How to crypto? part II: The main currencies and projects out there (BTC, ETH, EOS)
It’s becoming more difficult by the day to keep up with the changes in the ever-evolving cryptocurrency market. Even for the few of us who find the time for reading whitepapers and refreshing coinmarketcap.com, the sheer volume of information is overwhelming. In this article we will present the main projects, their goals and how each team is preparing for the future.
Bitcoin (BTC)
Bitcoin is a “cryptocurrency”. Bitcoin and other cryptocurrencies are competing against existing money (and gold) to replace them with a truly global currency.The promise of Bitcoin is that it represents: A global currency which allows individuals to own their own money (without having to rely on national banks). Lower fees for transferring money across geographic borders is one of Bitcoin’s ongoing project. Financial stability for people who live in countries with unstable currencies. (In 2016, the Venezuela’s currency hit an inflation rate of 800%). Two-thirds of the current global population has no access to banking, or has limited access — Bitcoin is trying to improve accessibility to the financial system.
Bitcoin validates transactions using a Proof of Work consensus algorithm, also called mining. This method also increases the cost of the block creation, pushing miners to improve the efficiency of their mining systems to maintain a positive economic balance. This parameter update should occur approximately every 14 days, and a new block is generated every 10 minutes. Proof of work is not only used by the Bitcoin blockchain but also by Ethereum and many other blockchains.
Ethereum (ETH)
Ethereum is a decentralized application and blockchain development platform. Based on the programming language Solidity (created by Ethereum developers), Ethereum was formed as an “open blockchain platform that allowed anyone to build and use decentralized applications that run on blockchain technology.”
Ethereum is a “token.” What Bitcoin does for money, Ethereum does for contracts. Ethereum’s innovation is that is allows you to write Smart Contracts: basically any digital agreement where you can say “if this” happens, “then something else happens.” For example: If I vote for the president, then my vote is official and no one else can vote as me. If I sign my name on this document, then I own the car, but if you lose the papers you no longer own the car. Up until now we’ve carried out these agreements with a signature at the bottom of a paper document. Ethereum improves this model because it is digital, and proof of the operation can never be deleted. Ethereum consensus mechanisms, namely Ethereum’s Casper FFG, works on a Proof of Work (PoW) algorithm. But because of the big costs of mining, Vitalik Buterin and his Ethereum team want to switch to using a new consensus system called proof of stake(PoS). Proof of stake is a different way to validate transactions based and achieve the distributed consensus.
Eos (EOS)
Like Ethereum, EOS is a decentralized application and blockchain development platform.EOS was launched by Dan Larimer, who also founded Steem and Bitshares and is arguably one of the most successful ICOs of all time in terms of funding magnitude.
Like all others listed here, it aims to be the world’s foremost platform for developing decentralized applications. If a bug is found, through supermajority consensus on the network, it would be possible to freeze the code and rectify it, all without requiring a hard fork.
The platform features horizontal scaling, which means that smart contracts can be executed and transactions processed simultaneously. The team even estimates that it can manage a million transactions per second. That is exactly the kind of speed a smart contracts platform would need to take over the world. The ability to fix errors and horizontal scaling is something present in no other coin.
The consensus mechanism is Delegated Proof of Stake. Same general approach used by Bitshares, Steem,Lisk, Ark, Shift, Rise. It works like POS, except rather than requiring you to stake you can vote for someone who will do the staking. This is why it’s much faster than other systems because you have only 20–101 active nodes at a time. Decentralization exists because voting can kick a bad node out.
Neo (NEO)
Probably its strongest selling point is the fact that it is “backed” by the Chinese government, and industry giants like Alibaba and WINGS.. NEO also has multiple dApps already built on it. Having access to the fastest growing economy in the world is a great advantage for the coin’s growth.
China has great influence in the world and its decision to stick by this cryptocurrency will give it an advantage that no other coin is privileged with. It can also support up to 10,000 transactions per second, which is a remarkable figure and has a unique system dealing with dispute resolution to avoid complications such as hard forks.
Iota (MIOTA)
Combining blockchain technology with the idea of the Internet of Things. IOTA technically doesn’t run on a blockchain but it uses its own Tangle technology. This technology allows IOTA to be transaction fee free, grow without limitations and makes offline transactions possible. The reason for the absence of transaction fees — peer-to-peer verification — is the same reason why there are no scalability problems with IOTA. In contrast to blockchains, the more people use IOTA, the faster the network will become and the more transactions can be verified. When you want to make one transaction, you have to verify two, meaning that the speed increases exponentially. This may seem a bit of a stretch, but the reality is that IOTA and its Tangle technology could severely disrupt the way transactions are handled.
Qtum (QTUM)
QTUM is a smart contract blockchain that’s currently being developed by a team based in Shanghai. Qtum is a proof of stake blockchain that uses the Ethereum Virtual Machine (EVM) for its smart contract VM. This means that almost any smart contract that can run on Ethereum can also run on Qtum.
Qtum is compatible with the Bitcoin- and Ethereum ecosystems and aims at producing a variation of Bitcoin with Ethereum Virtual Machine (EVM) compatibility. Note that differently to Ethereum, the Qtum EVM is constantly backwards compatible. Pursuing a pragmatic design approach, Qtum employs industry use cases with a strategy comprising mobile devices.
There are many other projects out there that have great potential. This are the ones that caught our attention and interest mainly because of their goals, and how they managed to increase their market cap in such a short time. This growth made many investors and people from all around the globe aware to say the least. In our next article we will talk more about consensus mechanisms and how they differ from project to project.
There are many other projects out there that have great potential. This are the ones that caught our attention and interest mainly because of their goals, and how they managed to increase their market cap in such a short time. This growth made many investors and people from all around the globe aware to say the least. People with no background in technology or economics started to look for ways to make profits. Mining cryptocurrencies became very popular, the promise of a passive income made many people curious. Because of cheap electricity, China has seen a huge number of people staking graphics cards and creating small concentrations of ‘mining pools’, exposing vulnerabilities of PoW. Proof of Stake (PoS) concept states that a person can mine or validate block transactions according to how many coins he or she holds. This means that the more coins owned by a miner, the more mining power he or she has. At Pool of Stake we are building on this idea and we are creating the ‘staking pool’ for everyone. Pool of Stake aims to create the first safe environment for Proof of Stake (PoS) coin holders to stake together. The reasons for this are the inefficiencies of Proof of Work (PoW) as a consensus algorithm, and the high entry barriers to participate in securing Proof of Stake (PoS) blockchains. Our team is considering building on EOS mainnet, or Ethereum’s Casper blockchain, each one promoting decentralized, fast, scalable and secure transactions. Only time can tell which one responds better to the needs of our concept, consensus mechanisms being the focus point of 2018 and the years to come. In our next article we will talk more about consensus mechanisms and how they differ from project to project.
