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Despite the current turmoil, cryptocurrency executives from various companies attending the conference have taken over Main Street in Davos to promote the adoption of digital assets in Globalism The Economic Forum Conference, which brings together global political and business leaders.
Various activities, such as a free Bitcoin pizza kiosk and a “Liquidity Lounge” were made available to attendees on the sidelines of the event.
Several blockchain companies are leading the cryptocurrency agenda. This year’s session, according to Securrency CEO Dan Donny, aims to establish relationships and networks, as well as highlight how to bridge the gap between new technologies and traditional finance.
According to Stan Stalnaker, chief strategy officer at Hub Culture, a social network that also operates a cryptocurrency, 50% of Davos stores have attracted crypto and blockchain-based institutions.
WEF on Cryptocurrency
As the crypto audience dominates the streets of Davos, whether these digital assets can become more people friendly and the environment emerges as one of the topics of the meeting.
According to WEF, to fully realize the benefits of cryptocurrencies, there is a need to address and visualize energy consumption. This is because these digital assets have had a bad reputation for being unfriendly to the environment, according to environmentalists.
For example, Bitcoin uses more energy per year than Sweden, Norway or the United Arab Emirates combined.
Bitcoin uses the so-called Proof of Work (PoW) methodology, which consumes increasingly large amounts of power. Another methodology, Proof of Stake (PoS), is more energy efficient and used by other cryptocurrencies, but is less secure.
However, Change the Code Not the Climate, a campaign to shift bitcoin mining from Proof of Work to PoS, believes that the conversion could reduce bitcoin’s carbon footprint by 99%.
Another popular cryptocurrency, Ethereum, has been trying to transition from PoW to PoS for the past six years.
WEF believes that when it comes to societal impacts, cryptocurrency has a stronger argument.
The World Economic Forum noted that “cryptocurrencies can enhance financial inclusion by driving innovation in financial services, such as peer-to-peer micropayments, which could provide access to anyone with an internet connection and reduce costs by automating financial services at scale. Wide”.
But cryptocurrencies can put the financial system at risk, for a number of reasons, including encouraging criminal activity and a lack of knowledge, transparency and regulation. Federal Finance Minister Nirmala Sitharaman recently stated that the biggest threat to cryptocurrency could be money laundering and its use to finance terrorism.
While cryptocurrency has a reputation for providing a cover for criminal activity, those who have attempted to quantify it have found that it may represent only a small portion of the total activity.
According to Chainalysis, criminal activity contributed to less than 1% of all crypto activity between 2017 and 2020.
However, the WEF stated in a blog post that criminals and anyone looking to hide their footprints will continue to be drawn to cryptocurrency.
“This means introducing better know-your-customer (KYC) regulations, periodic reporting, and possibly a framework that includes penalties for violating disclosure requirements,” she added.
He also noted that “finding the right balance between the factors of anonymity and increasing confidence in cryptocurrencies through disclosures will be key and a careful balancing act.”
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