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The Silver Linings of Crypto in 2022
SATURDAY, JANUARY 21, 2023
Bangkok (January 20, 2023) – “Too many people miss the silver lining because they’re expecting gold.” – Maurice Seitter
It’s been a tough year for crypto and blockchain. We’ve experienced severe breaches of trust, resulting in an adverse hit on the public and regulators’ perception of the industry. It’s already clear that recent events have rattled investor confidence and left long-term impacts that will require the industry to take significant steps and efforts to mend.
However, there are also silver lining for the crypto industry in the past year. Beyond the market fluctuations, we look deeper into what the crypto space has achieved this year in terms of building products and services, expanding their accessibility, introducing new solutions to old problems, and learning important lessons.
BUIDLing – The Prelude to Mass Adoption
For years, the industry has been trying to find solutions to address blockchain scalability for higher speeds of transaction processing. Within what is described as the Blockchain Trilemma, scalability is one of a blockchain’s three desirable properties, the others being security and decentralization.
In preparation for mass adoption, Ethereum transitioned from a proof-of-work consensus algorithm to one that uses proof-of-stake on September 15, 2022. This scaling solution, known as The Merge, is arguably the biggest scalability upgrade that the industry has seen since Bitcoin’s Taproot. Also, thanks to The Merge, Ethereum’s energy consumption dropped by an estimated 99.95%.
Increased accessibility of crypto services and resources
The lack of access to crypto is a barrier to adoption that the industry has been working hard to clear: without wide access, there can be no adoption. Therefore, Binance’s yearlong efforts to increase accessibility include expanding the languages supported on Binance to 40 languages, issuing 1.7 million Binance Cards in the EEA region, and supporting more than 100 fiat currencies with Binance P2P. Currently, we welcome more than 600,000 Binance NFT users weekly and process an average of $2 billion worth of crypto daily.
Security and compliance
It became glaringly obvious this year that, in order to push the industry forward, digital asset service providers must massively improve compliance and security measures to better protect users from bad actors in the crypto space.
By the end of 2022, Binance bumped up the number of registrations, licenses, and authorizations it has secured to 14, which includes major economic hubs like Dubai and France. In order to strengthen our compliance operations, we’ve also grown our compliance team to over 750 experts, an increase of more than 500% compared to 2021. We also worked tirelessly on sharpening our security and identity verification protocols. Today, only users who have verified their identity via government-issued documents can transact in digital assets on the Binance platform – a strict yet necessary approach to make everyone in our ecosystem safer.
Global Adoption: What’s the Progress?
Share of respondents who indicated they either owned or used cryptocurrencies. Source: Statista
Despite the challenging market conditions and setbacks in sentiment and trust, global adoption marches on, – both on the level of retail users and institutions adding blockchain-based tools and services to their arsenal.
Recent numbers from data hub Statista suggest steady growth in crypto ownership and use in the majority of the 56 countries surveyed compared to last year. Thailand had 44% of crypto ownership and use, ranking as the second-largest country following Nigeria. The growth rate is almost double compared to 2019. This result aligns with Hootsuite, a global social media management platform, which reported that Thailand is in the top five countries by the number of internet users aged 16 to 64 who own some forms of cryptocurrency. While Statista reported the number of users is expected to grow to 5.12m users by 2027.
A study by Binance Research found that many traditional institutions were getting on the crypto bandwagon or continuing to leverage crypto and blockchain technology this year. These include the likes of JPMorgan, Rakuten, Tencent, Tesla, Instagram, PayPal, American Express, Nasdaq, McDonald’s, Google Cloud, Mastercard, Sony, Nike and many more. A glance at the plethora of sectors that continue to adopt blockchain technology is illuminating. The list of use cases – and ultimately intrinsic value – of crypto continues to grow.
Key Learnings of 2022
The industry needs to remain agile and responsive to disruptive events.
Much of the industry’s focus has been on driving adoption and improving technology. This approach could lead many companies to overlook the possibility of disruptive events on the industry scale catching the flat-footed. In light of unforeseen crises in 2022, it’s clear that crypto platforms have to put in even more effort to mitigate critical risks from events and refine processes by being more transparent, optimizing risk management protocols, and enhancing user trust.
Over the past two years, regulatory compliance has been a core focus at Binance. In 2022, Binance’s compliance team grew from 500 to 750 people. This is part of the organization’s ongoing efforts to strengthen its compliance capabilities. Recently, Binance announced that it has joined the Association of Certified Sanctions Specialists (ACSS), the world’s only organization bringing together sanctions compliance professionals. By joining the association, Binance will be leveraging the training materials, comprehensive databases, and deep networks within ACSS to further enhance the skills and expertise of its compliance team and continue setting the industry standard for security and compliance alongside other industry players.
The crypto industry has grown unprecedentedly over the past few years. Regardless of the negative events that have transpired in 2022, we’ve achieved milestones that were unimaginable just a couple of years ago. As the world’s largest crypto exchange by trading volume, Binance is responsible for ensuring our users’ safety. We continue to draw on past learnings, pursue dialogue with policymakers, and urge others in the industry to do the same to stay on track with sustainable and secure growth of the crypto industry.