Digital Currencies & Blockchain 

Lecture 6

  • Alternative cryptocurrencies
     
  • Technical Differences
     
  • Smart Contract Platforms
     

Content

Origins of Altcoins

Evolution

Origins of Altcoins II.

Forks

Basic Tools

  • A peer-to-peer network connecting participants and propagating transactions and blocks of verified transactions, based on a standardized "gossip" protocol.

  • Messages, in the form of transactions, representing state transitions.

  • A set of consensus rules, governing what constitutes a transaction and what makes for a valid state transition.

  • A state machine that processes transactions according to the consensus rules.

Similarities

 

  • A chain of cryptographically secured blocks that acts as a journal of all the verified and accepted state transitions.

  • A consensus algorithm that decentralizes control over the blockchain, by forcing participants to cooperate in the enforcement of the consensus rules.

  • A game-theoretically sound incentivization scheme (e.g. proof-of-work costs plus block rewards) to economically secure the state machine in an open environment.

  • One or more open source software implementations of the above ("clients").

Similarities II.

Main Differences

 

  • Supply
     
  • Block time
     
  • Block size
     
  • Divisibility
     
  • Fungibility
     
  • Consensus mechanism

 

Bitcoin

 

  • Supply - 21 M (18M)
     
  • Block time -  10 minutes
     
  • Block size - cca 1,4MB
     
  • Divisibility - 100 M satoshi
     
  • Fungibility - ?
     
  • Hash - SHA256

 

Ethereum

 

  • Supply - 0,5 - 2% p.a. (113M)
     
  • Block time -  14 sec
     
  • Block size - 0.03 MB
     
  • Divisibility - 10*18
     
  • Fungibility - ?
     
  • Hash - Ethash --> PoS

 

Litecoin

 

  • Supply - 84 M
     
  • Block time -  2,5 min
     
  • Block size - 1MB
     
  • Divisibility -10*8
     
  • Fungibility - ?
     
  • Hash - Scrypt

 

Monero

 

  • Supply - 17.7 M + 0.3 % p.a.
     
  • Block time -  2 min
     
  • Block size - Flexible
     
  • Divisibility - 10*12
     
  • Fungibility - hell yeah!
     
  • Hash - CryptoNight

 

Consensus

Privacy

Onchain Data

Trading

Digital Currencies

  • Not all coins use blockchain - f.e. DAG, Holochain
     
  • Central banks are into digital currencies increasingly
    more -- China, Brazil, EU --> Central Bank Digital Currencies (CBDCs)

Smart Contract Platforms

Polkadot Architecture

ETH vs DOT DeFi

Cosmos vs Polkadot vs Near

Libra

What are altcoins?

Classification by FINMA:
 

  • Payment tokens -  means of payment for acquiring goods or services or as a means of money or value transfer.
     
  • Utility tokens - are intended to provide access digitally to an application or service by means of a blockchain-based infrastructure.
     
  • Asset tokens - represent assets such as a debt or equity claim on the issuer, a share in future company earnings or future capital flows, or physical assets traded on the blockchain. They are analogous to equities, bonds or derivatives.

What are altcoins?

What are altcoins?

ICOs

Readings

  •  Mastering Blockchain (Imran Bashir) - Chapter 15 

Recommended Sources: