Can our infrastructure handle the future of crypto?

Crypto and the blockchain are becoming integrated into every facet of our lives. These technologies, though, require a vast amount of infrastructure. Do we have the level of infrastructure needed to support these technologies? There are signs that we should be concerned about that ability. This blog breaks down some particular points of concern and where future problems may lie. 
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What are the biggest areas of concern?

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International relations and regulation

Infrastructure depends heavily on politics, an unfortunate but inescapable fact. This has always been a cause of concern for areas such as trade and energy sources, and the same can be said for crypto and blockchain infrastructure. When technology, energy, and data capabilities are impacted by financial sanctions or retaliatory gestures, it leaves cryptocurrencies vulnerable or inaccessible. Although crypto has become a solution for many looking to avoid the financial ramifications of political punishments, this is becoming a much harder solution. Nations are becoming aware that those they financially sanction - such as Iran or Russia - are circumnavigating any issues by employing digital assets. But using crypto as a way to be completely below the radar is becoming increasingly challenging due to the inherent transparency of the blockchain. 

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Energy sources and reserves

Take Iran, for example. Iran generates approximately 17% of the world’s proven natural gas reserves, but due to political issues, financial sanctions, and mismanagement, Iran faces regular electricity and gas shortages that impact everyday life. To try to negate crippling foreign sanctions, Iran is now prioritizing cryptocurrency mining as a source of revenue to avoid financial issues. It is not an issue of resource scarcity; it’s sociopolitical problems that result in neither crypto mining nor daily energy usage being given the backing needed. 

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Safety 

Targeting various infrastructures is the perfect way to cause chaos in the modern world. Whether that’s power grids, health information such as passwords and data, or financial institutions, all of these pieces of infrastructure are attractive targets for hackers and scammers. North Korea, in particular, spends a lot of time and resources targeting the infrastructure and data of foreign nations. The Bybit attack is a recent, urgent example of what happens when North Korean hackers, backed by the government, are successful. These hackers stole $1.5 billion in various cryptocurrencies. It later emerged that Bybit’s security was reliant on a free piece of software that the hackers were able to exploit. This is a lapse in judgment and a costly mistake, but it is a worryingly common issue for tech companies to not have the level of stringent security expected for the value of the data they hold. 

These safety concerns have a huge impact on our future ability to maintain and protect the infrastructure supporting crypto and the blockchain. 

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Rapid growth

Rapid growth is rarely a bad thing - until it is. The rapid growth of the Web3 world has already led to infrastructure issues. There has been a notable cycle in Web3: an application is created, it gains traction, hype is generated, users and investment flood to it, and then it suffers due to infrastructure limitations. This has been especially true of the blockchain world, where it is easier - and more appealing - to create exciting new applications rather than build the backend infrastructure needed to maintain the growth. 

On- and off-ramps are not sufficient in their current state and remain a big challenge to Web3 and blockchain adoption. When large companies such as Coinbase experience issues, it has a huge impact on the market. Even these established organizations do not always have the infrastructure in place to run smoothly. If the growth of the ‘sexier’ side of crypto and blockchain continues to outpace the ‘boring’ side, the infrastructure it depends on, we will not have the sufficient structures to keep up safety features, accessibility, and user demand. 

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Should we be worried?

There are areas of concern when it comes to the future of our technological infrastructure. We need more organizations and innovators to address the problem of the rails that keep the train on the track, and a little less on the exciting applications. However, this drive for innovation and to discover and utilize new technologies is the biggest strength of the industry. Necessity is the mother of invention, and the industry has a reputation for creating solutions to problems. The need for better, more efficient, and safer infrastructure is the perfect environment for innovative solutions. As more of the world integrates its financial system into the world of cryptocurrency and digital assets, it will necessitate better cross-border relations for digital assets such as CBDCs and stablecoins. 

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