In the previous episode, we demystified certain terms associated with Cryptocurrencies & spoke about how Coinbase’s IPO could be a massive moment in the history of Cryptos.
In recent weeks, there was a meltdown in the Crypto world - with all major cryptos taking a big hit on the back of China banning banks/payment firms from processing or entering into services related to cryptocurrency transactions.
In this episode we spoke about some lesser known Cryptocurrencies and their use cases.
#1 Cardano (ADA)
Cardano is a decentralized blockchain and it’s token is called ADA, which uses the Proof of Stake mechanism (PoS).
[Check out what’s the difference between Proof of Stake vs Proof of Work in this article]
Cardano was founded by the co-founder of Ethereum (Charles Hoskinson) and it was created to serve as an alternative to Ethereum.
It also powers ‘smart contracts’ - which in simple terms is a ‘program’ or a ‘transaction protocol’ which automatically executes T&Cs of an agreement/contract. No human element is required.
The organizations behind Cardano have released 3 products:
Atala PRISM is marketed as an Identity Management Tool that can be used to provide access to services. For eg. it can be used to verify credentials to open a bank account or to verify eligibility for government aid.
Atala SCAN & Atala Trace are being used to trace a product’s journey through a supply chain.
Cardano has the potential as per some analysts - to become the next Bitcoin.
#2 Ripple (XRP)
Ripple has a simple objective - to make cross border transactions easy. It is building a payments and exchange network (RippleNet) on it’s blockchain (XRPL)
It wants to connect banks, payment providers and digital asset exchanges, enabling faster and cost-efficient global payments.
Ripple’s blockchain (XRPL) is open source - meaning that anyone can contribute and improve the code.
Also, it doesn’t use the Proof of Work mechanism - and doesn’t rely on the process of mining to verify transactions. It has it’s own customized consensus algorithm (called RPCA)
The RippleNet offers 3 products to banks/financial institutions:
xRapid is a liquidity solution that uses the XRP cryptocurrency as a bridge between multiple fiat currencies, xCurrent allows cost effective real time payments between financial institutions & xVia allows integration of RippleNet participants.
Ripple, can be considered as THE cryptocurrency for global payment solutions to banks/FIs - and it’s potential, is massive!
VeChain powers ‘Blockchain as a Service or BAAS’ and is designed to be used by both small & big businesses.
VeChain’s public blockchain is called the VeChainThor - and it provides real world blockchain solutions ranging from supply chain management, anti-counterfeiting, tracking carbon emissions & decentralized voting - to name a few.
The VeChainThor blockchain uses the Proof of Authority mechanism to validate transactions - which gives the power to a few selected nodes in the blockchain. Also, VeChain app users don’t need to hold any crypto to perform transactions - which makes the UX really convenient.
VeChain has two tokens:
VET (VeChain Token) which is used to make financial transactions on the blockchain & trades on digital asset exchanges.
VTHO (VeThor Token) which is a ‘energy token’ used to conduct transactions - however this token doesn’t trade & can’t be used for market speculation.
Enterprises are increasingly adopting ‘Blockchain as a Service’ for various use cases and as its applications grow - so will VeChain.
#4 Polkadot (DOT)
Now, we’ve seen how every Cryptocurrency has it’s own Blockchain - which records the transactions and powers other use cases. And, this got me wondering - can Blockchains of different Cryptos be linked together?
It connects different blockchains, allowing them to communicate with one another - which could lead to exchange of data and open up a lot of different applications.
Imagine if Bitcoin’s blockchain could interact and exchange information/data with Ethereum’s blockchain - a lot of cross chain applications, products & services could be built.
COTI is one of those crypto networks that wants to become the ultimate powergrid of payments.
It has an application called COTI pay - which can process payments both online & offline - powering debit cards, credit cards, payments in fiat currency and cryptocurrency. COTI will issue its own credit & debit cards.
It also lets other businesses create ‘stable coins’ - which isn’t affected by the Crypto market. For eg. Amazon could create its own ‘stable coin’ for it’s customers to transact in - there’s a lot of potential in this ecosystem.
To end the episode, we spoke about certain risks of putting your money into Cryptocurrencies - and how you should abstain from using your emergency funds/savings to invest in Cryptos.