Inhalt

Crypto assets - how technology is changing the world for good

Crypto assets are changing the world in many ways. One of the best-known cryptocurrencies, Bitcoin, has established itself as a store of value in recent years and is seen as a potential hedge against inflation. Traditional Swiss banks and asset managers increasingly include crypto assets in their offerings. But the impact of cryptos goes far beyond this. The blockchain technology on which they are based now plays a central role in numerous fields of application outside of cryptocurrencies.

 

Adrian Fritz
Head of Research, 21Shares                                                    

 

Crypto is a new asset class and has a unique technological foundation. It is changing how we deal with data integrity and digital ownership in a world characterised by artificial intelligence. The renowned 21Shares research team has documented the critical use cases of crypto assets.

 

  • Bitcoin - protection against asset confiscation and counterparty risks
    Bitcoin was created in response to the global financial crisis of 2009. The innovation aims to develop a neutral, international, and censorship-resistant asset and a new payment infrastructure outside central banks' control. Over the years, more and more people have discovered Bitcoin as an innovative store of value, especially in countries with high inflation, geopolitical tensions, and economic uncertainty.
     
  • USD Stablecoins - fast and cross-border payments
    Blockchain networks make it possible to transfer valuables globally and almost instantly, just as quickly as emails. Therefore, cryptocurrencies can significantly change the USD 37 trillion cross-border payments industry. People already use stablecoins for money transfers in regions where the internet is widespread. Stablecoins denominated in US dollars are particularly popular here because they also protect against the devaluation of the local currency, even if they are exposed to counterparty risk. As cryptocurrencies integrate existing payment methods, stablecoins may soon become mainstream for payments.
     
  • Data storage - storing knowledge and data
    Decentralised data solutions protect against data loss. They help to store humankind's most important information securely and cost-effectively. At the same time, they protect against surveillance and prevent government censorship. One example of this is Arweave. A blockchain that was used to store Russian offences in Ukraine and censored content from the democratic newspaper Apple Daily in Hong Kong in a censorship-proof manner.
     
  • Digital identity - protection against identity theft and data manipulation.
    Blockchains can permanently store identification documents (IDs) and protect them against loss, damage, data manipulation and identity theft. The latter alone cost the world USD 8.8 billion in 2022. Today, decentralised identity protocols only account for 0.07% of the crypto industry's market value. However, over four million people worldwide already use the leading decentralised IDs.
     
  • NFTs - democratising revenue for artists, brands and musicians
    Traditionally, 88% of artists' revenue goes to galleries, platforms or distributors as commission fees. Thanks to the use of non-fungible tokens (NFTs) and smart contracts, artists and musicians can now secure more than 98% of the revenue from their work. Established brands such as Nike have also recognised the immense potential of such NFTs and have already implemented corresponding projects. The sports company has so far realised 186 million US dollars from sales of NTFs.
     
  • Forensic science - combating illegal activities
    Contrary to many claims, cryptocurrencies are only minimally used in the context of criminal or illegal activities. According to Chainalysis, they accounted for less than 0.3% of the total volume of crypto assets in 2022. The inherent transparency of blockchain technology allows law enforcement agencies to trace transactions to a degree that is not even possible in traditional finance.

 

Far more than just speculation

Many investors often only see crypto as a speculative asset class. But in reality, they offer a wide range of technological applications that positively impact the world. Other applications are there to solve systemic inefficiencies. Although infrastructural and regulatory hurdles must be overcome, these solutions are evolving and will soon become the central building blocks of the changing world.

 

21Shares website

21Shares on Social Media

 

 

Biography

Adrian Fritz is Head of Research in the research department of 21.co, the parent company of crypto ETP issuer 21Shares. He holds a Master's degree from Hult International Business School in San Francisco and began his career as a financial analyst. He then worked as a broker and in investment banking. Before joining 21Shares, he worked at Signature Management Consulting in Barcelona and as an analyst at Cellnex Telecom in Zurich.