It seems that Binance Coin (BNB) has expanded its scope of use from just being a token that offers reduced transaction fees on the cryptocurrency exchange. This development has been enabled thanks to the integration of BNB into other platforms. Now, users of the BNB token can seamlessly interact with these platforms without the need of going through another service provider.

#useBNB Dec pic.twitter.com/f305Loz6eg

— CZ Binance (@cz_binance) December 26, 2018

Interoperability

What can be seen here is the advancement of blockchain interoperability.

While the scalability issue of blockchains has taken center stage, interoperability features can have just as much of an impact on cryptocurrency adoption. Interoperable blockchains can swap each other’s tokens without a third party being involved, like an exchange.

A decentralized exchange, like the one currently being developed by Binance, is also an attempt to offer interoperability between digital assets without having a single point of failure. Current cryptocurrency exchanges present a huge concentrated risk for all of its users because any holdings kept there are prone to a single hack or information leak.

Several other projects are working specifically on offering interoperability between different blockchains or atomic swaps between different tokens. A minimum viable solution is certain to be found. The he question is not ‘if,’ but ‘when.’ The more interesting question is how this will morph the cryptocurrency industry and users’ perception of digital assets.

Hyper Bitcoinization

What Bitcoin has enabled is the transfer of value without any geographical restrictions and without any intermediaries, while at the same time providing an honest account of all transactions — a revolution ignited by merging technological engineering with monetary policy. This has led to people likening Bitcoin to money.

Any economist will confirm that the three main properties of money are:

1. store of value
2. medium of exchange
3. unit of account.

In the fiat world, the US dollar and euro are considered to be among the best at storing a value in international markets. However, it might not be used as a medium of exchange in a country like Uzbekistan, because local shops might not accept euros. At the same tim,e only the local currency is used as a unit of account, e.g. for tax purposes.

Now that we are all Bitcoin Maximalists, we need to take it to the next step and get rid of the confusion surrounding the monetary evolution of Bitcoin: pic.twitter.com/fwh8Ehsjw9

— Murad (@MustStopMurad) July 25, 2018

Right now, the most popular scenario for the future of the crypto space among experts is that Bitcoin will eventually consume all currencies and become the final form of money — both as a store of value and medium of exchange. As such, any other token becomes worthless. This is the scenario often voiced by Bitcoin maximalists. While this is very likely to happen, it is also possible to explore the other side of the coin.

Hyper Tokenization

Cryptocurrency projects have tried to tokenize everything possible, from simple online services to entire supply chains. While the ambitions of some of the projects seem a little too far-fetched, it is likely that the future might unfold so that access to services, products, or assets will indeed be fully tokenized.

There are already plenty of examples of tokenization. Even real-estate assets have been tokenized for the first time in 2018. As the tokenization process continues and more assets go through the digitization process, these become divisible, portable, and easy to transact.

In a scenario where every property of a person is tokenized and any valuable thing is accessible through a token, then there might be no need for money. Money was invented as a medium of exchange in an economy where the exchange of things was, and still is, linked with huge friction. For example, if I had tomatoes and wanted to buy a pair of shoes, it was difficult to find someone selling shoes in need of tomatoes for an equitable exchange. Before money in the form we know today, people used seashells for transactions, then coins made out of precious metals, and now banknotes.

There’s a 3rd possible path to denationalization of money: tokenization of everything.

When everything is tokenized, and thus divisible, portable, durable, and scarce, we will go back to barter economy and we will no longer need money, including bitcoin.

Tell me why I’m wrong. https://t.co/kyT7c2T3us

— Qiao Wang (@QwQiao) May 7, 2018

In a hyper-tokenized world, everything would be available in a digitized form and transactions would be trustlessly confirmed. When every transaction is instantly settled and tokens are interoperable between each other, then the whole economy becomes a huge marketplace of exchanging products and services without currencies. Taking it a step further, the need for a primary medium of exchange, like money, could potentially disappear.

[bctt tweet=”In a hyper tokenized world, Bitcoin’s use case goes up in the air.” username=”beincrypto”]

At the same time, the enabler of this future world is interoperability between blockchains. Without it, settling transactions between multitudes of tokens in our daily life would make no sense.

Conclusion

Clearly, both of the aforementioned scenarios have their own obstacles to overcome. The ultimate Bitcoinized future does seem more likely to happen. However, this perception could be due to the fact that societies have lived for thousands of years with a deep-rooted concept of money. Should, tomorrow, the concept of money be altogether erased from our society, transactional dynamics around the globe could develop very differently than when money was originally created.

A hyper-tokenized world would not only need to face technological barriers but also achieve a societal mentality breakthrough. Interestingly, in this case, Bitcoin will be the cryptocurrency that enabled its own demise.

The good thing is, Bitcoin doesn’t care.

What do you think? Will interoperability enable hyper tokenization of the world? Will it lead to Bitcoin’s fall? Tell us in the comments below! 

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