March 4, 2021 5 min read
Opinions expressed by Entrepreneur contributors are their own.
It’s official — cryptocurrency is once again having a moment. Thanks to a sustained bull run that started in October, Bitcoin has been making mainstream headlines across the board as it seeks to break through its previous all-time high of $20,000, achieved in December 2017.
Anyone around in cryptocurrency at that time will recall the slew of newcomers that entered the space. However, things were a lot different back then. Institutions wouldn’t have touched digital assets with a 10-foot pole and interoperability between blockchains wasn’t even discussed.
This time around, it’s a lot easier to navigate the cryptocurrency space. After the 2017 bull run, many entrepreneurs and innovators recognized the potential of cryptocurrency. They entered the sector to reduce friction, improve the user experience and generally making it easier to navigate. Those who want to get into cryptocurrency during this Bitcoin bull run will experience a much smoother ride as a result. So what’s changed?
Related: ‘Prepare to Lose All Your Money,’ Warn Crypto Investors
Accounting, tax and portfolio management
Back in 2017, crypto was very much still considered to be “magic internet money.” This was an era dominated by memes about crypto bros buying Lamborghinis with their stellar gains, laughing in the face of the IRS.
However, things quickly moved on following the 2017 price spike. Although cryptocurrency had been officially taxable in the U.S. since 2014, in 2017, Coinbase was the subject of a court order that ruled it had to hand over transaction and identity records for its users. Since then, the IRS has been clamping down on crypto exchanges and users.
Several forward-thinking startups were savvy enough to spot this coming. However, tax reporting is only one side of the equation. It can be complicated enough for individual users, but for businesses, the obligations can be even more arduous.
Cryptoworth launched in 2017 and now offers an end-to-end cryptocurrency accounting, portfolio management and tax reporting platform that scales according to your requirements. Crypto users come in many different types — merchants that accept payments in Bitcoin, day traders who take profits, miners running different kinds of hardware, even employers and employees transacting in crypto payments for earnings. Cryptoworth covers all of these and also offers solutions covering crypto auditing, asset management, custody and payroll among others.
An all-in-one solution like Cryptoworth means that any enterprise can fit into any or all categories of cryptocurrency users and keep ahead of all their obligations to the IRS, as well as customers, employees and other stakeholders. This is a significant step forward from 2017.
DeFi and surrounding infrastructure
DeFi barely existed during the 2017 bull run, aside from an early version of the Maker Dai stablecoin. Now, it’s an entire sub-segment of the cryptocurrency space, worth nearly $15 billion and growing fast. However, there are still only a few projects blazing the interoperability trail in DeFi, and one of those projects is Kava, the multichain decentralized lending platform. Kava makes it easy to generate DeFi yields on your cryptocurrency holdings while profiting from assets issued outside of the Ethereum ecosystem.
Related: Why We Should Advocate for Decentralized Finance and Its Regulation
Kava recently made another step forward in enhancing user experience thanks to a partnership with PlasmaPay, a global payment and remittance platform for DeFi. The partnership will initially allow users to purchase Kava’s suite of tokens at the PlasmaPay checkout. This makes it easy for 100,000 PlasmaPay users in 165 countries to purchase Kava tokens with their credit cards.
However, the two firms aim for a deeper long-term collaboration involving the integration of Kava’s full range of services into PlasmaPay’s infrastructure.
Security
Security in cryptocurrency is an issue that pre-dates the 2017 bull run and continues to plague exchanges, wallets and application users to this day. Blockchain security firm Slowmist estimates that crypto users have lost over $13.5 billion worth of digital assets to hackers over the years. While exchanges tend to get a bad rap, and often justifiably so, wallets are a more significant attack vector. Even “cold” (i.e., party offline) hardware wallets that are supposedly the most secure, like Trezor and Ledger, have been found to contain vulnerabilities and as of late, also significant data breaches.
So it’s about time that crypto users had a glimmer of hope of outsmarting the hackers. Belgian startup NGRAVE has developed what it dubs “The Coldest Wallet.” This hardware wallet has absolutely no connectivity, with the only cable designed for wall charging and no WiFi, Bluetooth or other network functionality included. It’s also the only wallet (and product in the entire crypto space) to feature an EAL7 security certification — the highest security certification in the world.
Related: Why Coinbase Will Be the Hottest IPO of 2021
Users interact with the wallet via a touch screen. They can also use NGRAVE’s LIQUID app to view their balances and make payment requests using a QR code. These are then scanned by ZERO, which signs the transaction request with the private key that is kept offline and out of sight of remote hackers.
We’re sure to see another raft of newcomers joining the cryptocurrency space seeking gains during this bull run. However, thanks to the last three years full of innovation, development and entrepreneurship, the newcomers this time around have a lot less to worry about than the previous generation — a sure sign that cryptocurrency is growing up.