For enthusiasts, alternative investments professionals, and cryptographers, cryptocurrency is either the next greatest economic revolution, an incredible store of value in addition to being a cryptographic transaction medium, or the best problem to solve seen in decades. Yet, for the general public, even understanding what Bitcoin is remains hard at best, since the average consumer is simply not technically sophisticated enough to understand, let alone access cryptocurrency. And, even for many established finance professionals (outside of FX trading) the idea of a transactive medium simultaneously acting as a store of value is hard to stomach.
Cryptocurrency professionals understand this paradox: while cryptocurrencies like Bitcoin are valuable, their value comes from scarcity since all cryptocurrencies are fixed quantity-wise, which means different forces outside of traditional supply and demand dictate how they are valued. The result is an entire market starting from scratch with its own rules, stopping existing professionals in digital and in finance–the latter being a natural fit with blockchain technology–from automatically rolling over to crypto. So, up to this point, leading finance professionals and investors have declared Bitcoin a scam, and most leading professionals in digital have had to learn entirely new skills to participate in a nascent, but highly valuable and highly scalable market. The emergence of cryptocurrency has been hard for almost everyone to adapt to, but technologies that make cryptocurrencies more accessible and easier to mine and use are poised to help all participants in the overall value chain realize greater value from using cryptocurrencies.
New technologies pose the biggest value-add for people new to cryptocurrency, especially as exchanges are concerned. Though the most-used cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are tradable on a wide range exchanges, the majority of lesser-known cryptocurrencies are distributed throughout wide networks of micro exchanges with different fee structures and additional costs for transfers and other features, making all but the top cryptocurrencies selectively accessible. Despite this frustrating problem, new companies are rising to meet the challenge of solving it.
For example, a new blockchain app TAP, set to release just before Q1 2019, is a simple and universal solution for anyone looking to buy, trade, and spend cryptocurrency. It’s basically a one-stop shop for people who want to invest in and pay with cryptocurrency. The platform holds balances with crypto exchanges and card schemes to provide instant fulfillment. Its middleware can execute any trade instantly without having to wait for funds to be moved. The app provides instant transactions while providing optimal exchange rates by keeping users’ assets in multi-signatory cold storage, using its proprietary middleware to search all exchanges, including arbitrage, to find optimal rates for any cryptocurrency trade. For example, if a trader wanted to transfer BTC to GBP, TAP’s middleware could trade BTC to USD, then to GBP if USD provided the best exchange rate for that specific trade. TAP also provides a streamlined onboarding process for either FIAT or crypto to provide deliver industry-beating rates to its customers. Users can go through a one-time KYC process to be onboarded onto the platform, getting access to multiple exchanges simultaneously. TAP also provides its own card, which users can instruct the app to make purchases through the instant sale of their crypto. The TAP concept has been 2 years in development: in 2016, CEO Arsen Torosian realized the gap between people’s interest and willingness to buy cryptocurrency is caused by a lack of accessible, intuitive, centralized platforms. To fill that gap, Torosian recruited David Carr, a pre-paid card program specialist with a track record of launching 65 pre-paid card programs. With the help of high-quality investors such as Alphabit and GBIC, their ICO is imminent and the app is currently in its 3rd alpha release. With the features they boast, as well as with the strength of their backing, TAP is arching to hit a home run in crypto-accessibility through the blockchain fintech space.
Yet what about more sophisticated crypto and blockchain users? For people who understand and use the technology already, accessibility might seem not to be a problem. Counterintuitively, accessibility is even more of a problem for this group since many crypto users only use one exchange or trust one or two cryptocurrencies, and have a hard time justifying venturing outside what they already know. For companies looking to appeal to crypto-savvy user segments, the trick is to show them the benefits of other cryptocurrencies through platforms incentivizing further cryptocurrency investment. In this way, one need look no further than ICONOMI. ICONOMI is a digital asset management platform that allows beginners and experts alike to invest in a wide range of cryptocurrencies in portfolio fashion. Its flagship technology, ICONOMI’s proprietary Digital Asset Array, is a blockchain-based system for hedging investments in multiple cryptocurrencies simultaneously. The array is customizable, allowing the user to add a broad number of positions on various quantities of different cryptocurrencies. This allows individual users to manage risk based on their investment style. Like a hedge fund, users can adjust the balance of assets in their arrays to lower the risk of overall depreciation and use ICONOMI’s real-time interface to react to markets. Unlike a hedge fund, users can also syndicate investments with supportive users on the platform’s blockchain-based inter-account interface, which allows people on the platform to see each others’ trades and investments, contact, and request syndication, and get a yes or no in return. Syndicates typically swarm fairly quickly on the platform, and quarterly transaction volumes from investment syndication on the ICONOMI platform typically yield in the high tens of millions across cryptocurrencies. Cryptocurrency investors with long-term investment strategies involving hedging who already understand the technology but are dedicated to only one exchange and a few cryptocurrencies could make profitable use of this platform to extend their altcoin-based capital gains.
Some people, however, will never venture outside of the top cryptocurrencies, especially those who invest in and trade stocks as their main form of passive income. These mass market participants–mostly Millennials and financial services professionals–may know a bit about cryptocurrency, but not enough to get involved to their maximum potential. For this mass market, the current standard-bearer of consumer-facing crypto trading tools, Robinhood needs no introduction. The free app uses blockchain technology to authenticate and facilitate trades across 10,000 financial instruments in addition to Bitcoin, Ethereum, and Litecoin. The tech trading giant surpassed E*TRADE in user numbers in mid-Q2 2018 after attaining over 4 million users while closing a $363 million Series D round in May with an overall valuation of $5.6 billion. The company’s fundraising successes this fiscal year have been hailed by Millennials and seasoned market watchers alike as a watershed moment for fee-free investing able to deliver industry-standard returns, proving naysayers incorrect about blockchain fintech’s ability to level the playing field for new investors.
Blockchain fintech as an industry is changing the playing field with regard to the differential value experienced professionals and new market entrants are able to realize. Before the emergence of blockchain technology and cryptocurrency, the traditional financial services industry was the main decider as to which financial products anyone could use, and these institutions did and do favor high-net-worth families, individuals, and businesses. This is changing with the emergence of blockchain as a major disrupter in the financial industry, and the above are only a sampling of the major value blockchain is bringing. To find out more, read our article on ways blockchain technology can be used to benefit financial services.
How do you feel about the use of blockchain to make cryptocurrency accessible to everyone? Would you use any of the above apps or platforms? Which one, and why? Post in the comments below and let us know!