Since 2020 the blockchain industry has been booming, and it showed no signs of stopping in 2021. Numerous niches besides cryptocurrencies have created a significant impact across industries. These include blockchain gaming, NFTs, metaverses, and more.
Although the year was filled with numerous significant moments, there were few critical ones that were either a stride forward for the industry or, at times, even backward.
So here’s a list of the top 5 most important moments in the blockchain industry in 2021. I will be discussing how those moments have created an impact and how it affects the future.
1. China Deems All Cryptocurrency Transactions Illegal
In September, the Central Bank of China banned all cryptocurrency transactions and mining operations. This was their final step in the crackdown against crypto. Until the ban, China was the world’s biggest base for Bitcoin mining operations. However, due to this ban, miners had to either stop all their operations or migrate to other countries.
Due to this ban, many started migrating to the US in crypto-friendly states such as Texas and setting up offices in places where the legislatures allowed them to. Furthermore, the price of Bitcoin fell by more than $2000.
However, in an unexpected turn of events, Kazakhstan emerged as the world’s second-biggest base for Bitcoin mining operations. The country’s regulations are crypto-friendly and only ask miners and crypto users to register with the government.
Well, for better or worse, Bitcoin doesn’t seem to be affected much by this move. This is due to numerous aspects, such as big businesses accepting it and making it more mainstream. In fact, even a country this year had announced that it would make Bitcoin its legal tender.
2. El Salvador Makes Bitcoin Its Legal Tender
In October, El Salvador became the first country to adopt Bitcoin as its legal tender, thus enabling people to use it anywhere and everywhere, from carrying out their day-to-day purchases to paying their taxes.
Before Bitcoin, the country was using US Dollars as its national currency, but now it plans to build its economy on cryptocurrency alongside the US Dollar. This move was met with mixed reactions.
While some experts believed the country would not be able to stabilize its economy considering the volatility in the Bitcoin market, others believed it was a courageous move to get out of the clutches of the global financial system.
Besides this, in November, the President announced plans to build a Bitcoin City near a volcano. For this, he will be partnering with Blockstream to raise $1 billion in Bitcoin. The construction will begin in 2022, and the city will have restaurants, businesses from the entertainment sector, residential and commercial areas, etc.
The city is being built near a volcano to leverage Geothermal Energy for Bitcoin mining, which is an energy-intensive operation.
While people and experts are still in two minds about the success or failure of these decisions, I guess building an economy takes time, and we might just have to wait it out to see how all this unfolds. Whether El Salvador sets itself apart from the global financial system or does it destabilize the entire economy, only time will tell.
3. Axie Infinity And CryptoPunks NFTs Surpass $1 Billion In Lifetime Sales
Axie Infinity and CryptoPunks are currently two of the most significant NFT projects in the blockchain and cryptocurrency industry. While Axie Infinity is a blockchain game where you collect blob-shaped creatures called Axies, CryptoPunks is an NFT project with a series of 10,000 24x24 pixels characters which are all unique.
In August, Axie Infinity became the first-ever NFT project to achieve a record $1 Billion in lifetime sales. Currently, 2.8 million active players and $3.6 billion have been traded on the in-house marketplace.
Following this feat, CryptoPunks in the same month surpassed $1 billion lifetime sales. In fact, when Axie Infinity created the record, NBA Top Shots was the second biggest NFT project in terms of its lifetime sales. However, with this, CryptoPunks went on to become #2.
While these might just be numbers, Axie Infinity is a blockchain game that brings together cryptocurrencies, NFTs and is perhaps one of the earliest projects that popularized the play-to-earn business model. The idea was simple - To let players truly buy, own, sell, or trade in-game assets and play in exchange for money that can be used in real-time.
Post this, the blockchain gaming industry has never been the same. Now numerous such games are emerging, trying to tap into various genres such as fantasy adventure to help people earn a stable living with just gaming.
4. Bitcoin Creates A Record For All-Time High Price
In the blockchain boom, numerous cryptocurrencies spiked to reach all-time high prices this year. The world’s biggest cryptocurrency, Bitcoin, was also a part of this. Bitcoin in March reached an all-time high value at $64,234.38, and since then, it has already broken that record twice. Currently, its all-time high value is $68,789.63.
Experts are wondering if the currency will be hitting $100,000 before the year ends. While that seems unlikely because it is currently staggering at approximately $46,000, it is definite that in 2022 Bitcoin will reach $100,000.
5. Companies Such As Twitter, Starbucks, And Others Accept Bitcoin And Other Cryptocurrencies
2021 perhaps can be declared as one of the most significant years for blockchain Bitcoin and other cryptocurrencies. Twitter has a tipping feature that enables people to tip their favorite content creators. People can now leverage it to tip creators with Bitcoin. Since April this year, Starbucks has been accepting Bitcoin payments via the Bakkt digital wallet.
While they are not the first companies to adopt Bitcoin and crypto, they definitely add credibility to the crypto industry, whose legitimacy is still being questioned. Besides these companies such as Master Card and Visa also announced that they will set up systems for accepting Bitcoin.
Conclusion
Overall, it looks like, despite the inhibitions and misconceptions against cryptocurrencies, the industry is progressing pretty well. This year has led to the beginning of numerous conversations around crypto that even governments are participating in. While some governments are crypto-friendly, others are not.
In 2022, it will be interesting to see what kinds of laws and regulations governments around the world are drafting and how they will affect the cryptocurrency industry.