If you look at the cryptocurrency market by market capitalization today compared to five years ago, you’d notice some assets in the top 10 that you’d maybe expect and that are still there, such as Bitcoin, Ethereum, and Cardano. But these are the only three assets from January 1st, 2018 that are still in the top 10. The rest haven’t disappeared, every other asset you see in the above image is still a tradable asset, though some have fallen further down the chart than others.
However, when you look at 2017, just one year before (below), you’ll see three assets you’ve likely never heard of, especially if you entered the space in 2018 or later. Sure, the assets still exist, as that’s the nature of blockchain, but let’s take MaidSafeCoin as an example. It’s still trading at 14 cents a piece, but there’s only $242 of volume in the last 24 hours. It’s only a matter of time before it’s not trading at all. While its market cap is stated as $64 million, that’s pretty irrelevant when it’s only traded on two exchanges and the last update from any of the project’s socials is from July 2022.
This is the case for many older crypto assets from projects that have been abandoned or have fallen from their initial hype. In this guide, we’ll be discussing how many cryptocurrencies will survive in the long-term. Will it be many or a few? Let’s jump in.
One Chain to Rule them All?
Bitcoin maximalists, along with the more voracious supporters of certain blockchain networks, would perhaps like you to believe that only one blockchain network will make it in the long-term. Theirs is the best due to the transaction speed, or X, or Y, and all other chains will become irrelevant. This seems an unlikely scenario, as each blockchain tends to be better at one thing or another, with each also having a variety of users. It would be the opposite of decentralization if there ended up being just one blockchain and cryptocurrency in the market.
That aside, think about cryptocurrency projects as brands, yes there are a lot of them, and not all of them will succeed, but there is still a place for a variety of blockchains and cryptocurrencies in the market, just as there is a place for multiple retailers of groceries in the physical world. It’s possible that we end up with one blockchain that is best for decentralized finance applications, one that’s best for decentralized identity solutions, and so forth, but the more likely scenario seems to be one of interoperability and choice for consumers.
Internet of Blockchains
An Internet of blockchains is the desired outcome for many crypto projects, such as Cosmos (ATOM). Rather than just one blockchain being used by everyone, interoperability between blockchains will allow many to flourish at the same time.
Cosmos is working on something called Inter-Blockchain Communication, which allows different blockchain protocols to communicate.
Inter-Blockchain Communication
The Inter-Blockchain Communication (IBC) protocol lets different blockchain networks communicate with each other. IBC was the final part in the development of the three major components of Cosmos. The other two components are the Tendermint Core and the Cosmos SDK (software development kit).
Think of how the Internet works to better understand IBC. With the Internet, TCP and IP allow computers to communicate with centralized servers. This communication results in the Internet we know and use daily. The IBC will instead connect entire blockchain networks, not huge servers. Users of the IBC can create an account that works across all IBC blockchain networks. This allows you to stake, trade, and participate in DeFi on multiple chains from one place. This will be called an interchain account.
Essentially, all blockchain networks that connect to the IBC have a Tendermint Core. All the networks developed using Tendermint and the Cosmos SDK have a common underpinning, with the differences being on the application interface level, meaning front end consumer interfaces (what you see on an app or webpage). Since the back end is essentially the same (what you don’t see), these networks are able to connect and communicate with each other using the IBC. The IBC can take the data from one chain and package it, then unpack it on the other in the correct format. This allows the networks to communicate despite the code potentially being written in different programming languages.
Are Any Blockchains Already Compatible with IBC?
There are already a ton of projects compatible with IBC. It’s likely that you don’t even know that many of the most popular blockchain networks were developed using the Cosmos SDK.
Some of the most notable blockchains that are IBC compatible are the Binance Smart Chain, Terra, Crypto.org Chain, Celer, Kava, Polygon, Oasis, and Secret. For a full list of apps and services in the IBC ecosystem, click here.
Some Will Fail, Some Will Survive
The overall reality is that some cryptocurrencies will surely fail in the long run, just as many Dotcom-era companies failed during the development of the Internet we all use now.
While there is a lot of centralization that has risen from that era, in the sense that we only have a few main giants in the industry (Google, Apple, Microsoft, Amazon for example), more than one certainly survived.
It seems likely that we’ll see parallels with cryptocurrency and the dotcom era in the long-term, with some falling behind while others rise to the top. Predicting which will survive then becomes the most difficult task.
