Crypto initially might have been a solution looking for something to fix. But now those somethings are starting to emerge.
Security tokens, gaming platforms, and stable coins will offer the first practical uses of Blockchain technologies this year, according to a panel of experts who recently spoke at OKCoin headquarters in San Francisco.
The event, organized by Crypto Briefing, offered a kind of status report on crypto’s efforts to attract a more mainstream audience. Despite Blockchain’s enormous potential, crypto hasn’t achieved the quick adoption of other disruptive technologies like on demand transporation services (Uber and Lyft), said moderator Jon Rice, managing director of Crypto Briefing.
But 2019 offers some promising use cases. Several firms plan to launch digital security tokens, which represent fractional ownership in assets like companies, funds, art and real estate.
For example, SharesPost recently conducted the first compliant security token trade in the United States with a custody solution through the company’s registered Alternative Trading System (ATS). The BCAP token represents ownership in Blockchain investments made by Blockchain Capital venture capital firm in San Francisco.
Panelist Greg Wolfson, director of strategic partnerships for SharesPost, said security tokens are a natural validation of Blockchain technologies because investors already trade trillions of dollars of stocks and other assets every day.
“Blockchain integrates itself nicely into such an existing system,” Wolfson said. “It’s something regulators, institutions understand. Investors want to own things that have fundamentals and transparency, like ownership in companies that produce something of value.”
Blockchain could offer investors “24/7 liquidity” for a broad range of assets, said Bryan Myint, managing director of Republic Crypto. “They could trade and own anything in the world.”
Blockchain could also boost the gaming industry, he said, in which players could use tokens to pay for “unique ownership of digital goods,” such as real estate in a town that only exists in virtual reality.
Cecilia Li, investment director of OK Blockchain Capital, said she believes the industry will embrace stable coins, a digital currency that is pegged to the U.S. dollar or other assets. Proponents have argued that stable coins could be a natural bridge for people more comfortable with fiat currency to transition into digital currencies.
In fact, Li thinks central banks in some countries will start forming Blockchain teams to create stable coins on top of fiat currencies. In theory, stable coins with fixed exchange rates backed by real world assets could help prevent inflation and wild price swings in the market.
In order to gain clout with regulators, the crypto industry needs companies and people to embrace Blockchain as essential parts of their lives, said Ronghui Gu, co-founder of CertiK.
Take Uber. The service gained so much popularity with drivers and riders that the company could push back against efforts to regulate it.
With crypto, “there wasn’t enough adoption by the time the government got involved,” Gu said. “There was nobody to defend it.”
The popularity of security tokens, stable coins, gaming tokens could help provide the crypto industry with much needed allies.
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