The fragmentation of the cryptocurrency sector has become a universal truth. While many devoted followers and role players in the industry have accepted the increasing fragmentation as a reasonable price for a decentralized financial system, this is likely to present a conundrum for the average Joe investors that have shown great interest in Bitcoin and other cryptocurrencies in 2020. At first glance, interoperability, which is what would change the name of the cryptocurrency game, seems like an impossible goal considering that there are over 8,000 cryptocurrencies in existence, which is 400% more than two years ago. While this increase sounds impressive, and it is, the novelty wears off once the inconvenience of this variety rears its ugly head.
Variety Breeds Complications
Decentralized applications, referred to as dapps, operate solely on their home blockchain which creates constraints. For example, if a dapp is built solely on BTC, this application is likely to only grant users access to the perks of bitcoin. This is why, despite the diversity presented by each cryptocurrency, new users find themselves frustrated by the struggle to take full advantage of the variety presented by the technology since blockchains do not provide the much-needed interoperability that is expected and required. While seasoned cryptocurrency traders have learned how to manually take advantage of the fragmentation across cryptocurrency exchanges, it is unlikely that the increasing number of new investors will be happy with the current status quo. Cryptocurrency experienced a drastic push towards normalization in 2020, which is the opportunity that developers have been waiting for, that could fall flat as a result of the severe fragmentation, and complexity, of the sector.
Consumer’s Right to Interoperability
As a result of this shift towards normalization, the people that are now entering the crypto market are not technology professors, programmers, or developers but are rather average investors who make use of Bitcoin Champion Software and others to achieve their ends. These users are accustomed to cohesive, comprehensive, and streamlined experiences that are not available at present. Industry experts have seen a greater demand for intermediaries, that replicated the centralized entities that these consumers are accustomed to, which has led to the sacrifice of ownership accesses and anonymity which the technology promises. In addition to this, the lack of viable solutions for fragmentation presents the risk that players who understand the need for conventional could offer solutions to these new users that undermine the freedoms and promise fulfillment that cryptocurrencies are meant to provide. While this intervention is frustrating, consumers have a right to ask for interoperability and ease of use.
Proposed Solutions
Trustless Bridges could provide a sustainable solution for the current silo problem that cryptocurrency is experiencing. A trustlessblockchain bridge is a public network that allows two different technologies and sovereigns to communicate freely with each other sans permission. This allows users the interoperability that they desire and require and provides a means for two blockchains to mutually transact or make use of chain-specific apps and features. This versatility could be applied to over a dozen blockchains in the future, which would solve the fragmentation problem.
