In the past few years, new encrypted currencies have emerged, including many innovations. Today, let's look at the core functions of encrypted money.
Security is required for any scenario
The most important thing for encrypted money is security. It is precisely because of the block chain, the security guarantee of the underlying accounts, that the balance of encrypted currency has a clear ownership of property rights. However, the following aspects affect the security of block chain, thus affecting the security of encrypted currency.
The distribution of arithmetic affects safety. If the calculation is too concentrated, the possibility of the whole network being attacked will increase. When you concentrate, there is a possibility that the block chain will be rewritten, and your currency may even become not yours. The value of encrypted currency on such block chains is greatly discounted. Miners have enough discretion to encrypt money safely, which is what people call de-centralization.
Algorithms affect security. Each encrypted currency tries to use different algorithms from other projects. Because if you use the same algorithm as another encrypted currency and unfortunately have a lower market value, you may be attacked.
For example, ETC and ETH have the same algorithm, but ETC market value and computing power are much smaller, which leads to large miners in ETH can easily realize the calculation attack on ETC. However, there are still some proactive and foolish projects in the market, such as KMD. KMD actively mines with Bitcoin, and Bitcoin miners can simultaneously mine KMD, which is equivalent to initiatively reducing the cost of being attacked by Bitcoin miners.
The algorithm also affects de-centralization at another level. Some algorithms are deliberately designed to mine only general purpose graphics cards and CPUs, avoiding some special chips as far as possible. This is because once efficient dedicated chips appear in the market, such chips are often controlled by individual manufacturers. Not everyone has easy access to these chips, which leads to another centralization.
Any encrypted currency project should try its best to solve the security problem. If this project is not done well, it can be directly PASS.
Holding scenario: hedging
In order to encourage users to hold, virtual money has a clear and transparent distribution rules. Most of the encrypted currency issuance is gradually decreasing, such as Bitcoin, Wright coin and so on. Even if a small amount of encrypted currency issuance decreases, the annual issuance ratio or issuance quantity will be controlled.
This allows a good encrypted currency to be invested or preserved.
Payment Scenario: Privacy, Convenience
Transfer payment is the most basic use scenario of encrypted currency, many projects will work hard in this regard. Privacy-conscious encrypted currencies are constantly emerging in the market, such as DASH, XMR, ZCASH, GRIN and so on. There are also a lot of project optimization convenience issues, such as faster check-in time, more convenient operation (light wallet and mobile wallet, etc.), larger capacity (expansion, reduce peak waiting) and so on.
Payment scenarios are probably the biggest use scenarios for money. Many projects are aimed at providing simple payment capacity, without advanced functions such as intelligent contracts, but belong to the most successful encrypted currencies, such as Bitcoin, Wright, DASH, XMR and so on. The same is true of the hot GRIN recently.
Diversified scenarios require intelligent contracts
In addition to payment, there are many scenarios for the use of money. Block chain systems provide programmable accounting capabilities (smart contracts) that allow encrypted currency to be applied in these complex scenarios. In the latest encrypted currency project, smart contracts are almost standard matching.
For example, project financing can use pre-programmed procedures, so that each investor can ensure that they are treated fairly. Decentralized exchanges can also use smart contracts to convince both parties that they will not be deceived.
Smart contracts greatly expand the usage scenario of encrypted currency. The first ETF to support intelligent contracts has achieved great success.
Scenes that combine with the real world require prophets
Intelligent contracts can only use data on block chains. The function of predictor can bring data out of block chains into the chain, so that encrypted currency can be used in real world scenarios. For example, by incorporating gold price and encrypted currency price into the block chain, gold futures can be traded in encrypted currency.
However, the role of the predictor has not yet been played, and it is not known whether there will be suitable scenarios in the future.
