This surge coincides with the global AI market’s impressive market cap of $214 billion this year. The convergence of AI and blockchain is reshaping how these technologies are developed, accessed, and deployed. But is decentralized AI more than just a speculative trend?

Breaking Down Decentralized AI

Decentralized AI integrates artificial intelligence into systems that prioritize distributed ownership, governance, and collaboration. Unlike traditional AI models, which are often centralized, decentralized AI operates through trustless frameworks.

Investors are jumping on the trend now more than ever, with decentralized AI startups raising more money this year than the previous three years combined.

Projects like SingularityNET exemplify this model by enabling the creation, sharing, and monetization of AI services. In March 2024, SingularityNET, Fetch.ai, and Ocean Protocol announced plans to merge their tokens.

This merger aims to advance collaborative AI initiatives and democratize access to these technologies. These frameworks can help reduce reliance on centralized institutions, paving the way for open and fair AI ecosystems.

The rise of decentralized AI is fueled by its potential to address privacy and ownership concerns. These agents can manage wallets, execute trades, and personalize content while safeguarding user data.

“Crypto users are already big on owning their assets and data, so decentralized AI fits perfectly by enabling AI agents that work directly for each user.Even more exciting, in crypto, you can have shared ownership of these AI agents. Imagine a DAO collectively owning an AI that manages its treasury, or a group funding an AI artist to generate unique NFTs. It’s about combining the intelligence of AI with the transparency and fairness of blockchain,” Jawad Ashraf, CEO of Vanar said in an interview with BeInCrypto.

Another key driver is the seamless integration of blockchain and AI. Blockchain offers secure data storage, while AI processes data and generates insights. Community-driven innovation and the appeal of shared ownership further enhance its adoption.

Challenges and Risks in DeAI

Despite its promise, decentralized AI faces significant challenges. Scalability remains a technical hurdle as blockchain’s current infrastructure struggles to handle AI’s resource-intensive demands efficiently.

Trust and governance also pose challenges. Transparency and accountability mechanisms are critical to fostering this trust.

“Scaling large datasets and models across decentralized networks without compromising performance is a significant hurdle,” Chi Zhang, CEO of Kite AI, said in an interview with BeInCrypto.

Data privacy concerns further complicate adoption. A recent survey by Informatica found that 40% of data leaders identified data privacy and protection as significant challenges in adopting generative AI. Frameworks must address these issues to gain widespread user trust.

“Conceptually, one of the toughest issues is trust. Decentralized AI requires people to trust not just the AI but the entire network running it, which means frameworks need clear, transparent mechanisms for accountability and decision-making,” explains Ashraf.

Decentralized AI must demonstrate utility to move beyond retail-driven speculation. For example, privacy-preserving AI can securely analyze sensitive medical data without centralizing it.

Financial markets offer another practical use case. Mark Stokic, Head of AI at Oasis Protocol, stresses the role of privacy-enabled AI agents in generating trading signals. These agents protect sensitive data while contributing to collective intelligence. According to him, the key is in building something that is still valuable once the hype dies down.

Moving Towards the Future

Forbes projections suggest the global AI market will reach $1,339 billion by 2030, a stunning ascension from $214 billion this year. This growth highlights the opportunity for decentralized systems to scale alongside traditional AI.

Stokic envisions these technologies powering smart cities, financial tools, and collaborative networks. These use cases could transform industries by prioritizing privacy, efficiency, and user ownership.

“This isn’t just theoretical. We’re seeing real applications where decentralized networks are providing compute power that would be impossible to access otherwise. Also, we finally have some attention from outside the crypto world. We’re seeing AI PhDs as founders of crypto companies. These aren’t just crypto natives trying to jump on the AI bandwagon, they’re AI experts who recognize blockchain’s potential to solve fundamental problems in the field,” Stokic said in an interview with BeInCrypto.

To realize its potential, decentralized AI must prioritize real-world applications and sustainable infrastructure. Projects like OG Labs and Warden Protocol are paving the way, showing what is possible when utility outshines hype.

“Decentralized AI must prioritize equitable development by tokenizing data and model contributions to incentivize broad participation while reducing reliance on centralized actors. Real-world use cases, such as DeFi strategy execution, decentralized supply chain management, and privacy-preserving healthcare diagnostics, can demonstrate its practical utility. Developing interoperable frameworks that enable seamless AI operations across multiple blockchains is essential for fostering scalability and widespread adoption,” said David Pinger, CEO of Warden Protocol, in an interview with BeInCrypto.

Decentralized AI is at a defining moment. Its rapid growth and promising potential must contend with significant challenges. It represents both a speculative trend and a transformative technology.

Its growth is driven by privacy, transparency, and collaborative innovation. The real test for this sector lies in whether or not it can deliver practical and transformative applications.

The post Experts Discuss if Decentralized AI is Next Big Trend or Just Another Retail Fad appeared first on BeInCrypto.

In an interview with BeInCrypto, Lee also underscored the use of crypto points farming for airdrops, perpetual trading on decentralized exchanges, and real-world asset (RWA) projects as other promising narratives to watch out for in 2025. 

The Surge of AI-Enabled Projects

Since the inception of ChatGPT, Lee emphasized that the crypto community has taken a keen interest in building projects that seek to converge the capabilities of blockchain technology and artificial intelligence. In 2024, many have shown positive results in facilitating decentralized access to AI.

Lee highlighted the Virtuals Protocol, a decentralized platform for creating, owning, and monetizing AI agents in virtual worlds, among the most successful projects. 

In the last month alone, Virtuals created more than 21,000 AI Agent tokens, according to Dune data, while certain tokens like AIXBT and LUNA surged more than 300% only days after their initial launch.

Lee also mentioned the AI-driven venture firm AI16z, which launched in October and currently has a market cap of $600 million. As of this month, the Eliza Framework, AI16z’s technical foundation, has become one of the most widely adopted open-source frameworks for AI agents.

This open-source platform empowers developers of all levels to build and deploy AI-driven solutions. AI16z’s framework was specifically designed to bridge the gap between centralized and decentralized systems, making it accessible to Web3 and Web2 developers.

A Successful Year for Meme Coins

Alongside AI integrations, there has been a push in the generation of new meme coins, which has led to higher trading volumes and a surge in overall earnings. 

“Solana’s resurgence and the creation of Pump.fun have led to the proliferation of meme coins. Meme coins are easily accessible nowadays and can be created with the click of a few buttons, carrying the trend from 2023,” Lee told BeInCrypto. 

Since its launch this year, Pump.fun has become a major player and dominates Solana meme tokens. The meme coin launchpad generated nearly $300 million in revenue in 2024, according to data from DeFi Llama.

Promising Airdrop Narratives

The success surrounding airdrop narratives in the DeFi space has also been a highlight of the year, according to Lee. 

“After lagging for the past couple of years, DeFi has caught a bid once again. Points farming for airdrops drove up the usage of Pendle, while Ethena’s new stablecoin model and its integration with many popular DeFi protocols have helped bolster its popularity,” he told BeInCrypto.

Pendle’s Ethereum-based yield trading protocol tokenizes the yield of crypto assets, allowing users to trade and manage yield-bearing assets. It enables strategies like fixed-income yield, yield speculation, and yield farming, bringing traditional finance concepts to the DeFi world.

Though the concept behind Pendle has been around for a long time, its particular framework allows users to trade tokens while earning yields of up to 47% on the underlying assets, outperforming similar existing projects. 

Launched in 2021, Pendle has seen a surge in popularity this year due to increased Ethereum liquid staking and airdrops from DeFi protocols like Ether.Fi. In April, raising Ethena’s USDe pool cap to $400 million fueled further activity, pushing Pendle’s total value locked (TVL) to a staggering $4.88 billion.

Crypto Points Farming Practices

Pendle’s approach to point farming has also been notable. Crypto points are a reward system used by Web3 projects to incentivize user engagement. By completing specific actions, users earn points that can lead to airdrops or can be used for other types of incentives.

“Points farming was a surprising development, with many new projects such as Eigen and staking protocols taking advantage of idle capital during the bear market, by offering points (in anticipation of future airdrops) in return for Total Value Locked,” Lee explained. 

When discussing successes within DeFi, CoinGecko’s research analyst also spotlit Aave Protocol’s token, which has experienced a recent surge in activity fueled by significant whale accumulation, injecting fresh liquidity into the market.

Similar to this, decentralized exchanges have also witnessed a surge in popularity for perpetual trading. Lee used Hyperliquid’s most recent airdrop as an example of how this initiative significantly boosted trading volumes.

Hyperliquid, a high-performance decentralized crypto exchange built on its own Layer 1 blockchain, made waves at the end of November when it airdropped its HYPE token to over 90,000 users. 

This generous distribution of tokens made crypto history as the largest airdrop ever done, while the token’s pricer surge has been ongoing, reaching an all-time high this week. The crypto community greeted the move with surprise, setting a new standard for future crypto airdrops. 

A Bright Future for Real-World Assets

According to Lee, real-world asset projects are here to stay. A type of physical or financial asset that exists outside of the digital spectrum, RWAs are represented on the blockchain in the form of a token. 

“In previous cycles, the RWA narrative struggled to take off but has managed to find its footing this time around. Major financial institutions have increased their involvement in the RWA sector, with BlackRock setting up its BUIDL fund to offer qualified investors the opportunity to earn US dollar yields,” he told BeInCrypto.

According to RWA.xyz, tokenized treasuries have already surpassed $3 billion, having grown from just over $700 million at the start of the year.

When BUIDL, a tokenized US treasury issued by asset management giant BlackRock, entered into the RWA space in July, it experienced a market surge that also triggered an overall increase in the total market capitalization of RWA-related assets.

The year has seen several prominent leaders among RWA crypto projects. Maple Finance, for example, tokenizes corporate debt, merging traditional and decentralized finance. The platform offers investment opportunities and financing solutions for businesses. 

By using smart contracts and automated credit assessments, Maple empowers institutional investors to lend to creditworthy corporations through the tokenization of real-world assets, allowing for novel financial instruments and strategies.

Ondo Finance is another prominent RWA crypto project, specializing in tokenizing fixed-income assets. It provides various vault strategies to optimize yield returns and mitigate risk, while the ONDO token offers exposure to diverse assets, making it a compelling choice for investors seeking unique financial opportunities.

The post CoinGecko Analyst Discusses Top Performing Crypto Narratives of 2024 appeared first on BeInCrypto.

Willy Chuang, Chief Operating Officer (COO) of WOO X and a long-time advocate for innovative applications of AI in trading, shared a nuanced perspective on the opportunities and challenges posed by AI’s integration into trading platforms.

Smarter Tools for Faster Decisions

One of the biggest advantages AI offers in trading is the ability to process large amounts of data instantly. With AI, platforms can analyze a variety of sources — market data, financial news, and social media trends — to predict price movements and identify opportunities.

High-frequency trading algorithms take this a step further, executing thousands of trades in less than a second — achieving a speed and precision that human traders simply cannot match. 

“AI has transformed the world of trading, moving beyond simple neural networks to advanced LLM-based models that can process a variety of inputs from the market, social media, and other sources. Quant funds are now using these sophisticated tools to uncover deeper market insights and allow for smarter decisions,” Chuang explained.

To understand the growing focus on AI technologies in trading, US patent filings provide a clear picture. Since the introduction of large language models (LLMs) in 2017, the share of AI-related content in patent applications for algorithmic trading has jumped from 19% in 2017 to over 50% annually since 2020, reflecting a sharp increase in innovation in this area.

This evolution has also made trading more precise. Advanced tools now analyze patterns in market behavior and adjust strategies dynamically as conditions shift. Machine learning models continuously improve by learning from historical data, enabling them to adapt more effectively to new situations.

But Chuang is quick to point out that these tools don’t replace humans — they complement them. This partnership ensures that traders can focus on making big-picture decisions while letting computers handle the nitty-gritty.

“Human traders aren’t being replaced here but are instead evolving their roles. They now focus more on creating and overseeing AI-driven strategies, managing risks, and ensuring ethical practices. This ‘partnership’ between AI and human-in-the-loop enhances decision-making and fosters collaboration across different expertise areas,” he said. 

AI Is Tackling Unpredictability in Trading

However, even the most advanced trading technology faces challenges when markets behave unpredictably. Rare events, like the COVID-19 pandemic in 2020, caused massive market disruptions that many systems weren’t prepared to handle. These “black swans” can lead to massive losses if trading platforms fail to respond effectively.

According to Chuang, ensuring AI systems remain adaptable during volatile conditions requires two key strategies. First, enhancing model explainability is critical — transparent AI decisions allow traders to understand and isolate the factors driving market volatility more effectively. This often involves a hybrid approach, where humans collaborate with AI to create experimentation frameworks capable of quickly adapting to new information.

Second, adaptability can be improved by integrating reinforcement learning, enabling systems to continuously refine their strategies and respond more effectively to unexpected changes.

“For example, deploying two AI agents to collaborate in managing incidents that cause volatility allows the system to fine-tune its responses in real-time. The agents can analyze the situation, adjust strategies, and store valuable insights for future reference, ensuring the AI continuously learns from each unexpected event,” Chuang shared.

Another critical challenge is ensuring the quality of the data used by platforms. High-quality, reliable data is essential for AI-driven trading, but sourcing and maintaining it is no small feat.

One of the biggest obstacles is consolidating data from various exchanges and order books into a single, consistent source while minimizing delays. Any inconsistency or lag can significantly impact trading decisions, especially in fast-moving markets.

“The sheer volume of real-time data demands a robust and flexible infrastructure capable of processing and storing information quickly and accurately. Creating versatile SDKs that work smoothly across various platforms adds another layer of complexity, as they need to balance speed, compatibility, and security,” he added.

Addressing these hurdles is key to realizing the full potential of AI in trading. With precise and timely data, trading platforms can equip users to make smarter decisions and remain competitive in dynamic financial markets.

Opening the Door for All Traders

For years, advanced trading tools were available only to large financial institutions with deep pockets and specialized teams. Smaller traders were often left out, relying on outdated methods or basic tools that couldn’t compete.

Today, that’s changing. Many platforms now offer affordable or even free tools that simplify complex trading processes. For instance, apps provide automated trading bots, market analysis, and personalized recommendations for traders at all levels of experience. These features allow small-scale traders to compete in ways that were unimaginable just a few years ago.

“It’s something we at WOO are committed to addressing. Our vision is to make advanced AI trading tools accessible to everyone, including smaller traders who may feel left out. We’re focused on creating personalized experiences that fit traders of all levels, simplifying complex AI technologies so that traders can focus on their goals without needing deep technical knowledge” Chuang stated.

But accessibility isn’t just about cost — it’s also about usability. In the past, products often missed the mark by catering only to either new traders or advanced ones, leaving many users feeling left out.

To address this, platforms are offering tutorials, webinars, and user-friendly interfaces that make it easier for traders to get started. This focus on education ensures that more people can take advantage of the opportunities that trading technology offers.

“User education is key for helping traders make the most of AI-powered tools. Our vision is to create hyper-personalized experiences that cater to each individual’s unique needs, regardless of their experience level. Focusing on personalized education and support helps to ensure that all traders can confidently navigate AI-driven trading,” he noted.

Building Trust Through Transparency

Regulatory compliance and ethical considerations are critical focus areas as AI becomes a core component of trading platforms. Keeping pace with financial regulations is particularly challenging for developers and platforms due to the complexity and constant evolution of the rules.

To operate effectively in this environment, platforms must follow the rules while maintaining transparency about the strategies and technologies they use. Clearly explaining how AI systems function and recognizing their limitations helps build trust with both regulators and stakeholders.

“Equally important, aligning the AI initiative closely with legal and compliance teams can make a significant difference. By collaborating, teams can share valuable ideas on how regulations can evolve to better fit an AI-heavy trading environment,” Chuang said.

Ethical considerations are just as vital. One major issue is the “black box” problem, where it’s hard to understand how AI systems make decisions. To fix this, AI needs to be more transparent so traders and others can clearly see how results are reached.

Protecting personal data is another top priority. Strong security measures must be implemented to safeguard sensitive information and ensure user privacy. The data sources used by AI must also be transparent and ethical, ensuring accuracy and eliminating biases that could lead to unfair or distorted results.

“Clear ownership of AI models is also important. This prevents intellectual property disputes and ensures that creators receive proper recognition for their work. Addressing these ethical issues allows developers to create AI-driven trading platforms that are powerful, efficient, trustworthy, and respectful of user rights,” he summed up.

The Path Forward

The future of trading lies in striking the right balance between technology and human expertise. Despite the growing role of automation, human intuition and decision-making remain essential. 

While technology can handle routine tasks and identify opportunities in real time, humans provide the strategic oversight, creativity, and judgment that technology cannot replicate. Advanced tools may perform much of the heavy lifting, but humans are still needed for big-picture thinking, creativity, and decision-making.

“Humans remain essential as the orchestrators of these AI agents. This collaboration ensures that AI operates effectively and aligns with traders’ goals. AI can handle much of the heavy lifting, but the strategic oversight and creative problem-solving that humans bring to the table are irreplaceable,” Chuang shared.

Either way, the combination of blockchain and AI is unlocking new possibilities. Blockchain strengthens data security and safeguards user privacy while streamlining processes like onboarding, allowing advanced tools to offer personalized insights and more efficient operations. For traders, it promises a future with secure, accessible systems that make financial markets more inclusive and resilient.

“Imagine a seamless onboarding experience where blockchain reduces friction and safeguards your information, while AI personalizes your journey and provides tailored insights. This synergy not only enhances the efficiency and security of trading operations but also makes cutting-edge technology accessible to everyone. The fusion of AI and blockchain is paving the way for a more innovative, inclusive, and resilient financial ecosystem,” he concluded.

As trading platforms work to solve problems like unpredictable markets and data issues, the opportunities for traders will keep growing. The mix of fast, efficient technology and human expertise is building a trading world that is more reliable, accessible, and forward-thinking.

The post Scaling Intelligence: How AI is Transforming the Future of Trading appeared first on BeInCrypto.

This move aims to legitimize Bitcoin as a state-backed reserve asset and marks a dramatic shift in the US government’s stance on cryptocurrencies. Historically regarded with skepticism, Bitcoin now stands on the cusp of becoming widely recognized as digital gold.

Shifting From Bitcoin Reserve Speculation to Strategy

If the US were to integrate Bitcoin fully, it would position itself as a leader in financial technology while countering the rise of state-controlled digital currencies like China’s digital yuan.

However, this policy raises critical questions: Could it trigger a global “crypto arms race”? Will it rev up creation in the crypto ecosystem or undermine Bitcoin’s decentralized ethos?

The proposal for the reserve, introduced by US Senator Cynthia Lummis, suggests that the Treasury and the Federal Reserve acquire 200,000 Bitcoins annually over five years, totaling one million BTC, approximately 5% of the total global supply.

“A Bitcoin reserve plan would fundamentally reshape the narrative around Bitcoin, elevating it from a speculative asset to a strategic financial instrument,” said Bill Qian, Chairman of Cypher Capital in an interview with BeInCrypto.

This shift would signal a recognition of Bitcoin’s long-term potential, prompting institutional investors to re-evaluate their positions. Within two weeks, calls for a Bitcoin reserve establishment in Russia and the city of Vancouver signaled that this could be the start of a global trend.

For Qian, the implications extend beyond investment strategies. He argues that institutional investors and crypto firms are likely to view this as validation of Bitcoin’s long-term potential. As a result, it could prompt a wave of capital allocation toward Bitcoin as institutions position themselves to benefit from its digital gold attributes.

This move could also influence corporate behavior, making Bitcoin a more mainstream payment for business transactions. Bill Hughes, Head of Global Regulatory Matters at Consensys, believes legitimizing Bitcoin as a reserve asset could have a trickle-down effect on corporate adoption.

“If Bitcoin is good enough for the Federal Government to hold on its balance sheet, it is good enough for any US company. We could start seeing corporate transactions that involve Bitcoin as consideration, particularly for large-dollar figure transactions,” Hughes said in an interview with BeInCrypto.

Could This Trigger a Global Crypto Arms Race?

A US Bitcoin reserve could also have deep geopolitical implications, potentially sparking a global race for crypto resources. Ji Kim, Chief Legal and Policy Officer at the Crypto Council for Innovation, views the proposal as a strategic move.

“This is clear evidence of the increasingly important role digital assets and Bitcoin in particular will play across markets. Digital assets should be considered a strategic asset class by our government, just as gold, oil, and other physical assets have been for centuries,” Kim said in an interview with BeInCrypto.

While the US is exploring the establishment of a Bitcoin reserve, emerging economies are already leveraging cryptocurrencies to reduce reliance on the US dollar. El Salvador, for example, has been actively accumulating Bitcoin since adopting it as legal tender in 2021.

The recent surge in BTC value has been celebrated by Salvadoran President Nayib Bukele, who has previously claimed that adopting Bitcoin could save Salvadorans up to $400 million annually in remittance fees. While some fear such policies could create international tensions, Kim sees it differently.

“This should not cause tensions or conflict. With the US playing a lead role in developing proper regulatory frameworks, recognition of digital assets can drive a more interconnected world with greater individual agency and empowerment,” he added.

In the arena of power and influence, the US Bitcoin reserve could counterbalance China’s growing influence through its state-backed digital yuan. For example, the state accepts digital yuan payments in settlements in China’s Belt and Road Initiative projects. This highlights Beijing’s chance of challenging the US dollar’s dominance in global trade.

“The US must act now if it hopes to retain financial leadership. By adopting Bitcoin, the US not only hedges against inflation but also signals its commitment to innovation, which is critical in the face of China’s expanding digital currency ambitions,” Qian said.

However, other experts caution that a US Bitcoin reserve might not fully neutralize the digital yuan’s geopolitical leverage. Unlike Bitcoin, which remains decentralized, the digital yuan offers state-backed guarantees and seamless integration into China’s domestic and trade networks.

Risks and Criticisms of a Bitcoin Reserve

Even with all its promises, the Bitcoin reserve plan has risks. Bitcoin’s price volatility poses a potential challenge, particularly for taxpayer exposure. Hughes soft-pedals this concern, arguing that Bitcoin’s current scale limits its impact on the broader economy.

“Bitcoin’s use in the economy and overall market cap need to increase by orders of magnitude before it could noticeably impact the US economy. Even a huge commitment of capital by the US government to the Bitcoin reserve would be scarcely noticed,” Qian explained.

Another concern is whether state involvement in Bitcoin could damage its decentralized ethos. Hughes dismisses this idea, stressing that government ownership does not equate to control.

“The purpose of the network is to allow anyone to hold and transact with the asset. That includes entities and even governments. The US government owning BTC will only encourage broader adoption as a store of value,” he said.

The US Bitcoin reserve plan could pave the way for more crypto-friendly regulation, as Hughes points out.

“You are seeing talk of a Bitcoin reserve taking place in parallel with promises that the US is now completely open for business in blockchain software development. One does not lead to the other, but they reinforce each other,” he concluded.

Advancing US Crypto Mining Infrastructure

Moreover, if nations like China or Russia respond by accelerating their crypto initiatives, it could lead to increased competition in areas like mining and digital infrastructure.

According to a recent JP Morgan report, “Bitcoin Mining: An Investor’s Guide to Bitcoin Mining and HPC,” 14 publicly listed Bitcoin miners in the US control a record 29% of the network. Most of this growth in hashrate comes from US-based Bitcoin miners, especially public mining companies. States like Texas have emerged as leaders, leveraging abundant renewable energy to power mining operations.

As of writing, Bitcoin’s hashrate, a measure of the computing power securing the network, hovers around all-time highs at 785.3 exa hashes per second.

With that said, the research argues that the surge in hashrate isn’t just about advancements in the US mining industry. It’s also tied to significant activity in other major mining regions, particularly Russia and China. As of December, Russia had to ban all crypto mining in occupied Ukraine and Siberia, citing concerns over local power grids.

“Mining operations could see accelerated developments in renewable energy integration and hardware efficiency to meet growing demand. Similarly, storage solutions would evolve to address heightened focus on security and custodianship for large-scale institutional holdings,” Qian said.

Hughes, however, offers a more tempered view. He believes the market’s response to increased Bitcoin demand, rather than government action, would drive invention.

“The increase in hashrate and advancements in energy efficiency could mitigate concerns about Bitcoin mining’s environmental footprint, aligning it with broader public policy goals,” he said.

Nonetheless, for crypto enthusiasts, the proposal of a Bitcoin reserve represents a vision for the US to lead in digital finance, nourishing the ecosystem through sound policy. The US could catalyze a wave of adoption, reshaping the future of global finance.

The Trump administration’s execution and international response will determine whether this plan triggers a global crypto arms race or sets a precedent for responsible integration.

The post US Bitcoin Reserve Proposal: Experts Discuss New Frontiers in Crypto and Global Finance appeared first on BeInCrypto.

With a remarkable holding of 439,000 Bitcoin, valued at approximately $46.92 billion, the company now owns over 2% of the total Bitcoin supply.

MicroStrategy’s Bitcoin Playbook

This aggressive strategy has both cemented Bitcoin’s place in corporate finance and sparked concerns about market stability. While supporters view MicroStrategy’s actions as a milestone for Bitcoin’s legitimacy, critics warn of the risks inherent in such concentrated holdings.

MicroStrategy has redefined the role of corporate treasuries by making Bitcoin its primary reserve asset. Unlike traditional reserves held in cash or low-risk assets, MicroStrategy has pursued Bitcoin acquisitions funded by clever financial tools, such as 0% convertible bonds and equity sales.

Most recently, the company raised $1.5 billion through equity sales, issuing 3.8 million shares to purchase 15,350 Bitcoin at an average price of $100,386 per coin.

“This strategy gave MicroStrategy a significant first-mover advantage,” Alexandre Schmidt, Index Fund Manager at CoinShares told BeInCrypto in an interview.

The company has positioned itself as a proxy for Bitcoin investment, offering stockholders leveraged exposure to Bitcoin’s price without requiring direct cryptocurrency ownership.

However, this approach comes with risks. MicroStrategy’s market value significantly exceeds the value of its Bitcoin holdings, which are driven by premiums on its shares. This creates vulnerabilities if Bitcoin’s value declines or the premium narrows, Schmidt explains.

The cryptocurrency market in 2024 has experienced record-breaking growth, with Bitcoin surpassing $100,000 on December 5.

This surge was at least partly fueled by optimism surrounding the nomination of Paul Atkins, a pro-crypto figure, as the incoming SEC Chair under President-elect Donald Trump. The broader cryptocurrency market’s value has nearly doubled in 2024, surpassing $3.8 trillion from $1.6 trillion in January.

An increasing number of companies have incorporated Bitcoin into their treasuries, signaling growing confidence in digital assets. On December 9, Riot Platforms, a leading Bitcoin mining and digital infrastructure company, announced plans to raise $500 million by offering convertible senior notes to buy Bitcoin.

One week earlier, Marathon Digital Holdings announced that it was raising $700 million to extend its Bitcoin purchases. However, MicroStrategy’s dominance within this trend has also raised questions about market stability.

Blockstream, a leading company in blockchain technology, has also been steadily accumulating Bitcoin and runs a Bitcoin treasury:

“In November, we established a new asset management division to serve as a catalyst to help other corporate Bitcoin treasuries maximize returns on their Bitcoin investments. We expect broader adoption by major companies and nation states that are already rethinking their approach to Bitcoin and a steady stream of positive news on this front in the coming year,” Sean Bill, Chief Investment Officer at Blockstream told BeInCrypto in an interview.

Can Bitcoin Stay Decentralized Amid Institutional Influence?

MicroStrategy’s 439,000 Bitcoins represent a double-edged sword for the market. On the positive side, the company has legitimized Bitcoin as a strategic asset, inspiring other corporations to consider Bitcoin for their reserves. Yet, this concentration also introduces systemic risks.

“The potential for such a liquidation raises concerns about liquidity and market stability. Even if Bitcoin’s price fell below $18,000—an 80% drop from current levels—MicroStrategy’s holdings would still provide a buffer against immediate financial pressure. However, such a scenario would have broader implications for the entire market,” Schmidt says.

Historical events support this view: in 2024, the German government sold 50,000 Bitcoin over five weeks, causing a 13% price decline. While disruptive, this event demonstrated Bitcoin’s resilience in absorbing large sales.

MicroStrategy’s dominance has reignited debates about Bitcoin’s decentralization. Exchange-traded products (ETPs) further complicate the picture by concentrating ownership among fewer entities.

While these vehicles make Bitcoin more accessible to traditional investors, Schmidt believes that ETPs cater to diverse investor pools, maintaining some level of decentralization.

Corporate Lessons from MicroStrategy

While MicroStrategy’s aggressive approach has garnered attention, companies like Block Inc. have taken a more measured path. Block reinvests Bitcoin-based profits into its reserves rather than relying on debt financing.

“Companies can opt to purchase Bitcoin directly using cash reserves or operating profits, avoiding the financial risks associated with leveraging or taking on debt. This strategy minimises exposure to market volatility while ensuring a more stable approach to building Bitcoin holdings. For instance, Block Inc. (formerly Square) exemplifies this method by reinvesting 10% of its Bitcoin-based profits into a Bitcoin treasury. This approach, rooted in organic company growth and financial fundamentals, reflects a balanced strategy for accumulating Bitcoin,” Schmidt explains.

Corporations exploring Bitcoin adoption must consider their risk tolerance, financial structure, and long-term goals. For individual Bitcoin holders, focusing on fundamentals is key. Bitcoin’s scarcity and decentralized nature remain unchanged.

“Bitcoin’s fundamental architecture, especially its decentralisation and unique consensus mechanism, means no single entity can control its future. While MicroStrategy’s influence is significant, it is only one participant in an increasingly diversified ecosystem. Bitcoin holders should focus on the fundamentals: its scarcity, robustness, and utility, all of which remain unchanged, and adopt a long-term perspective accordingly,” Bill said.

Schmidt, meanwhile, suggests diversification to mitigate risks tied to MicroStrategy’s actions.

“Keep an eye on market signals, like management changes or major share sales. Long-term strategies are crucial. Bitcoin has survived numerous 50%+ drawdowns. Patience rewards long-term holders,” he concludes.

MicroStrategy’s strategy highlights both the potential and risks of corporate Bitcoin adoption. While it has supported Bitcoin’s legitimacy and driven institutional adoption, it also spotlights the challenges of concentrated holdings in a decentralized network.

The cryptocurrency market’s growth in 2024 illustrates digital gold’s resilience and appeal. However, as more institutions enter the space, the balance between decentralization and institutional participation will shape Bitcoin’s narrative.

The post MicroStrategy’s $46 Billion Bitcoin Bet: A Double-Edged Sword for the Market appeared first on BeInCrypto.

Understanding their distinct dynamics is crucial for stakeholders to tackle the crypto market.

Community-Led vs. Institutional Altcoins

Community-driven tokens epitomize decentralization, emerging from grassroots initiatives instead of corporate boardrooms. Dogecoin is a perfect example of this ideal.

Launched in 2013 as a satirical take on cryptocurrencies, Dogecoin has evolved into a significant digital asset. At the time of writing, DOGE’s market capitalization stands at approximately $67 billion, reflecting its widespread adoption and strong community support.

In 2024, Dogecoin’s price substantially increased, surging by 376% and reaching a peak of approximately $0.43. This growth is symbolic of the influence of community engagement and high-profile endorsements on its valuation. Despite lacking significant technological breakthroughs, Dogecoin has repeatedly attracted a global audience through its simplicity and shared identity.

With that said, community-driven tokens face noteworthy challenges. Juan Pellicer, Senior Research Analyst at IntoTheBlock, highlights their vulnerabilities during bear markets.

“Community-driven tokens often rely on volunteer efforts, which can wane as market enthusiasm diminishes,” he said in an interview with BeInCrypto.

Without structured funding or dedicated development teams, many projects may struggle to sustain operations during hard times. Yet their decentralized nature can reduce risks. Equitable token distribution often mitigates market volatility caused by large-scale sell-offs, unlike some institutional tokens that liquidate reserves to survive.

Scalability is another concern for community-driven tokens. Grassroots momentum can drive prominence, but sustained growth often requires professionalization, which risks alienating decentralization advocates.

Institutionally backed tokens like ZKsync, meanwhile, have the advantage of resources and partnerships, providing greater operational resilience. As a Layer-2 scaling solution for Ethereum, it aims to enhance blockchain scalability and performance. Structured funding and stability enable these projects to keep going and navigate compliance with more ease.

“Institutionally backed tokens are generally better prepared to meet regulatory demands and maintain operations through economic turbulence,” Peciller added.

As of December 2024, ZKsync’s native token has a market capitalization of approximately $817 million and a trading price near $0.22.

Despite their advantages, institutional tokens face criticism for centralization by association. Many crypto enthusiasts view centralized control as contradicting decentralization principles. Critics argue that consolidating power within a few entities undermines trust and autonomy, which are fundamental to blockchain ideals.

Institutional tokens, on the bright side, offer valuable lessons for community-driven projects. Their focus on sustainable funding models can act as a blueprint for grassroots initiatives to secure long-term operational viability. Community-driven tokens could adopt their mechanisms for revenue generation.

Resilience and Regulation in a Maturing Market

Community-driven tokens like Dogecoin often experience price volatility influenced by social media trends and public sentiment.

For instance, Dogecoin’s value surged nearly 20% following Elon Musk’s announcement on November 13 of the “Department of Government Efficiency.” Conversely, ZKsync’s collaborations with major platforms have bolstered its credibility and adoption within the decentralized finance (DeFi) sector.

The resilience of altcoins in bear markets often depends on their operational structures.

“Institutional-backed tokens generally perform better in bear markets. They benefit from stronger liquidity, solid financial backing, and clearer regulatory compliance, which help them weather downturns more effectively. Community-driven tokens, on the other hand, tend to be more volatile and are often more vulnerable when market sentiment shifts,” Christoph Tunkl, CEO of Welf, told BeInCrypto in an interview.

In a 2022 blog post, crypto influencer Joe Roberts argued that there are a few key indicators to consider when confirming a token’s strong community presence. These include growth speed, the longevity of community sentiment, and analysis of social media metrics.

“Regarding cryptocurrencies, community strength is a crucial factor in determining the likelihood of a project’s success. This statement is exemplified by Dogecoin and Shiba INU, where the community supporting those coins is way more relevant than what their team is accomplishing and the project itself,” Roberts wrote.

Regulation is another factor that may heavily influence altcoins’ trajectories. Institutional tokens align more closely with regulatory frameworks, likely giving them an edge in an era of tightening oversight.

Community-driven tokens often lack formal structures, making compliance somewhat of a challenge, but they find more popularity with users. Without adaptation, many decentralized projects may meet existential risks under stricter regulatory conditions.

Industry advocates anticipate a nuanced future. Early crypto projects thrived on community-driven initiatives but struggled with sustainability. Exceptions like Dogecoin and Shiba Inu remain relevant due to strong communities.

Is a Hybrid Path The Future of Altcoins?

The divide between grassroots and institutional models need not remain absolute. A hybrid approach could redefine the altcoin space, harmonizing the strengths of both. Community-driven tokens might incorporate sustainable funding mechanisms while preserving decentralization. Similarly, institutional projects could adopt community engagement strategies to enhance loyalty and adoption.

“The market will likely become more regulated, and institutional players will have a bigger role. But community-driven projects will still be important for innovation and experimentation. It’s not necessarily a competition, but more of a complementary evolution,” Tunki added.

This interplay reflects broader trends in the crypto ecosystem. As blockchain integrates into mainstream finance, balancing decentralization with scalability and compliance will shape the next wave of altcoins.

As the crypto market grows, this balance will determine which altcoins thrive and which fade away. Whether through collaboration or competition, the interplay between grassroots momentum and institutional power will shape cryptocurrency’s future, creating an ecosystem as complex as the technology itself.

The post Future of Altcoins: The Battle Between Community-Driven and Institutional-Backed Tokens appeared first on BeInCrypto.

As regulatory pressures mount, user expectations shift, and competition with decentralized platforms intensifies, these exchanges are meeting challenges with compliance, innovation, and user-focused strategies.

Compliance: Setting Standards in Crypto Regulation

Both Coinbase and Binance prioritize regulatory compliance as a core strategy, though their approaches differ based on their market focus. In an interview with BeInCrypto, a Coinbase spokesperson discussed how the exchange has long championed clear regulations, particularly in the US.

“Through initiatives like Stand With Crypto, we’re mobilizing support to keep innovation in the US while fighting for clarity in the courts and working with Congress on bipartisan legislation,” the Coinbase spokesperson told BeInCrypto.

These efforts aim to create a framework that fosters growth while addressing risks in cryptocurrency policies.

Binance, in contrast, takes a global approach, investing over $200 million in compliance efforts and expanding its team to 700 members. The company has secured 19 regulatory milestones, including registration with India’s Financial Intelligence Unit.

“For us, leading a culture of compliance is an opportunity to set new standards for the entire industry,” Vishal Sacheendran, Binance’s Head of Regional Markets, told BeInCrypto.

However, challenges persist. Coinbase’s focus on US advocacy highlights the fragmented global regulatory environment, while Binance’s rapid global expansion has faced scrutiny over its inconsistency in adhering to local regulations.

Trust and Security in Cryptocurrency

Trust is foundational for centralized exchanges, and both Coinbase and Binance invest heavily in security to meet industry standards.

Coinbase leverages institutional-grade custody solutions and collaborates with law enforcement to combat fraud. The platform safeguards over $269 billion in assets while educating users about safe practices in the cryptocurrency ecosystem.

Binance employs a Proof of Reserves (PoR) system that ensures user funds are held 1:1 with additional reserves. Using zero-knowledge cryptography, users can independently verify the safety of their assets.

“Users should have full control over where and how their digital assets are stored,” Sacheendran explained.

Additionally, Binance’s security teams protected 1.2 million users from scams in 2024, recovering $73 million in stolen funds. The $1 billion Secure Asset Fund for Users (SAFU) provides added protection against unforeseen risks. However, some critics argue that PoR systems across the industry lack full transparency as they don’t always disclose liabilities.

Transparency, Liquidity, and Cryptocurrency Compliance

Transparency and liquidity are crucial for centralized exchanges, and Coinbase and Binance lead the way with their innovative tools.

As a public company, Coinbase adheres to strict reporting standards that build stakeholder confidence. It offers a deep liquidity pool and high-throughput APIs for seamless trading, ensuring stability even during market fluctuations.

Binance uses zk-SNARK cryptography in its PoR system, enabling users to verify their assets while maintaining privacy. The exchange’s debt-free financial model reduces exposure to market volatility, supporting liquidity and sustainable growth. Critics, however, question whether these transparency efforts sufficiently address systemic risks in cryptocurrency regulation.

Driving Innovation to Retain Users

Innovation is essential for centralized exchanges to remain competitive in a fast-evolving industry. Coinbase and Binance continue to introduce features designed to improve the user experience.

Coinbase has launched smart wallets to simplify self-custody, eliminated network fees, and introduced Base, a Layer 2 solution supporting sub-1 second, sub-1 cent transactions. Its partnership with Stripe expanded USDC’s utility for faster and more affordable global payments.

Binance, guided by user feedback, has rolled out tools like Spot Copy Trading and Mock Trading. These features cater to both new and experienced traders. Enhancements to its Web3 Wallet infrastructure bridge centralized and decentralized platforms, while Binance Solana Staking allows users to earn rewards securely.

Despite these advancements, decentralized exchanges remain appealing for their low fees and user autonomy. Centralized exchanges must continually innovate to address this competition.

Centralized exchanges are often the first point of entry for many into cryptocurrency. Coinbase and Binance focus on creating accessible and secure platforms to simplify this transition.

Coinbase provides intuitive fiat-to-crypto conversion, making it a reliable choice for beginners. Binance caters to a broad audience by offering diverse tools and features. Both platforms aim to guide users toward more advanced decentralized services as they gain experience and confidence.

The Future of Crypto Regulation and Innovation

As centralized exchanges adapt to changing regulations and user needs, Coinbase and Binance showcase distinct yet complementary strategies. Coinbase’s focus on US-based advocacy contrasts with Binance’s global compliance efforts, reflecting the varied demands of the cryptocurrency industry.

Both exchanges invest in compliance, transparency, and security to build trust and lead the industry forward. However, they face growing pressure to address criticisms and maintain relevance in an increasingly competitive market.

By balancing innovation with responsibility, Coinbase and Binance offer a roadmap for the future of centralized cryptocurrency trading while shaping the regulatory landscape for years to come.

The post Coinbase and Binance Spokesperson Reveal How They Navigate Crypto Compliances appeared first on BeInCrypto.

Regulations targeting these wallets are becoming more common, with Brazil’s recent move to restrict stablecoin transfers to self-custody wallets being a prime example.

Why Does Self-Custody Matter?

This battle raises important questions. Can self-custody wallets survive under a dilating regulatory eye? Or will institutional influence push users to rely on centralized systems?

Self-custody wallets let users hold their cryptocurrency directly. Unlike custodial wallets, which rely on third-party platforms, self-custody gives users full control. This setup protects against risks like exchange failures, as seen in the FTX collapse.

These wallets are central to crypto’s ethos of decentralization. They let users transact without intermediaries, offering privacy and the highest degree of financial freedom.

“Self-custody wallets are a key component to enhancing a user’s financial sovereignty, privacy, and security,” Hester Bruikman, Staff Product Manager for MetaMask at ConsenSys, told BeInCrypto in an interview.

Custodial wallets, on the other hand, come with counterparty risks. If the provider fails or is hacked, users may lose access to their funds. Self-custody eliminates this risk entirely, helping users to keep their assets safe.

Despite their benefits, these wallets have faced criticism for being complicated and risky. Recent innovations aim to change that, with smart contract accounts (SCAs) leading the charge. SCAs remove the need for a single key, replacing it with flexible recovery methods like passkeys and multi-party computation.

“Enhanced security models, leveraging machine learning and on-chain insights, now make it easier to protect users before they take an action,” said Bruikman.

These advancements reduce risks, allowing people to explore new Web3 applications in a safer way.

Other upgrades include gas fee abstraction, which lets users pay transaction fees in any token, and session keys that facilitate approvals for multiple actions. Embedded wallets are also making it easier for new users to manage their crypto directly within applications.

Regulatory Challenges Facing Self-Custody Wallets

Looking at the regulatory big picture, governments are tightening the rules around self-custody. Brazil’s Central Bank recently proposed regulations to block stablecoin transfers to self-custody wallets. Their goal? Align crypto with traditional finance while the national currency hits all-time lows against USD.

“The fact is that 70% of Brazil’s crypto transactions are in stablecoins, a clear sign that Brazilians are turning to USD-backed assets to escape the weakening real! Now they want to force funds to stay in centralized exchanges, giving them full control over your money. Brazilians deserve financial freedom, not more surveillance,” said one crypto influencer.

In Europe, the Markets in Crypto-Assets (MiCA) framework is setting new standards. Transfers over $1,050 involving self-hosted wallets must follow stricter anti-money laundering rules undergoing “customer due diligence” checks. These regulations aim to combat financial crime but may limit the use of these wallets.

Hester Bruikman notes that regulatory pressure has already slowed innovation, particularly in the US.

“Regulatory hostility…has had a meaningfully negative impact on innovation in the space among US-based technologists,” she said.

In September, the US Treasury officially withdrew a 2020 proposal by FinCEN, which would have imposed stringent regulations on these wallets. The rule sought to ban peer-to-peer digital asset transactions, DeFi activities, certain NFT platforms, and other decentralized operations. It also would have required users of self-custodial wallets to collect and report detailed counterparty information for every transaction they conducted.

The push for oversight is clashing with the crypto community’s desire for decentralization. The challenge is finding a balance that protects users while yielding growth.

Self-custody wallets are about more than just control; they represent financial sovereignty. They let users operate outside traditional systems, making them especially valuable in regions with unstable economies like Brazil.

Privacy is another key benefit. With this kind of wallet, users avoid the data collection practices of centralized providers. This is critical as financial privacy becomes harder to protect in a digital world.

Self-custody wallets also empower users in peer-to-peer ecosystems. From gaming to DeFi, these wallets allow direct participation without intermediaries.

“For as long as centralized options come with the same issues of traditional intermediaries, there will continue to be a desire for self-custodial alternatives,” Bruikman said.

The Future of Self-Custody Wallets

The road ahead is both challenging and promising. Innovations like SCAs are making these tools safer and easier to use. Wider adoption is likely by 2025 as more people adopt financial independence.

Market trends also indicate growth. MetaMask, the leading non-custodial wallet, saw a 55% increase in monthly active users over four months, going from 19 million in September to 30 million in January. The market for self-custodial wallets is estimated to reach $3.5 billion by 2031, growing at a CAGR of 8% from 2024 to 2031.

However, regulatory challenges remain. Governments will continue to push for oversight, and the crypto community must adapt. Hybrid models that blend autonomy with compliance could offer a path forward.

The importance of self-custody wallets is clear. They protect user sovereignty, foster innovation, and uphold the principles of decentralization. The task now is to ensure these values endure in an increasingly regulated world.

Self-custody is at the heart of crypto’s promise of decentralization and financial freedom. But it’s under threat. Regulations like Brazil’s stablecoin restrictions show how governments are reshaping the industry.

The future of self-custody lies in innovation and adaptability. With tools like SCAs and gas fee abstraction, these wallets are becoming more user-friendly and secure. The crypto community must continue to push for solutions that balance oversight with the autonomy users demand.

In this battle for control, self-custody wallets represent a critical choice: Who holds your crypto, an intermediary or you?

The post MetaMask Executive Discusses the Future of Self-Custody Wallets Amid Regulatory Challenges appeared first on BeInCrypto.

BeInCrypto sits down with Matthijs de Vries, founder of Nuklai, to discuss whether blockchain may be the solution.

AI’s ‘Black Box’ Problem, Why Blockchain Could Be the Answer

Blockchain is often only discussed along with cryptocurrency in public discourse. More recently, however, it has emerged as a surprising ally for AI.

AI technology may be able to change public perception by leveraging blockchain’s capacity to create transparent, auditable records of data usage, model training, and algorithmic decisions.

AI systems are often dubbed as “black boxes,” making decisions without offering much visibility into how those decisions are actually made. This lack of clarity is especially problematic in essential areas like finance, healthcare, and politics, where the stakes are high. Naturally, this causes the public view of its reliability to be shaken.

According to KPMG, three in five people, or 61%, are skeptical about trusting AI systems. 67% report low to moderate acceptance of AI. In industries, AI use in human resources is the least trusted and accepted, while AI use in healthcare is the most trusted and accepted.

Matthijs de Vries, founder of Nuklai, believes blockchain offers a solution.

“Blockchain plays a critical role in enhancing transparency and trust in AI by establishing clear ownership of both data and AI models. With blockchain, every transaction and modification is securely logged, creating a clear trail that anyone can verify,” de Vries told BeInCrypto in an interview.

Blockchain’s decentralized essence is built on transparency, which is a monumental strength in this particular context. This approach is a game-changer for AI development when it comes to using data ethically.

“High-quality, large-scale data is critical to AI development, yet access to this data is becoming increasingly restricted. Blockchain offers a way to reward data contributors fairly and ensure ethical data usage,” de Vries said.

Blockchain and AI in Science and Finance

This is especially relevant in healthcare. According to Frontiers in Digital Health, blockchain-backed AI tools in healthcare can enhance data security and improve patient trust by facilitating transparent data-sharing practices.

This is paramount as AI tools become more reliant on a breadth of diverse datasets to avoid biases. If blockchain integration were to materialize, healthcare systems could ensure that their AI tools are trained properly and can safeguard patient information.

In finance, blockchain is already becoming a cornerstone for transparency. According to the Journal of Business Research, the banking sector accounts for nearly 30% of blockchain adoption, making the industry its biggest supporter, and for good reason.

Blockchain can help track AI systems used in fraud detection or investment management, securing data integrity and regulatory adherence. This combination is powerful as financial institutions integrate AI systems into decision-making processes that require considerable accountability and public trust.

Advancements in Other Sectors

Beyond these sectors, blockchain-backed AI could improve transparency in politically sensitive areas. AI systems in public policy or election monitoring may face scrutiny for unclear algorithms. Blockchain’s ledger records every AI decision step, ensuring verifiability and added accountability.

One of blockchain’s most significant contributions to AI is its ability to resolve disputes. Blockchain provides an immutable record of data and processes, offering indisputable evidence for AI bias accusations. The same logic applies to creative industries like AI marketing, where it can tackle intellectual property issues or advertisement fraud.

“Blockchain cuts out the middlemen and gives you proof that things are real. This builds trust between advertisers, publishers, and consumers. It also helps stop ad fraud, making sure advertisers get what they pay for,” one researcher noted in a letter.

Blockchain doesn’t only help consumers to trust advertisers. It helps the marketing firms get their jobs done as well. One of the largest issues facing traditional advertisers is the lack of transparency in ad tracking and verification. As a result, agencies struggle to know if real people actually see their ads.

Blockchain solves this by creating a permanent record of ad views, clicks, and other interactions. The technology also mitigates direct communication between advertisers and publishers, cutting out middlemen like ad networks or agencies altogether.

Addressing Scalability and Interoperability Challenges

Despite all this potential, integrating blockchain with AI is no walk in the park. Scalability remains a substantial obstacle. Blockchain networks, by design, require substantial computational power, and combining them with resource-draining AI systems exacerbates the challenge.

According to a SpringerLink study, many blockchain platforms marketed as “production-ready” are still in experimental stages, with frequent updates causing compatibility issues. These limitations make it difficult to implement blockchain solutions at scale, especially for complex AI projects.

Interoperability is another question mark. A study published in IEEE Xplore stresses the lack of standardization across blockchain platforms, which creates fragmentation and slows down adoption. Due to these inconsistencies, developers struggle to integrate blockchain systems with existing AI frameworks.

“The user experience within Web3 remains a significant barrier. Many tools and platforms are not yet intuitive, creating a steep learning curve for those new to blockchain development,” de Vries added.

Yet, there is progress on the horizon. Collaboration across industries and open-source development are paving the way for scalable and user-friendly blockchain solutions. De Vries believes there is hope yet.

“We’re seeing an increase in joint efforts and ecosystem-building, where multiple projects work together to develop shared frameworks and solutions,” de Vries concluded.

As blockchain adoption grows, estimated by Statista to reach a global market size of $1.2 trillion by 2032, the integration of these technologies could redefine trust in systems that impact the global community.

While some may be increasingly skeptical of artificial intelligence, blockchain delivers a path to transparency. It ensures that machines do not merely think but think responsibly. Whether safeguarding patient data, optimizing financial systems, or holding AI systems accountable, blockchain may just be the saving grace to end AI’s woes.

The post How Blockchain Secures AI in the Face of Skepticism: Nuklai Founder Weighs in appeared first on BeInCrypto.

However, new developments in interoperability are breaking these siloes and allowing platforms to offer a more immersive experience. BeInCrypto talks to Ilman Shazhaev, Founder and CEO of Farcana, about how we engage with virtual worlds and nurture the next stage of digital evolution.

Breaking Siloed Gaming Ecosystems

Lack of true ownership has been a persistent issue in traditional gaming. Players spend countless hours and precious dollars building characters and assets, only to have them locked within one game. This issue also carried over to the metaverse to some extent.

Having one’s assets locked within a single blockchain network leads to the same old issue of exclusion and limited user experience. So, this barricade must be broken for the metaverse to thrive and offer immersive experiences, which is the true essence of this technology.

Interoperability addresses this issue by allowing assets, achievements, and identities to move across platforms and networks, transforming engagement with virtual worlds. This approach empowers players and lays the foundation for a connected metaverse ecosystem where digital assets hold real-world value.

“Blockchain gives players control over their virtual items across various environments, unlike traditional gaming where purchases are locked to a single account or platform,” Ilman Shazhaev, Founder and CEO of Farcana, told BeInCrypto in an interview.

Breaking Barriers with Blockchain

Tokenization lies at the heart of interoperability in the metaverse. Tokenizing assets as NFTs makes in-game items like avatars and weapons unique and portable across platforms. Tokenization turns these items into valuable digital assets players can use, trade, sell, or rent across environments.

“This eliminates the trend of valueless microtransactions that we see in so many AAA games today. You’ve reached a new level and unlocked a new skin, but what’s its value? Blockchain enables players to get that value out of their in-game assets,” Shazhaev said.

Platforms like Farcana exemplify how blockchain integrates interoperability into gaming. Farcana allows players to tokenize in-game assets, making them tradable or usable across other compatible environments. Similarly, Decentraland has taken this idea further by enabling users to transport avatars, virtual real estate, and other items to different metaverse platforms.

This functionality enhances user engagement, creating broader ecosystems where time and effort invested in one space can be carried over to others.

In-game assets offer players a richer, more meaningful gaming experience. However, according to a survey from EY-Parthenon, gaming assets are not among the most coveted digital assets by a long shot. When they repeated the survey between 2022 and 2024, gaming assets only saw a 4% increase and ranked seventh overall. With increased interoperability, gamers would be more inclined to invest if it meant more bang for their buck.

Developers benefit equally from interoperability. By connecting their games to broader ecosystems, they can attract a more diverse audience and create new revenue streams. Farcana, for instance, has expanded its in-game economy with a marketplace where players can trade items or contribute to prize pools.

Similarly, Decentraland hosts batches of unique weekly events, illustrated in its growing user base, demonstrating how interoperability drives participatory ecosystems.

Challenges in Achieving Interoperability

While interoperability promises a new era of gaming and metaverse experiences, it also faces significant hurdles. Scalability remains a critical issue.

As of 2023, Ethereum, the leading blockchain for gaming, can process only 15-30 transactions per second (TPS), compared to 193 TPS on PayPal’s network. This contrast leads to higher transaction costs and slower processing times, which can disrupt seamless gameplay.

Complexity is another major obstacle. Blockchain games often require players to set up wallets, purchase tokens, and manage digital assets. According to a 2024 report, 10% of traditional gamers cited these complexities as a deterrent to adopting blockchain-based games.

Overcoming these challenges will require developers to streamline onboarding processes while preserving blockchain’s core benefits of transparency, security, and ownership.

Perception also remains a barrier. Many players still associate blockchain games with speculative behavior and financial incentives, viewing them as less entertaining than traditional games. Shazhaev reflects on this shift:

“Developers are now optimizing play-to-earn frameworks to focus on creating sustainable ecosystems that prioritize gameplay quality over short-term financial gains,” he added.

By focusing on gameplay-first experiences, developers can address skepticism and encourage long-term engagement.

The Future of Interoperability in the Metaverse

Despite these challenges, the future of interoperability is bright. Unified marketplaces could soon allow players to trade assets across different platforms seamlessly, creating liquidity and long-term value for digital items.

Dynamic assets, or items that adapt their functionality based on the platform or game, are another promising innovation. Imagine a sword acquired in a fantasy RPG that becomes a decorative item in a virtual home or a tool in a survival game. This is what a true immersive experience should look like.

These developments align with broader trends in the gaming market. Investments in blockchain gaming surged, reaching $1.1 billion in Q2 2024, a 314% rise from the previous quarter. This rapid influx of capital signals strong confidence in the future of blockchain-based interoperability.

According to Statista, the projected market size for metaverse gaming is expected to skyrocket by 2030, reaching an estimated $168 billion market cap.

Shazhaev envisions a connected metaverse where players and developers alike benefit from these advancements:

“Blockchain allows us to build ecosystems where players and developers both benefit, unlocking new opportunities for engagement and innovation,” he concluded.

Overall, interoperability represents a fundamental shift in how gaming and the metaverse operate. By breaking down silos and enabling cross-platform connections, blockchain-powered interoperability is transforming isolated digital experiences into a unified and collaborative virtual universe.

Projects like Farcana and Decentraland are paving the way, demonstrating how blockchain can empower players and developers alike. However, challenges such as scalability, complexity, and perception issues must be addressed to achieve widespread adoption.

As blockchain technology matures, interoperability will play a central role in shaping the future of the metaverse. Integrating such technologies can allow gaming studios to deliver more immersive and infinitely scalable experiences that will alter how we interact with digital spaces.

The post Interoperability in the Metaverse: What Does the Future of Gaming Look Like? appeared first on BeInCrypto.

BeInCrypto talks to Anurag Arjun, co-founder of Avail, a blockchain infrastructure pioneer who is passionate about how decentralization can potentially transform online speech and governance.

Decentralized Social Media Faces Moderation and Privacy Challenges

In October, X (formerly Twitter) suspended the Hebrew-language account of Iranian Supreme Leader Ali Khamenei for “violating platform rules.” The post in question commented on Israel’s reprisal attack on Tehran, reigniting global debates about the power centralized platforms hold over public discourse.

Many asked: can it be that a nation’s supreme leader isn’t allowed to comment on airstrikes happening within his own borders?

Political sensitivity aside, the same thing happens all the time with everyday creators in much lower-stakes contexts. In the second quarter of 2024, YouTube’s automated flagging system removed approximately 8.19 million videos, while user-generated flagging removed only about 238,000 videos.

In response, decentralized platforms like Mastodon and Lens Protocol are gaining popularity. Mastodon, for example, saw a surge of 2.5 million active users since Elon Musk’s acquisition of Twitter in November 2022. These platforms promise to redistribute control, but this raises complex questions about moderation, accountability, and scalability.

“Decentralization doesn’t mean the absence of moderation—it’s about shifting control to user communities while maintaining transparency and accountability,” Anurag Arjun, co-founder of Avail, told BeInCrypto in an interview.

Decentralized platforms aim to remove corporate influence over online speech. These platforms allow the users themselves to define and enforce moderation standards. Unlike Facebook or YouTube, which face accusations about algorithmic biases and shadow bans, decentralized systems claim to promote open dialogue.

However, while decentralization removes single-point control, it certainly doesn’t guarantee fairness. A recent survey from the Pew Research Center found that 72% of Americans believe social media companies wield too much power over public discourse.

This skepticism applies to decentralized systems, where governance must remain transparent to prevent louder voices from monopolizing the conversation.

“Distributed governance ensures no individual or corporation unilaterally decides what can or cannot be said, but it still requires safeguards to balance diverse perspectives,” Arjun explains.

Community-Led Moderation Challenges

Without centralized oversight, decentralized platforms depend on community-driven moderation. This approach hopes to ensure inclusivity but also risks fragmentation when consensus is hard to achieve. Mastodon instances often have varying moderation rules, which can confuse users and jeopardize communities.

Wikipedia is a great example of successful community-led moderation. It relies on 280,000 active editors to maintain millions of pages globally. Transparent processes and user collaboration ensure trust while protecting free expression.

“Transparency in governance is essential. It prevents exclusion and builds confidence among users, ensuring everyone feels represented,” Arjun says.

Decentralized platforms face the challenge of balancing free speech with controlling harmful content like hate speech, misinformation, and illegal activities. A high-profile example is the controversy surrounding Pump.fun, a platform that allowed livestreams for meme coin promotions.

Misuse of this feature led to harmful broadcasts, including threats of self-harm tied to cryptocurrency price swings.

“This highlights a crucial point. Platforms need layered governance models and proof-verification mechanisms to address harmful content without becoming authoritarian,” Arjun explains

The seemingly obvious solution is to utilize artificial intelligence. While AI tools can identify harmful content with up to 94% accuracy, they lack the nuanced judgment required for sensitive cases. In any case, decentralized systems must combine AI with transparent, human-led moderation for effective results.

So the question remains: how do you protect people from harm or enforce any form of regulation without first agreeing on what constitutes foul play? Also, what would the community remold itself into if it were to organically police itself successfully?

Governance and New Censorship Risks

Decentralized governance democratizes decision-making but introduces new risks. Voting systems, while participatory, can marginalize minority opinions, replicating the very issues decentralization seeks to nip in the bud.

For instance, on Polymarket, a decentralized prediction platform, majority voting has sometimes suppressed dissenting views, demonstrating the need for safeguards.

“In an age when centralized control of information is a systemic risk, prediction markets offer a way of cutting through misleading narratives and viewing the unvarnished truth. Prediction markets are freedom preserving technology that move societies forward,” a blockchain researcher commented on X (formerly Twitter).

Transparent appeal mechanisms and tabs on majority power are crucial to preventing new forms of censorship. Decentralized platforms prioritize user privacy, giving individuals control over their data and social graphs.

This autonomy strengthens trust, as users are no longer at the mercy of corporate data breaches like Facebook’s Cambridge Analytica scandal in 2018, which exposed data from 87 million users. In 2017, 79% of Facebook users trusted Meta with their privacy. After the scandal, this number fell by 66%.

However, privacy can complicate efforts to address harmful behaviors. This ensures decentralized networks remain safe without compromising their core principles.

“Privacy cannot come at the expense of accountability. Platforms must adopt mechanisms that protect user data while enabling fair and transparent moderation,” Arjun explains.

Legal and Regulatory Concerns in Decentralized Social Media

A primary challenge for decentralized platforms is addressing legal issues like defamation and incitement. Unlike centralized systems such as X, which receive 65,000 government data requests annually, decentralized platforms lack clear mechanisms for legal recourse. Arjun emphasizes the importance of collaboration between platform creators and lawmakers.

“Engaging regulators can help establish guidelines that protect users’ rights while preserving the ethos of decentralization,” he says.

In authoritarian regimes, decentralized platforms provide a fighting chance to resist censorship. During the Mahsa Amini protests in Iran, for example, government-led internet shutdowns affected 80 million users, stressing the need for censorship-resistant networks. While decentralized platforms are harder to shut down, they are not immune to external pressures.

“Decentralization offers robust tools for resistance, but individual users remain vulnerable. Platforms must develop additional protections to shield them from persecution.“Decentralization began as a movement for user empowerment. To sustain that vision, platforms must prioritize inclusivity, transparency, and technological innovation,” Arjun concludes.

Overall, the future of decentralized social media hinges on addressing these hurdles with creativity and collaboration. If successful, decentralized platforms could redefine the dynamics of online speech, offering a freer and more resilient ecosystem for expression.

The question is not whether decentralization can work but whether it can evolve to balance freedom with responsibility in the digital age.

The post Can Decentralized Social Media Truly Guarantee Freedom of Speech? appeared first on BeInCrypto.

In this exclusive interview with BeInCrypto, Gorevic shares three essential strategies that can help transform Web3 projects into industry leaders.

1. Building Empowered Communities

Every successful Web3 project relies on an active, engaged, and loyal community. Gorevic sees community empowerment as the most critical element in crypto marketing.

“Community is the most important component of every project in Web3. The most successful projects will have an active, engaged dialogue with their audience, engage them for feedback, listen to their needs, and enable them to advocate on behalf of the brand or project they are supporting,” Gorevic told BeInCrypto.

Empowered communities do more than support—they participate. MetaMask Snaps, Consensys’ extensible platform, reflects this philosophy. Developers built the Snaps architecture by listening to user feedback, ensuring the platform aligned with community needs.

“We knew from our community of users and developers that they wanted the most extensible, trustworthy wallet possible to navigate the frontiers of Web3,” Gorevic notes.

This collaborative process demonstrates how community feedback shapes a product’s direction. By treating users as co-creators, projects build trust and foster lasting loyalty. Gorevic emphasizes that such collaboration turns users into advocates who actively contribute to a project’s success.

2. Having the Right Crypto Marketing Resources

In crypto marketing, influencers play a pivotal role in reaching broader audiences and shaping public perception. Gorevic, however, stresses the importance of choosing influencers who align with a project’s values.

“The best influencers for your projects are ones that are truly passionate about what you are building and understand your differentiation in the market,” he says.

Influencer partnerships should feel authentic. Projects must vet potential collaborators carefully, ensuring they resonate with the target audience. Authentic influencers amplify trust, a crucial element in an industry often criticized for its speculative nature.

Emerging technologies like NFTs, augmented reality (AR), and virtual reality (VR) also redefine how crypto projects connect with users. Gorevic highlights the power of these tools to create memorable and engaging experiences.

“Our NFT creator studio Phosphor has powered a number of great activations that allow our audience to have a ‘proof of experience,’ a memento of the marketing activation,” he shares.

Consensys also uses AR and VR installations during live events to captivate attendees and foster deeper engagement. These tools go beyond novelty.

They serve as bridges between technology and storytelling, allowing projects to communicate their value in clever ways. By integrating emerging technologies into their marketing strategies, projects can stand out in a crowded market and leave lasting impressions on their audience.

3. Focus on Transparency and Execution

In the Web3 ecosystem, where skepticism runs high, delivering on promises is more important than ever. Gorevic’s “show, don’t tell” philosophy is all about the importance of demonstrating tangible value.

“Ensure that you deliver on your promises, demonstrate how your users and community are engaging with and using what you are building, and ensure all your supporting messaging emphasizes your key points of differentiation,” he advises.

Projects that overpromise risk losing credibility, especially in an industry where failures are magnified. Gorevic encourages teams to focus on transparency by providing clear metrics and open communication with their communities. Aligning marketing strategies with measurable KPIs ensures accountability and helps projects adapt to feedback.

“For understanding the efficacy of marketing programs, it is also important to continue to look at your community engagement and sentiment as a barometer for what is and isn’t working,” he explains.

Transparency builds trust and creates a feedback loop that drives continuous improvement. Web3’s decentralized ethos offers valuable lessons for traditional companies, especially those stuck in hierarchical models. Gorevic believes Web3’s emphasis on collaboration and audience involvement can inspire traditional industries to rethink their engagement strategies.

“Brand building is not monodirectional, and in Web3, where we are all building in public, your community plays a critical role in shaping your identity and the perception of your brand,” he says.

Traditional companies often rely on one-way messaging to reach their audiences. In contrast, Web3 projects succeed by fostering dialogue and treating their communities as partners.

This approach tries to build loyalty and drive creation. Gorevic’s philosophy demonstrates how a collaborative mindset can transform industries beyond crypto.

While these strategies create opportunities, they also present challenges. Authentic influencer partnerships require careful vetting to ensure alignment with a project’s values.

Emerging technologies demand investment and expertise, which can stretch smaller teams or startups. Transparency, while crucial, exposes projects to scrutiny and forces teams to confront weaknesses.

Lessons for Traditional Industries from Crypto Marketing

Despite these hurdles, Gorevic remains optimistic about the future of cryptocurrency marketing.

“As we transition to more of a decentralized world in Web3, it is likely that community and curation will play a much more important role for brands to facilitate discovery and maintain an ongoing relationship with their audiences,” he predicts.

By prioritizing collaboration, authenticity, and transparency, projects can navigate these challenges and thrive in the volatile crypto market. Web3 represents a seismic shift in how brands interact with their audiences.

Traditional marketing models, with their top-down structures and one-way messaging, fail to resonate in a decentralized world. Gorevic’s insights offer a roadmap for projects looking to build lasting trust and loyalty.

“When you truly engage your community, they aren’t just part of the conversation—they’re part of the creation,” Gorevic concludes.

His approach highlights the transformative power of collaboration, authenticity, and transparency. Though rooted in Web3, these principles carry lessons for any industry surviving the digital age. As crypto continues to evolve, the projects that prioritize these values will define the future of marketing and innovation.

The post Consensys CMO Neal Gorevic Shares 3 Crypto Marketing Strategies appeared first on BeInCrypto.