2022 Cryptocurrency Industry Outlook | FTX CEO: Optimizing Scalability, Stablecoins Account for 80% of Regulatory Issues

FTX CEO Sam Bankman-Fried, also known as SBF, shared his views on the cryptocurrency space in 2022 on Twitter. He emphasized that these are personal opinions and not investment advice, and they could also be wrong. Here is a summary:

1) I've written a bunch about FTX's roadmap.

But I haven't written much about crypto's.

So, here goes. pic.twitter.com/hSIhbFW8zh

— SBF (@SBF_FTX) December 27, 2021

What Exists in the Cryptocurrency Field?

1. Solid User Base. There are approximately 200 million cryptocurrency users globally.

2. Smart Contracts. It is hard to overstate the importance of smart contracts in the cryptocurrency field. They are a key factor in transitioning cryptocurrencies from "digital gold" to areas like Web3, Metaverse, and DeFi.

3. Potential Applications: Remittances, payments, value storage, NFTs in the Metaverse, information transmission, social media, tokenized assets, decentralized finance, etc.

4. Scalable Solutions: New public chains, L2 and Rollups solutions, Lightning Network, etc., currently processing about 50,000 transactions per second.

5. High Attention: The cryptocurrency field receives far more attention than its current value. The total market capitalization of cryptocurrencies is around 2.5 trillion USD, lower than Apple and Microsoft, but which one gets more attention?

What is Lacking in the Cryptocurrency Field?

1. Regulation. Tensions exist between operators and regulatory bodies. Regulatory frameworks regarding token issuance, platform registration, stablecoins, etc., are too ambiguous, hindering industry progress and institutional participation. Collaboration between regulators and crypto companies faces difficulties, leading to confrontations rather than cooperation.

2. Blockchain Scalability. Various blockchains are starting to address scalability issues, but they are still insufficient. The current transactions per second (TPS) is around 50,000, whereas industry-level scales typically require millions. Despite significant potential for digital assets in the payment sector, they are rarely applied in payments.

What Should the Cryptocurrency Industry Do in 2022?

1. Regulation. The most crucial aspect is bridging regulatory gaps between countries, allowing asset transfers within jurisdictions like the US and Europe. Starting with stablecoins can solve 80% of the issues, establishing a regulatory framework based on reporting, transparency, and audits to gain support, ensuring the growth of open networks rather than confining crypto within the banking system.

2. Establish Market Standards. Set standards for spot, futures, and other markets.

3. Establish a Token Issuance System Requiring Registration, Information Disclosure, and Anti-Fraud Measures. Integrating consumer protection mechanisms and regulatory clarity to make users and institutions comfortable interacting in the crypto space, a goal that may be achieved in the coming years.

Barriers to Cryptocurrency Adoption

1. Network Effects. For example, in cryptocurrency payments, it requires support from both buyers and sellers, establishing payment networks, going through transitional periods, until consensus is reached by enough merchants and consumers for stable cash flow.

The same applies to blockchain-based social platforms and information flows. The existing user base for traditional games could reach billions of users and generate trillions of dollars annually, but this only makes sense when the virtual world is more appealing. The real goal is to create an outstanding game that integrates NFTs in a better way.

2. Scalability. "Fast" represents several million TPS, which no blockchain currently achieves. Therefore, having a concrete roadmap to scale to the million TPS level and executing it step by step is crucial for projects.

Generally, everything is essential. SBF points out a core belief he has come to embrace in recent years: "Everything is connected, everything is correlated." Trust is crucial for increasing user trust in the industry, where regulation is essential, but so is UI/UX. Every time there is a fraud incident, trust diminishes. When we build a great, beautiful, and practical industry, we drive everyone forward; otherwise, we mess up, and everyone takes a step back.

"So let's keep moving forward!" concludes SBF.