Cryptocurrency and blockchain technology has come a long way and still has a long way to go.
It is quite baffling to note that the same people that sneered at the idea of bitcoin several years ago have now made a 360 degree turn to embrace it, including the big names on Wall Street.
The genesis of smart contracts started with Vitalik Buterin's Ethereum in July of 2015 and this gave people more options than bitcoin offered them.
Fast-forward to 2021, Ethereum has revolutionized the payments industry, thereby threatening the position of traditional payment systems and driving adoption of crypto as a veritable means of payment and store of value.
New horizons such as decentralized finance (DeFi), Non-Fungible Tokens (NFTs), decentralized exchanges (DEXs) and liquidity pools quickly sprang up thanks to Ethereum, giving people an alternative to traditional savings accounts, stocks and centralized payment systems.
Whereas banks paid account holders interests at APYs of 0.1% to 5% on their deposits, DeFi smart contracts on the Ethereum network and more recent networks paid out yields in excess of over 100% on deposits through novel instruments such as lending and liquidity farming.
The banks are not folding their hands either, as they are fighting back through the Securities and Exchange Commission (SEC) as evidenced by the recent lawsuits against the likes of Ripple and LBRY.
But the fact remains that crypto natives and the general public are tired of the bureaucracy, sluggishness and costliness of traditional payment systems and are very much in love with crypto and blockchain as a result of the speed, convenience, affordability, security and scalability that this new technology offers them.
A recent announcement in the world of blockchain has it that smart contracts are coming to the bitcoin blockchain in no distant time. According to Zycrypto.com, Dfinity's Internet Computer Blockchain (ICB) has planned an upgrade that will enable smart contracts on the bitcoin blockchain.
This is good news for crypto enthusiasts like myself.
Therefore let's take a look at five ways this will drive mass adoption of crypto.
• It will cause an inflow of capital into crypto
A lot of institutional and individual investors are HODLing massive amounts of bitcoin in cold wallets.
According to Nairametrics.com, about 78% (18.9 million) of bitcoins in circulation are held by corporate investors.
I believe the introduction of smart contracts on the bitcoin blockchain will provide opportunity for such investors to earn more money than they currently earn from HODLing;
therefore I envisage a situation whereby they plunge a reasonable percentage of their BTC holdings into financing new products and services to be built on top of the bitcoin blockchain.
• It will bring more users into crypto and DeFi
The introduction of smart contracts on the bitcoin blockchain will galvanize people who sit on the fence to take a leap into the world of blockchain and DeFi,
because of the sheer amount of value that will be created as a result of new and novel products and services being built on top of the bitcoin blockchain.
Think NFTs on bitcoin and what it means for art enthusiasts all over the world.
• It will make NFTs more popular
NFTs have grown quite popular in recent times; but I think the introduction of smart contracts on the bitcoin blockchain will make it even more popular, as the popularity of bitcoin merging together with that of NFTs will cause an explosion in the value of NFTs.
• It will increase the volume of trades on decentralized exchanges
Bitcoin is the grandfather of cryptocurrencies and I believe its popularity coupled with the introduction of smart contracts will drive an increase in the value and volume of trades carried out on decentralized exchanges and NFT trading platforms.
• It will drive massive adoption of blockchain technology in developing countries
Most people living in Africa have never heard of cryptocurrency and a small percentage of those who have learnt of it think that crypto begins and ends with bitcoin.
I believe the introduction of smart contracts on the bitcoin blockchain will galvanize Africa's population into the world of blockchain because of its popularity, affordability, security, and scalability.
According to a report by Yahoo,
Nigeria stands at 32% on the list of countries that use crypto the most.
I believe the introduction of smart contracts on the bitcoin blockchain will double, if not triple the percentage of people that use crypto on the continent and other developing countries of the world.
In what ways do you think the introduction of smart contracts on the bitcoin blockchain will drive mass adoption of crypto, especially in Africa?
Let us know in the comment box. And please upvote and share this article. Thanks.
I published this post originally on InflowPost.com.