The cryptocurrency market has expanded rapidly over the last decade. Also multiple scandals and failures took place in this space. This is not a strange case with any innovative technology. Whenever confidence in crypto plummets, its supporters must restate their core beliefs and the project’s ultimate goal. But, in this case, what’s the internet of value and how can it help?
What is IoV?
The Internet of Value (IoV) refers to a digital space where individuals can instantly transfer value to one another. This happens without the need for intermediaries and at minimal costs. This can include various forms of monetary or social value such as currency, assets, stocks, and securities. It even extends to intellectual property rights, scientific discoveries, and voting in elections.
Existing financial systems like SWIFT, blockchain technology like Bitcoin and Ethereum support the internet of value. We also find use for emerging technologies like Interledger, PayID, and various apps that simplify value transfer. The IoV is similar but separate from the Internet of Things (IoT). IoTis a network of interconnected devices that can communicate with each other and produce diverse results.
The IoV aims to solve problems such as the:
- high costs and slow speed of traditional money transfer
- lack of access to financial instruments globally
- lack of transparency and accountability in current financial systems
By utilizing digital assets and blockchain technology, the IoV aims to provide instant, reliable value transfer. The goal is to give individuals more control over their money.
What are the Benefits of IoV?
One of the key benefits of the IoV is the ability to facilitate cross-border payments and cross-system transfers in a more efficient and cost-effective manner. With current legacy systems, these types of transactions can be slow and expensive. However, with the IoV, individuals will have the ability to transfer value instantly and at a lower cost.
IoV still has the potential to improve financial inclusion for the 1.7 billion adults who are currently underbanked. With the growing availability of internet access, the IoV can provide individuals in underbanked communities with access to financial instruments that were previously unavailable to them.
The use of blockchain technology in the IoV also promotes transparency and accountability in the financial system. Transactions on the blockchain are public and immutable, providing greater certainty and ease of management for individuals. This increased transparency and accountability can also help to build trust and legitimacy in the crypto market, encouraging more mainstream adoption.
However, it is important to note that the IoV is still developing. The IoV needs to connect with existing financial systems and technologies in order to fully achieve its potential. Furthermore, the IoV will also need to address issues such as volatility and scalability in order to make it more practical for everyday use.
Internet of Value and Web3
Beyond these uses, more web3 technologies are on the horizon that could:
- Free up financial applications that can’t exist right now because traditional assets aren’t liquid enough.
- Raise the level of openness and encourage closer interactions between retailers and their customers.
- Further support decentralization
Improved and new crypto assets are developed during downturn markets. Already, cryptocurrencies have widened existing markets and contributed to greater economic growth, more equality, and deeper global integration. Even now, the potential of these game-changing technologies has only begun to receive acclaim.
While video streaming has only been around for a while, people have been able to freely exchange recipes online for decades. Web3 will also need time to develop fully.
The Pivoting Point for IoV
However, the demise of FTX must be included in any crypto future discussions happening right now.
The demise of FTX was not due to crypto issues, but rather to the organization’s lack of openness and its reliance on a small group of people holding too much authority without exercising any accountability. This type of thing has happened in several other sectors, not just crypto, including technology, banking, and even the arts. Many individual investors and businesses were severely affected by the FTX case, which had far-reaching consequences.
Cryptocurrency has reached a turning point at a time when the economy as a whole is facing challenges and doubts. To make sure we are pushing for an improved, healthier financial environment without constraining innovation, the crypto economy and the financial sector as a whole should utilize this time to reflect on our core beliefs.
Most individuals aren’t served well by the current financial system; there are still 1.4 billion unbanked people in the world. Given the current financial climate, it is clear that novel ownership structures are urgently needed.
Cryptocurrency Relies Heavily on Transparency
In order to create an economic structure holds up to greater standards than traditional banking, the cryptocurrency sector must take use of blockchain’s intrinsic transparency. In the past, we have shown that attempting to use cryptocurrency for money laundering is a surefire way to be busted.
On the contrary, less than one percent of 2021 cryptocurrency transactions were linked to illegal behavior, according to studies. The cryptocurrency sector can ensure the safety of its users by employing architecture with the use of data, tools, instruction, and collaborations.
Decentralized finance (DeFi) is the most transparent part of the cryptocurrency ecosystem since all transactions are public and the protocols’ source code is available to anybody. The entire crypto industry should work towards having this kind of opennes. And it has already been put to good use in many different contexts.
Consumers need a guarantee that the crypto and by extension, the whole financial industry is doing its best to protect them. The industry and its regulating bodies worldwide to unite and work towards rules of behavior, including reporting on reserves and other disclosures.
The task and often opposing aims of ensuring consumer safety and encouraging further innovation fall on the shoulders of regulators. With crypto’s inherent decentralization, it will take close cooperation between the sector and governments across countries to walk the fine line between consumer protection and creativity.
In order to better understand previous events and their current ramifications for the industry, it is crucial to push for various regulations that provide access to information, insightful analysis, and technologies that safeguard consumers and equip entrepreneurs.
Cryptocurrency, like any other emerging technology, has drawn criminals and scammers. However, these individuals do not reflect the industry and should not be used as a proxy for negative stereotypes. The cryptographic protocols upon which it relies are publicly available and easily understood.
Cryptocurrency is vital to launching the next generation of the internet of value, which will allow for more financial independence and reduced risk as we continue to develop and create new frameworks to solve systemic inefficiencies.