The Bancor (BNT) could be the future of cryptocurrencies.
To explain, Bancor Network Token (BNT) is an Ethereum request for comment (ERC20) token that offers continuous on-chain liquidity. Theoretically, you could exchange any currency for any other currency on Bancor’s decentralized liquidity network.
Thus, you could exchange US dollars for Bitcoin (BTC) through Bancor. Then use Bancor to exchange Bitcoin for digital yuan. Hence you could use Bancor to send money from your account bank in the United States to your aunt in Wuhan.
How Bancor Could Tap Remittances
Potential uses for Bancor could be to send money transfers and remittances at the touch of a button. In addition, you could use Bancor to send stablecoins such as Tether (USDT) to other countries.
Bancor could make money from money transfer because remittances are a gigantic business. Individuals sent $689 billion in remittances in 2018, the World Bank estimates. That number grew from $633 billion 2017.
Remittances are wire transfers individuals send to people in other countries; usually relatives. Companies can profit from remittances because the normal remittance fee was 7% in 2018, the World Bank estimates. Hence it costs $7 to send a $100 remittance.
Theoretically, blockchain could reduce remittance fees by allowing people to send remittances directly to others via an app. However, you will need a mechanism for converting one currency to another to accomplish that goal. Bancor’s liquidity network is such a mechanism.
Bancor could compete in the remittance market by charging 3.5% for remittances, or half the standard price. Several cryptocurrency efforts including Ripple (XRP) are trying to enter the remittance market.
Why Bancor could be Cryptocurrency’s Future
Notably, the world’s most controversial and highest-profile cryptocurrency scheme Facebook’s (NASDAQ: FB) Libra a decentralized liquidity network.
The Libra Association plans to modify its currency to function as a transfer mechanism for fiat currencies such as the Euro, The Verge claims. The Libra Association’s hope is to win central bank acceptance by refusing to compete with their currencies.
Similarly, the People’s Bank of China (PBOC) is testing a digital yuan; a fiat cryptocurrency in China, The South China Morning Post claims. The digital yuan will allow people to pay with yuan at stores through an app and transmit yuan to friends and relatives.
I think the next logical step for the PBOC is a digital yuan you could spend anywhere on Earth. For instance, you could use the digital yuan to get U.S. dollars from an ATM in Los Angeles.
One way to create that digital yuan is to combine the digital yuan with Bancor.
What is a Bancor anyway?
The term bancor is a play on the French word banque. Banque means “bank gold” or “bank money.”
The great economists John Maynard Keynes and E.F. Schumacher used Bancor to describe their World War II proposal for an international currency. Keynes’ Bancor was a unit of account that tracked international flows of assets and liabilities.
Keynes’ hope was that countries and businesses would use the Bancor for international trade. Nations could have conducted the trade through a global central bank Keynes called the International Clearing Union.
Keynes planned to back the bancor with a basket of assets, including gold. Similarly, they back the Bancor (BNT) with a basket of gold. In addition, the Bancor Network functions as a digital clearing house for cryptocurrencies. That is reminiscent of Keynes’ International Clearing Union.
Keynes’ proposal is similar to both the Bancor Network and Facebook’s Project Libra cryptocurrency scheme. I think Libra appears to be a plan for a world central bank that will issue a global cryptocurrency.
You can make a similar argument about the Bancor Network. I think Bancor could be another scheme to lay the groundwork for a global cryptocurrency and central bank. However, Bancor lacks Facebook’s (NASDAQ: FB) high profile so politicians ignore it.
Is Bancor Scalable?
To their credit, the team behind Bancor created BancorX a cross-blockchain decentralized liquidity network.
BancorX is a digital clearing house that allows direct conversion between Ethereum and EOS based digital assets. EOS is a less-secure blockchain that is faster and more scalable than Ethereum.
For example, EOS (EOS) processed 28 to 45 TPS on 4 May 2020, The EOS Network Monitor estimates. Impressively, EOS has processed up 3,996 transactions per second in a test.
Theoretically, you could scale EOS and BancorX up to serve thousands or tens of thousands of customers an hour. In other words, EOS and BancoX could serve a mass market.
Thus, the Bancor Network could become a digital clearinghouse ordinary people could use. For example, you could use BancorX to transmit the DAI (DAI) and EOSDT (EOSDT) stablecoins to move US Dollars, the world’s reserve currency between countries.
To elaborate, a stablecoin is a cryptocurrency that contains a digital robot or mechanism that makes payment in a fiat currency such as the Euro. For instance, the DAI makes payment in US Dollars.
Thus, BancorX could become a successful international money transfer and remittance tool. Hence, Bancor could be close to achieving Keynes’ vision of an international clearing house for currencies and assets.
BancorX and the Quest for Scalability
To their credit, the team behind Bancor created BancorX a cross-blockchain decentralized liquidity network.
BancorX is a digital clearing house that allows direct conversion between Ethereum and EOS based digital assets. EOS is a less-secure blockchain that is faster and more scalable than Ethereum.
For example, EOS (EOS) processed 28 to 45 TPS on 4 May 2020, The EOS Network Monitor estimates. Impressively, EOS has processed up 3,996 transactions per second in a test.
Theoretically, you could scale EOS and BancorX up to serve thousands or tens of thousands of customers an hour. In other words, EOS and BancoX could serve a mass market.
Thus, the Bancor Network could become a digital clearinghouse ordinary people could use. For example, you could use BancorX to transmit the DAI (DAI) and EOSDT (EOSDT) stablecoins to move US Dollars, the world’s reserve currency between countries.
To elaborate, a stablecoin is a cryptocurrency that contains a digital robot or mechanism that makes payment in a fiat currency such as the Euro. For instance, the DAI makes payment in US Dollars.
Thus, BancorX could become a successful international money transfer and remittance tool. Hence, Bancor could be close to achieving Keynes’ vision of an international clearing house for currencies and assets.
What Value Does Bancor Have?
 the Future of Cryptocurrencies?){kind=link}