Mass Adoption Would Ruin Crypto. Keep It a Niche
There is an unavoidable tension between the aims of decentralization and onboarding everyday users.
By Daniel Kuhn](https://www.coindesk.com/author/daniel-kuhn/)**)
Jun 15, 2024 at 3:04 a.m.
Updated Jun 15, 2024 at 3:09 a.m.
(Photo by Epics/Getty Images)
Crypto would be better off remaining a niche.
The greatest crisis in crypto so far has been, undoubtedly, the rapid decline and tremendous fall of FTX. At the time of the collapse of what turned out to be Sam Bankman-Fried’s personal piggy bank, it was the third-largest crypto exchange. Its demise caused shockwaves across the industry, bringing down not just prices but a litany of companies.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.
This article is excerpted from The Node, CoinDesk's daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.](https://www.coindesk.com/newsletters/).***)
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At the time, in late 2022, it was unclear if crypto as a concept would ever recover – the blatant fraud of what was, up to then, among the most consumer-savvy and trusted crypto companies appeared to confirm the widespread assumption that all of this was just artifice covering up fraud.
Today, things are looking up, though there remains a pervasive fear that the industry is repeating old mistakes and bound for another comeuppance. For veteran crypto investors and observers, this is and always has been normal: ever since the bitcoin (BTC)](https://coindesk.com/price/bitcoin/)) market crash of 2014, following the failure of Mt. Gox, and subsequent rebound,](https://www.investopedia.com/articles/forex/121815/bitcoins-price-history.asp),) the cyclical nature of the market has been an accepted part of life.
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But isn’t it odd that this maturing industry has normalized these boom-and-bust cycles? It seems to me that mass adoption for any blockchain or consumer application is contingent upon the price of its token – or the industry itself – not always being at risk of imminent collapse.
See also: You Want Crypto Regulation? I’ll Give You Crypto Regulation](https://www.coindesk.com/opinion/2023/01/26/crypto-laws-us-protect-consumers-custody-exchange-separation/)) | Opinion
And that’s the thing. To a large extent, the biggest problem with growing crypto is the growth of crypto. This whiplash between euphoria when the markets surge and despair when it shrinks, every four years or so, is a result of crypto’s pursuit of mass adoption.
Crass adoption
The process is clear, a textbook case of economist Robert Shiller’s “irrational exuberance.”](https://en.wikipedia.org/wiki/Irrational_Exuberance_\(book\))) Promises of reinventing everything from money to the internet itself spark interest. People buy into the dream of decentralization (or, for many, the promise of a fast buck). Popularity drives prices up, which reflexively](https://capitalgains.thediff.co/p/george-soros-theory-reflexivity)) drives them up further as more and more people invest – until something breaks.
Almost always, the things that fail are the things that blockchains were built to mitigate or replace. And these things, almost always, were built to make crypto palatable and/or easy-to-use. It’s not an uncommon opinion that “the masses” likely won’t self-custody. But without self-custody, what’s even the point of something like Bitcoin?
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“The risk of growing adoption is that new entrants aren’t aware of Bitcoin’s core principles: decentralization, self-custody, hard money, etc. If new entrants don’t learn, understand, and espouse these core beliefs, the features that make them reality may not remain in the protocols over time,” said Alex Thorn, the head of firmwide research at investment bank Galaxy Digital.
See also: An Ode to LocalBitcoins](https://www.coindesk.com/opinion/2023/02/10/an-ode-to-localbitcoins-and-a-lesson-about-maintaining-bitcoins-public-goods/)) | Opinion
Adoption means following the law (which is often at odds with crypto's values) and creating easy-to-use sign-ins and on-ramps (which can be compromised). There is a tension – if not direct competition – between the aims of decentralization and mass adoption. Grow crypto too big, and you risk destroying what it is actually useful for. “Simply becoming folded into the dominant financial system ends up ceding a lot of the opportunities that matter with this tech,” said Nathan Schnieder, professor of media studies at the University of Colorado Boulder and author of “Governable Spaces.”
It’s a point echoed by University College Dublin lecturer Paul Dylan-Ennis, who said “crypto is a subculture that cannot accept it is a subculture. Most of our troubles stem from how talk of 'onboarding the next billion' causes us to decay our values.”
There all along
There is a certain irony that developers, founders and investors have spent 15 years and billions of dollars searching for a “killer app” for blockchain, and yet it already has one.
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Satoshi Nakamoto, and those who actually walk in his footsteps, have built digital bearer instruments that can be used any which way and cannot (easily) be taken from you.
That’s it. That’s the whole point of crypto.
That’s why, while almost no one pays for coffee with bitcoin, many use the privacy coin monero (XMR)](https://coindesk.com/price/monero/)) to buy this or that on the darkweb. If you look at how crypto is actually used to connect with the real economy, you’ll see it's essentially in niche areas. These include black or gray markets,](https://www.coindesk.com/layer2/2022/09/02/designer-drug-markets-get-boost-from-crypto/),) stablecoin remittance corridors](https://www.coindesk.com/policy/2024/04/16/tether-circle-diverge-on-how-to-tackle-global-patchwork-of-stablecoin-rules/)) and hobbyist pursuits.](https://www.coindesk.com/markets/2021/03/01/mining-bitcoin-for-heat-strawberries-and-chickens/).)
Mind you, these are huge markets. But today, as in other periods where it seems like crypto is right on the cusp of breaking through, this usage pales in comparison to the speculative use of crypto, where capital goes in, jumps around from coin to coin or protocol to protocol and causes the number to go up – essentially creating a circular economy.
And that’s fine. Gambling is a use case to a certain extent. But if people want crypto to be used productively, developers, founders and investors should be building for people who have an actual need for censorship-resistant money and tools. Almost by definition, that’s a limited audience.
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This is just my opinion. Many disagree.
Other views
Molly White, author of crypto-critical news services Web3IsGoingGreat and “Citation Needed,” argues that crypto is already mainstream. “There are individual projects that are still small and niche, but with Brian Armstrong and Sam Bankman-Fried rubbing elbows in Congress, and BlackRock and Fidelity launching bitcoin ETFs, I think that ship has probably sailed,” she said in a direct message.
Privacy advocate, educator and monero superuser SethforPrivacy sees things differently., The “unfortunate reality is that most people don't yet realize the need for Bitcoin nor are they willing to take on that much personal responsibility, and as such we must focus our efforts on improving Bitcoin for those who do realize the need today," he said.
See also: In Defense of Meme Coins](https://www.coindesk.com/opinion/2024/06/10/in-defense-of-meme-coins/)) | Opinion
There’s also an argument that decentralization is precisely the reason crypto will go global, so to speak.
“The ONLY thing that makes Bitcoin’s global ascension possible is its most cypherpunk attribute: that it is owned by no one, and operated by the users, not states or corporations," said Alex Gladstein, chief strategy officer at the Human Rights Foundation.
However, it’s not exactly clear what the masses want. Ethereum advocate Emmanuel Awosika, for instance, admits that “while we believe *everyone* wants privacy, censorship-resistance and protection against nation-state attacks, some people are fine with a product that solves a problem and has good UX.”
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While not everyone needs, let alone wants, privacy, censorship resistance and maximum decentralization, Awosika added, “We should explore getting crypto in the hands of as many people as possible."
Likewise, Roko Mijic, of “Roko’s basilisk”](https://www.lesswrong.com/tag/rokos-basilisk)”) fame, argued that it’s actually scale that gives decentralized tools any power, which is observably true in that Bitcoin is difficult to attack because it has miners spread across the world. “You can't resist censorship from inside a small-scale crypto network because the government will just bring down the whole network,” Mijic said.
Justin Ehrenhofer, founder of Moonstone Research in Chicago, echoed this sentiment, pointing out that a currency is only useful if it is widely accepted, and so “cypherpunks should focus on building systems that appeal to outsiders.” However, he did add that “with wide-scale adoption” there has been a degradation in the spirit of crypto, given that the average user stores their wealth in custodial exchanges.
I suppose the question is, how valuable are crypto’s core values?
Edited by Marc Hochstein.
Chainlink’s CCIP Enables Seamless Onchain Payments for XPay by XSwap
By **BHUSHAN AKOLKAR14.](https://www.crypto-news-flash.com/author/bhushan-akolkar/)**14.) June 2024Edited by JOHN KIGURU](https://www.crypto-news-flash.com/author/john/)) 14. June 20243 Mins Read
token chainlink link cryptocurrency on the green matrix background of binary crypto price chart.
XSwap has adopted Chianlink’s CCIP for its new XPay tool, ensuring secure and efficient onchain payments with top security and easy integration for cross-chain transactions.
The integration of Chainlink CCIP into XSwap’s ecosystem represents a significant enhancement in security and cross-chain transaction capabilities.
Chainlink has confirmed its position as the industry-standard protocol for secure cross-chain value transfers with its latest use case. XPay, developed by XSwap, is now utilizing Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to facilitate onchain payments.
XSwap expressed its excitement about the launch of XPay, a robust tool designed for cross-chain transactions, promising top security powered by Chainlink CCIP, easy integration for effortless cross-chain functionalities, and an expanded ecosystem for the XSwap community.
As XSwap continues to integrate into the ecosystem, the incorporation of Chainlink CCIP marks a significant advancement in security and cross-chain transaction capabilities.
As the industry-standard protocol for secure cross-chain value transfers, #Chainlink](https://twitter.com/hashtag/Chainlink?src=hash\&ref_src=twsrc%5Etfw)) CCIP unlocks an array of use cases for users.
In the latest use case, XPay by [localhost:3000/u/xswap_link](@xswap_link](https://twitter.com/xswap_link?ref_src=twsrc%5Etfw)) is using CCIP to power onchain payments ↓ <t.co/CNHgcJe6Sm>
— Chainlink (@chainlink) June 13, 2024](https://twitter.com/chainlink/status/1801313792166367391?ref_src=twsrc%5Etfw))
In recent weeks, Chainlink has been integrating its CCIP protocol across multiple platforms. Earlier this week, Weset, a platform specializing in tokenizing real-world assets, integrated Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to facilitate cross-chain transfers of its WECO token between BNB Chain and Ethereum. This integration boosts liquidity, enhances user experience, and streamlines Weset’s infrastructure, per the Crypto News Flash report.](https://www.crypto-news-flash.com/chainlink-ccip-integration-enables-cross-chain-weco-transfers-for-weset/).)
On the other hand, the decentralized computing platform Chainlink (LINK) has announced the use of its Cross-Chain Interoperability Protocol (CCIP) in the integration between DTCC and the new Smart NAV Pilot. This development solidifies Chainlink’s position as a leading player in the decentralized finance (DeFi) ecosystem, as reported by Crypto News Flash.](https://www.crypto-news-flash.com/chainlinks-ccip-revolutionizes-dtcc-integration-with-smart-nav-pilot/).)
More About Chainlink’s CCIP
As blockchain interoperability becomes increasingly crucial, Chainlink’s Cross-Chain Interoperability Protocol (CCIP) is emerging as a pivotal technology.
The Cross-Chain Interoperability Protocol (CCIP) offers a plug-and-play solution that simplifies processes by eliminating the need for locking, burning, and minting tokens. It also enables programmable transfers, allowing users to conduct data and token transfers simultaneously in a single atomic transaction.
Since its debut in August 2021, CCIP has set the standard for blockchain interoperability. With a decentralized network of proven node operators, a robust risk management system, and extensive ecosystem support across multiple blockchains, it is considered the gold standard.
CCIP now also supports projects involving multi-billion dollar institutions like the American clearing powerhouse DTCC and prominent blockchain industry players like Index Coop.
Chainlink’s native cryptocurrency LINK is currently trading around $15.20 with a market cap of $8.9 billion. Moreover, the daily trading volume has dropped by 30% to $276 million.
9:50 AM Price: $ 14.76
IOTA’s Web3 ID Solution has been selected for the prestigious European Blockchain Sandbox.
This initiative represents a major advance in privacy-focused KYC processes for the Web3 environment.
Following the launch of a blueprint for the EU Digital Product Passport](https://www.crypto-news-flash.com/iota-partners-with-digimarc-for-decentralized-blueprint-for-digital-product-passports-to-serve-eu-blockchain/)) with Digimarc in CNF previous report, IOTA continues to demonstrate blockchain’s versatility. A recent update from IOTA’s blog dated June 13, 2024, proudly announces the selection of their Web3 Identification Solution](https://www.crypto-news-flash.com/dell-and-iota-partnership-for-sustainable-energy-and-digital-cities-are-the-future-for-blockchain-and-industry/)) for the European Blockchain Sandbox by the European Commission.
This partnership, developed alongside walt.id, IDnow, Bloom Wallet, and HAVN, underscores IOTA’s influential role in advancing blockchain applications.
As revealed by Collin Brown via a compelling tweet, the European Blockchain](https://www.crypto-news-flash.com/unime-partners-with-iota-making-strides-towards-eidas-2-0-compliance-with-the-eu-identity-wallet/)) Sandbox is a pan-European initiative designed to integrate DLT use cases with regulatory frameworks, fostering significant dialogue between technology developers and EU regulators.
This environment enables rigorous testing and refinement of blockchain solutions, including IOTA’s innovative KYC system, which is now set to undergo practical assessments under real-world regulatory conditions.
Advancing KYC in the Blockchain Era
The IOTA Web3 Identification Solution revolutionizes traditional KYC processes, providing users with a secure, seamless way to control their data through DLT and tokenization. Following a rigorous identity verification by IDnow compliant with EU regulations, user identities are tokenized and stored in the Bloom Wallet.
This process ensures that Web3 dApps can verify users without accessing sensitive personal information, heralding a new standard in privacy-preserving digital identity systems.
Future Prospects and Collaborative Dynamics
This project’s efficacy is enhanced by the synergistic contributions of its partners. IDnow offers adaptable identity verification, walt.id manages token issuance, Bloom secures identity tokens in user wallets, and HAVN provides the EVM-compatible KYC chain infrastructure.
Such collaborations are pivotal for expanding the solution across DeFi and other Web3 applications, promising to reshape KYC processes through innovative blockchain solutions.
As IOTA continues to pioneer developments in blockchain technology,](https://www.crypto-news-flash.com/iotas-future-shines-bright-superior-technology-strong-partnerships-and-new-corporate-and-tokenomic-structure-in-the-billion-dollar-market/),) its market performance is closely watched. At the time of writing, IOTA trades at $0.1944, experiencing a decrease of 5.34% over the past day and 18.48% over the past week, reflecting the volatile nature of the cryptocurrency market.
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Blockchain firm IOTA has been selected to participate in the European Blockchain Sandbox.
According to a blog post, IOTA will be participating in the Sandbox with its Web3 identification product. IOTA says the solution tokenizes all kinds of identification processes, enabling identity verification in Web3 environments while users can maintain control over their personal information.
The European Blockchain Sanbox was launched in 2023 as part of a push by the European Union to advance distributed ledger technology (DLT).
Like other Fintech sandboxes, the environment provides a controlled ecosystem for testing and validating DLT solutions while engaging with EU regulators.
IOTA describes selection for the Sanbox as a significant milestone for their products, stating it may open up the door for a regulated KYC/identity product.
IOTA is partnering with IDNow, walt.id, HAVN, and Bloom, on the identity solution.
The IOTA Foundation is based in Berlin. The blockchain provider is looking to disrupt and improve various sectors of industry.
Digital Identity Solutions can validate transactions and ownership while verifying information like address, age, and more.
