• Bitcoin has long been the king of the cryptocurrency market.
  • New coins and tokens have shaken up the status quo with unique use cases and innovations.
  • Bitcoin has responded with its own improvements, leading to a healthier market.
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The global financial system is under an increasing amount of pressure to get with the times and evolve to the needs of its customers. Crises like the 2008 housing bubble's collapse, and failing currencies in places like Venezuela and Zimbabwe saw people looking for alternatives to traditional banking and financial systems.

Many people turned to Bitcoin as a solution, liking its ability to be used as an international payment system without involving third parties or governments.

Although Bitcoin has gained momentum primarily in the last three years, due to mass media and public attention, it's been around for over a decade.

Back in 2010 - 2014 cryptocurrencies were not well known and their primary reported use was as a tool for buying guns and drugs on the dark web.

Soon, innovators and techies saw the potential in cryptocurrency not just as a tool for the tax evader and shady buyer, but also as one which could benefit users with fast, stable transference of value.

The general public realized there was nothing to fear from Bitcoin, and people from all walks of life, fed up with the system, as well as with banks and high fees, started doing their own research. Once individuals started taking an interest, cryptocurrencies were on the rise.

It was the massive spike in interest and public awareness that forced banks, governments, and companies on the scale of IBM, Microsoft and Amazon to look into digital currencies and their underlying technology. These last three years have laid a fascinating foundation for what could be the future of money.

Piquing Mainstream Interest

Around three years ago news about early miners and investors seeing their thousands of accumulated Bitcoins turning into millions of dollars started cropping up as the price grew steadily.

Overnight millionaires were popping up everywhere as the price of Bitcoin rose to $1,000. Suddenly, Bitcoin was being bought by amateurs, and by investors seeing a chance at achieving the getting-rich-quick dream.

Bitcoin was easy to get, easy to trade, and seemed like a good option to make money as the interest in the digital coin was making the price bubble upwards. It took Bitcoin less than a year to 20x its value through 2017 - which should have been a warning sign to any cautious investor.

With all the hype, initial coin offerings (IPOs with cryptocurrency) started popping up everywhere. Blockchain companies would create a token for their business and then put it to market for investors to buy up in the hopes of making massive returns on their investment.

On the one hand, ICOs disrupted the venture capital model in a way not seen before, with companies able to fund their venture within minutes, hours and days beyond their expectations and without all the regulation traditional companies experienced. They had the opportunity to self-fund with thousands of investors around the world, eager to invest in the cryptocurrency gold rush.

On the other hand, however, the space became packed with scammers and amateurs eager to grab at the opportunity for funds in the unregulated space, often with no intention of paying back their investors in any way. People were throwing money at the flimsiest of projects, not doing their due diligence and with little knowledge of the company's model for success. In the past few years many ICOs, some of which raised millions in capital have failed, taking the money with them while others were purpose-built scams.

OneCoin is a prime example of an ICO scam as it took the cryptocurrency excitement and used that to mask a clear and obvious Ponzi scheme. The financial harm estimated in this scam allegedly topped $4 billion.

The predominance of blockchain

The hype caused a bubble that quickly popped and, from $20,000 Bitcoin dropped to lows of $3,000 in 2018 kicking off a long bear market, and burning many speculative investors.

The bear market made many newcomers back off, some leaving the market altogether and some holding on to a few Bitcoins in the hope it would turn. The bear market was bad for many of those who invested, but was on the whole a good thing for cryptocurrency as it caused people to stop using Bitcoin as the speculative asset it was never intended to be.

With fewer people crowding the space, enterprises and regulators were able to enter and focus on what they found to be most important about the cryptocurrency, it's underlying technology, blockchain.

Suddenly, IBM, Microsoft, Amazon, and others were building blockchain divisions. Banks, who once laughed at the ecosystem, were now hiring blockchain engineers, adding incredible legitimacy to the space.

Regulators now saw that blockchain, and digital tokens had a lot of value and could be separated from the scams and hacks often seen in the ICO markets. Regulators wanted to work with the technology and businesses wanted to leverage it for their systems.

The second coming

Having taken a massive hit through 2018, the cryptocurrency market started relying on the legitimacy that its technology - blockchain - had gained. Suddenly, after mostly losing gains, a few cryptocurrencies began gaining momentum in early 2019.

Soon, positive news about the cryptocurrency market saw the public's interest return - only this time, the interest was based on more than speculation, it was backed by big institutionalized money.

The media started labeling the first quarter of 2019 as the 'Cryptocurrency Spring' which excited investors as well as businesses. People had predicted that an institutional buy-in would propel the space once again, and it looks like 2019 is becoming the year for enterprises exploration of cryptocurrencies.

Eyal Hertzog, Co-founder and Product Architect of Bancor and long time cryptocurrency enthusiast talks about his predictions for the future of cryptocurrencies:

"Cryptocurrencies as we know them today are only the tip of the iceberg. In the future, we'll see tokens for everything from artists and artwork, to neighborhoods, charities, startups and more, creating new network models and embedding localized incentive structures into online and offline communities across the globe,".

"Right now, the Libra project represents a watershed moment as Facebook, one of the largest corporations in the world, has entered the fray along with giants like eBay, PayPal and Visa."

Bitcoin has now passed the $12000 mark and is showing no signs of slowing down in its return to the good graces of the public.

Hopefully, with regulation on the way and legitimate establishments at the helm this time around, the crypto market will become a steadier, more reliable space for real companies and new technologies to flourish, bringing transactions into the 22nd century and changing the financial systems we use for the better.

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As we've become more globalized, the demand from businesses and individuals for faster, easier, and cheaper cross-border payments has increased. This year, total cross-border remittances will amount to more than $22 trillion worldwide and are set to exceed $25 trillion within just two years.

With such vast sums involved, McKinsey estimates that each transaction yields an average of $20 for the bank which is a large profit margin. Now, the industry is facing pressure to become cheaper and more efficient. What's driving this demand, and what's in store for the future of cross border payments?

Consumer demands

Individual consumers are a significant growth market for cross-border payments. In the developed world and among the growing global middle classes, e-commerce is also a huge growth factor.

However, as discussed at length migrants from developing countries face some of the biggest hurdles in sending money back to family in their homeland, many of whom may be among the world's 1.7 billion unbanked. This explains why, looking at the historical timeline of money transfer firms, Western Union has maintained a market stronghold for more than 150 years now. Throughout that time, the company has remained the go-to means for anyone to send or receive cash, regardless of their banking status. The catch is that it comes with fees, which could stretch to over eight percent in some cases.

High speed vs. low cost

Even for those with a bank account, improvements in cost and speed of remittance have been small. Interbank network SWIFT rolled out its Global Payments Initiative (GPI) in 2017, aiming to create a fast and frictionless cross-border payment service.

By the end of 2018, the service had been adopted by 270 banks worldwide, making it possible to send international payments within 1-2 days, whereas previously it would have taken 4-5 days. However, many emerging economies such as Mexico and Turkey are not yet operating at SWIFT standards and miss out on its benefits.

Because the banks are failing to live up to demand, PayPal remains a popular choice, although again, it's a costly service with fees over 4% for international payments.


Competing firms such as TransferWise and Payoneer offer slightly more cost-effective alternatives to PayPal but still have only slightly pushed down fees leveled off since around 2016. One key challenge to lowering costs for these companies is that they're still dependent on the banks which still charge them high fees.

Crypto is now the front runner in cross border payments

The emergence of distributed ledger technologies and blockchain is proving to be a game-changer for global payments.

Blockchain enables people to send and receive cryptocurrencies, securely, cheaply, and near-instantly, from anywhere in the world. Although Bitcoin was the first cryptocurrency, there are now several blockchain projects starting to shake up the global payments industry.

The oldest and most prominent of these is Ripple Labs. The company has developed a product called RippleNet, a global ledger of private blockchains which are used as payment gateways. Any financial institution or payment provider can join the RippleNet, and once they do so, they can interact with other members, exchanging payments quickly and cost-effectively.

RippleNet can process payments in either fiat or cryptocurrencies, using its own cryptocurrency, called XRP, to maintain liquidity across the network. RippleLabs counts over 200 institutions as its partners, including American Express, Santander, and Standard Chartered. This explains why XRP is currently the #3 cryptocurrency in the world.

Emerging competitors

While Ripple is firmly focused on the existing financial infrastructure, other contenders have emerged with similar but subtly different targets. The Stellar network for example is an open-source, distributed payments infrastructure, but unlike the RippleNet, anyone can join the network.

Stellar boasts an impressive advisory team, which includes Patrick Collison (CEO of payment services company Stripe), Matt Mullenweg (founder of Wordpress) and Naval Ravikant (founder of AngelList.)

OmiseGO for example are also working on payment processing, however, they are focusing on improving financial inclusion in the developing world. It's an independently operated extension of Asian venture-backed payment company Omise. OmiseGO operates in a similar way to Ripple but is fully decentralized and available to individual users through its open wallet.

OmiseGO has the leverage of the existing relationships established by Omise, which include serving as a payment processor for Chinese giant Alipay. The project has also secured high-profile partnerships for payment processing with McDonald's and the Thai government.

It's true that the financial sector has made steps towards increasing the speed and lowering the cost of cross-border payments in recent years. However, demand is outstripping the pace of development. If blockchain and cryptocurrencies fulfill their initial promise, these technologies could ultimately replace the existing financial infrastructure with faster and cheaper cross-border payments, challenging the banking sector in a way it hasn't been challenged since the internet was invented.