Cryptocurrency has taken the world by storm during the last few years. An entirely new financial market was created almost overnight which has captured the imagination of all its participants. Cryptocurrency is even starting to attract institutional money from investment banks, hedge funds, and other proprietary trading firms. Despite the rapid growth, traders remain extremely frustrated by having to deal with the fragmented nature of centralized crypto exchanges.
A Change is Needed
When cryptocurrency first began, there weren’t many participants and the trading volume was relatively insignificant. But, over time, that has radically changed. Some tokens now have a capitalization in the billions and are being traded 24-7 by institutions all over the world. Despite the volume, significant problems exist with the current way that exchanges work. Some of those problems include the following:
- Constant fear of hackers
- Exchange manipulation
- Fragmented liquidity
- Risk of identity theft
One of the biggest issues regarding centralized exchanges is the risk of being hacked. These hack stories seem to always be circulating around the internet. While experienced traders may have the tools to avoid becoming a victim, potential new traders have zero interest in dealing with this. And it’s not just the small exchanges that are at risk. Even large exchanges, such as Mt. Gox and Binance, are subject to being hacked.
Another huge risk is having to deal with token manipulation. Unfortunately, there are many altcoins that just aren’t that popular at the moment. In these cases (and there are currently many), exchanges want to charge the token owners in order to “pump” the volume. It’s dishonest and unethical. It hurts crypto traders and it scares away potential new listings.
The risk of identity theft is also a very real possibility. Most exchanges have a daily limit on trading and withdrawals. If a trader wants to increase those limits, they need to submit their identification, such as a passport or other government ID, through an email. In today’s world with so many reports of data theft, especially in the world of cryptocurrency, does anyone really feel comfortable doing that? I certainly don’t.
One last huge problem is fragmented liquidity. Unlike the equity markets, where the prices and bid/ask sizes are standardized, it isn’t the same in the world of crypto. Each exchange maintains its own bid/ask size, its own bid/ask prices, and its own volume. Someone may see a favorable price on one exchange but because they don’t have an account there, they can’t trade it. It’s a huge problem that needs to be addressed in order for the industry to progress.
Although it will take a lot of work to solve all these issues, ICTE may have the answer for several of them.
What is ICTE?
Interplanetary Crypto Token Exchange (ICTE) is a cross-blockchain exchange federation with distributed IEO capability that vastly improves upon the archaic model of cryptocurrency exchanges. Because ICTE is an exchange federation comprised of several regional cross-blockchain exchanges, the liquidity pool will no longer be fragmented as it currently is under the centralized exchange model. Traders will no longer have the frustration of having to have multiple exchange accounts in order to trade size or receive favorable prices.
ICTE Business Model
ICTE will generate the bulk of its revenue from the following:
- Transaction Fees
- IEO Listings
- Membership Dues
- Validation Expenses
- Market Data and Enterprise Sales
Even during a fairly slow trading period like now, the 24-hour total volume across all cryptocurrencies was $54 billion. If ICTE can penetrate that market and make a compelling case of why traders should shift away from the centralized model, the business could stand to reap a windfall. Factor in the potential revenue from market data and enterprise sales and the figures quickly become compelling.
When looking around at different crypto projects, one thing I’ve been disappointed with is that the management’s experience doesn’t necessarily correlate to the business they’re trying to build. Fortunately, that isn’t the case with ICTE. The company is led by an extremely competent team with experience in different areas such as trading, market making, and FinTech. That experience is likely to pay big dividends as the business progresses from concept to a full-blown realization.
Final Thoughts
The next few years will be quite fascinating to see how the cryptocurrency market evolves. It has come a long way since 2010, but it still has so much further to go. There are still some very serious issues and problems that need to be fixed in order for crypto to get to the next level. ICTE may help bring about those changes thanks to its interesting and useful business model.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
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