EU Commission’s Web4 strategy could fail.

EU Commission's Web4 strategy could fail.

The Blockchain Industry: Embracing Web4 and Charting a Path to Success

The European Commission’s recent adoption of its new strategy on Web4 and virtual worlds marks a significant step towards creating an open, secure, trustworthy, fair, and inclusive digital environment for European Union citizens. This strategy, based on empowering human resources, supporting businesses, developing public services, and shaping global standards for “Web 4.0,” aims to position the EU as a leader in the next technological wave.

However, while the focus is on Web4 and virtual worlds, it is crucial not to overlook the significant role that Bitcoin (BTC) and Ethereum have played in the blockchain industry. Notable credit and financial institutions have placed their confidence mainly in these cryptocurrencies. It becomes clear that Web3, despite its trends, left little of substantial value behind, apart from a temporary surge in luxury markets. Thus, it is essential to redirect our attention to the areas that truly matter.

Retracting or Modifying Past Positions

The EU’s stance on Bitcoin may have detracted from its image as a forward-looking, technology-advancing region. To regain its position at the forefront of innovation, the EU should reconsider and modify its previous positions, especially regarding proof-of-work mining. Reinventing money is a significant undertaking, and the EU can secure its position by advancing its digital euro project while also supporting other cryptocurrencies. This approach minimizes risks and maximizes opportunities, allowing the EU to leverage the technology-neutral potential of blockchain.

Digital Twinning: Competing in the Digital Realm

The cornerstone of the proposed Web4 strategy is digital twinning, an area where the EU faces stiff competition from global powerhouses like the United States and China, particularly in artificial intelligence. While the EU holds a prominent position in physical domains like manufacturing and global exports, it lags in digital areas such as crypto and cloud computing. To bridge this gap, the EU must focus on emancipating digitally exclusive domains, including cryptocurrencies.

Seizing Opportunities in the Crypto Market

The current market lull offers notable opportunities for the EU to position itself as a leader in the intersection between the physical and digital realms. While some may dismiss innovations like decentralized finance (DeFi) and decentralized autonomous organizations as passing trends, it is still early days for these areas. By positioning itself now while attention is elsewhere, the EU can reap substantial benefits in the future.

Europe has already established itself as a leader in DeFi, with countries like Italy and France being the birthplace of significant projects in this space. The total value locked in DeFi remains above $45 billion, indicating its resilience in the face of market fluctuations. With innovations like ERC-4626 on the horizon, the true potential of DeFi is yet to be fully realized. By taking the lead in steering innovation, the EU can solidify its place in the impending financial revolution.

The Promise of Digital Assets

Over the past decade, the cryptocurrency industry has undergone numerous reinventions and reshaping efforts. However, the fundamental promise of a new form of money remains strong. Digital assets thrive in a digital environment, and their success depends on achieving a comparable level of excellence to their physical counterparts. The EU must prioritize the development of digital and crypto assets to bridge this gap and ensure their long-term success.

In conclusion, the European Commission’s strategy on Web4 and virtual worlds is a commendable step towards creating a thriving digital environment. To maximize its impact, the EU must reevaluate its stance on cryptocurrencies, embrace digital twinning, seize opportunities in the crypto market, and prioritize the development of digital assets. By doing so, the EU can position itself as a global leader in the blockchain industry and shape the future of the digital economy.

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