Yorke Rhodes, director of digital transformation, blockchain and cloud supply chain at Microsoft, said the cryptocurrency industry is past the early adoption stage.
“If we look at this as a moment of innovative technology and crossing the chasm, similar to other waves of innovation, I think we can learn a lot from those waves, it’s just how long it takes to cross a chasm like this,” Rhodes said at the Financial Innovation Summit on Thursday.
“You have early adopters, and once it reaches a tipping point, it becomes a reality, and when I say we reach an inflection point in 2021 with NFTs, DeFi and cryptocurrencies, I think we’re at that point where we’ve moved beyond the early adopters,” Rhodes added.
Rhodes said he started Microsoft’s blockchain journey in 2015. For the past six years, he’s been working to get “businesses across the chasm from a technology perspective” at the company.
Globally, the blockchain ecosystem is seeing a spike in interest, deals and funding during 2021. According to CB Insights’ blockchain report, the total amount of funding for decentralized finance (DeFi) deals so far in 2021 is more than six times the amount of funding for DeFi deals in 2020. In addition, data shows that global blockchain funding reached more than $15 billion within the first nine months of the year, up 383 percent from $3.1 billion in all of 2020.
Nate McKervey, head of blockchain and DLT at Splunk, said at the event that the recent growth in cryptocurrencies can be attributed to many factors, but much of it comes down to understanding, especially for executives at traditional financial institutions.
“A lot of this comes down to the high degree of variance in high management understanding. In some conversations, we have to explain the technology and remove as much doubt as possible, but you can’t really remove doubt until you understand the technology,” McKervey said.
“The executives who have dug in and started to understand recognize that this is a potential, and they’re starting to get ahead of the vendors and their peers. Really, it’s something I think everyone goes through, and I’ve gone through the same thing. I’ve been skeptical of this technology for years,” McKervey added.
Getting rid of the fear of the unknown is achieved through education, and it’s a journey that Rhodes wants executives to go through.
The potential of NFTs is “just on the surface”
“We’re looking carefully at all the market interest in cryptocurrencies, DeFi and NFT, and I think we’ve definitely reached an inflection point in the industry,” Rhodes said.
“NFT is a very interesting programmable digital asset that can represent many things” other than ownership of a digital image, Rhodes said.” It can also represent abstract things, like rights – a ticket to a basketball game is a right that gets you into a specific event,” Rhodes added.
Overall, adoption of non-forgeable tokens (NFTs) has risen considerably and continues to grow, with some even predicting the space will grow 100-fold in the next few years. According to CB Insights, the NFT funding space has exploded to over $2 billion in 2021, up 6,523 percent from the annual total in 2020.
“The ability to digitize physical assets and this and even physical contracts and to digitize so much in the form of NFT will allow software to engulf the world. It will allow us to do business faster,” McKervey said.
Rhodes noted that the entire cryptocurrency ecosystem has only scratched the surface of NFTs.