2024: The Year Blockchain Broke Through
A Year of Acceleration
I will remember 2024 as the year blockchain broke through. The transformations started early and just kept coming. What’s astounding to me is that at no time during this year did the overall direction or the market change. The only thing that happened was constant acceleration.
A New Era of Regulatory Convergence
At the end of 2023, we already knew that 2024 was looking likely to turn out well. The European Union’s Markets in Crypto Assets (MICA) act was going to come into effect. This created a legal framework for crypto-assets, real-world assets, and stablecoins in Europe. We were already seeing businesses turn up across the region in anticipation of this transformation.
SEC Approvals and Regulatory Successes
And then as we entered 2024, the hits just kept on coming. The first Securities and Exchange Commission (SEC) decision to officially approve the Bitcoin ETF came 10 days into the year, followed by Ethereum in May. By the middle of the year, the conversation shifted from one of two cool things happening to a more general vision of global regulatory convergence: everywhere around the world, crypto, digital assets, and stablecoins are becoming legally accessible to individuals and enterprises.
A New Era of Acceleration
As if things were not going well enough, a string of regulatory and legal successes in the U.S. was capped off by an election that, among many other things, has sealed the direction and fate of this industry. It is not an exaggeration to say that on the morning of November 6, the world of blockchain looked vastly different.
Permissioned Blockchains and Tokenized Deposits
What was a gradual shift towards regulatory approvals, public blockchains, and legalized digital assets has become a sprint. Most importantly, permissioned blockchains, tokenized deposits, and other aspects of the blockchain ecosystem that existed solely because they were seen as more acceptable to regulators than public blockchains have all lost their market value and position. Clients that were cautious in October now suddenly worry that they are losing an intensely competitive race.
A New Era of Acceleration in the U.S.
Two months ago, the U.S. was a laggard in global regulatory convergence. Today, the prospects are that the U.S. will accelerate significantly and, possibly, leave other parts of the world behind in a rapid path towards acceptance and scaling of digital assets. Early cabinet picks and appointments in Trump’s administration announced already, show a strong pro-crypto and digital assets bias, though none of these will take effect until 2025.
Privacy Technology and the Future of Blockchain
Furthermore, on November 26, a federal appeals court rejected efforts by the Treasury Department to sanction Tornado Cash, a piece of privacy software used to make anonymous payments. The Treasury alleges that this technology was used to launder money for North Korea. Advocates for crypto technology did not dispute that but argued that the Treasury should go after individuals or entities responsible rather than a particular piece of software, especially one that operates on a decentralized network with no specific owner or operator. The U.S. and Europe are still pursuing cases against individuals who are deemed responsible.
Conclusion
Privacy technology is going to be especially important in driving future adoption of blockchain technology among enterprises and institutions. Tornado Cash was never an attractive option for business users, as it intertwined two different concepts: privacy and anonymity. Business users are not looking for anonymous payments and transfers, but they do, however, need to keep details from their competition. A favorable court ruling on privacy generally will make business users feel more comfortable leveraging privacy technologies on-chain.
FAQs
Q: What were the major developments in 2024?
A: The major developments in 2024 included the European Union’s Markets in Crypto Assets (MICA) act, SEC approvals for Bitcoin and Ethereum ETFs, and a string of regulatory and legal successes in the U.S.
Q: What was the impact of these developments on the blockchain industry?
A: These developments led to a year of acceleration in the blockchain industry, with constant growth and innovation.
Q: What does the future hold for blockchain technology?
A: The future of blockchain technology looks bright, with privacy technology playing a key role in driving future adoption among enterprises and institutions.
Q: What are the implications of the U.S. election on the blockchain industry?
A: The U.S. election has sealed the direction and fate of the blockchain industry, with a strong pro-crypto and digital assets bias expected to accelerate the industry’s growth.
Q: What are the potential risks and challenges facing the blockchain industry?
A: While the blockchain industry has made significant progress in 2024, there are still potential risks and challenges facing the industry, including the possibility of frauds, thefts, or business collapses.
