Illustration: Aïda Amer/Axios
Wall Street’s sharp rebound hasn’t quite carried over into digital assets still languishing in the cold of an intensifying crypto winter. But the market volatility obscures a quiet blockchain revolution taking place under the surface.
Why it matters: Bitcoin, ether and non-fungible tokens (NFTs) often dominate public conversations about crypto, and the public’s imagination. Amid the turbulence, however, it might be more useful to think of those instruments as an extension of the technology powering them, with practical applications beyond digital tokens.
Driving the news: Last week, JPMorgan Chase CEO Jamie Dimon renewed his criticisms about the sector, likening tokens to “decentralized Ponzis.” With all of crypto’s mushrooming legal and financial troubles, it’s hard to argue his point (although some did).
- Yet the notorious crypto scourge extolled the virtues of blockchain, with the banking giant dabbling in it with Onyx, a global payment platform.
The big picture: JPMorgan isn’t the only one forging ahead with blockchain development, even as the cryptocurrency slump deepens. The technology’s use cases are growing in other areas like gaming, telecommunications and electronic commerce.
- Prior to the pandemic, blockchain phones were billed as the next big disruptive thing, though early momentum appears to have stalled.
- South Korea is exploring its uses in identification and authentication (which makes sense since Blockchain is effectively a digital ledger), to help boost the economy.
- And newly formed companies are pioneering novel uses of the technology – like TessaB, which sells second-hand phones with the use of a digital ledger; and IoTex, a platform that links “Internet of things (IoT)” devices to the real world.
What they’re saying: Echoing Dimon, analysts at Bank of America pushed back against the idea that blockchain lacks “intrinsic value,” one of the most fiercely debated ideas in crypto. Pointing out that Ethereum’s ledger has generated over $4 billion in transaction fees year to date, BofA suggested the technology has more room to grow.
- “We are not yet able to forecast cash flows, given blockchain technology is a nascent industry and cash flows remain unpredictable — but stay tuned,” the bank wrote.
- “Blockchains may generate cash flows through transaction fees from validating native token transactions or from validating transactions originating on applications that run on top of the blockchain.”
The bottom line: Even if crypto assets continue reeling, blockchain’s utility and use cases will keep accelerating.