There are literally thousands of different project available in the market right now ranging from coins with market capitalization of multiple billion dollars to those which worth nothing. When we speak of cryptocurrency, Bitcoin will always be the first thing that came into our mind. However, other than Bitcoin there are still a lot of interesting and viable crypto projects out there. This article serves the purpose of giving a brief introduction on what Bancor is.
So what exactly is Bancor. To be simple, Bancor is a blockchain protocol or platform which can be utilised to convert between different crypto tokens , unlike the conventional way of performing exchange on crypto market. Although this might seems insignificant, but it is actually extremely useful for currency other than Bitcoin and Ethereum. Due to the fact that Bitcoin and Ethereum are two of the most well-known and popular coin, almost all of the exchanges that caters the need of crypto will support both Bitcoin and Ethereum. Less well-known coins on the other hand will be extremely unlikely to be supported and this will eventually give rise to problem of liquidity.
In order to tackle these kind of problems, exchanges offers a service to hold the tokens for a duration between a seller offers and a buyer buys. To simplify it , the exchange purchase the token from the token holder and then sell the token to other people for a higher price. However , a huge underlying issues on this operating mechanism is that the exchanges will have to work under the assumptions of for every token that they bought , they will be able to find someone else to buy from them in good times. If no one buys it, the exchange will be left with worthless coins. This is where Bancor comes in handy. Bancor’s vision is to provide liquidity to all the tokens which currently exists in the market , creating a future of that involves millions of tokens that are effective locally yet tradeable.
To understand what Bancor really is and how it operates , we have provided the original unedited Bancor(BNT) Whitepaper for our readers to digest and understand the detail of it.