Satoshi Nakamoto’s invention of Bitcoin in 2009 not only created a cryptocurrency, but it also revolutionized the financial world. More cryptocurrencies started being created and each cryptocurrency had a specific goal and target audience whose problems they sought to address.
With a plethora of cryptocurrencies being made available consistently, it has become really hard to keep a track of them. We will talk about one of the most promising cryptocurrencies of 2018, Loopring.
According to Loopring’s official website,
Loopring is a protocol for building decentralized exchanges. Besides the protocol smart-contracts, Loopring also offers a collection of open-sourced software to help you build decentralized exchanges.
Mt Gox was one of the most popular and oldest exchanges for Bitcoin from 2009-2014. It was responsible for more than 65% of Bitcoin’s dealings. However, in 2014 Mt Gox filed for bankruptcy and claimed that Bitcoins from their exchange were hacked. Thus, began a severe crypto crash which was observed by a Chinese Software Developer Daniel Wang.
Daniel Wang decided to revolutionize the exchange industry and created an open source protocol to save cryptocurrency investors from Mt.Gox like incidents. Loopring is not itself an exchange but it is a platform that can help decentralized exchanges to use its code.
With Loopring’s protocol, you do not have to depend on centralized exchanges to save your assets. Loopring saves you from sending your cryptocurrencies from your wallets to centralized exchanges. Centralized exchanges are prone to hacking. They are bad at management and offer no features. But with Loopring’s protocol, you do not need to be dependent on these exchanges.
Loopring protocol helps you save the cryptocurrencies in your wallet and trade them without sending them anywhere. Smart contracts will assist in trading by using Loopring’s tokens to automate your order when the right price is met. Loopring engages in atomization which means that the order is decomposed into tiny fragments. With the loopring protocol, you can control the pricing on decentralized exchanges, as opposed to centralized exchanges.
Let’s explain Loopring’s protocol through an example. Suppose, you have a token X in your wallet and would like to replace it with token Y. Loopring’s protocol will generate a call and spread it to the network after your confirmation. When another user is interested to engage in business with you, you both negotiate and agree on a price and initiate the deal. Afterwards, miners of the protocol will help in the validation of the transaction by comparing the orders. Next, a smart contract will atomize token X with token Y. Lastly, the validated transaction is then performed on the blockchain through ring miners.
To buy loopring, you will have to follow 2 steps.
Firstly, you have to go to an exchange like Coinbase that sells Bitcoin or Ethereum. We recommend buying Ethereum because it has lesser transaction charges than Bitcoin.
Secondly, you have to send your Ethereum to an exchange that sells Loopring. Loopring is available on a lot of exchanges, but we recommend Binance for its easy-to-use user interface.
You can store your Loopring on any wallet that accepts ERC-20 Tokens. However, we will recommend Loopring’s official wallet Loopr which is a web-based wallet.
Positives and Negatives
Loopring aims to solve a major problem in the crypto space. Thus, with proper execution, it has the potential to become one of the top cryptocurrencies. Moreover, it facilitates decentralized cryptocurrencies to function better and put an end to the conventional risky centralized exchanges.
Lastly, the founder and team of Loopring are highly experienced and talented and the partnerships with leading cryptocurrencies like Neo and Qtum give it an edge.
On the other hand, like most cryptocurrencies, Loopring also has a few problems. It is still in development stages. There is also discussion about whether decentralized exchanges will accept Loopring’s protocol or will they choose any other protocol. For exchanges to accept Loopring, they will have to provide critical information to Loopring, hence a trust factor needs to be established between Loopring and decentralized exchanges.
We believe Loopring technology and whitepaper are promising enough to revolutionize the crypto industry. With a brilliant founder and formidable team behind it, as well as strong partners like Neo, Loopring is one of the most under-rated cryptocurrencies to invest in.