Cryptocurrencies can be volatile and chaotic, but they reflect the continuation of the industry’s sustainable long-term growth, which sits in the middle of the fourth price-innovation cycle. This is what the analysts at Andreessen Horowitz (a16z) write.
1️⃣ Crypto is in the middle of a 4th “price-innovation” cycle.
Crypto can be volatile and appear chaotic, but there is an underlying logic at work, as @cdixon & @eddylazzarin first pointed out in 2020: https://t.co/g8OriZSgSt pic.twitter.com/ukS0MXhh8y
— a16z (@a16z) May 17, 2022
Experts linked the market’s further growth to the move to Web 3.0, which "will create the best opportunities in a decade." They noted that OpenSea’s audience currently accounts for no more than 2.5% of Internet users. For YouTube — 45%, and for the Meta platforms — approaching 100%.
The implementation of the Web 3.0 concept will create fairer economic conditions for content creators compared with the current Web 2.0 era, the experts say.
Analysts calculated that payments to Spotify, YouTube and Meta totalled $636, $2.47 and $0.10 per musician, channel and user respectively. Applied to NFTs, accounting for royalties as exemplified by OpenSea, this metric averages $174,000.
The impact of cryptocurrencies on the world is also evident in DeFi, noted a16z. In less than two years, TVL — volume of locked assets — has surpassed $100 billion. With smartphones, protocols can bridge the gap for around 1 billion people who lack access to financial services. And many more who do not receive the full spectrum of services can also be included.
Experts stressed that the industry also contains projects that disrupt entrenched monopolies or tackle important social issues, as exemplified by Goldfinch, Spruce, Helium, Sound, Flowcarbon, and others.
A16z is convinced that Web 3.0 will be formed by several networks. In addition to the obvious leader Ethereum, its success is being attempted to be replicated by Solana, Polygon, BNB Chain, Avalanche and Fantom.
Cryptocurrencies are still taking their first steps in development, the experts say.
“In our assessment, today there are between 7 and 50 million active Ethereum users. If you compare it with the Internet, this is the state of 1995. Cryptocurrencies are far more than just a financial innovation — they are also social, cultural and technological,” they concluded.
In April, a16z opened a division for research into cryptocurrencies and other technologies related to Web 3.0.
Earlier, a16z partner Chris Dixon headed Forbes’ list of venture capitalists.
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