Some may have heard of a smart contract, but few know why the technology behind Bitcoin, Ethereum and the future of contracts actually works. We explain the potential behind the smart contract and what it looks like.
Today, "crypto" is hardly understood as an investment instrument. Crypto is obviously not crypto, and the positions on what is valid sometimes diverge diametrically, even between proven authorities. This leads to great uncertainty among experts, and even more so among the general public. This article aims to shed some light through the fog onto crypto and help distinguish crypto-scam from crypto-value. It will show which cryptoassets and crypto tokens have intrinsic value and how this could be measured in the future using fundamental value analysis methods. The two largest and oldest cryptos, BTC (of the Bitcoin network) and ETH (of the Ethereum network), serve as reference points and examples.
Bitcoin is blockchain, but blockchain is not Bitcoin. Today, hundreds of standalone blockchain systems exist, the most powerful besides Bitcoin is Ethereum. As the first general-purpose blockchain, it goes far beyond Bitcoin's readiness for use as a payment system, virtually single-handedly dominating the Defi and NFT markets, for example, and has now even surpassed Bitcoin in terms of the number of users. Benefits of general-purpose blockchains for the economy and society explained.
The transformation in the financial industry is progressing. Disruptive technologies, increased transparency, lack of trust in central instances, high speed and changing customer needs are important drivers of digital transformation. Cryptocurrencies and digital assets are coming into play as innovations. These enable financial services to be used in a decentralized manner across the globe via the internet and blockchain technology. The original use case is Bitcoin, which enables peer-to-peer (P2P) payments. The next stage of expansion is referred to as Decentralized Finance (DeFi). DeFi has the potential to change the world and enable 1.7 billion unbanked people to access finance.
Some say Bitcoin cannot be stopped, others claim it is only a matter of time before it is banned. At the same time, however, it is clear that states have no interest in strong parallel currencies and are under pressure to act. They have a whole arsenal of measures at their disposal for their reaction, which they can bring into position against Bitcoin. The Bitcoin price would correct accordingly.
Distributed ledger technology is the basis for all current systems such as Bitcoin, Ethereum, Litecoin, Hyperledger, etc. But what is it? What does Blockchain mean, and what are Smart Contracts? We help against confusion and explain the principles of crypto technologies.