CryptoCurrencyWire Editorial Coverage: According to a new paper from researchers at Imperial College London that suggests digital currencies are now primed for mass adoption, Bitcoin (Crypto: BTC) and other cryptocurrencies will become mainstream forms of payment within the next decade for goods and services on the strength of their increasing suitability for the role.
- Outsiders and even insiders struggle to maintain accurate understanding of rapidly evolving space
- Ratings agencies, indexes and industry analyst sites cropping up to address information verifiability deficits
- “Spendability” and usability emerging as acid tests for cryptos, ICOs and blockchain tech
Key factors driving the mainstream adoption of digital currencies, such as the ability to act as a store of value or function as a technologically superior medium of exchange amid the rapid rise of contactless and mobile payments, have already cemented crypto as a permanent fixture of the payments landscape. However, it is difficult for even well-versed investors to understand and evaluate the legitimacy of individual cryptocurrencies, initial coin offerings (ICOs) and blockchain technology companies. This challenge has led to the emergence of ICO rating agencies and market analysis sites such as Cointelligence. Some of the key players helping to make sense of this increasingly complex space include payment solution developers such as Virtual Crypto Technologies, Inc. (OTCQB: VRCP) (VRCP Profile), Worldpay, Inc. Class A (NYSE: WP) and Square, Inc. (NYSE: SQ), as well as online credit marketplace developer LendingClub Corp. (NYSE: LC) and investor-focused fintech leader Broadridge Financial Solutions, Inc. (NYSE: BR).
The Evolution of Money
The Imperial College London paper argues that crypto is the next logical step in the evolution of money. This argument makes sense, especially as improvements to scalability, design and regulatory certainty help shore up the other main factor driving crypto’s adoption: its ability to act as a unit of account and measure of value in the economic system. This key function of money is an important factor underwritten by store of value and medium of exchange, and it has led to the emergence of “spendability” as a new and dominant criterion for evaluating the legitimacy of a cryptocurrency or ICO. This standard makes sense because one of the fundamental tests of whether a given crypto is money — and therefore a sound investment for those on Wall Street — is whether consumers can go to the main street and actually use the currency to purchase goods and services.
It’s no secret that people outside the industry barely understand the ongoing Cambrian explosion of cryptocurrencies, payment systems and blockchain technologies. This rapidly evolving ecosystem is difficult for even industry insiders to keep accurate track of. However, several agencies and analyst sites have cropped up to provide more reliable, actionable and transparent information to investors. Bloomberg recently teamed up with digital asset management firm Galaxy Digital Capital Management to launch the Bloomberg Galaxy Crypto Index (BGCI), which tracks the largest, most liquid portion of the cryptocurrency market. ICO rating agencies and sites — such as ICORating, ICO Champs and Crush Crypto — are continuing to develop more comprehensive rating methodologies designed to weed out the inherent subjectivity of such ratings. However, the problem of corruption continues to plague this ongoing process, and the crypto community is growing increasingly wary and aggressive.
Crypto-Rich, But Can It Be Spent?
Many ICOs today fail to actually meet the criteria required to be considered viable long-term contenders by many analysts. These offerings are stuck in the idea phase with what amounts to a cool concept and vision but no functional proofs to move to the next level. Hence the increasing prominence of spendability (and practical usability for technologies) as a hallmark of legitimacy, because this single factor is typically one of the strongest indications that a company can truly transform an idea into reality. This is where advanced point-of-sale (POS) technologies such as those being developed by Virtual Crypto Technologies (OTCQB: VRCP), which can allow any crypto to become spendable, stand to make a significant difference.
With the unveiling of VRCP’s upgraded version of its bidirectional (buy and sell bitcoin) NetoBit ATM at the TechCrunch Tel Aviv event in early June, as well as an update to the NetoBit Pay application and its latest participation in the Crypto Economy, Regulation and Banking panel at the Bit2C Crypto annual conference in Israel, the company has further established itself as a leader in the sector. Alon Dayan, the CEO of Virtual Crypto, explained that the pilot launch of the new machine, which mimics the ATM and credit card processes familiar to consumers, has thus far received an “extremely positive” response. The machine is a sleek, compact, dual-monitor solution with an intuitive interface that allows users to initiate a transaction by simply scanning an app-generated QR code.
User Experience Key for Consumers and Retailers, Digital or Otherwise
Real-time transaction verification by VRCP’s proprietary validation algorithm, based on state-of-the-art blockchain technology that helps set an industry standard of mere seconds for completion instead of the minutes or hours traditionally required, continues to make the company’s over-the-counter NetoBit ATM solution a game changer for both operators and consumers. This kind of reliable ease of use is the sort of innovation it will likely take to make crypto user friendly enough for the mainstream and more readily perceived by both consumers and retailers as a desirable form of money. The platform’s ability to utilize any cryptocurrency and provide real-time price and transaction validation offers sector players a means of directly contacting end users, building up a reputation and validating their presence as a legitimate entity to both indexes and ratings agencies.
VRCP is dedicated to making cryptocurrencies accessible to the public through innovative payment solutions, and the company represents a diverse IP, software and hardware position for investors looking to increase their exposure to the crypto/blockchain space. Of course, VRCP is not alone as a payment solutions provider, and other players are bridging cryptocurrency, payments, fintech and blockchain technologies.
Worldpay (NYSE: WP) is regarded as one of the leading POS operators in the game today and has been making increasing strides to incorporate blockchain technology in order to better serve its merchant and financial institution customers. This is increasingly important for the company, as cryptocurrency exchanges are forecast to generate upwards of $3 billion in revenue by 2023, providing Worldpay with a sizeable and growing market for the company’s services.
Square (NYSE: SQ), which announced it had secured the necessary BitLicense required to operate in New York state’s $1.547 trillion (gross state product) market in June, also recently opened up its wildly popular Cash App to bitcoins via a partnership with Genesis Global Trading. One of only a handful of New York State Department of Financial Services-regulated trading partners, Genesis Global Trading was also one of the first OTC crypto trading platforms to gain ground among institutional investors.
LendingClub (NYSE: LC) appears to fully comprehend that, like the crypto/blockchain space, the online credit marketplace is an evolving ecosystem. The company’s goals of leveraging blockchain technology to increase liquidity for investors and provide advantages such as dynamic pricing adjustments that will narrow the gap between borrowers and investors may one day put LC in a position to offer a wide range of products and services beyond credit and investing. Former CEO Renaud Laplanche certainly seems to think so, because his rival company Upgrade has been pursuing the development of an application on the Ethereum blockchain to track and record loan data for some time now.
Broadridge Financial Solutions (NYSE: BR), the fintech giant that successfully completed a blockchain-enabled bilateral repurchase (repo) pilot last year with Natixis and Societe Generale sees things in much the same way as LendingClub. Blockchain-driven innovations have the potential to add significant liquidity to loan markets, potentially revolutionizing transactions with complex structures such as syndicated loans, which typically can take up to 20 days of grueling manual settlement work to complete. Faster processing like this, as well as the potential to reduce legal costs and closing fees, could lead to big improvements in the way certain instruments are handled.
While the factors differentiating a legitimate cryptocurrency ICO or blockchain technology project from a failure or scam are still being hashed out, a laundry list of hallmarks has been established. Chief among those hallmarks is the concept of spendability and usability. Practical applications with demonstrably advantageous results in the realm of blockchain tech and field-proven transaction functionality that brings benefits and improved user experience to the table in the realm of crypto and payment tech are quickly becoming acid tests for investors. A company such as Virtual Crypto stands poised at the nexus of overlap between the two worlds with an arguably exceptional IP, software and hardware portfolio that investors should be aware of.
For more information on Virtual Crypto Technologies, please visit Virtual Crypto Technologies (OTCQB: VRCP)
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