Cryptocurrency and blockchain have been around since 2009, meaning the industry is still in the teething stages. Initially, crypto was met with mass skepticism and was associated heavily with criminal activity on the deep web.
However, skip forward 13 years and cryptocurrency is widely accepted both commercially and socially.
The interest in crypto and blockchain assets can be associated with ease of access, educational material, mainstream eCommerce adoption, and the NFT explosion of 2021. Below, we’re going to discuss contributing factors in more detail and let you know how the demand is being met.
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The 2021 NFT Explosion
2021 was an impressive year for cryptocurrency, as Bitcoin saw its market price surge to an all-time high, Dogecoin became a serious investment, and Ethereum’s infrastructure grew exponentially. However, among the blockchain successes, it was NFTs that people couldn’t get enough of.
In the space of one year, NFTs went from being a niche community-driven commodity to a mainstream phenomenon. Whether people began hating NFTs or falling in love, it all contributed to the rise in cryptocurrency investments. After all, to buy an NFT you need to have cryptocurrency.
Mainstream Adoption of Crypto Payments
Moving away from shady black market deals on the deep web, cryptocurrencies are being accepted as valid payments by major retail corporations including Microsoft, Twitch, and Burger King. This move
helped appeal to existing crypto users while giving non-users the seal of approval they needed to start investing.
Protecting Personal Information
In the centralized world, personal data makes the world go around, and it needs to be stored across powerful servers. However, cybercriminals are always knocking at the door trying to steal personal data, which can be devastating in the heavily technological world we live in.
With the rise in data breaches, people began to question whether their information was secure. Therefore, many people turned to blockchain services, including investing in cryptocurrency, to have more control over their data.
How Has the Blockchain Industry Responded?
With more people investing in cryptocurrencies and buying NFTs, the exchange system had to adapt to cope. In particular, the decentralized exchanges (DEX) had to deal with liquidity issues, given that isolated blockchain DEX relies on liquidity pools, which often suffer low supply.
If a pool hasn’t got enough liquidity, the resulting sale or trade is much higher than the market value.
The problem here is a lack of interoperability, which is the word used to describe different blockchains interacting with each other. Solving the problem of interoperability resolves liquidity issues within DEX platforms, which can then cope with the rising demand of crypto traders.
At the forefront of multi-chain DEX innovation, you will find Dex-related products, which currently bring ten different blockchains into an all-in-one exchange.
More people are investing in cryptocurrencies than ever before, meaning the decentralized exchange infrastructure needed to reinvent itself to accommodate interoperability. To achieve this, blockchain bridges were put in place to string numerous blockchains together and improve crypto liquidity.