Coinlive Talk: Why the Rise of Crypto is Inevitable
1. The adoption of crypto is inevitable, and will take place in an organic and natural way
2. This is mostly in parts due to cost savings, opportunities for growth, and structural competition
3. With time, both merchants and consumers alike will begin to embrace the presence of crypto in our daily ecosystem
Even as a nascent sector, participation in the Crypto industry has been steadily growing in Singapore. A recent study by YouGov indicates that one in ten Singaporean residents transacted cryptocurrencies in end-2021, with one in eight expecting to do the same within the next twelve months.
Yet despite these promising statistics, one cannot simply put aside the risks and uncertainty associated with the emerging industry, especially in light of recent events such as the crash of Terra-Luna and the collapse of now-infamous 3 Arrows Capital. The current bear market / crypto winter also saw renewed scepticism and doubt towards cryptocurrency over the past months. To find out more about whether or not Crypto’s emerging growth is likely to last into the future, I spoke with El Lee, Chief Operations Officer for Digital Treasures Center (DTC).
El Lee, Chief Operations Officer, Digital Treasures Center
“In light of recent circumstances, how do we actually re-affirm confidence amongst the masses towards Crypto?” I inquire.
“We don't really have to encourage individual to pick up crypto”, El says confidently. “The need would arise for each individual at different stages of their life and different scenarios”. From the perspective of DTC’s Chief Operations Officer, the prevalent uptake of crypto and blockchain technology is an inevitable one, and he gives us three structural reasons why this is necessarily the case.
1. Cost Savings
“If you were to do a swift transfer, it would take you anywhere between 20 to $30 just to do that transfer,” El explains. “Blockchain payments allow us to do away with fees for middlemen, central agencies and facilitate greater cost savings”. Indeed, the decentralised nature of blockchain payments ensure that transactions do not involve parties beyond those directly involved in the exchange – hence allowing for cheaper and less fictitious transactions.
It goes even further than just middlemen costs for firms however, the incorporation of blockchain technology may potentially also reduce the need for manual intervention in the aggregation of data, as well as easing regulatory reporting and auditing. This is especially true with the advent of web3.0 services as well, which promise further blockchain services such as smart contracts, allowing for more immediate and transparent agreements between merchants and their contracted parties.
Coupled with DTC’s own ease of initiation through zero onboarding and maintenance fees, merchants all around truly stand to enjoy significant cost savings through the adoption of crypto payment methods.
While these may indeed sound promising, the inherent risks that have surfaced still cannot be downplayed. Vulnerability exploits and malicious offensives have compromised many a blockchain, despite their supposed secure consensus protocols.
“For the ordinary consumer, even in the absence of these attacks, the transparency of transaction data on the chain may prove to be discouraging for the masses to adopt it fully,” I argue.
Always the quick thinker, El refutes that immediately. “In all honesty, when you go into a blockchain and check a wallet address right now, out of those few million addresses, how do you know which one belongs to me?”
Indeed, while transaction data may be kept transparent on the ledger, it ought not to be too large a concern, especially for those with nothing to hide. Besides, it is hardly the case for a malicious attacker to go to extensive lengths to uncover the wallet addresses of ordinary consumers or businesses either way.
There are still ways to track one’s wallet address though, such as through the use of crypto analytic services such as AML and CFT. Nevertheless, El is right in suggesting that for the majority of instances, there is really no need for merchants and service providers to be concerned about privacy matters on the chain.
This is especially so with payment companies such as DTC having established strong compliance protocols including strong Know Your Customer (KYC) and Know Your Transaction (KYT), that safeguard consumers against fraud or money laundering.
“Like it or not, Visa and Master[card] will continue to exist,” El concludes. “But this is a new form of payment that is quickly adopted and the cost is definitely much less and lower than traditional ways of payment.”
2. Opportunities
“If you just look at the statistics of Metamask owners, there are 300 million worldwide,” El tells me. “So that's a ready pool of clientele you're getting access to the moment you turn on the tap and say, Is that crypto? That's a huge number, right?”
Just as El says, despite the nascency of the industry, there is still a considerable number in our community that already have first-hand experience with dealing in crypto, with 13% of Singaporeans having transacted cryptocurrencies in end-2021. This is by no means a small number, and is clearly a pool of clientele, as El tells me, that merchants could very well tap on to.
Additionally, the adoption of crypto also could potentially strengthen the existing relationships between merchants and their consumers. Whereas most merchants currently rely upon third-party intermediary platforms such as Amazon to market and transact their products, blockchain technology could eliminate this dependence on intermediaries and allow merchants and consumers to transact directly.
This therefore allows consumers the ability to choose what data they wish to share or keep private from merchants, hence allowing for greater agency over their purchases and personal information. Personal data, as blockchain technology and the crypto world has gone to great lengths to prove, are one of our most valuable assets in the world of decentralised payments.
Coinlive’s Interview with El Lee, Chief Operations Officer of DTC
3. Competition
With crypto payments, merchants and businesses stand to benefit, from lower transaction costs and more expedient trades. As El tells me, “Through crypto, merchants enjoy faster settlement times and lower cost to transact... you’ve got players in Singapore that would be equivalent to the likes of Amazon and the like already taking [the] lead in accepting crypto payment”.
Indeed, just as El suggests, larger companies have often been the harbingers of technological revolution. Aided by larger resource pools and scalability, larger firms have taken the plunge to initiate the first step towards this new digital age.
“[These firms] have undergone a lot of study and research before they have implemented [crypto],” El says confidently. Larger companies often lead the charge on revolutionary change, possessing the necessary capital to serve as the bulwark against potential failure or fallout.
With more and more smaller firms looking at these giants and observing that they have accepted crypto, it becomes only a matter of time before competition begins to stack up and more merchants begin accepting crypto on their own for fear of losing out, both in terms of cost savings as well as opportunities.
Even though it may be difficult to tell exactly when crypto payments may begin to truly proliferate within Singapore, it is nonetheless certain that its adoption will come eventually on an organic level. Merchants will begin to observe the tangible benefits of adopting crypto, in just the same way as members of the community and consumers would begin to see how they are now getting more bang for their buck with every transaction.
As El puts it, “that’s when consumers will be motivated and your friends will start telling you, Hey, have you tried the crypto wallet?”
This is an Op-ed article. The opinions expressed in this article are the author’s own. Readers should take the utmost precaution before making decisions in the crypto market. Coinlive is not responsible or liable for any content, accuracy or quality within the article or for any damage or loss to be caused by and in connection to it.
Written by: [Coinlive] Darren