Daren Matsuoka, lead data scientist at a16z crypto and author of the State of Crypto report, and Eddy Lazzarin, CTO at a16z crypto, dive into the latest trends shaping cryptocurrency in 2024. They discuss the growth of active crypto users while tackling the challenges of data integrity. With insights on stablecoins, the evolving blockchain infrastructure, and the growing impact of cryptocurrency in U.S. elections, they illustrate a thriving ecosystem. The conversation highlights innovations driven by emerging technologies like AI and the enthusiasm among builders in the crypto space.
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Quick takeaways
The podcast highlights how active crypto addresses have surged to 220 million, reflecting unprecedented growth and user engagement in 2024.
Key infrastructure improvements, including Layer 2 solutions, have significantly lowered transaction costs, facilitating broader use of stablecoins as viable payment methods.
The intersection of crypto and politics is gaining traction, with interest in crypto influencing regulatory discussions and potentially impacting upcoming U.S. elections.
Deep dives
State of Crypto Adoption and User Growth
In recent years, the crypto sector has witnessed significant growth, particularly in its user base and infrastructure development. As of 2024, the number of active addresses reached an unprecedented 220 million, signaling increased activity across blockchain networks. Analysts estimate there are currently between 30 to 60 million real, transacting crypto users, a considerable rise from previous years. This upsurge in users highlights the importance of ongoing improvements to blockchain infrastructure, which have lowered transaction costs and facilitated the launch of various applications.
Innovations in Blockchain Infrastructure
The podcast discusses how essential infrastructure improvements are helping the crypto industry transition from a developmental phase to practical applications. Efficiency gains from Layer 2 solutions and other advancements have significantly reduced transaction fees, making it less expensive to conduct transactions on blockchains. These improvements have also encouraged the emergence of new applications across different sectors, with some blockchains, like Solana, emerging as leaders due to their low-cost transaction capabilities. As a result, the crypto landscape is becoming more accessible for both developers and everyday users.
Emerging Trends in Crypto Applications
A key focus of the discussion is the resurgence of stablecoins as a viable payment method due to improved transaction costs. With fees plummeting to mere pennies per transaction, stablecoins are beginning to be viewed not just as collateral for trading but as a practical medium for everyday transactions. This shift opens up new possibilities for using stablecoins in various payment applications, which had been largely overshadowed in previous years when higher fees stifled their use. The advancements in blockchain technology and infrastructure have thus created an environment ripe for innovation.
Political Involvement and Market Dynamics
The increasing intersection between crypto and politics is highlighted, especially as the industry seeks to influence regulatory frameworks that affect its growth. It is suggested that interest in crypto across several swing states may play a crucial role in shaping future elections, reflecting a growing national conversation on crypto issues. This development is accompanied by the introduction of exchange-traded products for Bitcoin and Ethereum, which are seen as major legitimizing milestones for the industry, potentially attracting a broader range of investors. Such changes indicate that the crypto landscape is becoming intertwined with mainstream financial markets.
Future Outlook and the Potential for Innovation
Looking ahead, the podcast emphasizes the need for the crypto industry to continue evolving beyond its infrastructural roots, focusing on creating user-centric applications that leverage the blockchain's full potential. The discussion reflects optimism that as transaction costs decrease, more complex applications and user behaviors will emerge, ultimately attracting greater adoption. There's an expressed hope that as developments advance, improvements in user experience will dominate future reports, marking a shift from infrastructure-focused discussions to practical applications. This indicates a transformative phase for the industry as it integrates deeper into everyday life.
We take you behind the scenes of our newly released, annual State of Crypto Report — a16z crypto's analysis of the latest data and trends that have defined the industry in 2024.
This year's report features some brand new insights, from estimating the number of real crypto users globally, to understanding how much interest in crypto swing states may have ahead of the U.S. election. We also dig into infrastructure improvements to blockchains and key applications — including stablecoins, AI, and so-called DePIN. Be sure to visit a16zcrypto.com for all this and more including a new “Builder Energy” dashboard, which we’ll discuss on the show.
Joining me to talk about the findings are lead data scientist and report author Daren Matsuoka and CTO Eddy Lazzarin. The first voice you'll hear after mine is Daren's, then Eddy's.
Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.
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