According to CoinMarketCap, there are currently over 1,600 different cryptocurrencies, and looking at the different token sale websites – hundreds more will soon be upon us.
The word “cryptocurrency” itself was synonymous with “Bitcoin,” as it was the only player in the space.
Bitcoin was created after the 2008 financial crisis by the pseudonymous cryptographer, Satoshi Nakamoto. Its creation ultimately started a ripple effect, quickly disrupting numerous industries by making blockchain technology and virtual currencies more mainstream. In turn, it also served as the inspiration behind the ebb and flow of cryptocurrencies, corporate digital transformations and market trends that followed.
Since the creation of Bitcoin and the multitude of cryptocurrencies that branched from it, the use of distributed ledger technologies became widespread. Bitcoin, although successful at becoming “digital cash” and an electronic store-of-value, lacked many features, which ultimately left much more to be desired for.
Ethereum is one of the best examples of a popular cryptocurrency platform, utilizing smart contracts to allow for a new era of decentralized technology innovation: Blockchain 2.0. Ethereum became an essential part of expanding the cryptocurrency industry, as hundreds, if not thousands of cryptocurrency projects began as an Ethereum smart contract.
These prompted savvy investors to invest capital in a variety of cryptocurrencies, on a multitude of exchanges. On the flip side however, the array of cryptocurrencies available made it difficult to track, trade and monitor the holdings themselves, which often exist across a variety of exchanges, wallets, and infrastructure platforms. Decentralized exchanges (also known as DEXs by the cryptocurrency community) have tried to fixamend this problem.
DEXs use smart contracts, with a consumer accessible UI meant for peer-to-peer (P2P) cryptocurrency transfers that require no intermediary parties, such as exchange servers or centralized entities. DEXs have the capability to support hundreds of cryptocurrencies, rather than the few seen on exchanges such as Coinbase. This has led to a growing user base of these new kinds of exchanges, drawing in many ICO and Ethereum erc20 investors and traders.
Although somewhat successful, many DEXs often lack the proper volume compared to other major exchanges. This lack of liquidity can often lead to large spreads between the prices seen on traditional exchanges and DEX. But as the DEX industry expands, as it has been over the past months, it will be the responsibility of the user to find a way to take advantage of the closing liquidity gaps between the varieties of exchanges.
The natural evolution in this case was the rise of crypto-portfolio tracking apps.
Blockfolio is a rather popular app, with over 1 million downloads in Google Play. Totle is a crypto management tool that aggregates order books from decentralized exchanges onto its platform, letting its users buy and sell across DEXs such as EtherDelta, Bancor, Kyber and Radar Relay without sacrificing security or user privacy, a tradeoff that users of centralized exchanges usually accept.
Despite the growing number of unique cryptocurrencies, there has been a sector that has been largely kept out of the industry: traditional securities. Platforms such as Polymath are attempting to fix this exclusion by introducing ways for companies to create and utilize security tokens.
Securities tokens essentially bring traditional assets, like stocks, and REITs (real estate investment trusts) on to a blockchain, facilitating the transfer of traditional assets into a new medium. Although these are still in their early stages, many cryptocurrency experts expect securities tokens to be the next big blockchain innovation, drawing traditional institutions to realize the benefits of using blockchain technology.
Traditional assets, such as stocks, have become the main focus of innovators working on creating securities tokens. However, alternative assets (such as hedge funds, private equity and non-listed REITS) have been largely swept under the rug in an effort to bring “real” assets on to the blockchain.
OpenFinanceNetwork (OFN) supports the alternative assets industry by expediting the transfer of the alternative assets through its trading platform. Its platform offers securities token trading, providing increased accessibility and reliability to more consumers. OFN works with brokerages, custodians, banks and other financial institutions to ensure the reliability required for a security token trading platform.
The exponential growth of the crypto marketing is just getting started, and it’s interesting to see how we catch up to it.