Easy Cryptocurrency Trading: The White Whale of the Blockchain Industry
Without looking it up, when would you guess the Internet was invented? As with many things in life, the right answer to that question is up for interpretation, but for our purposes let’s stipulate that it was in 1990, when Tim Berners-Lee began writing the code that would become the WorldWideWeb.
Lee’s invention, the first scalable and usable attempt to connect geographically disperse computers over a network was misunderstood, mocked and dismissed for years after its release. It was looked at as a tool for hobbyists, for professionals, or worst of all, for nerds!
That was the case until a quietly successful technology company burst into the public consciousness with a product that made accessing the WorldWideWeb simple for the first time. That company and eponymous product was called America Online (AOL), and it did for the internet what no company has quiet managed to accomplish for Blockchain (as of writing). AOL made the internet truly user-friendly and easily accessible, even for the most technology-phobic among us.
Within a few short years, AOL introduced millions of people to the internet — in 1998, 11% of people in the developed world were on the internet, but by 2002 penetration had surpassed 40% — while playing a huge role in shifting public opinion about the technology from scorn to obsession. Why was AOL so successful? They made accessing and using the internet reliable, understandable, and most importantly, simple.
The Importance of Simplicity
The vast majority of jobs in this world are in some way related to sales. That is because salespeople are charged with an incredibly difficult task: motivating people to break from their routine. People will find any number of reasons to adhere to their habits, rather than straying into the uncharted territory of the “new,” even when the positive effects overwhelm their negative counterpoints.
Perhaps chief among those reasons is intimidation from perceive complexity, something we have all experienced at one point or another. This is particularly powerful blocker, as it prevents us from even getting started, from making the first attempt. This is why the hardest part of a college calculus course often is simply signing up, or why learning to play guitar is the first song.
Fortunately, complexity can be overcome. For the student, this means peeking at the textbook and realizing the initial concepts aren’t so hard, or the guitar player, learning the simplest of C chords. Achieving a goal in the face of complexity often comes down to finding ways to simplify the complex by taking a iterative approach and bringing ease where once only friction existed.
What Simplicity Means for Blockchain
Everything about blockchain is complicated… but it doesn’t have to be. Because blockchain was created by engineers, for engineers (at least to start), much like the Internet, a painless user experience was not prioritized in its design. From their point of view, surely other engineers would be able to make use of the system, so usability was not of the highest concern at the time.
While blockchain remained a niche technology, this weakness in the technology was not a serious issue, as anyone interested enough in putting the immature invention to use was certainly willing to learn how to do so. But, as interest in blockchain, born largely out of the excitement elicited from the cryptocurrency markets began to grow, it quickly became apparent that the complexity of the system remained a serious barrier to mass adoption.
From wallets, to addresses, to blocks to mining, blockchain is at its core a behemoth of complexity. But once you understand that a wallet is like personal bank account, an address is that account’s number, a block is a section of a ledger and mining is the construction of ledger as a whole, suddenly the intimidation begins to melt away.
Challenges in Trading Cryptocurrencies
This brings us to crypto trading, and there difficulties therein. This has thus far been the “gateway drug” of blockchain, the introduction for the majority of new disciples. What makes crypto trading the perfect in? The same thing that seems to make the world go ‘round… money.
For years, though in 2017 especially, savvy and daring investors have found ways to profit from the strategic purchase and sale of various cryptocurrencies. The crypto market is attractive to a diversity of investors due to its volatility (daily price shifts of 5% or more are common, while in stocks, a 2% change in considered significant) and availability.
But, while some investors have found ways to be successful trading these assets, far more would-be investors have yet to begin, despite having the interest and will to do so. Why is that? It, of course, comes back to complexity.
For years, the only way to invest in cryptocurrencies was to use exchanges that were specifically designed to act as marketplaces for these unique assets. People could create accounts on the exchanges, and purchase various cryptocurrency tokens as they please, and later sell them, ideally for a profit.
Sounds easy, right?
Well… not so fast.
To use an exchange, people first need to be in the right place, as most are limited to specific geographical locations. Until recently, investors could only transact in the form of Bitcoin-X (where X = a different cryptocurrency), rather than directly from say, dollars or euros. Then, rather than simply being able to buy the tokens at an assumed set value, the investor would have to declare the specific value they were willing to pay for the other token, once again not in dollars, but in Bitcoin.
The investor would have to repeat this multi-layered conversion process over and over for each individual cryptocurrency, of which over 2,000 are in existence and are traded 24/7. It would take weeks of research and practice, even for experienced traders to learn the process and master it even in its simplest form.
After years of this mess, the industry began to take notice of this fundamental problem, coming to the realization that the inherent complexity of the system was fundamentally preventing the technology’s development, as millions of would-be users, investors and participants were shunned from doing so due to their justified intimidation.
That’s when the real progress began…
Sanity Starts Coming to Crypto
Beginning in January of 2017, the cryptocurrency markets experienced an unexpected and unprecedented swell in value, and attention. The global market cap rose from $18 billion to $112 billion by June, before skyrocketing to almost $800 billion in December. The once niche market was now worth more than the most valuable company in the world at the time, and had captured the attention of not just the hobbyists, but of everyone.
Suddenly it wasn’t just the most technologically-savvy among us who wanted to invest in this technology, but everyday people — parents, grandparents, students — who months before had never given it a thought. But as they attempted to make their first investments, they soon realized what those in the industry had know for years — investing in cryptocurrencies was like investing in stocks, but was in fact far more complicated.
Investing in stocks is easy. You either call your broker and tell them how much you want to invest and where, or you buy the stock yourself using a straightforward software like e-Trade or Robinhood. Its easy enough for anyone to do, you simply see the price of the stock and select how many shares you want, and the system does the math for you. But that is not how cryptocurrency exchanges work. The stock purchase, know as a “market order” requires only one decision — how many shares do I want?
But as discussed above, cryptocurrency exchanges don’t allow you to make market orders, only “limit orders,” where the price must be set each time, requiring multiple conversions. For years, this was the only way to invest in cryptocurrencies, until a series of dedicated companies began working to make this process easier.
The first company to really take a step forward was Coinbase. They offered investors the ability to buy a small selection of cryptocurrencies without having to go through the exchange process. But Coinbase offered relatively few cryptocurrencies to choose from — in fact of the 1000’s of cryptocurrencies in existence, even today Coinbase offers fewer than 10.
Another company, Shapeshift offered investors the ability to convert different pairs of cryptocurrencies quickly, but at a serious marked-up price. It made conversions easier, but didn’t offer novice investors any tools to help them know how best to invest.
More recently, a new era of companies have emerged that exist specifically to make the investment process as easy as possible for people. Elevatyr, for example, gives people the ability to invest in a diverse portfolio of cryptocurrencies instantly. So, rather than having to buy one cryptocurrency at a time, people can invest in a dozen or more of the world’s most popular cryptocurrencies simultaneously, bringing the stock investing experience one step closer to crypto.
The Future Is Bright
We are still only at the beginning of what industry insiders hopes will be a revolution in finance, investing, and in the fundamental way the world works. As time marches on, investing in this emerging technology will continue to become easier, faster, and simpler all around, as companies like Elevatyr continue to find ways to make cryptocurrency a fundamental part of our economy and lives.
Disclosure: This article does not represent cryptocurrency investment advice, and is for informational purposes only. Trading decisions should be made on an individual basis, and be informed by independent research. Elevatyr makes no recommendation as to trading behavior that should or should not be taken. The author of this article owns a small stake of a variety of cryptocurrencies.
