Collaboration is a term that has become quite popular in the cryptocurrency community.
When it comes to partnerships and alliances to promote optimized use of digital coins on blockchain systems, there’s the Blockchain Alliance, the most generically named group, with its impressive collection of members including Bitfinex, Bitfury, Bitstamp, Coinbase, and Kraken.
There’s also the Universal Protocol Alliance, which bills itself as the most extensive collection of crypto collaborators in the fin-tech space, with its mission to “bring 100 million new users into cryptocurrency.”
Many More Blockchain Partnerships
Besides these two popular groups, there are all sorts of other alliances, some more industry-specific, such as the Blockchain in Transport Alliance or BiTA, which boasts 500 members in 25 nations, and $1 trillion in revenue each year.
If even the more obscure and targeted blockchain alliances are organizations of that size, in terms of both membership and revenue, that gives investors a sense of just how much of this alliance activity is occurring within the global economy. Blockchain is revolutionizing many industries and fundamentally changing not only business but the government, too. The rate at which technologies emerge in enterprise is dizzying, and the rise of the blockchain alliance reflects the broader advance of blockchain-based systems. One can also see the ubiquity of the blockchain alliance in enterprise reports, as noted in this abstract from ResearchandMarkets:
“The scope of this report is focused on a selection of the top companies offering blockchain financial services and the key areas in the field that are driving industry growth and allowing these companies to succeed. The publisher also explores the blockchain industry’s structure, noting strategic alliances and acquisitions.”
Blockchain Alliances in Developing Digital Assets
In addition to the above types of collaborations, when you look at the overall terrain, even some of the digital coins themselves are, in a sense, alliances between various corporate and organizational stakeholders. For example, the Hyperledger project boasts a deep roster of sponsors, as does Ethereum, which is often referred to as the runner-up to Bitcoin, although Ripple (XRP) sometimes steals that thunder.
“Hyperledger can be thought of as an umbrella project that intends to supply the necessary framework, standards, and support necessary to build open-sourced blockchains that become widely adopted,” writes Michael Draper. A quick list of companies that have signed onto the initiative include notables such as IBM, Intel, and J.P. Morgan. As for Ethereum and Ripple, to crypto enthusiasts, their long lists of collaborators are a matter of common knowledge.
UPA’s Groundbreaking UPT Project
However, even within this context, the UPA has stolen the show with a Universal Protocol Token (UPT) ICO in March, plus a rollout of various stablecoins pegged to fiat currencies, as well as a universal stablecoin for Bitcoin. The diversity and robustness of the group’s approach to fintech innovations have put the alliance and its members on the map.
As of November 20, the UPT has been listed on the Bitcoin.com exchange where investors can also take advantage of UPUSD, UPEUR, and UPBTC.
Who’s Involved in the UPA
Who are the UPA players? First, there’s Uphold, a company that has made its bones on quick and convenient digital money verification, and OmiseGO, a firm historically active in the Ethereum world that takes pride in its innovations for blockchain payment processing and financial infrastructure. Another major partner in the UPA is Cred, a firm that has innovated cold storage and ongoing digital asset maintenance. The UPT promises to be a useful tool in Cred’s already designed crypto-to-cash and fair interest rate initiatives, which make heavy use of blockchain core principles.
These, plus several other collaborators, including Blockchain at Berkeley and CertiK, have created UPT ostensibly to “create blockchain interoperability and a more transparent set of crypto stablecoin assets.”
By making all cryptocurrencies convertible on a single network, the Universal Protocol Platform combines smart contracts with what stakeholders call “highly secure and convertible proxy tokens.” This streamlines the process of listing new cryptocurrencies onto exchanges, solves problems for financial institutions, and makes cryptocurrency investing more practical for retail investors, in part by decreasing risk.
As for the general motivation and rationale behind creating blockchain alliances, it’s quite evident that there are some benefits to bringing various companies and parties together to develop deliberate standards and sandboxes for cryptocurrency systems.
Firstly, every stakeholder contributes its capabilities to the project. In the case of the Universal Protocol Alliance, a release from the group notes that “each alliance member will provide a critical component to the ecosystem.”
Various sponsors may also contribute their weight in the form of their respective track records within the industry. Seeing a broad roster of participating companies helps investors and others to feel more confident about the outcomes tied to a digital asset project.
Solidarity and stability sway regulators. As concerns mount around various cryptocurrencies and how they are backing markets, having broad alliances brings some measure of reassurance to those who feel that the world of cryptocurrency is really just the ‘Wild West’ and that it’s challenging to verify markets for particular coins or predict investor behavior, etc.
In creating a range of stablecoins this way, the UPA is diverging from Satoshi’s vision in creating the first Bitcoin. Classic blockchain networks are, by nature decentralized. Pegging stablecoins to fiat currencies ‘re-centralizes’ them, thus branching off into an entirely different blockchain-based system and way of thinking. But in general, projects that have the power of an alliance may be more likely to navigate the complexities of national regulatory agencies and compete for the attention of investors in the practical, everyday world. That’s part of the ambitious mandate that the UPA has set for itself in a rapidly changing fintech environment.