Web3 is Not Just a Speculative Playground: The Bright Spots Shining Through
By Ayush Ranjan, co-founder and CEO of Huddle01
As the Web3 industry continues to evolve, many claim that it’s nothing more than a speculative playground where millionaires are minted overnight. Memes seem to reign supreme over actual utility, causing long-term builders and dreamers to lose faith in the industry’s future. But despite the media narratives, there are indeed bright spots.
Blockchain and Crypto: Benefiting Humanity
The truth is that blockchain and crypto technologies are genuinely benefiting humanity, particularly in emerging markets. Web3 technology is helping the underserved and underbanked, combating deficiencies in modern traditional institutions in finance and beyond. This is a fundamental societal shift that cannot be ignored.
Emerging Markets Dominate Adoption Rankings
According to the World Bank’s 2024 estimates, there are still 1.4 billion people worldwide who remain unbanked. Decentralization is fundamentally about addressing uneven value distribution. The industry needs to support more builders who are committed to driving change.
Africa is leading the charge in crypto adoption, mainly due to limited access to banking services. Even in 2021, around 300 million adults in Sub-Saharan Africa couldn’t access essential banking services. This lack of access severely limits people’s ability to conduct everyday transactions and save/invest, let alone run a business.
Crypto is Changing the Narrative
Crypto is changing this narrative by providing an alternative to traditional financial systems. According to Chainalysis’ 2024 Global Crypto Adoption Index, developing nations dominate the rankings, with countries such as India, Indonesia, and Nigeria leading the way.
As of 2023, Sub-Saharan Africa had the highest Bitcoin (BTC) adoption rate in the world, with Nigeria ranking second globally on the Global Crypto Adoption Index. By mid-2023, Sub-Saharan Africa accounted for 2.3% of global cryptocurrency transaction volume, receiving around $117.1 billion in on-chain value.
In these geographies, crypto serves practical purposes beyond just speculation.
Functionality is Advancing
In emerging markets, we are witnessing the functional use of crypto rather than just its use case as a speculative asset. Local entrepreneurs with first-hand insights into local problems drive meaningful change, and new technological innovations fit for purpose.
Initiatives like CARE’s pilot programs in Kenya and Ecuador demonstrate how crypto can provide access to essential goods and services while fostering economic recovery from the COVID-19 pandemic. Non-fungible tokens (NFTs) have become accepted cross-border fundraising vehicles.
Acute Governance Problems Can Drive Adoption
Recent examples show that acute governance problems can also mean adoption is growing by necessity. The Indian city of Raipur recently put real estate records on the blockchain with an innovative encryption startup called Airchains, aiming to prevent forgery and reduce processing time from a month to three days.
In developed countries, there would typically be an inquiry to consider the issue. Raipur, however, had a tendering process and a strong desire to solve a challenging problem urgently.
Fund Adoption, Not Shiny New Things
While capital flows into crypto projects in emerging markets are becoming more significant, they still fall short compared to the funding available for projects in well-developed nations. In 2023, developed nations, particularly the United States, led with approximately $1.975 billion invested in Q3 alone, with US-based companies accounting for 34.5% of all crypto VC funding.
In contrast, emerging markets struggled to secure comparable funding, with Africa’s total venture capital investment around $1 billion for the entire year, highlighting the challenges projects face in these regions.
The Recognition of Emerging Markets’ Potential Grows
Lately, the recognition of the potential in emerging markets has grown. Crypto investment should now pay attention to where mass adoption is happening. Crypto is a functional tool, rather than a speculative asset, in emerging markets.
As Ayush Ranjan, co-founder and CEO of Huddle01, concludes: "The industry needs to support more builders who are committed to driving change." By doing so, we can unlock the full potential of Web3 and create a brighter future for humanity.
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Note: This article is for general information purposes only and should not be taken as legal or investment advice. The views expressed here are the author’s alone and do not necessarily reflect or represent the views of Cointelegraph.
