The Cryptoverse, more than just Digital Money
Not all Crypto assets are created to perform the function of a currency, hence ‘Crypto Currency’ can be somewhat misleading.
Today we summarise the predominant fundamental characteristics behind seventeen of the most popular crypto assets.
But first, let us address the history behind why these assets and currencies exist:
Generally, a cryptocurrency is a digital asset designed as an alternative medium of exchange and store of value that uses cryptography to secure transactions, control the creation of additional units, and to verify the transfer of assets and value. Cryptocurrencies are predominantly decentralized in nature. Transactions are validated by network nodes and recorded in a public data structure in the form of a distributed ledger commonly known as a Blockchain. More on this topic here.
The first, (and most common) cryptocurrency created was Bitcoin. Bitcoin was created in 2008 in the aftermath of the global subprime financial crisis of 2007 by an anonymous person (or group) called Satoshi Nakamoto. The inevitable failure of subprime lending markets caused the cataclysmic failure of global financial systems. The quintessence of crypto assets/currencies is economic freedom.
Altcoins (alternative coins) are usually created and issued via an ICO (Initial Coin Offering) on an already existing blockchain, such as that of Ethereum.
Tokens essentially represent ownership. Tokens can represent ownership of almost any underlying investment digital or real-world. Tokens allow holders to perform various functions outside of just ownership, such as governance and rewards.
Assets are created to perform many real world applications, not just that of digital money.
Many assets, more applications
The differences between crypto assets can be confusing. For example, protocols and dApp’s will all have differing maximum and circulating supplies, transaction speeds and confirmation finality.
To give you an idea of the huge variations of the crypto market, we’ve made a list of some of the most popular and interesting projects;
As discussed, Bitcoin is first generation blockchain technology and revered as the Grandfather of the Cryptoverse. It was originally created as a decentralised payments network to facilitate the transfer of value without the need to rely on intermediaries. Due to its inefficiencies around energy usage, confirmation finality, transaction fees and heavy duty consensus mechanism (PoW) the asset is predominantly now used as a digital Store of Value akin to that of Gold. Bitcoins native token is BTC.
Ethereum was founded by Vitalik Buterin and seven others, including Charles Hoskinson and Gavin Wood. Ethereum is essentially second generation cryptotech having successfully implemented the Smart Contract on its native blockchain.
Smart contracts were first proposed in 1996 by a computer scientist Nick Szabo, famous for inventing a virtual currency a full decade before the invention of Bitcoin. In his original essay published in 1996 named “Smart Contracts: Building Blocks for Digital Markets” Szabo described a Smart Contract as “a set of promises, specified in digital form, including protocols within which the parties perform on these promises.”
Since then, Smart Contracts have come to be known as one of the most crucial computer systems innovations in existence.
Ethereum confirms transactions using PoW (Like bitcoin), however, is transitioning to a new consensus mechanism, proof of stake (PoS). The aim is to enable Ethereum to evolve and compete with third generation protocols by becoming significantly less harmful to the environment, drastically reducing network fees, becoming deflationary in nature (scarce) and paving the way for higher throughput.
Generally, the speed and number of transactions a database or network can process is referred to as transaction throughput, expressed as a number of transactions per second (TPS). Ethereums native token is called Ether or ETH.
Cardano can be typically referred to as a third generation technology due to its network secured via a proof of stake consensus mechanism called Ouroboros. Ouroboros consensus aims for improved network security and modularized design. Cardano’s modularization allows for network delegation, sidechains, and light client data structures.
Cardano’s goal is to allow “Changemakers, Innovators and Visionaries’ to bring about global change by redistributing power from unaccountable structures to individuals. Cardano Recently entered an agreement with the Government of Ethiopia to provide digital identity to five-million students who otherwise would likely not have photo and address ID, for example.
Cardano was founded in 2017 by Charles Hoskinson, a co-founder of Ethereum. Cardano’s native token is ADA, named after Ada Lovelace, a British Mathematician who is regarded as the original computer scientist.
Like Polkadot, Cardano aims to solve the blockchain trilema. The blockchain trilema is a set of tradeoffs protocols consider when designing architecture and tokenomics.
Polkadot was created by Gavin Wood, a founder of ethereum who wanted to design a better version of the ethereum blockchain. Like Cardano, polkadot is referred to as an ‘Ethereum-killer’.
Polkadot’s unique selling point is interoperability. Polkadot aims to act as a bridge to enable various protocols to communicate. Currently this is not possible due to differing programming languages native to each ecosystem. Polkadots native token is DOT.
Chainlink is commonly known as an Oracle. An oracle is imperative for ecosystems utilising smart contracts. Oracles enable protocols and smart contracts to interact with external, off-chain (off-the-blockchain) data.
Inbound oracles bring off-chain or real-world data to the blockchain, whereas their outbound counterparts do the opposite: they inform an entity outside the blockchain of an event that occurred on it.
For example, inbound oracles allow data pertaining to real-world events to be called to the blockchain, with use cases ranging from automated trading based on the current price of an asset to gambling dApp payouts in the event of a win. Smart contracts contain the rules, and oracles provide them with the data they need to trigger and execute those rules. Chainlinks native token is LINK.
Tether is a so-called stablecoin, and is pegged to the USD. Stablecoins are less volatile than other other assets mentioned herein and should maintain a ratio of USD 1:1 USDT.
USDT is the native token of Tether. Currently, Tether facilitates the vast majority of purchases of assets in the Cryptoverse. THere are concerns over whether its pegg will maintain over the long term. Other stablecoins include USDC, UST, and DAI.
Monero is an altcoin that focuses heavily on privacy. Unlike bitcoin, the economics of transactions sent/received on the monero network cannot be viewed by anyone. While the identity of the payer and the recipient and the amount are recorded, they are shielded. You can therefore make transactions anonymously. Moneros native token is XMR.
Binance is widely regarded as the largest crypto exchange globally and originates from China. Due to regulatory crackdowns globally, Binance moved its HQ from various locations and is understood to reside in Malta currently. Binance has a wide array of altcoins, many which would not usually be found on other exchanges such as Coinbase or Kraken. Binances native token, the binance coin is also known as BNB.
Ripple aims to connect traditional financial institutions such as retail banks to its payment protocol, ripplenet. Ripple hopes to provide fast and near-feeless cross-border payments using its payment rails. Ripplenet is essentially back-end infrastructure.
Unlike Bitcoin, it is a centralized network, maintained by a single company. The native token is XRP.
Stellar is a platform that also facilitates international payments, like XRP. Its founder, Jed McCaleb was a founder of Ripple.
This involves transferring money in one currency and then arriving at the recipient in another currency. Stellars native token is the lumen.
Litecoin is a spin-off (fork) of Bitcoin. It is faster, carries lower fees and can handle more transactions per second, although somewhat limited. Bitcoin is commonly known as digital gold due its ‘store of value’ characteristics, you could therefore consider Litecoin as digital silver. Litecoins native token is LTC.
Dogecoin is also a fork off bitcoin, and was created as a joke. It is generally referred to as ‘memecoin’. However, due to its friendly community, network effect and endorsement by Billionaire Elon Musk (the self proclaimed DogeFather), this coin has since advanced to the top five largest crypto assets by Market Capitalization. Dogecoins native token is DOGE.
VeChain’s goal is to connect industry supply chains using blockchain technology. It provides a transparent immutable map of the entire production chain of a product.
You can identify exactly where the product was made, the raw materials used and the quality of those materials. VeChain was founded by Sunny Lu, a former employee of Louis Vuitton, who wanted to go to war against counterfeit products. VeChains native token is VET.
Nano is billed as ‘digital money for the modern world’. Nano is a lightweight currency that is designed to facilitate secure, practically instant payment (0.2seconds), without fees. It addresses many of the major limitations of both legacy financial infrastructure and the majority of first and second generation crypto assets.
Nano has pioneered the perceived fourth generation of blockchain technology and actually utilises a revolutionary data architecture known as block-lattice as opposed to a traditional blockchain, (technically referred to DAG (directed acyclic graph)). DAG technology essentially enables each wallet address to have its own blockchain. It is widely regarded as the most eco-friendly asset.
Nano’s mission is to function as an everyday currency for the unbanked, some 50% of earth’s population.
Filecoin is a decentralized storage network which allows users to rent digital storage space. This involves splitting documents into small pieces and then storing them on multiple computers around the world.
It is considered a secure alternative to cloud services. Anyone offering storage space receives FIL tokens in return.
Elrond is a blockchain protocol that uses so-called sharding technology to enable extremely high througput. The network adapts itself automatically and at lightning speed taking into consideration the demands of the network.
Last, but certainly not least, Brickken. We couldn’t start with ourselves now, could we.
Brickken is a blockchain tokenization platform that is the first of its kind. Built on Ethereum, we aim to standardize the process by which asset tokenization and tokenization services across the globe are executed and facilitate asset tokenization through Brickken’s decentralized application (dApp).
Brickken was founded in January 2020, and quickly became a leading voice in the world of tokenization for its avant-garde use of blockchain technology.
Asset tokenization is the process by which any real-world asset, tangible, or intangible, is digitized and then divided into smaller pieces that take the form of tokens. Each token represents a proportional part of the digitized asset, offering the owner of the token, the corresponding economic rights.
Brickkens native token is BKN, and will be launched via an Initial Dex Offering (IDO).
Before investing ensure you do your homework
The above seventeen crypto assets/currencies are the tip of the proverbial iceberg. While many crypto currencies move with the price of bitcoin, each has its own characteristics, purpose and application.
It can be difficult to understand the underlying technology of a crypto currency. Still, it’s wise to familiarize yourself with a coin before investing. Reading each respective white paper is a good place to start.
Ask yourself the following questions:
- Who developed the crypto and for what purpose?
- How many coins are in circulation?
- What are the advantages?
- Does it have a real world application?
- What limitations does the coin have?
- Are there competing coins?
- Which parties are using the coin or platform?
By doing your research, and understanding the asset, you will naturally filter out many scams.
If you’re just getting started with cryptocurrency check out our crypto wiki. Here you can find terms and jargon to make sure you have a full understanding of the crypto space!
Be one of the first to know when BKN launches by joining our discord channel or telegram group or check out the airdrop.