Andreessen Horowitz, a private American venture capital firm (a16z), is excited to share the results of their recent research into the state of cryptocurrency in 2022. The report is based on data from the a16z investment portfolio and other sources. It’s designed to give people a sense of what the industry is like right now and where we think it’s headed in the future.
The report covers everything from the number of web3 users to the future of Ethereum. It highlights that Web3 is much better than web2 for creators and the impact of crypto on the real world.
Crypto market develops in cycles
According to the a16z report, the crypto market is developing in cycles, and people are right in the middle of the fourth ‘price-innovation’ cycle. The journey began around the time that Bitcoin was first created. Ever since the digital world has been unstoppable.
The crypto industry is now in a state of constant change. There is always new technology, new companies, and new trends—and the very nature of how we use the technology also changes. The next few years will see new infrastructure projects emerge, including many that have been under development for some time now.
Much has been written about crypto market developments over the past year. The a16z state of crypto is the first of an annual overview of trends in the crypto industry. The report has been shared through the crypto vantage point of both tracking data and across the countless entrepreneurs and builders we meet.
The a16z report holds Web3 is much better for creators
The a16z crypto report shows a journey towards decentralization, taking a look at this changing environment and giving crypto enthusiasts some insight into what we can expect from it in the future.
The a16z crypto report addresses how web3 is much better for creators than web2. This shouldn’t be surprising since it’s been evident for some time now that web3 gives better control over your content and allows you to monetize it in ways that weren’t possible with web2.
According to the research, web3 users are making more money than ever before. The number of web3 users has grown by 4% each year since 2021—a significant jump compared to previous years. And even though there are still some issues with user experience on platforms like Ethereum and Steemit, people are finding ways around them through new tools like Trezor Wallet and MetaMask Extensions.
The crypto industry is also becoming increasingly decentralized. While Ethereum dominates the web3 conversation, there are plenty of other blockchains. As the industry grows from its infancy and matures, users increasingly demand better user experiences and more intuitive interfaces.
The focus on user experience is one of the most important things to happen in crypto since its inception—and it will continue to be so as we move forward into this era of innovation and decentralization.
Crypto holds many aspects
According to the a16z crypto team, digital assets are far more than just a financial innovation – it’s a social, cultural, and technological ones. In the past few years, there has been a high demand for decentralized finance or DeFi, and digital dollars.
Some significant events have shaped the crypto industry over the past few years. In 2017, bitcoin hit an all-time high of $19,783 per coin. That same year, Ethereum launched its initial coin offering (ICO), which allowed investors to buy tokens for Ethereum’s blockchain network. This was an important moment in cryptocurrency history because it showed us other ways to raise money than simply selling tokens directly to investors (like ICOs).
In 2018, prices dropped dramatically across all currencies as regulators cracked down on ICOs and crypto exchanges. The following year, more regulation was imposed on cryptocurrencies and significant technical improvements to blockchains (including Turing completeness).
And now? Now we’re seeing a new wave of innovation on top of those falling prices: crypto is becoming more decentralized and valuable for developers and businesses alike. We’re seeing a massive surge in activity from projects like Ethereum and EOS that allow people to build decentralized applications (dApps) without worrying about scalability or centralization issues—issues that have plagued many previous dApps and led them down dark alleys.
Additionally, we’re seeing massive growth in adoption as these tools become available for developers who are building on top of them—the number of dApps being built is skyrocketing, with over 2 million users signing up each day, according to DappRadar.com stats!
A16z holds that crypto has impacted how we do things in the real world. We’re seeing more and more companies using blockchain to improve their supply chain processes, protect their data, or even help prevent identity theft. And it’s not just big businesses—the average person can benefit from crypto, too: from paying with crypto at restaurants to using blockchain-based social media platforms to connect with their friends and family.
Crypto has come a long way since its inception. When you look at the state of crypto today, it’s clear that we’re in the midst of a revolution that is transforming the way we think about money and how creators are compensated for their work.