An infographic by MSCI showing how swiftly decentralized solutions and services have grown in popularity hints at an impending blockchain revolution.
Blockchain technology is a foundation for verifiable financial systems and proof of ownership for digital commodities and assets that goes well beyond Bitcoin, Dogecoin, and other popular cryptocurrencies.
Big tech has eroded the world’s trust in the technology sector, from privacy concerns to antitrust issues. People want better and more trustless financial services and the blockchain economy is growing to suit those needs.
MSCI’s infographic shows how swiftly decentralized solutions and services have grown in popularity, as well as how investors can participate in this fascinating new sector.
The Three Key Trends of Blockchain Adoption
Blockchains can enable more efficient systems to support three important trends in the financial future by eliminating the requirement for a centralized middleman to facilitate transactions.
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- Digital hard money and assets
- Decentralized finance (DeFi)
- Digital goods and collectibles
Bitcoin is the face of digital hard money because it was the first cryptocurrency and deflationary monetary asset. Bitcoin offers anyone with access to a deflationary digital asset that they can transfer in minutes without having to trust centralized middlemen since it has a fixed quantity of 21 million bitcoins specified in code and a decentralized network powering transactions on the network.
While Bitcoin was the forerunner of the blockchain revolution during the last decade, new blockchain-based functionality is enabling non-fungible tokens (NFTs), as well as more fair and trustless financial institutions through decentralized finance.
Decentralized Finance (DeFi) Makes Financial Services Accessible
The world is looking for trustless financial services via which they may borrow, lend, and perform other necessary financial services, in addition to seeking decentralized hard money assets in the form of cryptocurrencies like Bitcoin.
Decentralized finance (DeFi) makes these services possible by allowing users to access them through decentralized applications (Dapps) that are driven by smart contracts. In a DeFi application, more than $260 billion is currently “locked” or engaged with some type of smart contract.
The ten largest DeFi applications are listed below, in order of the amount of value currently “locked” or engaged with the apps’ smart contracts.
DeFi provides functionality and incentives for players in the blockchain economy, from staking tokens within a protocol in exchange for governance votes to providing market liquidity by locking tokens up in exchange for a percentage of trading costs.
What is the MSCI Blockchain Index?
The MSCI Blockchain Index was created in partnership with ARK Invest to represent the performance of a group of firms involved in the development of blockchain-based products and services.
These organizations fit into five key areas of the digital blockchain sector, ranging from cryptocurrency payment services to actual hardware items for verifying blockchains:
- Developers of tech and protocols of decentralized finance like Dapps and smart contracts
- Products and services for the infrastructure of digital markets like cryptocurrency exchanges and payment gateways
- Providers of blockchain solutions and services through corporations
- Hardware and software providers for the verification of blockchains
- Buyers and sellers of cryptocurrency providing liquidity and facilitating payments
Companies like AMD, Visa, and the Intercontinental Exchange (ICE) are among the index’s leading constituents, contributing to the blockchain economy from a wide range of industries.
The MSCI Blockchain Index assures you don’t get left behind as decentralized finance and other technologies usher in a trustless revolution in financial systems and digital asset ownership.