The following article was written by Luis Aureliano, a business writer and financial analyst. With over 15 years of experience in global finance and an MBA in economics and management, Luis’s areas of expertise include business, marketing, communications, personal finance, macro economics, stocks and emerging markets.
Bitcoin, the most popular cryptocurrency on the market, paved the way for other alternative coins to continue expanding on its foundation. However, even the newest alt coins still rely on blockchain, the backbone of bitcoin, to function.
Bitcoin is useful due to its ability to store value, but any digital coin can do that if there are enough people who will invest. Cryptocurrencies may have gained popularity as a digital form of money, but their usefulness is in a more extensive and complex venue. Blockchain technology and its developments have tapped into new potential in digital coins by unlocking them as platforms for services such as trading environments, lending platforms, social networks, and more.
Better Contracts
One of the biggest advantages cryptocurrencies offer is the ability to create smart contracts. When investors trade assets or purchase coins, they are often unknowingly interacting with smart contracts that automate the operations of their chosen platform. Cryptocurrency is the medium in which smart contracts function. They can be used to buy digitized assets such as sugar, corn, wheat, stocks, and other types of fiat currencies, by achieving parity with existing contract values. Accordingly, smart contracts also allow traders who own cryptocurrencies to trade even if they do not have the liquidity most exchanges necessitate.
Naga, for example, is a platform that offers clients a comprehensive list of thousands of both real and digital assets, on which they can trade by utilizing the Naga Coin (NGC). This up and coming blockchain-based exchange is joining a successful trend wherein cryptocurrencies are more than speculative instruments. For instance, the Naga exchange works in conjunction with special developer APIs that allow them to list the digital items from their videogames, opening a cross-platform market for players and investors into this new segment.
The Naga Group AG, which is launching NGC, has quickly become a hot item in the technology world. The company’s July IPO raised eyebrows with shares that soared by over 400% in three months. All told, the company’s IPO was one of the most successful on the Frankfurt Stock Exchange in the past 15 years. It has already proven deserving of such a title, with their seminal trading platform garnering over $4 billion in monthly trading volume and serving hundreds of thousands of investors. Naga is now working on creating a fully integrated trading ecosystem based on their NGC tokens that includes a crypto wallet, the wildly successful social trading platform SwipeStox, and a developers’ tool kit for decentralizing and selling virtual property directly on blockchain.
SwipeStox has already shown strong traction in the market, and Naga Group’s upcoming token sale promises to raise enough funds to continue expanding the existing ecosystem. With this new emphasis on cryptocurrency, Naga will let traders and investors build creative, unified portfolios more effectively than the status quo can.
Opening New Exchanges
Like Naga, many exchanges have their own version of a digital coin to conduct transactions on their platform. The token’s value is determined by its demand, but also by its eventual use in these services. In other words, the more popular the service, the more successful is its platform, and the healthier the market for their token. Though some exchanges and blockchain platforms may be new, the results of this race rely on their popularity and application, not necessarily time.
Due to these new coins and tokens that are quickly increasing in popularity, bitcoin has been left in the dust by its successors. Despite bitcoin’s position as a first mover, it has yet to show a convincing mainstream use case and resists change.
Underlying Value
While blockchain platforms play a significant role, the number of players in this space grows every day. It is not enough to merely conjure up a new blockchain service. For a platform to make it in this market, it must deliver a value its rivals have not offered by now. Among other industries, fintech firms that can make this happen best are ones like Naga who understand these changing paradigms, requirements, audiences, and can act accordingly.
Thanks to the companies leading the blockchain industry, even the uninitiated are able to understand its wider implications. As it creates more autonomous, seamless services across the world’s industries, this notion will become more accepted and reach critical mass. For startups pitching to venture capital firms (or doing their own token sale), the inclusion of blockchain will not be as important as the right use for it. Blockchain and cryptocurrency are not products, they are solutions, and as soon as the world has access to applications that use this solution to answer their biggest questions, the sooner we can all feel like we’re truly in the 21st century.