Posts Tagged ‘bitcoin’

What is The Future of Cryptocurrency?

Tuesday, October 13th, 2020

A cryptocurrency is a form of digital cash, which is made and managed through the use of cryptography techniques. This form of cryptography makes digital currency encrypted and prevents any frauds from occurring. Cryptocurrency owes its advancement to the development and success of bitcoin. Bitcoin set the trends for all cryptocurrencies that exist and has given the framework for all future cryptocurrencies to come. Bitcoin captured the attention of many investors and the media when its value suddenly increased to $266 in 2013, and from then on, its value kept on increasing to around $30,000 until it started to drop significantly by almost more than 50%.

This sparked outrage and debate over the future of cryptocurrency and its stability in the market. But, now, as people begin to understand the concept upon which its value is determined. Things have calmed down, and people have begun to use a digital currency like normal FIAT money.

But the question on everyone’s mind remains the same. That will one day digital currency succumb to the Euro, Pound, and Dollar? Or cryptocurrency like a trend, which will simply fade away with time?

The future; what does it have in store for cryptocurrencies?

We all saw that bitcoins price plummeted to $3000 during the coronavirus pandemic. But it then quickly rose back to over $10,000 in a matter of a few months. There have been different views on the subject. Some believe that the ongoing pandemic is like a fresh start for the bitcoin market. At the same time, others believe that the pandemic has shown us just how unstable the value of the currency is. Tiwari is very positive about the bitcoins value, and he predicts that the cryptocurrency will reach a value of around $100,000 during the pandemic. He was explaining that global panic will eventually make the currency more valuable.

Speculations have suggested that, there is a big possibility that crypto will be added to Nasdaq. This will add credibility to the digital currencies and its use as a more conventional form of currency.

It is important to note that cryptocurrencies are still a fairly new concept. Adopting new concepts take a lot of time, sometimes even generations. This does not mean that cryptocurrencies will take generations to be adopted. It is all about the ease of use and how willing people are to adapt to the new change.

The backlash and scrutiny associated with Crypto

Two of the main reasons for the success of bitcoin are also the two things that bring bitcoin and other digital currencies under the scope of governments and judicial notices in negative limelight. The decentralized system and the anonymity associated with digital currency has made it the go-to currency for hosting illegal activities and transactions. Money laundering, drug dealing, and overall payment for illegal goods and services on the dark web are all made through digital currency.

Institutions such as the Financial Crimes Enforcement Network (FinCEN), the FBI, and homeland security have all expressed concerns about bringing digital currency in accordance with government regulations. This problem is not going away anytime soon.

Countries are finding ways to integrate cryptocurrencies in their economies

European countries such as France and Italy are finding ways to make the use of digital currencies more common in their countries. They believe that this will allow for more investment and faster transfer of currencies among their citizens. However, they are currently coming up with new policies and measures that will make digital currency more assessable to the general public. These countries are also working on security issues so as to prevent money laundering and other illegal activities that can be committed by using cryptocurrencies. When one country creates a working system that covers the transactions and fixes the issues of security. Then that country will create a role model for all others to follow. The acceptance of digital currency worldwide will follow, with countries accepting the change as fast as the falling of dominos. However, all of this is still a maybe, and things can fall through. But, it seems more likely that cryptocurrencies will soon be more accepted throughout the developed countries, at least.

Cryptocurrency is third world countries:

There are many ways in which people still trade cryptocurrencies is countries where they are banned. But their use is limited and can come with risks. Third world countries are the last ones to accept technological change. Factors such as poverty and the non-availability of technology make it difficult for new changes to be incorporated. Furthermore, corrupt governments also makes this a difficult task.

Even if we see the acceptance of Digital currencies worldwide, we still may see many countries as such reluctant to accept the change. North Korea is one example.

Digital currencies success and failure also depend on the public:

The value of the digital currency is based on the demand and supply curve. This means that if more and more people want to make their transactions through bitcoin, its value will increase if fewer people want to hold or use bitcoin, its value decreases. There are a finite amount of digital currencies created, their value and their supply depend upon their demand and their mining.

As more transactions are made, more bitcoins are created to reward the miners. This means that in the long run, we might see a more stable value for digital currencies. But, it all depends on how quickly everyone will adapt to this relatively new form of currency. If future generations are more inclined to use, then we will see a boom in the market. Moreover, people might ditch traditional currencies altogether at one point and move towards digital currency. The opposite can also occur, future generations might lose trust in the new system, with less and less people accepting cryptocurrency as payment. Its value may fall so much so, that people might forget this concept ever existed. So our acceptance is the real basis for the success and failure of this currency.

 

What is the Difference Between a Coin and a Token?

Tuesday, October 13th, 2020

Table of contents:

  • What is a coin?
  • What coins are used for?
  • What is a token?
  • How are tokens made?
  • What are tokens used for?
  • How do tokens benefit companies?

 

If you are new to the cryptocurrency scene, then there must be a lot of terms that leave you in a confused and anxious state. Don’t worry; the OPOLO wallets team has you covered. One of the most common confusion among new crypto users is spotting the difference between a coin and a token.

You must be thinking, coins and tokens; they are all just cryptocurrencies? Well, the answer is yes, but there are differences in both.

Today, through this guide, you will learn the differences between coins and tokens. You will also be able to distinguish between the two of them with ease easily. I will provide you with the definition, the key differences, and give you examples.

So let’s begin!

What is a coin?

A digital currency coin is a cryptocurrency asset that has its own blockchain. It does not require someone else’s blockchain to function. For example, Bitcoin, Ethereum, and Litecoin.

Each of the examples mentioned above works on their own blockchain. Their entire network is made from scratch, using the same framework of past technologies that were availed first by Bitcoin.

To make the statement above simpler:

  • Bitcoin works and is mined on the Bitcoin blockchain network
  • Ethereum works and is mined on the Ethereum blockchain network
  • Litecoin works and is mined on the Litecoin blockchain network

Transfers of these digital assets can be made from one individual to another individual. But, no form of physical currency is transferred. Each and every coin exists on its own blockchain, which is a global database. This database is accessible worldwide to anyone with a computer. Moreover, each transaction that occurs needs to be verified on the blockchain as well.

What coins are used for?

Digital currency or coins are used in the same way as regular coins are used, just like money. You can imagine that each coin is just like the currency in your wallet. Just like normal currency, these coins are a store of value, a medium of exchange, and a unit of account.

For example, you can use bitcoin to buy goods on the internet, such as things from an online store. You can keep your bitcoins safe for use on a rainy day. These days’ things are also priced according to BTC.

Some digital currencies do provide additional benefits to the ones mentioned above. For example, people who have acquired dash as their digital currency can vote on important decisions that occur within the company, such as software updates and investment planning.

Tokens are paid for and transferred through the use of digital currencies. For example, Ether is paid for Ethereum based token transfers.

What is a token?

Tokens are somewhat the opposite of coins. While coins use their own blockchain to make transactions. A token uses an already made blockchain and are created through the very same blockchain that they use.

Tokens made from NEO blockchain can only use the NEO blockchain, and tokens made from Ethereum blockchain can only use the Ethereum blockchain. The most widely and commonly used blockchain for this purpose is Ethereum. Tokens that are made from Ethereum, are known as ERC-20 tokens. While tokens made from NEO are called as NEP-5 tokens.

How are tokens made?

Anyone with programming experience can make a token. All it needs is a little bit of technical abilities and some of the native coin on which the token is being made. A token is like a piece of code running on the blockchain. And anyone can put that immutable (non changeable) code on the blockchain.

For example, if the token is made on a NEO network then the developer will need to spend some NEO to confirm the creation of his or her token.

A thing to note is that a fee needs to be made for each token transaction on the particular blockchain. Which means that any NEO token transfer will require you to spend some NEO coin. This is just like how fees are paid for the transaction of each coin on the network.

What are tokens used for?

Tokens are made so they can be used by dApps, which is an abbreviation for Decentralized apps. Developers have the option to create as many tokens as they want and then where these tokens will be sent. They will pay for this service using the digital coins they hold of the blockchain they are using to create these tokens.

When these tokens are created, they are used to access a variety of features of the application they were made for.

These features can either be discounts, paying bills, and using different services such as music or navigation. Often, tokens are also made to represent a physical asset such as a house. People sell houses using smart contracts, and physical properties are represented using a token.

For example, WePower (WPR) allows its users to buy and sell electricity units on its dApp. Each token is a representation of a certain amount of electricity.

How do tokens benefit companies?

Companies and developers do not have to create a blockchain for themselves nor find users to mine them. This saves them a lot of money and time. Moreover, they get a secure system to get all their transactions done from.

Another important factor is that for a blockchain to be secure, you need a lot of miners. This would be a near impossible task for companies if they weren’t using digital currency blockchains.

The process of creating tokens from these blockchains is also quite simple and requires minimum coding experience. Moreover, companies such as Ethereum and Dashcoin offer good incentives.

Digital currency blockchains are also a more trusted system for users, and it is not hard to attract them to the prospect of using tokens for dApps.

 

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