Ever since bitcoin was created in 2009, the crypto space has seen hundreds upon hundreds of new and wacky digital currencies enter the space and following in the footsteps bitcoin left behind.
There are several ways of looking at this. One being that it’s great to see such an emerging industry take flight with loads of different avenues people can take for cryptocurrency and the other being saturation – as in because of all the new projects are coming in at once over such a short period of time, things become watered down to an extent.
The Chief Technical Officer of BitGo Benedict Chan, believes in the former and thinks that a saturated market could be a good thing.
“Having a consolidation of developers and talent, going towards strong projects could be a good thing for the entire industry.”
In sharing this viewpoint, the bitcoin bull and the Morgan Creek Capital co-founder Anthony Pompliano, or “Pomp” has highlighted the net positive impact of the ever-expanding range of cryptocurrencies within his theory on token density.
Introducing the Token Density Theory: Why Libra, and tokens like it, are incredibly positive for Bitcoin
Let me know what you think! https://t.co/8kMKQiyvmK
— Pomp ? (@APompliano) June 20, 2019
Essentially, the theory that Pomp has is that with more watered down projects the market becomes, the more users it will draw in. using Facebook’s Libra as an example Pomp explained the model further.
“Based on the Token Density Theory, Libra is likely to create an influx of users for Bitcoin and other tokens if it successfully launches. Additionally, it wouldn’t be surprising to see other large technology companies create their own tokens, which would further increase the positive effect on existing tokens.”
It will be interesting to see how this plays out. For more news on this and other crypto updates, keep it with CryptoDaily!