When you read any of the explanations about crypto money, you will see a remarkable detail. The explanation is “Blockchain technology is an incredible technology for the sharing of information, but crypto money is not more than an honest one”. Nathana Sharma from Singularity University does not agree with this view, and in fact, blockchain and crypto money are inseparable.
Thousands of crypto moneys on the market are now being developed as part of blockchain protocols such as bitcoin, ethereum and mono. The nature of Blockchain technology requires this. If you can not develop your own technology (such as IOTA), you have to connect to one of the existing protocols.
Sharma sees this definition of “cryptocurrency – crypto money” as the main reason for misunderstanding. Almost none of the thousands of crypto currencies function as currency. Investing in crypto currencies is not like investing in a mortar anymore. Instead, consider crypto currencies as a digital entity that depends on the value of the blockchain protocol it is connected to. The fact that Bitcoin is a new currency is one of the biggest reasons for this confusion, and if you look at the past years, Bitcoin itself is working as a fundraising mechanism from a currency.
When you look at hundreds of crypt money on the market at the moment, you see that a majority is quite badly designed, far from serving a specific purpose. You can see this as a dot.com balloon that exploded in the 90s. Pets.com, which earns millions of dollars in dollars, and Amazon.com, one of the world’s most valuable companies, are children of the same period. Even when the name of the company Pets.com is unknown, we are not sure what to expect when it comes to Amazon.com’s future, finding promising crypto moneys that can be as powerful as Amazon.com’s future.
How can we do this? Suppose you want to develop a project using intelligent contracts on a decentralized blockchain.
To write and enforce smart contracts, you must use a crypto money-supported blockchain protocol. (Ethereum, Ada Cardano, Neo … or another crypto money) When the project you are developing is passed on and used, the blockchain protocol you used as your infrastructure will become more popular. As this network becomes popular, the value will increase, and as the value increases, it will be used more. Supply – demand relationship.
As demand increases, cryptographic money is produced in a certain number (or the number to be extracted by mining), unlike traditional gold-like markets where the supply can expand (how much gold can be produced due to mining). The only way to have a crypto paralel that would consider the mining service to be highly technological equipment, expertise and time is to buy it from someone else. (Let’s not consider revenue sharing models initiated by mining companies for now.)
As a result, the demand for a blockchain protocol and the crypto price increases faster than the price increases. (It’s like Bitco’s.)
For Facebook and Airbnb, one of today’s most valuable companies, is essentially essentially networking. The more popular the networks are, the more valuable the company is. The so-called network effect causes the network to grow in utility and value as it grows, and that’s exactly what’s on the blockchain-based crypto par. (The more people use it, the more they increase, the more the value increases, the more people start to use it.)
Unlike the Dot.com bubble, blockchain protocols are managed by non-profit organizations and you have to invest (as a miner or investor) to join the network. The service is also provided by these participants.
Before you invest in a crypto money, you can ask yourself the following questions so that you can understand if it is the right investment.
Is this protocol worthy? Why is it worthwhile?
How logical is it for features such as security, transparency and lack of centralization (dlt) that are fundamental to information sharing?
Is this blockchain protocol scalable?
Most importantly, as a participant (miner or investor) do you mean anything? Economically rationally designed? Is supply limited or inflation dependent?
In the first instance, asking these questions can give you the opportunity to invest in a more accurate technology. Of course, it is worthwhile to thoroughly examine the future plans of the crypto money (blockchain protocols), road maps, solving problems, and by whom it is developed and supported. So you can find next Amazon.com, avoid Pets.com.Tags: blockchain crypto money