Crypto 2.0 could be digitally effective | Bloomberg

Crypto 2.0 May Be Digital Cash You Can Actually Use to Buy Stuff

A cryptocurrency is a digital exchange medium that uses strong cryptography to secure financial transactions, control the creation of additional units and verify the transfer of assets. The first cryptocurrency that started operating was bitcoin in 2009 and since then; many others with different characteristics and protocols have appeared.

Now, on the part of crypto 2.0, it is said that these currencies should, as with Bitcoin, allow direct payments between two parties without meddling intermediaries or government supervision. Despite this, it should be stable enough to be used in daily transactions.

The recent interactions of digital money, which are now known in the language of the industry as stable currencies, are the hottest fashion in the world of encryption. Meanwhile, new stable currencies are being created at breakneck speed with 120 projects currently under development. It should be noted that more than half of them started last year.

It is well known that Bitcoin was founded by the mysterious Satoshi Nakamoto, has gained a great worldwide fame. In spite of them, it has presented abrupt changes of prices it has brought as a consequence that it is almost unusable as currency. The explosion in stable coin companies is, in part, another attempt to create electronic cash for transactions.

A Seoul-based businessman, Ryan Kim, works on a stable coin project called Xank already said about the issue “Satoshi had a revolutionary philosophy of what money could be and stable currencies are taking the torch towards that vision” also add “Bitcoin has become a speculative game and is too volatile to use in commerce”.

Likewise, for a large number of developers working on alternatives, stability is the biggest challenge. Many of the new companies are following the Tether model and relating the value of their currencies to that of a separate asset with low volatility, such as the US dollar, and maintaining large amounts of guarantees.

Different opinions

A lawyer for Pinsent Masons LLP in London, Charlie Clarence-Smith, said that stable currencies could be used similarly to their fiduciary counterparts, but their success will be determined by the size they can reach and the depth of liquidity.

While on the other hand, an investor who has written a book about blockchain technology that supports digital assets, William Mougayar, considers that stable currencies have the potential to become digital money, however, he notes that there is still no evidence that has happened.

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Source: Alastair Marsh and Olga Kharif | Bloomberg