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Shopify implements blockchain tools including 'tokengating'

Shopify implements blockchain tools including 'tokengating'

created Simon peters13 February 2023

Last week, bitcoin fell slightly as mixed economic and regulatory news continues to leave investors uncertain about the direction of the market.

At the beginning of last week, bitcoin was trading above $22, but fell sharply on Thursday amid negative US regulatory news for the cryptocurrency sector and fresh economic data casting doubt on the path of rate hikes by central banks. It is currently trading around $500.

Ethereum it recorded similarly large declines on Thursday. After breaking above $1 mid-week, it plummeted and has since settled in a trading range around $650.

JPMorgan sees 'escrow tokens' in the future of cryptocurrencies

The main investment bank JPMorgan issued a report detailing what he sees as one of the future trends for cryptocurrencies and indicated deposit tokens. Escrow tokens provide an alternative to stablecoins as they are issued by holding institutions rather than a third party.

This is somewhat similar to the historical issue of money where banks issued their own notes, ultimately backed by the central bank. Remnants of this system can still be seen in Scotland (where banks issue pound notes) and also in Northern Ireland.

Stablecoins have become a key aspect of the cryptocurrency ecosystem over the past few years, but not without problems. JPMorgan, in effect, is suggesting that these stablecoins will be “taken out of the equation” as digital, blockchain-based versions of bank deposits.

The key difference, however, is that stablecoins must have some form of collateral to maintain a 1:1 value with the fiat currency they reflect, whereas escrow tokens theoretically require no type of backing.

Shopify implements blockchain tools

The main eCommerce platform Shopify launched a suite of blockchain commerce tools for sellers on the platform: incl "tokengating", more cryptocurrency wallet features and other innovations.

Tokengating is probably the most interesting development in this case. Platform merchants can use this feature to tell which token holders get access to exclusive products such as launches NFT. This gives merchants the ability to reward loyalty or offer exclusive products to high-value customers.

Blockchain technology is still under development in many ways, but clearly has innovations and new ideas emerging and evolving every day. Shopify is one of those brands that not everyone has heard of, but is actually very present in the background of many online retail offerings.

We may soon see several major online retailers adopt Shopify's new blockchain suite to reward customers and offer other benefits. Big companies like Gymshark, Kylie Cosmetics, Penguin Books and others are using the company - so who knows where these functionalities might pop up soon.

Has bitcoin returned to the bull market?

While market timing is never a particularly rewarding endeavor, there is increasing speculation as to whether we have already seen the worst of 2022's crypto winter collapses.

Chief Executive Officer Pantera Capital, Dan Morehead, claims that bitcoin looks stronger in the coming year. While Morehead's comments can be marked as incidental, he draws attention to the world's largest cryptocurrency.

Morehead points out that Pantera has been investing in bitcoin for over a decade and has seen many of its ups and downs. Determining the duration of the asset is therefore futile.

It is more important to have a clear rationale for investing in an asset and to stick to that investment rationale, while ensuring that it is reviewed from time to time to determine whether that rationale continues to hold.

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About the Author
Simon peters
eToro analyst. A graduate of the Faculty of Mechanical Engineering at Brunel University in London. He is CFA UK Level 4 certified in Investment Management.