What is Bancor (BNT)?
The Bancor Protocol is one of the new generation cryptocurrencies issued as smart tokens, which are capable of being placed in any Ethereum coin and convert into any other token. Bancor protocol is an endeavour of the Bprotocol Foundation, which is a non-profit company based in Zug, Switzerland. Buy Bancor (BNT) India with BuyBitcoin.
Bancor protocol allows anyone to create a smart token which is capable of holding other types of cryptocurrencies. The tokens held in reserve can use by any party to liquidate or purchase them instantaneously through the smart contract. Bancor makes it the perfect tool for a crypto day trader to use on a daily basis.
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In simple words, Bancor is a Decentralized Liquidity Network that allows you to hold any Ethereum token and convert it to any other token in the network, with no counterparty, at an automatically calculated price, using a simple web wallet.
Roles of the Parties in the Bancor Protocol Ecosystem
The roles of different parties vary from each other. Here is how various parties make their participation:
- Users: A user can hold, receive, transfer, request, liquidate and purchase tokens. They are the core backbone of the network to make sure it is continually being used as intended.
- Smart Token Makers: Token makers can issue new smart tokens that can use for token-changing, trading, etc. These creators can be regular people who are developers, companies, organizations or foundations. They need to be able to figure out the initial supply, the price, the Connector Weight, and management of the initial issuance of tokens. The Connector Weight is how many connections the connector has. The connector links the Smart Token to every other token in the network. The more connections, the stronger it is.
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- Asset Tokenizers: They can issue ERC20 tokens that allow smart token holders to use the assets as reserve tokens. This allows it to connect to a wider group of assets outside of cryptocurrencies that are up and coming blockchain assets.
- Arbitrageurs: They manipulate the market to reduce the gap between the price on the Bancor network and the crypto exchanges. Manipulation, in this case, sounds very negative but in reality, they’re similar to market makers in the stock market. Their job is to make sure there are enough buys and sell in the market to create liquidity in the system. Arbitrage, in this case, helps create more liquidity along with keeping more consistent prices.
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The Bancor protocol is the first technological solution to the classic economic problem known as a double-coincidence-of-wants problem in the field of asset exchange. In bartering, the problem was solved by money, so that people can act asynchronously over time and space.
In this case, money is the value carrier for goods. To increase the value of assets using money as a value carrier, the existing stock exchange model relies on the work of market makers who provide liquidity and create market depth. The Bancor protocol proposes a new solution that eliminates the barrier-to liquidity problem, the double-coincidence-of-wants problem, by using an asynchronous pricing model enabled by asset-holding smart-coin.
Buy Bancor (BNT) India
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