Cryptocurrencies and Blockchain
By Steven Dryall
Principal, Incipient Industries
What is “Cryptocurrency”?
Cryptocurrency is tamperproof digital money that can be traded openly. Cryptocurrency technology enables the ability to reliably create and exchange value over the internet without an intermediary. Bitcoin was the first viable example of cryptocurrency. Bitcoin proved the capabilities of cryptocurrency technology and initiated the digital economy.
Many other cryptocurrency technologies have emerged following bitcoin and more will be created. Different cryptocurrency technologies possess different attributes, but they all share the same ability to reliably exchange value. A “general-purpose cryptocurrency”, such as bitcoin, is meant for use in open markets with no designated trade purpose or associated value.
What is an “Asset-Based Cryptocurrency”?
An asset-based cryptocurrency (ABC) is a cryptocurrency that uses digital tokens to represent a tangible pool of assets. The value of the digital tokens is based on the assets. An ABC uses the same underlying technologies as general-purpose cryptocurrencies, but is different in how those technologies interact with systems and people.
How is an Asset-Based Cryptocurrency Created?
ABCs have characteristics and challenges that are unique when compared with general-purpose cryptocurrencies such as bitcoin. An ABC ecosystem has a distinct set of requirements that define the success or failure of that ecosystem.
To be viable, ...
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