While the inherent volatility in blockchain-based cryptocurrencies has frequently found its way to major news outlets, developments in the background are of far greater import for the crypto ecosystem. The sustainability of these new digital currencies is routinely called into question, which is justifiable considering their fungibility, so addressing these concerns is crucial. Many ICOs and cryptocurrencies have been riding the hype wave without demonstrating their longevity, yet the young technology’s flaws are now a somewhat ironic catalyst for a host of new complementary services designed to plug these holes.
Though pundits criticize the ascent of cryptocurrency and their questionable fungibility, the calls for imminent demise are missing the greater point, which is the wave of innovative services and partnership announcements that will improve the young ecosystem. New second layer solutions and products focused towards interoperability are bringing a tsunami of change to blockchain and its associated offerings. The unveiling of industry-wide streamlining efforts is proving much more important than the speculative elements of cryptocurrency. If adoption is a function of a service’s unique utility, these newly announced partnerships will breathe fresh life into the nascent industry and help it garner greater support.
Facing the Fungibility Requirement
The main properties of any fiat currency are wholly interchangeable units that are also spendable. Although the requirement of interchangeability has been met, the spending component remains problematic for cryptocurrency. After announcing the acceptance of bitcoin in 2017, some major multinationals are abandoning this new payment method, considering the extraordinarily high costs of execution and potential volatility. Furthermore, it remains a sluggish alternative relative to credit cards and other forms of online payment.
Although newer entrants to the cryptocurrency sphere have focused on fixing this issue, while also presenting viable competition to existing payment forms, these alternatives are still not widely accepted. One of the major reasons associated with slow adoption is the number of steps required to move funds into and out of blockchain ecosystems. Aside from the obvious multi-stage process for moving funds, these currencies are not universally accepted due to their existing drawbacks.
Looking beyond these attributes, the most overlooked subject in the cryptocurrency arena is the lack of interoperability. Without an easier, more efficient way to participate, widespread adoption of blockchain and its services will remain a slow process. The many barriers to entry remain significant for ordinary individuals who want to benefit from newly emerged utilities, hurting broader acceptance of blockchain’s unique characteristics that make it a perfect force of disintermediation.
Merging the Internet of Value
Blockchain has long been viewed as a positive force of change across industries. It helps the internet meet its original ambition to seamlessly transfer value in the absence of centralized gatekeepers—a definition the Internet of Value that has been elusive, until now. For blockchain adopters, 2018 promises to be the year of change for irritating impediments. Primarily, the launch of the Lightning Network promises to make using cryptocurrency exchanges much easier, thanks to its second layer protocol which helps users transact off-chain. This helps expand interoperability and exchangeability to millions of transactions per second while reducing clearing times to seconds and eliminating the associated costs.
Apart from the introduction of the high-profile Lightning Network, other innovators have taken it upon themselves to offer equally impressive alternatives. Request Network, for instance, aims to fill the gaps in the online invoicing and payment sector. Apart from payment processing, the system is designed to handle invoicing, auditing, and incorporate IoT systems, all while integrating every global currency in a low-touch ecosystem. However, these are just the newest ideas designed to improve the functionality of the cryptocurrency environment and encourage broader blockchain adoption.
Enterprise level clients are also on the hunt to harness the best and brightest blockchain has to offer, but it depends largely on overcoming the technology’s many defects. The Internet of Things, which works to collect data from connected devices, has been a powerful industry buzzword for some time. Now, firms like IOTA are helping their customers collect this data more effectively with blockchain technology. The idea is so potent that IOTA has publicized its recent partnership with Volkswagen as proof of blockchain’s revolutionary potential in the auto industry. Thanks to its incorporation of Tangle, a protocol for verifying transactions that is significantly cheaper than the Proof-of-Stake or Proof-of-Work consensus methods, the system is lighter and enterprise-ready, increasing the appeal for a greater embrace from multinationals.
Even retail is full of opportunities for blockchain-based partnerships, as evidenced by the recent collaboration announcement between retail engagement platform HotNow and Stellar. HotNow brings merchants and consumers together through their gamified engagement application, awarding users with HoToKeN for promotional activities that aid participating retailers. HTKN can then be redeemed for discounts at merchants, helping bring online retail traffic through the doors of offline merchants and closing the value cycle without any leakage. By integrating Stellar and its own Lumens cryptocurrency protocol with HoToKeN, merchants can accept micropayments and more importantly HTKN instantaneously at a very low cost, improving the overall appeal and fungibility of the system for both users and vendors.
Expanding Upon Blockchain’s True Value
Though blockchain is still a young technology, it has already displayed magnificent adaptive potential for those entities that can find uses for the infrastructure, and that are also willing to plug the gaps with secondary systems designed to improve accessibility. As the potent examples above illustrate, blockchain can be highly dynamic and truly impactful when services and currencies are paired with the right solutions, helping improve the overall ecosystem’s longevity. With these sorts of efforts leading the charge towards greater user-friendliness and openness, the pace of adoption could quickly echo the rapid rate of blockchain’s modernization.
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