The Bitfinex CTO Paolo Ardoino believes that cross-chain value transfers are now the most critical issue facing the entire crypto sector in 2020. In our cryptocurrency news today, we see how the problem can be fixed.
With more than 4,000 digital assets in circulation and many of them are stuck to their own ecosystems, the lack of liquidity and interoperability plagues a lot of tokens. The blockchain ecosystem diversity seems to be harming the industry and it locks the value inside the illiquid tokens and makes the growth of the sector much slower. The Bitfinex CTO discussed the cross-chain value transfer and explained that this is the most challenging year ahead for the platform. He explained why he believes that 2020 is the most significant for 2020 and he said:
“The reason why I think this technology will be quite important next year is that a lot of different blockchains have developed over the last few years. And new blockchains are always in continuous development. So liquidity fragmentation is occurring across all these blockchains, as blockchains have native tokens and potentially also assets issued on top of them. This creates a need, in my opinion, for a fluid way to move assets from one blockchain to another.”
While he was explaining how the problems can be solved regarding the liquidity, Ardoino said that there are different blockchains that create bridges. The bridges are a way to communicate with other blockchains but he believes that this solution is not symmetric because the end goal is to bring liquidity to the specific blockchain. What he wants to do is to create a more symmetrical system where each blockchain will interact with another blockchain as long as they are supported in the agnostic bridge system.
When Ardoino was asked whether natural selection will lead to the death of most of the networks, he answered:
“Well, that will happen anyway eventually. As in any field, natural selection and advances in research will eventually move users’ interest to technologies that are most secure, perform best, and offer the most integrated solutions within other products in their day-to-day use. Having cross-chain gateways enable assets issued on fading blockchains to be moved easily onto chains with more activity will help smaller projects.”
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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