As of August 28, 2019, there are 2,338 cryptocurrencies in the world. In comparison, the number of fiat currencies considered as legal tender is no greater than the list of countries recognized by the United Nations, which is 195.
Although just nearly 40% of the planet considers Bitcoin (the de facto representative of the crypto world) legal, the majority does not categorically outlaw it, according to Fortunly.
It is safe to say that most of the people that know and understand cryptocurrency accept it, and more and more private organizations and governments are embracing it, despite its imperfections.
The proliferation of crypto assets in circulation is no longer shocking. It is all too easy for anyone to participate in initial coin offerings (ICOs), and regulators, in general, tolerate crypto trading.
While the lax ecosystem may embolden scammers to rip investors off with fraudulent ICOs, the rapid growth of blockchain projects is not a cause for concern. While the amount of cryptocurrencies might seem overwhelming, there’s always room for more.
The Search for the Universal Coin
The digital landscape should continue being a fertile environment for cryptocurrency development. Innovators will enjoy the democracy to experiment different ideas and learn from one another in hopes of creating the coin that can finally replace the fatefully doomed fiat money.
Despite Bitcoin’s popularity, it may never achieve mass adoption due to its wildly volatile price. Stablecoins are thought to be the future of cryptocurrency, and they make a strong case for it.
Unlike pure cryptos, stablecoins, have intrinsic value because they are pegged to one or many stable assets, including fiat currencies and other cryptocurrencies. A good example is Facebook’s up-and-coming Libra..
Not all stablecoins come with collateral. Non-collateralized stablecoins are promising because they are designed to attain and maintain price stability free from any other asset influenced by a central authority.
Non-collateralized stablecoins can radically change the world if they succeed. However, their failure can be catastrophic, for they can’t be liquidated since they are not tied to any stable asset.
Most, if not all, cryptocoins have great potential to overhaul the financial system, but not every one of them will actually work in practice. Fintech companies should have the latitude in dreaming and making mistakes in order to “mint” the universal coin sooner rather than later.
The Rise of Tokens
The crypto world has gotten bigger without causing adverse effects to valuable and new assets because there is little to no cannibalism. Many cryptos do not directly compete with each other; in fact, some of them are actually tokens, not coins.
One of the practical reasons why digital tokens exist is to help private companies build better products by incentivizing consumers. For instance, Jaguar Land Rover plans to reward drivers that share their data by giving out IOTA tokens.
The world could never have too many cryptocurrencies if we were to unlock their full potential and address their inherent weaknesses. As long as we apply the lessons we’ve learned from the Bitcoin bubble to prevent another reckless crypto speculation, we should let the variety of digital coins and tokens explode.