What’s in Store for the Future of Cryptocurrencies?
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Bitcoin Press Release: So far in 2018, the cryptocurrency bears have the upper hand. Major digital currencies like bitcoin have failed to impress investors like they did last year, and the December 2017 highs seem like a pipedream. In fact, some have gone so far as to say that the bitcoin bubble has burst. This brings up a very important question–what’s in store for the future of cryptocurrencies?
One ongoing industry trend is the threat of regulation. In Asia, for example, China has continued its regulatory crackdown. Bloomberg recently reported that China is “targeting platforms that allow the nation’s investors to trade digital assets on overseas exchanges, people familiar with the matter said.” This comes on the heels of other regulatory measures, and represents the Chinese government’s desire to “to cut off one of the few remaining avenues for Chinese citizens to buy digital assets.”
South Korea, another country known for its tougher stance on cryptocurrencies, is still largely undecided on how to implement its goal of “foster[ing] transparency in cryptocurrency trading, with regulators monitoring any illegal activity.” In some ways, however, the future doesn’t look too bright, as many South Korean millennials have been hurt badly by cryptocurrency trading. It is causing depression among some according to Garrick Hileman at the University of Cambridge, while other South Koreans are “losing motivation to go to work.” This is because “they are watching their peers make 10 times what they’re making in their day jobs just by speculating on cryptocurrencies.”
At the same time, though, the deflating of the bitcoin bubble might not be all bad. In South Korea, for example, citizens will be able to pay using cryptocurrencies in over 6,000 stores. On the other side of the Pacific Ocean, San Francisco based Coinbase recently released a service that lets merchants take Bitcoin, Bitcoin Cash, Ethereum, and Litecoin payments. Ironically enough, the decrease in cryptocurrency speculation and increase in regulation is driving the industry more towards the original purpose of bitcoin–a means of making anonymous, decentralized peer-to-peer payments. In this ever changing environment, it appears as if the payment method route is the way to go.
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The Need for Speed and Trust in Asia
In the Asian blockchain market in particular, there is a need for both increased speed and greater trust. Speed is essential because it’s what keeps Asian businesses interested in crypto payments. If a business owner can use an existing method that is faster than a blockchain based payment system, why use the blockchain at all? Additionally, existing crypto payment alternatives suffer from a lack of trust. The lack of transparency and traceability are two of the main reasons why Asian regulators have cracked down on cryptocurrencies and blockchain companies so severely. Blockchain startups need to focus on providing quick transaction times without compromising trust compliance.
One blockchain company, COTI, is developing a decentralized currency of the internet, with the goal of streamlining the world’s ecommerce network. The platform facilitates peer-to-peer B2B, B2C, and C2C payments while at the same time addressing two major blockchain issues–network speed and a lack of trust.
The platform will be able to process up to 10,000 transactions per second, keeping it competitive with traditional payment platforms like PayPal or Visa while at the same time outclassing its blockchain competitors. To address the trust issue, COTI utilizes an internal Trust Scoring Engine that uses both quantitative and qualitative data to assign each party an objective “trust score”. Thus platform users will be able to gauge the overall trustworthiness of the counterparty and still maintain a level of security and anonymity. The Trust Scoring Engine also plays an essential role in keeping transaction costs low–those with higher trust scores are subject to lower fees, and vice versa. The COTI platform is ideal for global e-commerce and international payments, because it addresses two major concerns that are typically associated with crypto cross-border payments–security and speed.
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Other companies are focusing on incorporating blockchain technology into existing payment methods. One example, Graft, is a global, blockchain powered, decentralized payment gateway that accepts traditional payment systems–like credit, debit, and prepaid cards–in addition to cryptocurrencies. It allows merchants to easily take any payment method at the point of sale and is ideally suited for retail settings. The company is in the process of integrating with traditional payment terminals like card readers, making the implementation process easy for pop-up shops and stores
Still other companies like the Request Network are working on systems that automate accounting operations such as accounts payable and payroll. In essence, their global blockchain platform lets users request payments directly from payees, thereby removing third parties like banks and credit card companies. The system gives users a level of flexibility as well, because sellers can modify invoices or issue credits and discounts. In theory, companies can perform key accounting functions in real time, which cuts costs and improves operational efficiency.
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