While ICO mania and speculation have dominated the cryptocurrency headlines, the future of cryptocurrencies lies in tying specific cryptocurrencies to specific uses. Many are caught in the idea of a straight swap of BTC for fiat currency. What is more likely to happen is a piecemeal swap of industry-specific coins as new companies and industries start transacting in their own cryptocurrencies and leaving fiat currencies behind.
BTC is already the de facto cryptocurrency reserve currency when trading from altcoin to altcoin where the trading pair is not available. The altcoin would first be traded to BTC and then swapped for the desired altcoin. But this is not efficient as the trade has to be done via an exchange. And it comes with the added difficulties of time and security. The ability to trade BTC for DASH or ETH for MIOTA is needed, without going through an exchange. For this to happen, a service layer solution is needed.
Service Layer Solution
One current service layer solution company is Laser.xyz. Laser offers a service layer model that operates on top of the blockchain network. They offer features that are not native to a particular blockchain, such as anonymous transactions and instant transfer. And they also offer interoperability between blockchains that have adopted this service layer. Currently, fiat currencies are exchanged between banks using the SWIFT protocol. No such protocol exists for cryptocurrencies, and Laser is seeking to remedy this.
Laser offers pseudo-confirmation of transactions in seconds, a blockchain agnostic service layer to seamlessly facilitate transactions from one chain to the other, and anonymity of ownership. Laser is not a cryptocurrency, though it has its own photon cryptocurrency.
Laser’s model provides for compensation of full nodes, while also requiring them to put up collateral to operate. With incentives to provide stable computing resources, Laser promises a reliable, trustworthy, and sustainable blockchain environment.
The Future of Cryptocurrencies
Integration between blockchains is becoming more important. What is occurring is that some blockchains are being developed and are catering to particular economic spheres, such as gaming, last mile delivery, healthcare, home rental, data monetization and more. They will all have attributes rendering them ideal for their particular industry. The future of cryptocurrencies lies in industry-specific coins for unique purposes.
Some kind of integration is necessary for the rise of industry-specific coins. The current trend is that cryptocurrencies will be industry-specific – one for electricity, one for insurance, one for lending, one for gaming, one for restaurants, one for travel, one for social media, etc. And what is needed is a service layer to connect all these together seamlessly, so that users can get the benefits of each specific coin. So if I prefer to keep DASH and the local restaurant owner prefers LSK, it won’t matter as long as we both use an appropriate service layer solution.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.