What are Crypto-Currencies?

Behind every cryptocurrency, there is a project with special features. In reality, the term cryptocurrency is almost an abuse of language because all crypto-currencies are not intended to become a means of payment. Let’s take a few examples:

  • Bitcoin is the best known. Indeed, it aims to become a means of payment.
  • The ethereal is the second best-known currency. It was created from bitcoin thinking that we can deepen this technology. They developed the “smart contract” which is already used by many insurance companies like Axa.
  • The monero is a cryptocurrency that has the distinction of being anonymous. We can not find people who trade via these crypto-currencies. At least, we can find a number. But, it will be difficult to associate this number with a name.
  • Siacoin is a decentralized cloud storage crypto-currency that aims to compete with existing storage solutions. Instead of renting storage from a centralized vendor, Sia users rent storage from one another. Sia retains only the storage contracts concluded between the parties, which define the terms of their agreement.
  • Solarcoin is a French cryptocurrency that aims to encourage the development of solar energy.

All these crypto-currencies rely on the same technology: the blockchain.

What is the blockchain?

To illustrate, the blockchain is a giant book in which we write absolutely everything that happens. Suppose we are 3 people in a room, each one has a copy of this book which is the blockchain. As soon as one of us makes a move, moves an object or says something, we write it at the same time in the blockchain.

In this way, if a fourth enters the room, she can know everything that happened before. This book is not falsifiable unless more than half of the piece validates false information. For example: if I write in my version that the television which is in the room where we belong to me and that the other people present refuse this information because it is false, this information will not be validated by the network.

Today, if Google and Amazon pooled all their power in the cryptocurrency market, they would represent just 10% of the network. To control and falsify it, it should be at least 51%.

What is she really worth?

The cryptocurrency market is governed by supply and demand. They all have the value that people give them. If people decide that bitcoin is worthless then their value will be zero. In the same way that if tomorrow no one is interested in diamond, its value will be reduced.

Today, a bitcoin is worth 7300 €. A few months ago, there was a lot of talk about a fall. Bitcoin has exceeded € 15,000 at the end of December 2017 before falling back to € 5,000 in recent weeks. However, we forget that a year ago 1 bitcoin was worth € 1,000. It is experiencing impressive growth as 95% of cryptocurrencies.

Are they reliable?

There are nearly 1500 cryptocurrencies. Among them, there are inevitably projects that will be reliable, others will not be and some will unfortunately never succeed.

An uninformed person who does some research or makes contact with more experienced people in this market should not be too worried about spreading the scams.

To give some concrete examples: in the blockchain, it is totally impossible to create a false bitcoin, false papers or false contracts. While today it is possible to print fake tickets or have a false identity.

What can you buy with cryptocurrencies?

Just about all, Owen (Hasher) made a video on the Facebook page where he spent 24 hours in New York using only bitcoin. You can pay for your coffee, your meal, even your plane ticket on the airline company Expédia. France is late on this point, there are few traders in France who accept cryptocurrencies.

Is there any regulation that gives a framework to these currencies?

Regulation is the big question mark. Today, there is nothing precise. Discussions are ongoing. Regulations should come into being this year. The actors of the cryptocurrency world are waiting impatiently.

Do you think that in a few years crypto-currencies will become a classic means of payment?

I’m absolutely sure of that. I think my kids will use crypto-currencies daily.

One Comment on “What are Crypto-Currencies?”

Leave a Reply

Your email address will not be published. Required fields are marked *