Since the inception of Bitcoin in year 2011, the cryptocurrencies market is increasing day by day. Cryptocurrencies have surpassed every other available financial instruments when it comes to ROI. Early adopters of cryptocurrencies have earned more than 5000% ROI on their investments within months.
Cryptocurrency exchanges have everything to do with crypto wide spread and high valuation. It was crypto exchanges which took the power from the hands of ‘Miners’ to the general public. Without crypto exchanges, the cryptocurrencies would be available to only a few.
Today most of the people use exchanges wallet to store their hard earned money into the form of cryptocurrencies. You can call it lack of knowledge or the overseeing the security issues, but truth is that cryptocurrencies exchanges holds all the power in crypto market. They provide interface for trading, to convert fiat money into the cryptocurrencies, and many other services.
The importance of crypto exchanges can be felt in the latest China cryptocurrency ban. As soon as China decided to shut down crypto exchanges, the majority of crypto market fell at that moment. Bitcoin fell by almost $1600 and total market capitalisation lost $60 Billion within 2–3 days.
There are also security risks related to the crypto exchanges as well. Bitfinex, Bithumb, Bitmain, Cryptopia have past records of hacking. They got hacked in the past and millions of dollars worth money have been lost to those hacking. Investors appealed but no one listened to them.
Many conspiracies have also been connected with many exchanges like Mt.Gox which led to complete loss of investors money. Many crypto exchanges have also remained a target for hackers and some even indulged in scams as well.
The Bancor Protocol is challenging the status quo, by providing a fair and transparent platform for anyone to trade (buy or sell) their cryptocurrencies. Bancor employing an asynchronous price-discovery model enabled by asset-holding Smart Tokens™. Smart Tokens™ are always purchasable and sellable for the token(s) they hold in reserve. The continuous liquidity of Smart Tokens™ removes the barrier-to-liquidity and enables the trade of all kinds of cryptocurrencies.
There is no need to wait for a buyer or seller to trade cryptocurrencies. People have the freedom to choose of what and when to trade through The Bancor Network, instantly, without relying to 3rd party exchanges.
The ‘long tail’ of cryptocurrencies is growing, leading to diversity in overall valuations and trading
In cryptocurrency, the potential long tail could point to trillions of dollars in user-generated value when combining all small and niche currencies beyond the few largest. However, for a long tail to emerge in cryptocurrency, the liquidity problem must be solved and technical barriers to creating and managing a currency must be reduced.
Over 130 tokens now have an implied valuation of north of $10m, comprised of new blockchains like zcash, monero or litecoin and tokens created on top of existing blockchains (like ethereum or waves) such as golem, augur or gnosis. Just four years ago, only two tokens had a market cap over $10m, bitcoin and litecoin. Currently there are thousands of active cryptocurrencies.
In the last month, 18 tokens averaged over $10m in daily trading volume. The allocation of cryptocurrency trading across exchanges and currencies has changed markedly over the years.
To allow “smaller or less popular” cryptocurrencies to be liquid, Smart Token™ holds a reserve balance in one or more other ERC20 tokens, thereby enabling anyone to exchange between itself and any of its Connector tokens. The Smart Token’s™ smart contract issues new tokens (expanding the supply) to anyone who purchases it with any of its Connector tokens, and withdraws tokens from the Connector (contracting supply) for anyone choosing to liquidate the Smart Token™. The price of a Smart Token™ vis-a-vis any of its Connector tokens is calculated as a ratio between the current Smart Token’s™ supply and its Connector balance, at the pre-set Connector Weight.
There is no need for domination in the crypto industry. What we need is a fair and transparent technology to make people aware of the existence of cryptocurrency and makes it a no brainer.
