All About Crypto
We both know that in 2020, cryptocurrencies have experienced a tremendous increase. for example Bitcoin (BTC) which is up about 450%, Ethereum (ETH) which is up more than 1000% there is also Yearn Finance (YFI) which is up to 6400% within 3 months of that year.
It turned out to be amazing in that year for cryptocurrencies to even outperform stock gains. But do you really know what crypto is used for, is it just a commodity of coins and digital tokens that are used as objects of trading, aggressive movements but have no functional value at all or maybe crypto actually has a usability value that can be really useful? in the future.
Then, what factors can make crypto prices soar up, is it because of market speculation? Broadly speaking, the increase in crypto prices can be triggered by 3 things :
We cannot deny that the aggressive rise in cryptocurrencies can be triggered by market speculation or excessive market optimism, but where does this optimism actually come from? of course from its potential functional value and usefulness.
The development of technology and crypto adaptation is indeed very rapid and also expanding. With this development and adaptation, the potential for real and widespread use of crypto in the future will become more and more real and this will certainly increase the value of the crypto economy.
Scarcity factor will be higher, for example Bitcoin, because the amount is limited and the supply cannot be added. Bitcoins can be reduced or destroyed because of human negligence (forgetting passwords). Bitcoin is the rarest and most liquid commodity in the world.
Actually what kind of technology does crypto offer to the world ?
Simply put, crypto technology can liberate all forms of digital services in the world without having to be controlled by companies, institutions or even countries.
Usually a digital service is created by a company that employs programmers. The service can be enjoyed by its users because it is managed by the company. the company charges a service fee to users and the company can pay for server maintenance services to service providers such as Amazon or Alibaba to keep the service alive.
Now what if these programmers make digital services that can be enjoyed directly by users without having to be managed by the company and do not need to use a single server. Crypto technology with the name Blockchain is the one that can create a network of servers that are scattered throughout the world and are operated by a home computer network. that way, any program that is made on the Blockchain network can run without the need to be controlled by a particular company or institution.
What kind of programs can be made on Blockchain? Actually it can be anything, for example financial services such as savings and loans, insurance, disbursement of inheritance, buying and selling assets and others. Indeed, these services are widely available, but still with traditional mechanisms, such as banking and securities. but for crypto activists, traditional services have many weaknesses, especially those related to the limitations of the human role.
With crypto technology, the role of humans to apply these services can be replaced with computer programs that are completely independent of human interests. This technology is called SMART CONTRACT. For example, financial services made with cryptocurrencies can facilitate transfers around the world very quickly and cheaply. How come ? because there is no manual role for Humans and no bank administration fees need to be paid. sophisticated right ?
The crypto-based financial service program is Decentralized Finance- DeFi. this service is open, global and neutral. This program does not recognize geographic boundaries, does not care about political conflicts between countries and does not look at rich or poor social status. anyone anywhere and whatever their background can all access the same protocol. no one is privileged, enough with an Internet connection everyone can freely access this financial service without the need to fill out a stack of required documents that must be met and signed.
Financial services with blockchain technology can be said to be safe from human beings who have bad intentions, why is that? Because the operational service can run itself automatically and no human can tamper with the system that has been launched on the blockchain. Financial services are transparent in nature from the operational system but at the same time their privacy is maintained. meaning that anyone can verify the process in the service. that the service protocol actually executes the order and is not a hoax. and what's even cooler, the user is not asked for an identity which can be used in traditional systems to be sold to third parties who can get us spammed.
With various crypto projects running and the adaptation process that is increasingly widespread, it is possible that in the future there will be many blockchain-based digital financial services that are widely used around the world.
Relationship of Bitcoin, Ethereum and other coins with realization of Blockchain technology, Smart Contract, DeFi and others.
Interestingly, the key to the application of this technology is not Bitcoin but Ethereum and DeFi tokens born from programs made on Ethereum blockchain technology, such as Chainlink, Uniswap, Compound, Synthetix and others.
Currently, many programmers around the world are competing to make services in the form of DeFi. they make it not on the servers of companies like Amazon or Alibaba, but on the Ethereum Blockchain as the server base.
This Ethereum blockchain can continue to live and be active as a server, because there are thousands of miners around the world who use their home computers to mine Ethereum as well as a server path for data transfer programs that have been created.
The programmers creating the service will need Ethereum to launch their program on the Ethereum blockchain because they need to pay the miners.
In issuing their services, programmers also issue tokens which are distributed to users. This token is used for voting as a new feature addition. So, its nature is very similar to stocks.
In order to be decentralized, developers usually distribute 80 to 90 percent of tokens to users, while the developers themselves hold 10 to 20 percent of the tokens as their voting power. With the wider function of the program, it is hoped that the token price will increase and the developers can profit from the increase in the token price.
Yeah, it turns out that there is a lot of potential utilization or function of crypto technology in the future. For those of us who believe in crypto adaptation in the future, we can invest in tokens or coins that have real missions and goals in the future. let's buy, while there are many discounts. LoL
All images by : Unsplash.