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    Home » What is Ahead for Crypto in 2022?
    Bitcoin Information

    What is Ahead for Crypto in 2022?

    August 22, 2022Updated:August 22, 2022No Comments5 Mins Read
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    If you’re only paying attention to crypto prices, then you may not be able to see all of the major developments that are happening in this space. 2022 has been a rough year for the price of Bitcoin and many crypto assets on the market.

    The current state of sad crypto prices is likely to lead to a similar situation for the next bull market. One should pay attention to the entire ecosystem right now. It is important for anyone speculating on the crypto market. As we head into the end of 2022, we can expect to see a continuation of the current crypto bear market. Also, the official launch of Ethereum 2.0, and a new layer-two privacy protocol for Bitcoin.

    A Continuation of the Bear Market

    Many crypto newcomers may be hoping that the market will turn around in the next few months. However, history shows that this is unlikely to happen. Past trends do not necessarily guarantee future price movements. However, the reality is that the crypto market has operate on a roughly four year boom and bust cycle. This is since the earliest of days. 2020 and 2021 saw massive increases in the prices of Bitcoin and other crypto assets. However, this boom was not destined to last forever. Eventually, the market became overcrowded with people. People who did not fully understand the assets they were buying. This is which is what eventually led to a sudden collapse in crypto prices.

    Instead of a quick recovery, it is likely that crypto prices will stabilize at current levels or a bit lower for months or even years. The market needs time to figure out where things go from here, but these times of consolidation have proven to be great for accumulating crypto assets at cheap prices in the past. There are plenty of reasons to remain optimistic and excited about crypto in the years to come, but price action may not be a key selling point for some time. After the recent collapse in crypto prices, it will take some time for a new round of beginners to come into the space and trust that the bottom is not going to drop out on them as soon as they make their first purchase.

    Ethereum 2.0 in Crypto

    2022 may turn out to be the biggest year in Ethereum’s entire history due to the impending change from proof-of-work (PoW) to proof-of-stake (PoS) that is expectation to take place in September. Many consider this to be the largest change to ever happen to a blockchain network due to the combination of the severity of the alteration with the fact that Ethereum is already the second largest crypto network when measured by market cap (behind Bitcoin).

    While there is already a PoS chain, known as the Beacon Chain, that has been running alongside the PoW Ethereum chain, the upcoming change in September will completely remove the PoW part of the network. This means all of the miners who have been mining on the Ethereum network for years will need to find a new network to point their computing power. Due to the expected loss of revenue for Ethereum miners, many crypto commentators have speculated that these miners may try to continue the original PoW-based network after the switch to PoS takes place. If this happens, it will be up to the market to determine which chain has value and should continue operating.

    Crypto Continued

    A similar situation occurred in the aftermath of hacking of The DAO in the early days of Ethereum. Some Ethereum users did not philosophically agree with the decision to effectively reverse the hack at the base protocol layer via a change to full node software. For them, this was a violation of the “code is law” mantra that had been popular in the Ethereum community up to that point. Those who disagreed with the reversal of the hack of The DAO were able to continue the “code is law” vision on the network that became known as Ethereum Classic.

    It’s unclear what will happen when the merging of the switch to PoS happens. However, recent speculation that large staking pools may force to censor certain types of transactions. After the change takes place has thrown another wrench into the mix. Whatever happens, it’s clear that September will be one of the most interesting months in Ethereum’s history.

    Bitcoin’s Privacy Solution

    Many crypto newcomers still believe that Bitcoin is an anonymous and private digital currency. However, this myth could not be further from the truth. Bitcoin is extremely traceable at the base layer. However, a number of new methods for transaction bitcoin at layers above the actual blockchain show promise for improving privacy. One of the most talked about new methods for private bitcoin transactions is Fedimint.

    The security model of Fedimint relies upon Bitcoin held by a federated of trust parties in a multisig address. However, the key benefit is that transactions made on the Fedimint layer cannot be traced by anyone. It is effectively a version of the anonymous ecash systems. Ones that rose to prominence in cypherpunk circles back in the 1990s. It’s unclear if the first commercial Fedimint wallet will launch by the end of the year. This is a critical part of Bitcoin payment infrastructure that should watch closely over the next year or so.

    This disclaimer informs readers that the views, thoughts, and opinions expressed in the text/sponsored content belong solely to the author, and not necessarily to Bitcoin of America, organization, committee or other group or individual. All investments are at your own risk and should be done after careful research.

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