CRYPTOCURRENCY: WHAT & WHY

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Crypto 101 – Part

Crypto 101 – Part 2

In part I of Crypto 101, we had discussed the basics of blockchain tech and the various use cases of crypto.

Bitcoin is the largest and most know crypto or blockchain product; blockchain use is a fallacy that is restricted to currency and store of value. However, that is not the case. In Part II we will talk about the largest blockchain products by use and their various uses.

Cryptocurrency

The most popular of crypto is bitcoin. It was created as a medium of exchange and store of value.

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Followers of bitcoin consider it to be “digital gold” without the deficiencies of Gold i.e., Gold needs physical storage and distribution, has compliance challenges and is not readily convertible into cash. While bitcoin can be converted into cash in seconds and bitcoin has now been authorized as a medium of exchange by leading payment platforms from Mastercard, Visa, PayPal and Square. Of course, its price is volatile and subject to sudden 40-50% swings leading some to look at it as a risky proposition. Gold doesn’t have such wild swings. Litecoin use case is the same as bitcoin. The jury is still not out on this, so watch the space. Smart Contracts Ethereum gets compared to MS-Excel by the early adapters. It is used for smart contracts, making them secure from hacking. Giants like JP Morgan, BNY Mellon, Microsoft, Accenture, Banco San-tander and others are already using this tech. Ethereum is being used for contracts, issuance of new coins (Called ICO-Initial Coin Offerings), Betting, Escrow and even Digital identity Management. Clearly, if security and privacy are vital concerns, Ehtereum has found its place under the sun. However, as of now, the cost is high because of the complex blockchain instructions required to create the contract. simple contract without complicated logic can cost USD 7000; on the other hand, a highly complex one can cost as high as USD 45000. This means that users go to Smart Contracts only when the business stakes are high and the cost is not a factor. Having said that, already over 1.5 million smart contracts had been entered into using Ethereum tech.