If you’re an early investor in bitcoin, ether, SOL or Crypto Punk NFTs, you have lots to be thankful for this year.

But as I prepared this special Thanksgiving edition of “Money Reimagined,” the idea of celebrating soaring crypto prices was rather unsatisfying.

The good news is there are lots of developments in the crypto sector that capture its transformative economic and social potential and don’t require embracing the rather distasteful “have fun staying poor” mindset of a few speculators. After looking through CoinDesk’s coverage the past 12 months, here are five things I think the crypto community can be thankful for.

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The Advance of “Layer 2” Scaling

I chose this nerdy topic first because, ultimately, the question of whether crypto can one day be a viable alternative for the wider global economy depends largely on its ability to scale. It needs the capacity to rapidly settle a massive number of transactions without imposing burdensome costs on users.

Some folks, such those at Bitcoin Cash who led a largely failed move to increase Bitcoin blocks’ data storage capacity, believe scaling requires changes to the base layer blockchain protocol. But that can undermine network security and lead to more centralization. The real promise lies in “layer 2” middleware that pushes processing capacity “up the stack.” With this, transactions and software commands are executed “off-chain” while the base blockchain still acts as a validation anchor to prevent double-spending.

The best known layer 2 product is Bitcoin’s Lightning Network, which was first fleshed out by Thaddeus Dryja and Joseph Poon in a January 2016 white paper. Only now, in 2021, has Lightning come into its own, however, as the basis for El Salvador’s embrace of bitcoin as legal tender. The country’s Chivo wallet remains beset by bugs and President Nayib Bukele isn’t exactly the international community’s darling. Still, the fact that Lightning is allowing many poor Salvadorans to make small payments without incurring heaving processing fees is a positive sign for the advance of this technology.

Other layer 2 advances this past year lie in decentralized finance, or DeFi. Protocols like Polygon and Arbitrum are using tools such as zero-knowledge rollups and Plasma to increase throughput of transactions on Ethereum and other smart contract layer 1 chains, while also creating more opportunities for cross-chain interoperability. These advances are vital if DeFi is to truly challenge the traditional finance model for the global economy.

Continue reading this column here.

–Michael J. Casey

BlockBank has officially launched its all-in-one AI-powered super application, combining the best of DeFi and CeFi to streamline users’ access to fiat and crypto financial services.

Key functionalities of the V2 application include:

Cutting-edge AI technology
Debit cards
Custodial and non-custodial wallets
In-app swaps (using Uniswap and Pancakeswap)
Tiered staking program (earn up to 20% APY!)

Download the application on Google Play or the Apple App Store and visit https://blockbank.ai/ for more information.

Here is recommended reading from CoinDesk editors this week:

ConsenSys Suddenly Bars Iranian Students From Ethereum Coding Class

“You are located in a country that we are prohibited from providing goods or services to under U.S. law,” the firm’s ConsenSys Academy told the 50 students. Anna Baydakova reports.

The ‘Bitcoin City’ Fantasy

How might El Salvador's new low-tax, net-zero startup municipality play out? Dan Kuhn, CoinDesk's deputy opinion editor, is asking.

El Salvador: Who Needs the IMF When You Have Bitcoin?

The IMF is a brutal bully constantly declaring its virtue. It’s about time someone pushed back, CoinDesk columnist David Z. Morris says.

Ethereum’s Fees Are Too Damn High

The most used smart contract blockchain is practically unusable, says media reporter Will Gottsegen.

Salvadoran Ambassador to US: Bitcoin Challenges Your Authority

Other countries will “follow our leadership” on bitcoin, Milena Mayorga tells CoinDesk TV.