While the cryptocurrency market took a downturn through the first five months of 2022 and continues to do so, financial services software entrepreneur Christopher Beltran predicts “there will be a lot of building happening” in cryptocurrency and blockchain applications in the next few years.

John Best, Best Innovation Group co-founder/CEO, agrees, adding “we’re not seeing a bunch of people dump out” of their cryptocurrency investments.

He compares crypto to the dot-com bubble in the early 2000s, recalling how after the bubble burst, companies like Google became among the world’s largest. Some of these companies are eyeing cryptocurrency.

“Amazon hired a load of really impressive crypto people,” says Best, who hosted a recent discussion on crypto and the metaverse. “Why would they do that unless they had a good business case?”

He asked session attendees what would happen if Amazon made its own digital coin and gave a significant discount to people who used it to purchase Amazon products.

“Anybody who is price conscious would leap at that because savings is savings,” Beltran says. “I don’t know if they’d necessarily perceive it as, ‘Wow, this is the most valuable coin on earth.’ It would be seen more as just another coupon play. I’d probably use it. Why not? You’re going to get savings."

Best believes trust will be a key to the success of such a coin because trust brings prices down and service up.

“I also think they see an opportunity to make money,” Best says. “There are too many middlemen in the payments process, and they’re only there because they’re using previous technology that isn’t necessarily useful today.”

If Amazon or another company creates a coin, what impact would it have on credit unions? Best says credit unions could be disintermediated, and that deposits could be lower if money filters out of traditional financial institutions and into new digital coins and blockchain applications.

Blockchain technology could also lead to smart contracts. Historically, if a contract is violated today, a judge or jury mandates what happens next, and law enforcement enforces the handover of the asset.

Conversely, Best suggests the auto market is moving toward smart contracts. “We give a loan to a person and the contract says if you pay your loan, you get to drive this car. If you do not pay your loan after X amount of time, the car is ours. If you stop paying your loan, not only does your car cease to work, it drives itself back to the credit union branch.”

Beltran says smart contracts would be easier to enforce and could be settled directly by the lender.

“A smart contract code—by virtue of the assets being talked about in the contract having some sort of digital representation and being in a wallet that’s accessible and open—can have a handle or a grip, almost like a mini escrow piece, on that asset,” he says. “Having a contract physically able to act on the asset when conditions are met is an interesting form of enforcement because you almost don’t need a justice system or legal framework to guide transactions and liabilities enforcement.”

The ability to digitally track ownership is a key aspect of blockchain, and one that will be crucial for future applications for cryptocurrency. Beltran says now is the time to develop those applications regardless of the market’s downturn.

“I don’t see anything fundamentally being questioned about blockchain,” he says. “It’s fairly predictable it was going to go down just because the whole world is going down. At the basic high level, nothing really worries me right now. It’s almost like it’s bargain time. It’s time to build.”