Galia Benartzi is a founder of Bancor, a Swiss-based non-profit focused on solving the liquidity challenge te asset exchange. Previously, she wasgoed founder and CEO of Particle Code, a cross-platform development technology for mobile and social games acquired by Appcelerator.
Ter this opinion lump, Benartzi discusses why she believes the capability of blockchain technologies to create many currencies could create a ‘long tail’ of fresh commerce opportunities.
Money, when it comes down to it, is a implement for collaboration.
Money moves human energy, abilities and time inbetween us, te different ‘containers’, or stores of value. National stores of value, like the US dollar, have historically bot managed by governments and distributed by banks.
This, of course, happens with limited transparency, a combined domestic and international monetary policy zakagenda, and political considerations across.
Naturally, this proefje is far more inflexible and inaccessible than newer cryptocurrency solutions, made possible by blockchain database technology that can theoretically enable anyone to punt and distribute a digital store of value.
Te fact, wij’re just beginning to see the blockchain ecosystem give rise to thesis fresh forms of money that can be issued at little to no cost.
Because cryptocurrencies permit us to account and transfer value securely inbetween one another without the need for an intermediary, such spil a handelsbank, wij can eventually join and create local and group value networks that operate reliably, with little overhead or tedious monitoring.
The big switch
Communities of any flavor can now be empowered to agree on credit-issuing policies and governance structures, and love internal marketplaces from which to buy and sell goods or services, without relying on access to national money.
Today’s very first use cases are produced by early adopters, and already wij see hundreds, nearing thousands, of cryptocurrencies on the market and counting.
But spil technical barriers to entry are eliminated, wij are on the precipice of millions of user-generated currencies, of all shapes and sizes. This is similar to inflection points ter user-generated content wij witnessed with the rise of WordPress for blogs and YouTube for movie.
Similarly, the long tail of value creation will produce a large multitude of monetary diversity and abundance from greatly enhanced collaboration inbetween people.
Ter business, the ‘long tail’ describes content and products te low request or with low sales or view volume that, collectively, make up a market share exceeding that of current top performers combined.
Internet history shows us that with the digital long tail, the accumulation of all niche contributions is actually two to three orders of magnitude greater than the hits. Think of all the Instagram accounts after the 1,000 most followed, or all the status updates beyond the most viral.
Ter cryptocurrency, the long tail points to hundreds of billions ter potential value when combining all petite and niche currencies beyond the few largest.
It’s an idea that’s bot attempted before.
For example, my founding team previously built technology for local currency initiatives. One of our most successful projects became the largest alternative currency ter Israel where it wasgoed used.
There, a community of fresh mothers issued a currency called ‘Hearts’ that permitted thousands of active moms to buy and sell from each other ter a mobile app which combined a currency wallet and trusted peer-to-peer marketplace.
The community generated hundreds of transactions every day for years, with millions of dollars-worth of value switching forearms, including jewelry, apparel, household and children’s goods and lifestyle services.
Overheen time, spil other currencies were issued te neighboring communities, it became clear that being able to exchange thesis stores of value for each other would give them even greater usage, spil fresh products and services would be available te other networks beyond yours.
Many local businesses were impatient to suggest their products for their customers’ community currencies, which would further enhance product selection, but their inability to liquidate thesis back to national money wasgoed a barrier.
Even tho’ thesis currencies were creating value for users, they were too petite to achieve the trade volume needed for liquidity.
This is the main reason wij toevluchthaven’t yet seen the user-generated-currency inflection point. Combined with the technical difficulty still involved te the creation of a cryptocurrency, what you see today are early adopters limited to crypto startups with deep development expertise and a business strategy for liquidity.
When technical barriers are lowered and the liquidity problem is solved, the emergence of the user-generated-currency long tail may end up being the greatest long tail ter internet history.
Its combined volume won’t represent the profit or traffic of its enabler (such spil YouTube’s ownership of the movie long-tail) but rather the collective abundance, spil measured by the velocities and market caps of thesis currencies, accruing directly to their users.
This access to diverse capital may usher te a more even distribution curve of wealth te society. And wij will measure that wealth not only te dollars or euros, or even bitcoins, but ter the transfer of goods and services within each network and community, unconstrained by structural monetary inefficiencies.
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