What is cryptocurrency ?
Each cryptocurrency is backed by a Blockchain protocol whose technological prowess could be summarized as follows:
- The exchange of value via the internet is made possible. This is the birth of digital assets. While an electronic file can be copied and shared endlessly (image, text, music), cryptocurrency cannot be duplicated.
- Storage of information on a tamper-proof register, requiring no trusted third party.
This technology that generates so much enthusiasm opens the way to unexplored opportunities. Numerous projects, carried out by multiple teams, have thus been able to see the light of day.
Here is a classification of the different cryptocurrencies according to their uses.
01/ Infrastructure cryptocurrencies
These cryptocurrencies are associated with platforms designed to make the most of the two aspects mentioned above: these are computer protocols allowing the creation of more complex applications, taking advantage of the possibilities offered by Blockchain technology. Smart contracts (or “intelligent contracts”) and Dapps (Decentralized Applications) are the most promising elements.
These projects are intended to become the creative bases on which new services will be based. Among the applications most often mentioned, we could cite:
- Decentralized voting system
- Creation of customizable derivative cryptocurrencies
- Certification register
- Automatic execution of immutable contracts
- Fundraising platform
- Marketplace with decentralized operation
- Secure shared public database
- etc.
Examples: Ethereum, NEO, IOTA, NEM, Waves, Lisk
02/ Cryptocurrencies for payment systems
These electronic currencies embody the best-known application in the blockchain universe: a token (or token, coin, digital asset) as a unit of value to enable exchanges. This is the primary use of Bitcoin, as formulated by Satoshi Nakamoto in his 2009 white paper. Since then, a multitude of new cryptocurrencies have been launched. Each offers different characteristics:
- Number of units in circulation
- Issue and distribution of currency
- Speed of transactions
- Level of anonymity
- Predefined governance mode
- etc.
Examples: Bitcoin, Bitcoin Cash, Litecoin, Dash, Monero
03/ Cryptocurrencies for specific uses (Services)
Many applications are trying to leverage the potential of Blockchain technology to create new uses. In this case, cryptocurrency is used to support various economic systems, linked to the services offered. For this category, the token responds to a specific application.
Ex: Sia is a computer storage space sharing network, peer-to-peer, and operating autonomously; this system is enabled by the inclusion of SiaCoin, the network's currency, directly at the heart of the protocol. The range of possible possibilities remains very wide. The associated electronic currencies meet a specific use: proof of identification, exchange of services, voting system, currency for donations, etc.
Examples: Sia, Storj, Augur, Golem, Civic, Iconomi, Steemit Note: it is not uncommon to see applications emerge, with their own exchange units, from blockchain infrastructures mentioned previously. In other words: blockchain infrastructures are likely to allow the creation of multiple currencies called tokens.
DEX = DEXs are decentralized cryptocurrency exchange platforms which, unlike centralized exchange platforms, can more effectively combat computer attacks. In addition, they better preserve security, privacy and autonomy. The majority of DEXs (90% of the most active) are hosted on the Ethereum network. In practice, if you want to exchange ETH for DAI for example, the aggregators will compare the different rates practised by the DEXs, and carry out the exchange on the one which offers the best rate. Ultimately, the platform is a simple interface that puts a buyer and a seller in contact. For this, you need nothing more than a username, password and a crypto wallet. On the other hand, DEXs are slower than centralized exchange platforms, especially in cases of high traffic.
CEX = The acronym “CEX” stands for “Centralized Exchange”.
This term refers to a centralized exchange platform. This platform is in reality a company that controls all the transactions that are carried out on the platform, as well as the numerous products that are available. This type of platform connects buyers as well as sellers. To use this type of platform, you must carry out identity verification to validate your user account.
DEFI = Decentralized finance (abbreviated as “DeFi”) is a way to exchange, buy and sell with few intermediaries and therefore, in theory, to avoid blocked funds or unforeseen fees or any other action that would impact the finances of fund owners (such as the subprime crisis). This is accessible in particular thanks to the Ethereum blockchain, using peer to peer between individuals and thanks to the Uniswap, Polygon and other protocols1. The goal is to avoid centralization, which can sometimes simplify vulnerabilities and lead to hacks.
DAPP = A dApp, or decentralized application, is a computer application that runs on a blockchain and which offers a user experience similar to that of centralized applications. dApps generally involve the use of cryptocurrencies, in particular, for the payment of transaction fees linked to their use
* This site does not promote any exchanges in public , as their uses may vary depending on regulation from your country.
-The goal here is to understand their usefulness
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