The company shows the relevance of digital assets by comparing them to inventions like the car, the Web, and electricity. Wells Fargo highlights that the crypto industry primarily focuses on technology, which has caused Web3 to lead to poor user experience.
In a recently published report entitled Understanding Cryptocurrencies, Well Fargo compares cryptocurrencies with other innovations.
The US financial institution referred to the term Internet of value, a concept widely used in the past. Helen Hai, Binance’s Head of Fan Tokens and NFTs, also mentioned it as a cornerstone of the focus on crypto. That makes sense when seeking to differentiate between Web2 and Web3.
Cryptocurrencies Are an Innovation on a Par with the Internet
The company shows the relevance of digital assets, which it bought with the relevance of inventions like the car, the Web, and electricity. Wells Fargo initially points out that Web3 will seem as bad for finance as the original internet was for communications.
However, they explain that cryptocurrencies offer new investment possibilities and opportunities not seen before. Wells Fargo also believes those assets would be the building blocks of a new internet.
Cryptocurrencies have gained relevance, causing the market to grow prematurely, which is positive due to significant adoption.
The institution says that the term Internet of Value begins to make a lot of sense. However, Wells Fargo also noted that this innovation still needs improvement. They explained that this creation requires an infrastructure for investors to trade digital assets effectively.
There Is a Dilemma Regarding New Crypto Users
Wells Fargo notes that the crypto industry primarily focuses on technology, its most significant trend. That situation has caused Web3 to lead to a poor user experience. New users have faced entry barriers that have made them leave due to negative impressions of the ecosystem.
Excessively technical knowledge of applications like tokens, fees, and blockchains, among others, is initially overwhelming.
The bank’s research department has written similar reports before, as they want to ensure that newcomers see the advantages of crypto assets.
The Conclusion about Crypto Assets of Wells Fargo
Wells Fargo’s findings emerged from contrasting inventions like the internet, electricity, and cryptocurrencies. However, some might view this as an attempt to compare very different types of fruits.
Despite the differences between pears and apples, the work of Wells Fargo was to find similarities. The report mentions payment processors, purchases, remittances, and other more advanced uses like the Bitcoin Lightning Network. Wells Fargo considers that early movers can take advantage of open network effects and gain economies of scale.
Wells Fargo adds that the primary risks faced by the industry are additional regulation and failures in technology and business. Besides, they believe there are operational risks with handling and storing crypto assets, price volatility, and limited consumer protection.
Meanwhile, Bitcoin is trading at around USD 24,259 and has accumulated a 3.3% over the last week. While its daily trading volume is above USD 19.82 billion, its market capitalization is about USD 461.83 billion, according to CoinGecko.
By Alexander Salazar