- Even with the rapid growth of blockchain technology
in a variety of applications and industries,
cryptocurrency still dominates its use.
However, beyond the use of cryptocurrency
as a form of digital money,
cryptos, short for cryptocurrency,
and a derivative called crypto tokens form the basis
for some fascinating and important innovation.
I'll begin with a quick overview
of the current crypto market.
Bitcoin was the first cryptocurrency
and continues to be the largest and most impactful.
Its success provided the basis
for thousands of spin-off cryptocurrencies.
We call these Altcoins, short for alternative coins.
Many are, in fact, based on the Bitcoin code base,
which being open source allows anyone
to copy and modify the code.
This makes it easy for literally anyone
to create their own cryptocurrency.
Some cryptos exists to compete with Bitcoin,
but also to serve specific needs and applications.
For example,
cryptos are used to support cross-border payments,
making it easier and faster to send money
between two countries with different national currencies.
Cryptos are also used as a mechanism for raising capital.
While Bitcoin is the cryptocurrency leader,
both in terms of market capitalization and usage,
the second most popular is a cryptocurrency cold Ether.
Ether runs on a blockchain platform called Ethereum,
which supports both a crypto
and a system for application development.
Unlike Bitcoin,
we know the actual person who created Ethereum.
It was created in 2013
by a Russian Canadian called Vitalik Buterin.
Ethereum uses the decentralized architecture
of blockchain technology to turn its network
into a computer.
Each connected device collectively makes up
the Ethereum virtual machine, or EVM.
This EVM is low cost, scales massively, avoids downtime,
and has security baked into all its functions.
Solutions can be built using
its proprietary programming language called Solidity.
Examples of Ethereum applications called Dapps,
include sophisticated banking services,
marketplaces for digital art, crowdfunding, and games.
Ethereum's crypto Ether is used as the funding mechanism
for computational resources utilized on the network,
and to pay any transaction fees required by Dapps.
Another type of that runs on a blockchain
is called a crypto token.
Cryptos, sometimes referred to as crypto coins,
are the equivalent of cash,
but crypto tokens can be used to represent
many other types of value.
Tow popular forms of crypto tokens
are security tokens and utility tokens.
Security tokens can be used to represent whole
or fractional ownership of any asset
that already has value,
such as real estate, a car, or corporate stock.
For example, a person could own a token
that represents a 5% share of a boat.
Utility tokens give users access
to a future product or service.
For example, a startup issues utility tokens
to users to raise money,
and later users utilize the tokens
to use the startup service.
The crypto coin and token space continue to introduce
new concepts and innovation at a rapid rate.
As time passes, the technology becomes more mature
and confidence in use increases.
That said, it is still a risky domain
from the perspectives of stability,
reliability, and market acceptance.
The unique nature of cryptocurrency,
which largely operates outside
the confines of existing financial systems
and local and international regulations,
is presenting challenges to governments and regulators.
Some countries are embracing cryptocurrencies
while others are banning them.
It's also easy for me to focus on the positives of crypto,
of which there are many,
but it's important to recognize that is also used
for nefarious uses such as ransomware
and buying and selling contraband on the dark web.
Cryptos will continue to represent a massive use case
for blockchain technology for the foreseeable future
as other valuable uses also emerge.
Whatever your journey looks like in the blockchain space,
expect cryptos to play a key role.