What is crypto automation?
As time goes on and the world of crypto adapts to the world of the traditional economy, more and more correlations are seen between traditional and centralized finance. For example, right now the market is down after the US Federal Reserve announcements and the war in eastern Europe.
In this way, both traditional indices and cryptocurrencies have fallen drastically. However, when the traditional market normalizes, so will cryptos. Therefore, it’s a correlation that shares the positive and negative elements of the environment.
Another characteristic that the crypto world has inherited is atomization, an economic concept that refers to groups of people who perform Person-to-Person (P2P) transactions without affecting the general market.
In the crypto world this is a feature that has already been presented for some time, but still need to determine the consequences. Atomization has positive and negative things; many analysts consider that an “atomized market” is one with healthy competition.
The atomization market consists of individual and small transactions between two parties that are not frequent enough to change the price of the asset. An example would be the sale of 20 pieces of furniture from an individual seller to an interested buyer.
It is not necessary to involve companies; it is a simple purchase that will not affect the price of furniture on the market, even if they are sold cheaper or more expensive than normal.
In the crypto world this can also happen, the parties get together and have an agreement to buy tokens without going through the exchange. For example, we know that bitcoin is worth about $20,000 right now. In an atomized crypto market, people can agree to make a BTC exchange at a slightly different price without this actually affecting BTC’s “real” price.
In this way, the price of 20,000 dollars is exclusive to exchanges and in crypto atomization you can skip the exchange step to directly make an agreement with the other part. In this case, competition with the exchange is not encouraged, but the possibility of reaching agreements with other parts without any higher authority governing you.
It means that the crypto atomization combines perfectly with the values that gave life to it in the beginning. In other words, to take charge of your own funds and reach financial freedom.
In crypto it´s also easier, decentralized wallets allow you to make any token exchange without leaving any records for banks or governments. The blockchain certainly takes note of the transaction and “saves” it, but the transaction`s number it´s not associated with any name, so no one can trace the identity of the parts involved.
That said, some DAOs see atomization as negative. Blockchains like Ethereum’s allow the creation of other layer 2 “sub-blockchains” that would let anyone to create an alternative mini-market for cryptocurrencies.
When a group of people manages to organize to atomize a market, they could affect the market, invalidating everything we have mentioned above. This means that, if you trade for prices lower than what a token has in an exchange, this group could cause a fall in prices.
This would only happen if this organized group has a lot of influence and it no longer includes a few people with little capital. Similarly, a community can come together to create the atomization of cryptocurrencies in a small online space and without negatively affecting prices, without market manipulation.
Without going any further, Binance has created a P2P marketplace where it only acts as an arbiter and has already created a community. Knowing this, the real atomization comes from the people who aren’t in the exchange themselves, and such groups can be found in apps like Telegram or forums like Reddit.
In this case, you have to understand crypto atomization as an essential part of the nature of the crypto world and blockchain, so if you are interested in developing blockchain projects consult with experts in the area, MiT Software, write to us.