Today, we almost never use cash for everyday transactions. Traditional paper money is now presented in the form of monetary obligations of the issuer in electronic form on the smartphone’s screen. But the current system of non-cash payments is not a new phenomenon: it has developed as a result of many years of work, by both practitioners and theoreticians in the field of jurisprudence and economics. Non-cash settlements assume the obligatory participation of economic intermediaries – Banks or other types of credit organizations So it is logical to link the appearance of non-cash settlements with the emergence of the credit and banking system.
The appearance of a new kind of money in 2009 – Bitcoin – made it possible to open the next page of economic history. The emergence of the newest digital economy and the adoption of cryptocurrencies as a way of making transactions will make it possible to take non-cash payment to the next level – without intermediaries, large commissions, and lost time. But is crypto-economics ready for the load that will arise due to the daily use of cryptocurrencies, and most importantly, are there any solutions now that would allow using digital tokens as an equal surrogate for the money we are accustomed to?
We singled out 5 key and mandatory characteristics that would allow cryptocurrencies to become an effective and usual means of payment:
- Stability: In order to become an effective form of payment, people must subconsciously evaluate the goods in its units. This requires maximum stability of the exchange rate and the balance of supply and demand.
- Scalability: Cryptocurrency for day-to-day calculations should ensure uninterrupted transactions in the face of an ever-growing number of users.
- Ease of use: The procedures for acquiring, storing and spending cryptocurrencies should be as simple as possible.
- Widespread: The use of money depends entirely on the network effect. Practicality, cryptocurrencies will grow directly in proportion to the growth of its popularity.
- Incentives of Expenditure: Until now, the main incentive for acquiring cryptocurrency is the investment interest of future growth of the asset. In order for the cryptocurrency to be paid, incentives should be developed to spend it, but not save.
Obviously, at the moment there is no cryptocurrency, which could fully meet all the criteria described above. But we have singled out the top 5 cryptocurrencies, which to some extent are leading in one or more of the characteristics, or, probably, will correspond to them in the near future.
Litecoin – one of the most famous cryptocurrencies, which we want to mention first in this rating. If Bitcoin is “gold”, which is difficult to transport and expensive, then Litecoin is a fast and easy-to-use “silver”. Litecoin is a great alternative for those who do not want to work with Bitcoin because of expensive and long transactions. Litecoin has one of the safest networks among all the altcoins, because it is protected by ASIC-equipment, costing more than $ 150 million.
Litecoin is considered one of the most liquid assets, which can easily be exchanged for fiat currency, using services and platforms. Litecoin works with many debit card developers, such as TenX. Considering the user base that has accumulated over 7 years, Litecoin has good grounds for further widespread distribution.
Gulden is a cryptocurrency that allows simple, fast and secure money transfers. The name “gulden” comes from the old German/Dutch word for “gold coin”. The Dutch guilder was in circulation until 2002, when the euro was introduced and the guilder was no longer the official national currency of the Netherlands.
Gulden was launched in April 2015, and is a Litecoin fork. Gulden can process transactions 4 times faster than bitcoin, thanks to PoW² technology. Today, technically, this is not the most effective cryptocurrency, but nevertheless Gulden has a number of advantages that simplify the acquisition and exchange.
Buying Guldens is very simple: just register on the official website and get a purse. After that, the “mobile” application becomes the “bank” with Gulden. The Gulden app is available for iOS and Android. Some of the advantages of this cryptocurrency include the ability to pay for goods and services in the Netherlands. You can also transfer money to any IBAN bank account. The project collaborates with Nocks.co, which instantly converts Bitcoin / Euro to Gulden.
Nano is a fast payment platform that doesn’t have a transfer fee, which makes it an ideal means for conducting peer-to-peer transactions. Nano is based on the unique architecture of blocks, where each profile has its own blockchain. This ensures fast operations and unlimited bandwidth. The goal of Nano is to become the main means of payment in the cryptocurrency market.
Initially, Nano cryptocurrency was launched in 2015 by Colin LeMahieu under the name RaiBlocks. On January 31, 2018, the developers made an official statement on the rebranding of the coin and renaming it to Nano.
Nano has developed a convenient online wallet, desktop version, and mobile application for storing and sending cryptocurrency. The project team is constantly active in the development of Nano on GitHub.
IMMO – has not yet entered the cryptocurrency market, and has been in the shadows for several months. According to many accounts, IMMO was developed by one of the strongest dynasties of bankers – the Rothschilds. Their goal is to make IMMO a world reserve cryptocurrency, which will compete with the generally accepted dollar.
According to the official documents of the project, the IMMO token has Intrinsic Value and includes a diversified portfolio of valuable resources. The value of which, in the course of time, does not decrease, and often only grows. Among them are real estate, land, water and other resources. Resource management will take place in the legal form of a Trust (with the help of the Trust throughout the centuries, the richest people have saved and transferred their property securely). If the conceived token connects the traditional legal model with the cryptocurrency, it most definitely will be successfully implemented and accepted by society.
IMMO attracted the attention of experts such as Vitalik Buterin (CEO Ethereum), Lon Wong (CEO NEM), Ryan Taylor (CEO Dash), Jimmy Song (the veteran Bitcoin Core developer), Tim Draper (CEO Draper VC), and other influential personalities in the crypto-space. There are rumors that IMMO was discussed at length among the G20 finance ministries during a conference this summer in Buenos Aires.
El Petro – is a sensational cryptocurrency, supported and promoted by the President of Venezuela, Nicolas Maduro. Cryptocurrency is seen by the president as life-saving, due to the conditions of a falling economy and US sanctions policy. The cost of El Petro will be supported by real assets held by the government of Venezuela: oil reserves.
Crypto-experts were very skeptical about El Petro, doubting the promises of Nicolas Maduro, who guaranteed securing the token with natural resources. Nevertheless, for the first day of sales, the Cryptocurrency attracted almost $735 million.
Last month, Nicolas Maduro said that the country will have a new system of salaries and prices tied to the national currency of El Petro. He also said that at least in the first stage, two monetary units will be circulating in the country – bolívar soberano and El Petro. In the future, El Petro will become the national currency.
Today, for a number of reasons, this project can not pretend to be a global cryptocurrency. Nevertheless, the very fact that a first state cryptocurrency has appeared testifies to a positive trend in the development of the digital assets market.
Of course, There is no ideal means of payment in the market for cryptocurrency. Innovative, but not yet time-tested projects, do not receive due distribution due to their instability. Technologically obsolete projects that have received a positive public response do not cope with scalability problems and heavy loads. In most cases, cryptocurrency projects, having competitive advantages on one of the characteristics, are inferior to the rest. Nevertheless, it can be assumed that a cryptocurrency, that can replace the money we are used to, will appear. After all, many blockchain startups are aimed at working in this area, which ultimately should lead to the emergence of “ideal” money.