Bitcoin, the original electronic peer-to-peer digital currency system, was created in 2009. Along with it came blockchain technology, which fintech firms have since started using for purposes outside of simply mining more currency, or rivaling bank payment systems. While bitcoin remains by far the best known and most valuable cryptocurrency, some have started to express doubts about its future. Even as its price-per-coin soars, many see signs that point to bitcoin losing its popularity. One of the biggest catalysts of this notion is the number of new and more widely applicable uses that innovators have found for both blockchain and new alternative coins.
Bitcoin is in Retrograde
Bitcoin is a cryptocurrency with a strong presence in the global market and the fintech industry. Though it continues to rise in value, this digital coin is not keeping up with other newer assets on the market. It appears bitcoin is losing its touch with the trading community. Whether as a currency itself or as part of an ETF or other index, bitcoin may have a challenging time keeping up.
Today, almost any firm can have its own initial token sale (ITS) to raise money for a service that will incorporate these alternative coins down the road. This move lets companies garner investments in their idea without having to cede creative control, and it creates better engagement with their new platforms. These tokens derive value both from how popular they are (like bitcoin), but also have a more unique value proposition (use in a service).
Additionally, the very system on which bitcoin relies has far outstripped the usefulness of bitcoin itself. Banks, online exchanges, eCommerce websites, and countless other firms are beginning to use blockchain to create new services in existing industries, hoping to disrupt the status quo. Finally, Bitcoin may quickly be reaching overvalued territory. Though the coin’s value has consistently seen upward momentum, the current price point just might be too high for some people. This can cripple its popularity because of the way it’s denoted in the public. Advertising the price of a single bitcoin makes it sound much too expensive to the average retail investor, and deters investment in fractions of the coin that drive much of volume.
New Assets on the Rise
As more online trading companies and exchanges go with blockchain technology, clients have a more varied and comprehensive list of assets with new lucrative additions. This isn’t yet a problem, but could spell big trouble for bitcoin down the road. As new coins and tokens offer unique capabilities, bitcoin remains mostly one-dimensional in uses. Ethereum, for example, revolutionized blockchain with its implementation of smart contracts.
Newly-created cryptocurrencies are not hard to come by, and smart companies are increasingly choosing to mint their own digital coins rather than use existing ones. Naga Group AG, for example, is a digital asset trading innovator that has recently launched an exchange around their NGC token, where clients can trade currencies (fiat or crypto), commodities, stocks, indices and other virtual assets. The Naga platform makes all investable assets accessible to those with Naga Coin in a single comprehensive interface. This new cryptocurrency solution is the latest addition to the Naga’s trading ecosystem, which already includes SwipeStox, a platform for social investing across more than 700 assets. Other fintech companies are also looking towards blockchain to make assets more reachable to a wider audience, but Naga has a significant head start due to the infrastructure they’ve already built, and their stunning market achievements.
The team is already responsible for successful fintech products that serve hundreds of thousands of traders daily, and have a wildly successful IPO under their belts. Driven by industry experience and a stellar product, the company’s initial public offering was the Frankfurt Stock Exchange’s most successful in over 15 years.
Alongside industry experience with compliance and customer service, another unique component of Naga’s value proposition is the ability for game developers to list their in-game items on the exchange. This special API, called Switex, unlocks the true market demand for virtual property by itself, and as an investment vehicle as well. With 500% performance on their stock since being listed, Naga is looking to take their upcoming initial token sale to a new level and capitalize on their momentum.
ETFs (Exchange Traded Funds) consisting of groups of classic digitized assets such as commodities are also available on blockchain. Creative fund managers can develop algorithms for autonomously managed indices of real or crypto-assets. Platforms like Naga provide firm infrastructure and liquidity for such investment instruments, which could be integral in reducing the volatility of cryptocurrency.
Why Choose New Assets Over Bitcoin?
Despite Bitcoin’s popularity, the digital coin has run into some serious issues, most of which have to do with cybersecurity. First, Bitcoin wallets have been hacked before, with more than 2,600 cyber-attacks taking place before January 2016 alone. While blockchain technology is considered a more secure system to store data, it is not bulletproof just yet, and increasing popularity makes it a bigger target.
Second, new wallets can become vulnerable if old passwords are appropriated from backups. There exist exploits that drain old and new wallets both, instead of just emptying the old wallet into the new one. For users to avoid this situation, they must create a new account and a new address, to which the purchased bitcoins would be sent from the old wallet. This roundabout, bootstrapped way of using bitcoin has a long way to go before being able to support a real economy.
Though Bitcoin is considered untraceable because it is not connected to a bank account or credit card, this statement is not entirely true. A hacker can track the transactions history of the digital coin, which would allow him to connect identities to addresses. Once he manages to do that, he may be able to find whatever financial information is necessary through other databases.
Bitcoin and Its Competition
Bitcoin is a popular choice among crypto traders, but its rivals might be able to overthrow it sooner than some realize. Nowadays, anyone who has access to the internet can have his or her own coin, a fact supported by the sheer number of companies that now have their own digital coins. Furthermore, bitcoin is being pushed aside due to the widening variety of new assets that are now available online to. Some have even called Bitcoin a bubble that is just waiting to implode on itself. Regardless, unless the original cryptocurrency can finally find a way to justify its high valuation, it may soon be left in the lurch by its more useful and affordable competitors.