【Crypto APIs Column】Industry New Trends! On-chain data providers will make the blockchain industry more mature

Many companies specializing in blockchain data have emerged rapidly. In fact, the current blockchain industry and regulatory agencies are in need of professional blockchain data analysts to bring higher value to this tamper-proof and transparent data. We have selected an article written by the blockchain data company Crypto APIs to see how they evaluate this market.

Research by Gartner has found that with increasing attention on blockchain and its applications in cryptocurrency, by 2030, blockchain will create approximately $3.1 trillion in new business value. The research also emphasizes that as more companies start exploring more practical uses of the technology, 2023 will be a turning point for mainstream blockchain applications.

As many companies face various obstacles in product development when expanding their businesses, having secure and robust developer tools is crucial when applying blockchain and cryptocurrencies.

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In this article, we discuss some key trends in the industry and introduce a software solution company that all participants in the market can utilize.

1. Cryptocurrency Wallets

Due to the lower correlation of cryptocurrencies with traditional assets, they have evolved into an excellent diversification tool and have become a popular investment choice. In 2017, Morgan Stanley and other financial institutions categorized Bitcoin and other cryptocurrencies as a new investment class.

Cryptocurrency companies have responded to this trend by quickly offering institutional asset and custody services, with Coinbase being a typical example. In recent market turmoil, the market capitalization of Bitcoin has continued to soar, and due to investors' continued optimism towards this digital currency, it has sparked further interest among the general public.

To meet the increasing demand for cryptocurrencies in the market, cryptocurrency wallet participants are striving to stand out by offering a wider range of cryptocurrencies, higher security, and streamlined operational processes. One key product from Crypto APIs - the "Blockchain API" - addresses these issues through an integrated approach. Last year, TechCrunch selected this product (Unified Infrastructure Gateway) as the best choice for blockchain activities. The "Blockchain API" integrates with 9 blockchains and a few software solution providers, including one serving Singapore's Zilliqa, to meet the needs of the Asian market.

Crypto APIs, working with wallet participants, can expedite their product development progress and simultaneously reduce operational costs. The team is currently supporting a Taiwan startup company - AuthenTrend. AuthenTrend is a leading cryptocurrency wallet provider, offering fingerprint-enabled security tokens to all participants in the cryptocurrency market. With the Blockchain API, hardware wallets can transmit transactions to public blockchains integrated under the product. Without this solution, cryptocurrency wallet participants would need to invest significantly in establishing and operating nodes to communicate with the blockchain.

According to recent research by The Block, the cost of node infrastructure ranges from $500,000 to $2 million annually. This development process is slow and continuously drains a company's resources, especially for new enterprises. A robust product, coupled with secure infrastructure, can collectively ensure the protection of consumers' interests.

2. Cryptocurrency Exchanges

There are many cryptocurrency exchanges in the market, and consumers often struggle to fully understand and choose one that suits them. One key issue they mostly face is security. Therefore, consumers must understand the underlying infrastructure supporting the exchange's functions and specific features that prioritize consumer interests.

Crypto APIs collaborate with exchanges globally (such as Swyft in Australia and CashFinex in Estonia) to support their daily operations. Their products help generate deposit addresses (supporting IBAN in European countries) and maintain security by automatically transferring funds from hot wallets to cold wallets, ensuring consumers' funds are immediately returned to the exchange. This approach reduces the opportunity for hacker activities. Exchanges can also choose to receive notifications related to fund transfers on addresses through the Webhooks feature, aiding in promptly flagging abnormal transactions.

3. Digital Banks and Emerging Banks

Another significant trend in the financial sector is the emergence of digital banks challenging traditional models. While these emerging banks are not new in Western countries, they have only started to emerge in the Asian economy over the past five years. Japan might be a leader in Asia in enacting laws legalizing cryptocurrencies, but a closer look at Hong Kong reveals vibrant activities there.

Standard Chartered-backed virtual bank Mox was established following the founding of Tianxing Bank on March 30. Additionally, Zhongan Bank recently started the next phase of its digital transformation by launching an insurance platform. Analysts predict that once the results of digital banking licenses are announced later this year, Singapore will also witness a similar trend wave.

A study by Deloitte shows that traditional use cases of blockchain technology in financial services include trade finance, consumer onboarding, regulatory reporting, and cross-border payments, but companies are gradually starting to explore revenue-generating use cases. A significant part of this approach includes cryptocurrency trading services, as major financial giants are also facing pressure from disruptive new technologies. As they enter the cryptocurrency market, they will also seek software solutions that can simplify the creation of new consumer applications. Consumer applications include existing wallets, exchanges, or cryptocurrency payment platforms, but also anticipate new use cases such as cryptocurrency wealth management or private investment functions.

With Asian governments strengthening regulation of digital assets and consumer confidence in authorities' interventions gradually growing, we can expect mainstream adoption processes to accelerate. When the market reaches this point, we will see mature financial participants gradually beginning to interact with the cryptocurrency market, creating a very interesting scenario.

(Sources)
1. Insights from Gartner Consulting on Enterprise Blockchain
2. Cryptocurrency as an Investment Class
3. Risks of Cryptocurrency Wallets
4. The Block's Research in the Digital Asset Space
5. Singapore Monetary Authority Payment Services Act
6. Revenue Pressure from Digital Disruption in Financial Institutions