Crytpo Crowd Takes Over Davos to Promote Digital Assets at WEF Meeting
Despite the current turmoil, cryptocurrency executives from various companies attending the convention have taken over the main boulevard of Davos to promote the adoption of digital assets during the World Economic Forum conference, which brings together political leaders and global trade.
Various activities, such as a free Bitcoin pizza stand and a “Liquidity Lounge”, were offered to participants on the sidelines of the event.
Several blockchain companies are leading the cryptocurrency agenda. This year’s session, according to Securrency CEO Dan Doney, is about building relationships and networks, as well as highlighting how to bridge the gap between new technologies and traditional finance.
According to Stan Stalnacker, chief strategy officer of social network Hub Culture, which also operates a digital currency, 50% of stores in Davos have attracted crypto and blockchain-based organizations.
WEF on cryptocurrency
As the crypto crowd dominates the streets of Davos, the question of whether these digital assets can become friendlier to people and the environment has become one of the topics of the meeting.
According to the WEF, to fully realize the benefits of cryptocurrencies, it is necessary to tackle their energy consumption and perception. Indeed, these digital assets have a bad reputation for not being environmentally friendly, 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 more and more energy. There is another methodology, Proof of Stake (PoS), which is significantly 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 PoW to PoS, estimates that the conversion could reduce bitcoin’s carbon footprint by 99%.
Another famous cryptocurrency, Ethereum, has been trying to switch from PoW to PoS for six years.
The WEF believes that when it comes to societal effects, crypto has a stronger case.
“Cryptocurrencies can promote financial inclusion by driving innovation in financial services, such as peer-to-peer micropayments, potentially providing accessibility to anyone with an internet connection, and reducing costs by automating large-scale financial services,” the WEF noted.
But cryptocurrencies can put the financial system at risk, for a variety of reasons, including incitement to criminal activity and lack of knowledge, transparency and regulation. Union Finance Minister Nirmala Sitharaman also recently stated that the biggest risk of cryptocurrencies could be money laundering and its use to finance terrorism.
While crypto has a reputation for providing cover for criminal activity, those who have attempted to quantify it have found that it may only represent a small portion of total activity.
According to Chainalysis, criminal activity contributed less than 1% of overall crypto activity between 2017 and 2020.
However, the WEF said in a blog post that criminals and anyone looking to hide their footprints will continue to be drawn to cryptocurrencies.
“That means introducing better know-your-customer (KYC) regulations, periodic reporting and potentially a framework that includes penalties for violating disclosure requirements,” he added.
He further noted that “finding the right balance between the attractions of anonymity and increasing trust in cryptocurrencies through disclosures will be key and a delicate balancing act.”
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