An in-depth analysis on Usechain ecosystem by Professor Henry Cao
In conjunction with the previous article debated on the current feasible utility of cryptocurrency, Usechain is going to demonstrate its utility via the blockchain network which will be discussed in the following article.
In 2016, we started working on Usechain through presentations and lectures. The idea is to develop a blockchain for financial applications. The blockchain will need to have real accounts and identity traceability to conform to KYC and AML standards. In addition, it requires high scalability and frequency for transactions to take place as well as reducing high transaction cost. If such technology bottlenecks are resolved, we envision these financial applications can start in the following areas.
Firstly, identity accounts can be used to generate private identity tokens. The idea was first proposed by Hayek in 1990s and it is called Hayek tokens. With the Hayek tokens, individual can use them to embed private debt or derivative contracts that are tradable. Hence, private contracts become tradable and the risk is subjected to the financial risk of the contracts plus the Cash-In-Transit (CIT) risk of the involved parties. There will be limited quantity of personal Hayek tokens (USI) and unlimited Hayek tokens (USN). The Hayek tokens can be minted through minting rights (USG) in combination with UST. USIs can be minted and generated with top school diplomas. Public accounts are created to collect community taxes and redistributed back to community.
The second application is to establish a decentralized exchange in which users can trade different kinds of tokens, including Hayek tokens. The current centralized exchanges consist of various problems such as manipulation, theft and front-running that have ruined the blockchain industry. The creation of a consensus mechanism with low energy consumption and scalable design will help to develop an effective decentralized exchange, improving on user-friendliness, eliminating centralized problems as well as increasing execution speed to perform efficiently as compare to centralized exchanges.
The third application is decentralized payments. Satoshi Nakamoto developed Bitcoin to handle a peer-to-peer payment network. However, the high cost and low transaction speed make Bitcoin inefficient as a payment channel. With Usechain’s high performance blockchain, we make P2P payment implementable. To accomplish decentralized digital payment, we need to establish a stable coin. The stable coin can be generated using the following path way:
a) Through a money market fund
b) Through a collateralized debt
c) Through a virtual smart federal reserve bank
The fourth application is personalized Arrow-Debreu tokens. Personalized Arrow-Debreu tokens payout one unit in some specified states and no payout in other states. In 1950’s, Arrow and Debreu showed that with Arrow-Debreu tokens, the market will be complete, which is any verifiable allocations is implementable. For example, when Donald Trump win the election, a particular Arrow-Debreu tokens payout one unit and no payout if he loses. The difference here is that the payment depends on the issuer’s credit risk.
Overall, there are other financial applications such as loans, bonds, stocks, derivatives, commodities, mutual funds, insurance, investment banking, etc. which can be explore in the future. In addition, non-financial applications such as medical records, property rights, supply chain management can be considered as well.
To fulfil the utility purpose for these applications, we need a real identity, high performance blockchain and currently there exist no realistic blockchain technology. We decided to establish our own blockchain instead, to promote ecosystem growth, to provide an underlying utility for the tokens within the ecosystem.
Reach us at:
Website: http://www.usechain.net/
Weibo: https://weibo.com/usechain
Twitter: https://twitter.com/usechain
Facebook: https://www.facebook.com/UsechainFoundation/
Telegram: https://t.me/usechaingroup
Medium: https://medium.com/usechain/
Bitcointalk: https://bitcointalk.org/index.php?topic=3432061.0
Reddit: https://www.reddit.com/user/Usechain
