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How Many Blockchains Does The Future Hold?

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How Many Blockchains Does The Future Hold?

Introduction

This article was posted on Monday, 15:44, UTC.

We’ve seen the successful execution of dozens upon dozens of ICOs on the Ethereum platform. In too many cases, these ICOs just wind up being a useless token of thanks and their value tends toward zero. In plenty of cases, the token is a valuable part of a system. In either case, one ecosystem can only facilitate so many tokens at a given time. If too much traffic develops on one chain, it becomes increasingly expensive to transact upon that chain, and so other chains are sought.

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This is the question to explore, then: what other chains will become necessary? We’ve seen the news of the Red Pulse ICO, both positive and negative, and news of Chinese interference in the ICO market as a whole, have a severe impact on NEO, which itself launched from an ICO basis. Other alternatives include the more obvious Ethereum Classic, whose primary difference from Ethereum is that its token holds less base value. Platforms like NXT gave rise to IOTA, one of the highest-performing ICOs of all time.

While every chain must have a base token with some value, how many chains, really, does the world of the future need? Are there even enough currently in existence?

Others are sure to follow. The author thinks: the more, the merrier. But this has long been counter-logical. Instead, we’ve been taught that the so-called “network effect” of each chain would eventually dissipate toward a dominant master chain. While this hasn’t turned out to be true, one wonders how much room there is at present time and in the future for all the tokenized chains. Let’s have a look at the price of the tokenized chain base coins, in ascending order:

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  • NXT – $0.08
  • Waves – $4.40
  • Counterparty – $11.29
  • Ethereum Classic – $14.89
  • NEO – $23.61
  • Ethereum – $291.76

Collectively, these networks add up to a market capitalization of around $30 billion. If they each were to continue to grow independently of each other, instead of follow the old theory of them eventually merging into one (in their case, Ethereum since it is presently in the lead in both metrics, and users, and tokens), then this figure alone could broach $100 billion within the next two or three years, given the growth that they’ve seen in the same time to date. Many of these chains are relatively new and still retain network gross values that would lead oen to believe otherwise. The main thing holding the non-Ethereum chains back (Counterparty excluded, since it is Bitcoin-based and its future remains uncertain as regards the capacity of the Bitcoin network for regular transfers) is a lack of utility provided by tokens.

NEO has seen more activity than others in this regard, but we think that all of them have the potential to explode once they have demonstrative successful use-cases which have the potential to enter people’s daily lives. The ideal chain, after all, is the one that no one sees unless they need to. Simply allowing consumers to interact with revolutionary blockchain tools without having to know what they’re doing, in the same way that banks have previously allowed people to interact with the financial system, will in the end lead to great mass adoption.

The author concludes that we probably don’t yet have enough blockchains to facilitate the widespread and decentralized revolution of tokens that society will be undergoing in the coming months and years. We also learn, from the example of NXT, that the value of the chain’s base token does not need to be high in order to produce results for tokens built on them – the example of IOTA, which retains a price of 54 cents to NXT’s 8 cents, but was built on the NXT platform, tells that story.

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P. H. Madore

P. H. Madore

http://phm.link

P. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link

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