Bancor: The Power of Creation & Liquidity of Cryptocurrency

in bancor •  2 years ago


If you just heard about cryptocurrency you should know that there were more than 900 cryptocurrencies available over the internet as of 11 July 2017 and growing. New cryptocurrency can be created any time.


Picture it just like YouTube. As of now there are millions of videos available to watch and about 300 hours of video are uploaded to YouTube every minute. Almost 5 billion videos are watched on YouTube every single day.

If you calculate the number it is almost impossible for "long-tail videos" or channels with low number of subscribers or low demand could have the possibility to be watched. In fact YouTube gives the same ability to everyone so that his or her videos could still be published and watched by the same audience around the world.

Collectively, all of those long-tail videos make up a total number of views exceeding that of current top performers combined.


This is what Bancor Protocol is all about, to give the same power, the same tools and the same opportunity for any kind of cryptocurrency to be liquid and have the same liquidity with that of other top cryptocurrencies like Bitcoin or Ethereum.

We all know that currently people can only liquidate their tokens or cryptocurrencies through exchanges like Poloniex or Bittrex. Aside from the hassle and time consuming process to sign up, deposit money, withdrawal, etc. There still no solutions for instant liquidity where anyone can liquidate their tokens anytime without the need of 3rd party exchanges and with lower or no fees.

The Double Coincidence of Wants, the difficulty to find two persons whose disposable possessions mutually suit each other’s wants, is actually the real issue that creates the dependence on third party exchanges. Failure of the third-party providers to provide adequate services could result in significant losses of revenue for all stakeholders. It happened to MtGox and BTC-E.


The problem with the current system is that the majority of cryptocurrencies are facing liquidity problem. Not to mention that there is still technical difficulty in the creation of a cryptocurrency.

So even though these currencies were creating value for their community or for their holders but since they were too small to achieve the trade volume needed for liquidity then they will never become liquid. This is a serious issue because we are witnessing an inequality for long-tail currencies or those with low demand but yet give significant value for a specific community.


Bancor Protocol provides a platform which makes it easy for anyone to create their own currency or we can call it: User-generated Currency.

If you familiar with User-generated content like blog or videos that were published every day using Wordpress, Blogspot or YouTube then that’s how User-generated currency works. You can create a cryptocurrency for your own purpose or your own community as easy as creating and publishing a blog.


It’s been for too long that the creation of cryptocurrency just limited to those with programming skills. But it is now come to an end.

Just like gives you the ability to build your own website which previously limited to those with web-development skills, that’s what Bancor Protocol provides to those who want to create their own currency and give impact to their society.


The power of Creation and Liquidity is what people need to access the fair distribution of wealth in society and the fair transfer of goods and services within the community.

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I am not sure if creating tokens can change anything in economy and especially not the false distribution of property. Bancor seems still trading and speculation and no solution, sorry.




Let's say the residents of a small and poor town called Mena (just for example) agreed to create their own token, called Menacoin. And the community agreed that all stores and shops in Mena can use this Menacoin for any kind of transaction instead of just cash like dollars. And then this Menacoin distributed fairly to all residents of Mena.

So now imagine the power of the community: People in Mena can live their daily live without using a single dollar of cash. And because of the fair distribution of Menacoin, all the poor people can now enjoy the same tratments and the same privilege like everybody else in Mena.


Trading and speculations is one thing people do out of it. This is not an argument proofing it is no solution at all.
Basically you have to know that the plattform is still under development so currently the token is to its major part just subject of speculations.

Another thing to understand is how the mechanism of price discovery reduces the effect of shortterm hypes.
This is - when there are good news and people notice, "oh bancor is cool" and like 100 people decide to buy in.
On a traditional exchange market this will have a much greater effect because of the sudden scarcity of bancor tokens available. But for the bancor tokens they are always liquid and you may buy them anytime for the actual price without having a counterparty who wants to sell it or has then stashed. This means no scarcity less short-time hype driven pumps.

So to this problem about liquidity it indeed is a solution.
And then there is a huuge potential what those users may do with the tokens to get their economy going - lime the mena village :)

Those use-cases are up to your imagination and I really recommend you to read the whitepaper, to have a base for this imagination ;)

And don't forget they are no simple tokens... It's a smart token. :)

Congratulations, great article!!!!!