If you thought that the world would be a simpler one with Blockchain, think again.
Blockchain has the capacity for great evolution but has increased the complexity of an already complex world. Let me illustrate with an example — in the traditional world, you were responsible for investment decisions or selecting a firm to make decisions for you. You fit into a compliance profile and any reputable firm managed the regulations and compliance. Simple.
Lets turn to Blockchain. With BC you are responsible not only for most if not all of the decisions — self-education, picking credible counter parties [many semi or non-regulated], adhering to regulations, managing personal compliance, making the investment decisions and providing your own security. And this, at a time when there is a full-scale overhaul of the transaction life-cycle.
Our subject matter today is not only the complexity of BC but also more specifically why we need additional currencies in a world that is now over run with currencies. Further, what is the significance of more currencies to the design goals of the ABCS token, the native token of the AbacasXchange.
Thirty years ago the world had 168 currencies. These currencies were the medium of transfer and the unit of account of the world’s countries. With the introduction of the EUR, governments felt compelled to reduce the number of currencies by 15+ in an effort to reduce friction. Contrast this with today. We have 5000+ currencies and counting. Why have we come full circle and what is the effect of the creation of new chains, currencies and tokens?
The reason for new currencies and tokens is rather banal and intuitive but the antithesis of simplicity.
A blockchain delivery model has three primary drivers:
- value transfer [hence all assets will find their way to the blockchain]
- data transfer [support tokens to validate blockchain-based data]
- human nature [humans like choices and coin/token features represent choices]
So regardless of our desire to simplify, humans tend to complicate — our evolution towards a series of interconnected blockchains, progressively more complex with each passing day.
What does this mean in our world?
All assets will reside on the blockchain and will indeed function as its own currency.
Utility tokens will continue to proliferate to fill the holes in the transaction lifecycle — validations, confirmations, proofs, security, data decentralization etc.
New tokens and blockchains will arise daily to provide new choices — faster settlement, anonymity, zk snarcs, consensus, credit, security, etc.
One can expect many hundreds of thousands of blockchains [and variations] to satisfy the appetite for seamless STP delivery.
We are only just beginning.
Why the AbacasXchange and the ABCS token?
The AbacasXchange is building a universal delivery model. We are constructing the exchange anticipating a tendency for increasing complexity — an ever-expanding universe of interconnected blockchains. The objective remains the same — seamless, trustless transactions. However, since the blockchain has the capacity for an immutable record of data, it has the capacity to allow transactions to be consummated in a manner never before experienced by the consumer. Yet herein lies the practicable challenge. (We will defer the economic challenges of centralization-decentralization to another day).
Let me illustrate.
Imagine that you wish to sell one asset and buy another. In the traditional world, this is simply a sell and a buy at your traditional broker dealer. Simple. All validations are existing pieces in the current delivery model.
In the blockchain world, a trustless transaction is significantly more complex; particularly if one wishes to build a universally-accepted, mainstream product that satisfies security, compliance and regulatory requirements. A transaction may require interactions with two or more proof of asset chains; two or more data distribution chains; two or more identity validation chains; two or more value transfer chains; two or more compliance validation chains. You may also have traditional custody components and asset servicing with which to deal. You get the picture!
And what does this mean for the consumer — in order to trade two securities, the client may need to identify and hold ten to fifteen tokens per security. This is not practical, desirable or reasonable. The design goal of the AbacasXchange is therefore to mitigate the complexities of transacting using the blockchain. No other exchange initiative has, thus far, identified this as the primary service delivery challenge of a blockchain-based delivery model. Not only have we identified this but we are constructing the exchange on two levels to accommodate the challenges.
The AbacasXchange operates on two levels — the macro exchange i.e. the value transfer layer and the micro exchange i.e. the utility token or service provider layer. The ABCS token operates as an essential part of each of the external interactions which occur through the transaction life-cycle. Interactions will vary by asset and transaction requirements.
As a result of this, any transaction may have different actors and touch different chains. This means that Abacas must manage the outreach and the associated micro payments in order to alleviate the client of this burden. This is no small undertaking and must prove to be economically viable.
Practically, this cannot be managed using a third party crypto such as ETH or XEM for a number of reasons :
- Price volatility
- Inter-convertibility
- The volume of utility chains
- Cost management.
Both clients and service providers want pricing consistency. By using the inherent value of the ABCS token, the AbacasXchange can manage pricing for all its suppliers. Hence, the service provider can more easily predict revenue and receive timely payment and the client can more easily predict cost. Further, Abacas prefers to be blockchain agnostic; not bound by the economics of one chain or another. This means that Abacas will leverage the chains in which it can provide a cost advantage to both the company and its clients.
Finally, when one considers the expected transaction size and the number of service providers, utilizing ETH for example will not be financially viable. For these reasons and others, it is both practical and logical to issue the ABCS token to provide the inter-convertibility necessary amongst the AbacasXchange partner chains