{"id":14474,"date":"2017-12-22T01:45:09","date_gmt":"2017-12-22T09:45:09","guid":{"rendered":"https:\/\/www.tradingheroes.com\/?p=14474"},"modified":"2025-07-30T00:34:02","modified_gmt":"2025-07-30T07:34:02","slug":"cryptocurrency-consolidation","status":"publish","type":"post","link":"https:\/\/www.tradingheroes.com\/cryptocurrency-consolidation\/","title":{"rendered":"Why the Future of Cryptocurrency is in Consolidation"},"content":{"rendered":"

\"The<\/p>\n

As traders, we make money by identifying potentially profitable situations in the markets. This might be identifying chart patterns, playing a certain type of news event or understanding the fundamental dynamics behind price movements.<\/p>\n

So when it comes to cryptocurrencies, it is helpful to think two steps ahead and imagine what the cryptocurrency landscape will look like, 5 years from now.<\/em><\/p>\n

Sure, all your buddies are making 400% returns on those crapcoins now. But will they still have those profits in a year?<\/p>\n

Will Bitcoin still be king?<\/p>\n

Or will there be many cryptocurrencies happily sitting around the campfire, singing Kumbaya?<\/p>\n

Nobody really knows and I'm the last person who you should be listening to, when it comes to making predictions about the technology behind cryptocurrencies.<\/em><\/p>\n

However, I would like to give you some ideas to think about before you make your next investment or trade. This is based on my current understanding, personal experience and research on the cryptocurrency markets.<\/strong><\/p>\n

As you know, things change quickly in the cryptocurrency world, so what I think today, might change tomorrow. But if we stay informed and keep an eye on the big picture, then we should be able to see changes coming, much sooner than the general public.<\/p>\n

This is one of those big picture ideas:<\/p>\n

The cryptocurrency markets will consolidate dramatically.<\/p><\/blockquote>\n

Here's how that might happen…<\/p>\n

Bridging the Gap Between Fiat and Digital Currency<\/h2>\n

\"Bridging<\/p>\n

Money as we know it, or fiat currency, has been masquerading as digital currency for quite awhile. Systems like Fedwire, PayPal and ACH have allowed you to transmit fiat currency digitally.<\/p>\n

But even though it's digital, there are still so many rules when it comes to when and were you can send that money. If you are in the US, have you ever tried to send money to someone in Nigeria, via PayPal?<\/p>\n

Good luck with that.<\/p>\n

The promise of Bitcoin and other cryptocurrencies is to give anyone the ability to send money to anyone they choose, regardless of location, nationality or bank affiliation.<\/strong> But having so many different cryptocurrencies available can cause a problem, because you will have to exchange the currency you own for the currency that your counterparty wants to get paid in.<\/p>\n

For example, let's say that you own $1,200 worth of DASH right now. But you want to by a new pair of pants from a website that only accepts Ripple.<\/p>\n

On most exchanges right now, you will have to exchange your DASH for Bitcoin or Ethereum, then trade the Bitcoin\/Ethereum for Ripple. That's two additional transactions and that can make your pants pretty damn expensive.<\/p>\n

The Need for Seamless Currency Exchanges<\/h2>\n

This is where Interledger<\/a>-type solutions come in. This protocol would make the exchange of digital and fiat currencies completely transparent to the two parties involved. I recently went to an Interledger Meetup in San Francisco and it made me realize that this type of solution is necessary and will probably be available very soon. Interledger has a working prototype and similar projects probably do too.<\/p>\n

It was a fun event.<\/p>\n

…and the fact that they had wine didn't hurt.<\/p>\n

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A post shared by Hugh Kimura ?? (@tradingheroes)<\/a> on