Information + Resources
Bancor Protocol is an upcoming Ethereum-based project that seeks to create “smart tokens,” or a “Keynesian” exchange currency to root all other cryptocurrencies. This will allow users to rapidly exchange between other Ethereum tokens, represent other Ethereum tokens as Bancor Network Tokens (and still gain value from those tokens), as well as create their own tokens that, when valued, add value to the overall system’s value. This would allow small businesses or municipalities to create digital currencies with specific uses, be it for tourism or tipping or potentially even for national use.
Bancor wants to capture the “long tail” of the crypto-economy, or the countless small business projects that get ignored or rarely used but are still valuable. If they were all mounted on the Bancor network, utilizing Ethereum’s smart contracting system, this would create a very deep, stable reserve for all tokens. The ICO crowdsale happened on June 12th and lasted 3 hours until the record-breaking $144 million dollar hidden cap was met. They’re now at $153 million. Tim Draper is a notable backer. Bancor’s network suffered a hack simultaneously that messed with the crowdsale. The last ICO I checked out was Mozilla founder’s and Java creator’s co-created Basic Attention Token, and that sold out in 24 seconds. This one looks to have quite a lot of hype around it too. Bancor also collaborated with WINGS on its crowd sale.
There’s definitely debate as to its integrity as a platform, though, as Ethereum already does all of what Bancor does minus Bancor’s proposed interface. Bancor seems to run counter to Ethereum’s decentralization ethos as well. That said, Ethereum and other ERC20 projects are still early in development and not easily accessible, and Bancor wants to provide its own sort of social media for ERC20 tokens. It’s an interesting idea that may net them a lot of users, but there isn’t a reason this couldn’t be done on Ethereum’s blockchain alone without splitting the net value of ERC20 tokens to fill Bancor’s coffers.
ICO sales are very risky and involve untested platforms, generally involving blind trust on the part of investors in a gold rush for the next big thing. There can be a fine line between marketing jargon and real ideas for a lot of people when tech is this new and without established standards. People are very protective of the integrity of blockchain tech, which is a good thing. How interesting to witness all this. Stay tuned for more!
// Written June 8, ’17. Price at the time: 100 BNT / 1 ETH (ICO sale)
// Edited June 18, ’17.
// Edited June 21, ’17.