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David Drake

February 25, 2018Article

How Leading Cryptocurrencies are Competing to Take the Digital Crown


The CoinMarket currently has about 15OO cryptocurrencies listed with a total market capitalization of about $509 billion as of February 20. However, Bitcoin continues to dominate the market with its current market capitalization standing at $194 billion. But will this cryptocurrency continue to carry the digital crown in terms of value and popularity?

According to Dr. John Mathews, CFO at
Bitnation, Bitcoin could maintain its high value in the short-run due to its strong and secure network.

"Bitcoin is the most mature blockchain (9 years) and has a stronger brand than any other coin. It also continues to enjoy strong network effects and a highly skilled developer base. It is the safest asset within the crypto-currency ecosystem. For these reasons Bitcoin's value will continue to exceed other coins," Mathews says.


Growing competition

But this isn’t the only reason why Bitcoin's reign is under threat. Three currencies, Ethereum, Ripple and Bitcoin Cash, are a close second and quickly closing in since they’re growing at a fast speed in their aggregate market capitalization. It’s, therefore, likely that one of these currencies could dethrone Bitcoin to become the next market leader.

Ethereum, the second cryptocurrency with a 19.8% market dominance, offers a unique advantage through its blockchain platform. Its ability to support other applications offers a promising growth potential and more transaction volumes. Its platform allows for the creation of smart contracts and digital tokens while providing vast opportunities for crowdfunding as well as the automation of the traditional organizational structure. It also offers faster transaction speeds, an aspect that places it in a better position to take the crown from Bitcoin.

Marcus Vandea, CEO at
Playfold, says, “Ethereum will become the absolute king of the blockchain world, akin to what Google and Amazon are to cloud computing. Bitcoin will be sacrificed for the sake of the other coins.”

Bitcoin cash is another cryptocurrency that’s in the upper echelons of challenging Bitcoin’s dominance. A forked currency that split from Bitcoin's original blockchain, Bitcoin Cash was created to address problems such as slow transaction speeds and limitations with scaling up experienced by Bitcoin. Though it was only created in August 2017, Bitcoin Cash currently enjoys a 5% market share.

”Bitcoin fees and transfer times have quickly become obsolete. Now there are plenty of choices with instant, untraceable, and feeless transfers. Bitcoin Cash surprised us all with a massive price surge that attacked Bitcoin last year. I think we will see scenarios like this again this year. After all the whole point of new technology is to replace the old with something better. However, who will take this crown is pure speculation at this point,” notes Vincent Jaques, CEO at
ChainTrade.


Rising Innovation

Ripple, on the other hand, offers an instant payment system. Commanding a 9% share in the cryptocurrency market, Ripple's blockchain platform reduces fees and transaction processing delays for users, an aspect that offers great prospects for growth should mainstream financial institutions and intermediaries adopt it. If this happens, this innovative platform could challenge Bitcoin's dominance in the digital currency market, as Mathews notes.

"Bitcoins growth rate will be surpassed by smaller projects that innovate and progress toward making crypto accessible to the mainstream," he says.

This makes Ripple a major currency to watch out for especially now that leading financial institutions in the money transfer business, like Western Union, have began to run trials on its blockchain platform.

As these three cryptocurrencies compete for the crown, Andrew Prell, CEO of Convergence and
Silica Nexus, notes that the digital crown will go to whichever currency can tame price fluctuations.

“As the use of crypto for online, Fintech and retail transactions increases, it will likely be those that can answer volatility control best that will outpace bitcoin, the ‘digital gold’, as the crowning currency of 2018,” he says.





Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.


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David Drake

June 8, 2018 Article

Are Companies Ready for a Decentralized Future?


Survey results presented by Deloitte during the recent Consensus event show that corporations are changing momentum and opting to explore the possibility of blockchain to build practical business applications. According to the survey, 74% of large firms see a compelling business case for this dynamic technology.

The survey was conducted between March and April of this year in seven countries including France, Canada, China and the US. More than 1,000 executives drawn from industries such as healthcare, technology, media and finance participated in the survey.

Almost half of them expressed interest in this “
trustless ecosystem” and mentioned their firms already have a blockchain system in place while 41% aim their technology to be operational next year.

Inevitable Growth

According to Juan Imaz, CEO and founder of
Profede, application of blockchain technology has already started in some industries.

He says, “Throughout various industries from healthcare to finance, blockchain’s breakthrough technology is already being implemented and investigated to improve and enhance the way institutions and organisations function. From Fortune 500 companies to startups, blockchain is making its way.”

Imaz proceeds to highlight Western Union and Airbnb as examples of corporates that have already began using blockchain.

He says, “Western Union conducted a blockchain-based payments trial with Ripple. Airbnb bought ChangeCoin which is a bitcoin startup and also acquired a team of blockchain experts. For its data tracking and management processes, retail giant Walmart is now using blockchain.”

On his part, Navjit Dhaliwal, CEO of
Iagon feels the survey results reflect an imminent boom of blockchain in corporations.

He says, “In my opinion, we are currently at the stage of enhanced innovative capabilities and as Blockchain technology begins to be widely adopted, it seems as though this is the moment in which, yes, we are looking at the inevitable upsurge of Blockchain adoption and implementation within the corporate realm.”

Further, Dhaliwal highlights several companies that are considering blockchain. He says, “As seen with Salt Lake City-based Evernym, Brazil-based ConsenSys and UK-based Electron, when considering the impact that the enhanced acceptance of blockchain technology with corporates will have on the growing cryptocurrency industry, it is undeniable that, by corporations adopting and implementing Blockchain tech, the cryptocurrency industry will experience similar growth.”

Just an Overhype

Although many companies are shifting their views to adopt a pragmatic mindset, almost 39% stated that blockchain is “
overhyped”. Interestingly, 44% of American executives who were surveyed shared the same sentiment.

Nonetheless, the report shows that more companies are demonstrating interest in blockchain. This is a definite improvement to the
2017 Deloitte survey, where almost 40% of those surveyed have limited or zero knowledge of this technology.

According to Reginald Ringgold, founder of BlockVest Decentralized Exchange & Index Fund, HSBC is the largest crusader of CDM, which is the key to enabling blockchain become a reality within the derivatives space.

He says, “HSBC says it’s made the world’s first trade finance transaction using blockchain. Couple that with the U.K-based bank Barclays recently setting up an internal CDM adoption working group, and will be presenting its vision for how smart contracts can be combined with the concept Thursday at ISDA’s annual meeting in Miami, Florida.”

Ringgold further adds, “It’s a pivotal time for the project, as ISDA is expected to release the first iteration of the blockchain-compatible version of CDM early this summer. If the capital markets transition to the Common Domain Model, then this will open up a world of opportunities to standardize data structures, lifecycle events etc. Enlight of this we are definitely staring at a upsurge of use in Blockchain Technology within the financial worlds Derivatives markets as well as international trade. This will definitely boost the future growth of the cryptocurrency industry as more institutional money flows into the sector.”

Imaz believes this is just the beginning for blockchain. He adds that, “Once big giants use this innovative technology to improve their efficiency and costs, we will see widespread knowledge and growth of blockchain-based technology being used in the future.”

Ringgold further comments, “BlockVest, HSBC & Barclays will all benefit immensely from the advancement of Blockchain Technology within Derivatives markets and a transition to a Common Domain Model (CDM). As it is supposed to fix the inefficiencies and cut the costs of derivatives trading.”

 

 Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.


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