While the onset of a crypto winter has slowed the venture capital inflow into the sector, so far this year $18.3bn has flowed into areas that offer a durable value proposition. These investors understand the potential of blockchain technology and the decentralized internet, underpinned by its native token — crypto. They can see beyond the speculative narrative around crypto and understand its role as a building block to the decentralized internet, enabling anyone to take part in it and have ownership while also unlocking financial opportunities.
Blockchain and crypto expand their scope
Blockchain is a peer-to-peer network made up of actors who can interact and exchange information without the involvement of a centralised entity. Transparency, security, permanence and decentralization are all hallmarks of the technology, which could transform a variety of industries.
In finance, blockchain and crypto could become vital to activities such as securities settlement, and could help provide liquidity and access to financing through dispensation and decentralized finance. Security tokens, for example, provide a way to digitally represent ownership of assets, such as gold or real estate, or economic rights, such as a portion of profits or revenue. Blockchain could also underwrite many banks’ forays into central bank digital currencies and play a growing role in identification verification.
For investors, more diverse blockchain use cases could bring a wealth of new investment opportunities. Adam Goldberg, co-founder of venture capital firm Standard Crypto, suggests that many see token investments as being like buying equity in a company. “When you look at what crypto networks are useful for, it is not just facilitating trust,” says Goldberg. “It is also rewarding early participants with ownership.”