How Will Crypto Develop? Trustworthy Spaces
For ten years now, the smartest programmers of the crypto world have been tackling a difficult problem: how do you transfer cryptocurrencies from wallet to wallet faster and cheaper? And many have produced great results.
The patriarch of the crypto world, bitcoin, is a shining example. How much does it cost to transfer a billion dollars in bitcoin? Forty dollars? Fifty? It doesn’t matter. In any case, it’s cheaper and faster than doing it through a bank.
Well, if it’s all sunshine and rainbows, then why is the crypto world’s market cap only 500 billion dollars, in the best of years? Why isn’t everyone using crypto right now, with the quarantine crippling the banks?
The answer is simple: in the crypto world, the level of trust between the users is minimal. And if we don’t trust our partners, what do we do? We spend money to protect our money. I was born in Russia. Now there’s trust issues for you. Cops in Russia are like lawyers in the States. In the US, you shield yourself with paperwork; and in Russia, you cut deals with law enforcement. And in both countries, a large percentage of the GDP is spent on it all.
How could cryptocurrencies compete with fiat money? Only if we create what I like to call «trustworthy spaces». And building them would take another ten years. Or even more.
How do we do it? Last year, we launched the Fatcat’s auction. In a year, we sold twenty lots. For small amounts. But we knew full well that big turnovers were still far away. Going in, it wasn’t the money we were after. We cared about something else. We made sure that each lot at the auction aroused interest. And that receiving the lot made each winner as happy as possible. And that’s exactly how it went down.
So what’s happening now? The winners of last year’s auctions are now ready to put up lots themselves. And these new auctions have no starting price. But the trust is strong enough that the sellers are fully ready to take such risks.
Our level of trust increased, so we can negotiate new lots easier and faster. The first auctions took weeks of negotiations. The current ones take hours. Our high level of trust allows us to decrease management costs. The higher the trust – the less time wasted – the less money spent on paychecks. Therefore: increased profits.
I believe that in five years, people will trust our auction just because of the sheer amount of transactions completed. And with growing trust, the market cap will increase, too. But I still think there’s a significant lack of «trustworthy spaces» in the crypto world. That’s why the market cap of cryptocurrencies is not growing ten-, hundred- or even thousandfold.
If I had some advice for the authors of new projects right now: don’t focus too much on IT technologies or new mathematical models. That’s all well and good. But that’s not what’s important right now. What’s important is simple human trust in your projects. And that’s something that takes years to gain. So we’ll all have to get ready for quite the marathon.
Author: Nick Mokhov, co-founder of Fatcat’s Auction
Fatcat's is a unique auction platform for art, rare things, and innovations. There you may bid in crypto and become owner of an extraordinary masterpiece of a famous artist. Or you may even create jewelry yourself in 3D by our new lot offer.
Follow us by Instagram @art_crypto or Twitter @Fatcats_Int
Or you may become auction participant as lot owner or co-investor. Contacts us https://auction.fatcats.market/contact
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