Digital Assets In 2025: Worst- And Best-Case Scenarios
Co-Founder and CEO at Cindicator, a tokenised fintech company building the Hybrid Intelligence ecosystem for effective asset management.
The recent appearance of Libra executives in the U.S. Senate and Congress has firmly put cryptocurrencies and digital assets on the global agenda.
Digital assets are no longer the realm of speculators. Companies like Visa, MasterCard and Uber are willing to invest tens of millions in Libra’s yet-to-launch security
In this article, I want to look beyond market prices and instead look at possible scenarios for the medium term. This should help you to create your own hypotheses and plan your business accordingly.
The Best-Case Scenario In The Next Five Years: Tech Revolutions
If the distributed ledger technology would fulfill its potential and reach mass adoption, then major trillion-dollar industries would be completely changed. The upheaval might wipe out billions in share valuations of some companies and could create completely new digital assets that might be used to run new structures.
Logistics — including shipping, warehousing and supply chain management — could be overhauled, changing the way global trade is done. Currently, a single container shipment might require 30 people and over 200 interactions, according to IBM and Maersk, as reported by Forbes. All intermediaries still keep the paper trail and their databases are simply the digital copies of the documents. Integrating all data and replacing hard copies with a single distributed ledger entry could free up immense resources. If major players would reach an agreement on common data standards, adoption could be very fast, similar to how the use of containers grew exponentially in the 1970s.
Finance and banking is another obvious industry that might soon be unrecognizable. Bitcoin already enables anyone to send and store funds around the world without any intermediary. Decentralized financial products on top of the Ethereum blockchain provide an exchange, lending and borrowing through smart contracts. Banks are not going to disappear, but they might have to shift power to consumers if the decentralized alternatives would gain wide adoption. Decentralized alternatives could emerge and spread very fast, but banks’ responses would be slower.
Politics and government processes could also change dramatically. Smart contracts and on-chain transactions might make processes more auditable and transparent. Meanwhile, digital identities and on-chain voting could make democracy more direct and focus decision making on issues that really matter, offering an alternative to party politics that are highjacked by populists of all kinds. It would likely take a lot more than half a decade for blockchain solutions to reach a nationwide level, but it’s enough time to prepare and execute the first elections and decentralized decision-making on the blockchain, granting the technology much-needed legitimacy and credibility.
Drivers Of Adoption
These are only the most obvious industries that could be reshaped in the medium term. Other industries might develop faster under certain conditions. To make better forecasts, it makes sense to watch key drivers of adoption.
Enterprises involvement. Tech giants like Facebook and Samsung are racing to gain their share of the future decentralized infrastructure. Comparing to startups and decentralized protocols, they are more likely to steer other large companies toward adopting blockchain solutions.
Usability. Creating and managing public and private keys, signing transactions is still too complicated for the average user. Improvements in ease of use could accelerate adoption.
Security and privacy. Blockchain is often hailed as a boon for security. Yet apart from Bitcoin’s proof-of-work algorithm, distributed ledgers are too young to claim any superiority in terms of security. And while privacy comes to the forefront due to scandals like Cambridge Analytica, most public blockchains don’t yet offer a serious alternative. Blockchains mostly store data in an encrypted but open format, allowing big data analytics to gain insights into users and transaction flows.
Economic pressure. A downturn or crisis might lead to a search for new economic models and ways to transact and govern. Decentralized cooperation enabled by blockchain could create new forms of organization that are still hard to imagine.
The Worst-Case Scenario In The Next Five Years: The Market Sobers Up
Given the current high expectations, even development at a slower pace might be viewed as a failure. This could lead to lower market valuations of digital assets, thus driving down the value of assets raised by projects through token sales. At the same time, lower capitalizations could slow down the flow of funds in the blockchain industry. As a result, growth could be stunted even further.
Yet the development would still continue even with significantly lower funding. First, the teams have already raised billions from both token buyers and VCs, as I wrote about previously. Second, hardcore enthusiasts will continue to tinker with blockchain. And of course, new businesses will continue to launch with a greater focus on monetization.
Key Factors To Watch
When forecasting the mid-term future of blockchain, several factors are worth watching to evaluate the likelihood of slower growth.
Government regulation. While it’s practically impossible to ban cryptocurrencies, more advanced use cases require clear legal frameworks. Unless governments would proactively work to create regulatory clarity, adoption would be slowed down by legal considerations.
Technical developments and releases. In 2017 and 2018, startups have raised billions to develop blockchain solutions and applications. Failure to ship products or the lack of product-market fit could dent confidence in distributed ledger technology (DLT) and slow down progress.
Major security breaches. High-profile cyberattacks could spread fears and hinder adoption by both enterprises and consumers who might be less likely to entrust money to decentralized services.
Bitcoin price. The oldest
cryptocurrency attracts the most attention and is used by the media and the general public as a way to evaluate the health of the whole blockchain space. While it’s a superficial metric, the Bitcoin price dynamic likely both reflects and influences inflows of funds into the industry. To Conclude
Forecasting industries that move so rapidly is hard.
This article is merely the start; I encourage you to make your own conclusions about the best- and the worst-case scenarios and relevant factors to watch. Doing so will give you a base from which to avoid getting caught up in the next cycle of hype around digital assets.