a balance of at least 0.1 BTC increased significantly to a new all-time high of over 4.1 million. On November 28, the number of addresses containing 1 BTC to 10 BTC also reached an ATH of 800,000 addresses.

Number of users with Bitcoin balances of 1 BTC or more from October 21 to November 22. Source: Glassnode

Decentralized finance (DeFi) ​is also on the rise despite the crises that have caused a massive slowdown this year. The number of DeFi users around the world is growing every day. Total value locked in DeFi was close $180 billion at the peak of the crypto market in November 2021. But by 2030, we expect it to rebound to around $232 billion.

While GameFi also took a hit and fell to $8 billion, credible data suggests it will bounce back to $50 billion by 2025 – although others think it might fall apart in 2023. One of the most promising blockchain categories is the machine economy, or decentralized Internet of Things, which could account for $5.5 trillion to $12.6 trillion in value by the start of the next decade.​

Related: From Bernie Madoff to Bankman-Fried, Bitcoin Maximalists Have Been Validated

With people increasingly interested in owning and monetizing their data, blockchain – or, more specifically, smart devices connected to smart contracts, such as decentralized wireless projects​ —​ will see greater adoption starting in 2023.

And then comes 2023

The crypto and blockchain space has survived four crypto winters, demonstrating its resilience, and it is here to stay. In 2023, we will see increased interest in greater transparency and the need for regulations to build trust between those crypto and blockchain projects that continue to act in bad faith.

Bad actors will continue to be swept away by legitimate blockchain projects and entrepreneurs working together to improve the cryptocurrency space. Where major crypto companies previously held most of the power, 2023 will elevate innovative builders creating next-gen apps that will drive the next wave of mass adoption.

Raullen Chai is the co-founder and CEO of IoTeX. He previously worked for companies such as Google, Uber and Oracle. He holds a doctorate. from the University of Waterloo, where his research focused on the design and analysis of lightweight ciphers and IoT authentication protocols. At Google, he led many important security initiatives for its technical infrastructure, including SSL attack mitigation, privacy-preserving SSL offloading, and certificate transparency for all Google services. He was also the founding engineer of Google Cloud Load Balancer, which now serves thousands of cloud services, with over one million requests per second.

This article is for general informational purposes and is not intended to be and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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