How Cryptocurrencies Are Silently Changing The World
We often hear about cryptocurrencies, there’s some saying that they will revolutionize the economic sector, and others saying that they’re going to have a “bad end”. After the crash of January 2018, most critics celebrated thinking they were right. And if we are talking from a speculative perspective, they were right. Absolutely right.
I didn’t get interested in cryptocurrencies until December 2017, perhaps the worst time in this sector. The price of Bitcoin was falling, bringing with it all the other cryptocurrencies. Most of the industry’s startups were declaring their failure. But… This time helped me understand which project was really sustainable and with a function that could be really useful. In the last year articles on Bitcoin and this industry have decreased significantly, making the masses forget this sector. Behind the scenes, however, they worked hard to develop a technology that was still unripe but that had great potential. In this article, I want to talk about these projects, which in silence are continuing to grow in the right direction.
The first is the CDP Portal. CDP stands for Collateralized Debt Position enables the generation of DAI, a “price-stable cryptocurrency” that is “pegged” to the U.S. dollar, against collateral that you lock up in a CDP until you pay back the DAI you generated. Simplifying, we can say that you will be able to get a loan in USD, using your cryptocurrency (like Ethereum) as collateral. When you pay back your debt, you will have your cryptocurrency back. If we think to cryptocurrency as an asset like gold, we can get a loan without selling our assets, without a credit check from a bank, insured by blockchain. If we think that more than 1.7 billion people live without the possibility to have an account at a financial institution, this could help a lot.
Let’s now talk about Lightning Network. When Bitcoin became famous for his price back in fall 2017, users started to understand that it wasn’t enough fast to achieve the purpose for which it was created. The problem of scalability has always been one of the main obstacles to mass adoption. Lightning Network has become the lead way to make up for these problems. But how this technology works? The Lightning Network is a new protocol layer built on top of Bitcoin. It uses cutting-edge smart contracting to achieve faster-than-VISA transaction throughput while retaining the peer-to-peer nature of the Bitcoin protocol.
These are just two examples of the disruptive technology that was developed when everyone thought cryptocurrencies were dead. I will come back with other information on interesting applications in the next few weeks.
To all expert users: in this article I tried to simplify some concepts as much as possible, making some statements not entirely correct.