If We Have Millions Of Different Coins, How Are We Going To Manage And Use Them?
An attempt at simplifying blockchain concepts, companies, and coins.
By Julian Jung
Last week I put together a newsletter explaining why I think we will have millions of different tokens. In case you missed it, you can check it out here. Immediately after sending out the issue, I had multiple people pose the same question. See screenshot below.
I am with you Jared. It's already insanity keeping up with multiple wallets and exchanges. One can only imagine what happens when the number of coins multiply by 100x.
Something to keep in mind. When the first cars came out. Everyone thought they were ridiculous. They could only go 5 MPH, and you had to have at least 3 people man it (an engineer, a driver and my favorite: a person holding a red flag that would have to run 100 feet ahead of it to warn pedestrians about the car that was heading its way) on top of that, cars had to operate on cobblestone roads so they would frequently get stuck.
Ok, maybe something a little more relevant to all of us. Do you remember the days of dial up internet? What could you possibly get done with that?
The point that I am trying to make here is that we are still in the early days of crypto. If you are reading and sharing (especially sharing), this newsletter and investing, you are pioneers in the space. You are the car red-flag-bearers, those who would trade their phone line to get on the internet back in the day. But as we all know, innovation moves forward in technology, and it will soon make this space truly usable.
How I imagine it happening in the crypto future: we will have something similar to LIBOR, an international standard for calculating interest rates. Once we are able to establish a pegged exchange rate for various crypto currencies, you will start to see a proliferation of simple consumer apps that will store all of your coins, and allow for instantaneous transactions using the coins that are best suited for the job (Bitcoin for big purchases, Ether for smart contracts, Litecoin for tipping people). What is necessary is a fair and standardized format to swap tokens instantaneously.
Some projects now that are helping us drive towards the future of seamless & instantaneous transactions are atomic swaps and interoperable exchange protocols. Atomic swaps allow for instantaneous exchanging of one token to another without the need of a 3rd party (read more with the link above).
An example of an interoperable exchange protocol would be 0x. 0x identified an obvious problem: all of these blockchain companies are essentially building their own exchanges from scratch. As a result, you have differing degrees of quality and they are silo-ed off from one another. 0x is building a standardized exchange protocol that allows anyone to plug into their smart contracts and add exchange functionality. This will make it a lot easier to trade fiat for x token, and x token for y token. I actually really like this project and if you have a chance you should spin through their white paper.
End of the day, you have to remember that we are just in the second inning when it comes to the Crypto world. There are a lot of really smart people entering the space that will make it a whole lot easier in the near future. The days of remembering your private keys, triple checking your send addresses, writing down 24 random words for your ledger are numbered. It won't matter if you have 10 tokens or a million...keep trudging on.
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Disclaimer: I hold 0x tokens and nothing in this newsletter should be considered financial advice. Please do your own research as investing in cryptos is highly speculative.
Keep the questions coming! Don't forget that I am also learning on this Crypto journey with all of you. What an exciting time to be alive!