A protocol based on the blockchain, Bancor allows its clients to exchange different tokens directly instead of using the usual cryptocurrency exchange sites over the internet.
Most of the time, the exchange services cannot provide the proper liquidity for the cryptocurrency tokens at all time. Bancor hopes to resolve that with its network through consistent supply and demand.
The objective of Bancor
The main goal of the Bancor network is to solve the liquidity issue concerning the cryptocurrency market.
Leading coins don’t have this problem, as they always have traders waiting to make transactions. But for the several hundreds of other coins, the lack of attention give rise to the problems of liquidity.
The idea is to integrate these other tokens on a network so that users would be able to exchange their tokens with more freedom.
Bancor Protocol and Smart Tokens
The protocol creates smart tokens using smart contracts. These smart contracts as the alternative media of exchange.
There is no use of second parties that are used by the exchange sites. The smart token allows the users to execute the trades on blockchain platform.
The smart contracts hold ERC20 tokens within in order to perform the trades. User’s choice determines the exchanges within the network.
Smart tokens can be instantly converted into any of the token connected with the network or the token connected with the connected tokens of the network. The conversion is swift and automated.
Bancor Network Token (BNT)
Bancor has its token system named BNT which is used to operate various functions of the network. It is held as a reserve against other smart tokens and reduces the need for conversions since the tokens are connected through the network.
Users can simply execute their trades through smart tokens without converting their individual tokens. The liquidity is maintained by the Constant Reserve Ratio protocol of every smart token contract. The protocol prevents smart token depletion from the reserves. The rate of exchange for any token pair is determined through mathematic calculations that are programmed in the network.
Potential for Application
Bancor offers a perfect module for any business corporation wanting to integrate a smart token system to their business. With the help of this system, the company doesn’t need to use any of the established tokens.
Instead, they can use their own token system and connect their token to bancor. This opportunity may inspire towards the major adoption of cryptocurrency technology in the near future.
Purchasing and Storing BNT
The web interface is very simple for users to use and purchase BNT. They can use their own cryptocurrencies which are supported in the network and purchase BNT through smart contract.
Some of the leading exchange services also support BNT, such as Bittrex, Binance, HitBTC, Gate.io, OKEx, Liqui, and Tidex. After purchasing the tokens, you can use any of the popular wallet services to store your tokens.
Final Thoughts
The ultimate intention of the Bancor cryptocurrency is to bring liquidity in the market. The idea has huge value in the current environment.
With proper advancements and developments, Bancor has the potential to aid the opportunities of cryptocurrency adoption on a global scale.
