In a new study, financial services giant, Wells Fargo, revealed that the innovation of cryptocurrencies and digital assets are the cornerstone of sustained economic growth and prosperity. Interestingly, the report compares digital assets to the invention of “internet, cars, and electricity.”
Innovation is one of the main concerns of the humankind. As mainstream interest in digital assets continues to surge, innovation ensures to fulfil the hightening consumer demands and needs. Business and organisations globally are constantly in conversation around crypto’s potential to shape the future.
Digital Assets Bestows Financial Freedom
In a special report titled, “Digital assets — A world of possibility”, Wells Fargo, the fourth largest bank in the U.S. by market capitalization, stated that the growth of digital assets will boost, “new possibilities and investment opportunities.” The digital asset sector will be a disruptive force in the world of finance, just as the original internet was to communications and information. As per the American multinational, the digital assets sector can be considered as “The Internet of Value”.
According to the report, the creation of Bitcoin (BTC) back in August 2009 has taken the financial industry by storm. It is one of the most revolutionary inventions as it guarantees people a new level of sovereignty, and thus a new form of financial freedom.
Cryptocurrencies represent an evolution where transactions are done utilizing peer-to-peer network creating a blockchain of the participants involved. Therefore, it is in totality creating a new virtual world, which might change the course of the foreseeable
future finance. Wells Fargo wrote,
“We believe digital assets are a transformative innovation on par with the internet, cars, and electricity. Oddly, they may be one of the easier transformative innovations to grasp at this early stage. The reason is that they have a present comparable — the internet.”
Traditional Internet Vs the Emerging Crypto Industry
As per the report, traditional internet was built to move information including emails, pictures, and videos. This process transfers copied information and not originals. For most part copies are fine as long as the intended messages are being communicated. However, this system becomes invalid when to comes to money as “copied” money holds no value. In order to fix this problem, Satoshi Nakamoto, created the digital money and a dedicated network to run the virtual money.
Wells Fargo noted that user experience within the crypto industry is still poor, with overcomplicated dApps and wallet management. In order to mitigate this, the banking behemoth stated that it aims to “make sure newcomers see the big picture concepts before being buried in detail.” The main risks in the crypto industry are additional regulation, technology and business failures, limited consumer protections, price volatility, as well as operational risks associated with handling and storing digital assets. Wells Fargo explained,
“In the beginning, innovations can be very difficult to grasp because, as Socrates once said, “You don’t know what you don’t know.” So, most of our digital asset and cryptocurrency writings over the past year have been focused on the detail — how the technology works, where cryptocurrencies come from, risks, opportunities, and the like. It helps at times, though, to take a step back and see the big picture.”
Since the inception of traditional internet, human lives have been made easier by dematerializing physical things, and making them digital. The emerging digital asset sector has the same kind of game-changing potential. The report revealed that as digital assets do not reply on the physical world, businesses and consumers will have the flexibility to transact from anywhere. Networks will be shared, as will be technology improvements. The advisor added,
“Anyone can create a new product on top of these open networks, which spurs innovation and cuts down on high physical costs. For consumers, we believe open networks will lead to more choices, greater experiences, lower costs, and easier communications. Businesses will have to choose whether they see these changes as threats or opportunities.”
Crypto will Accelerate in the Coming Future
The study also expressed how the current version of the internet reinvented post offices, music stores, landlines, and local news. It used these comparisons to attempt to create a benchmark to explain how “The Internet of Value” will reinvent local currencies, payment networks, securities, property, and contracts.
It specified that cryptocurrencies are the building blocks of a new large digital network that moves money and assets, and that network is open for anyone in the world to use. In conculsion, Wells Fargo, said,
“Traditional finance is beginning to embrace open networks, and we expect the adoption of digital assets to continue to accelerate over the coming years. Early movers may get to ride the open network effects, and gain economies of scale, while those late to the movement may lose — something that the internet has taught us for 40 years.”
