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Top 3 Cryptocurrencies From The Technological Point-of-View

There is no shortage of cryptocurrency news out there. The ups and downs of top digital currencies like Bitcoin and Ethereum make the future for cryptocurrency unknown. However, looking at cryptocurrency from a technological point-of-view may paint a clearer picture.

The global cryptocurrency market cap at the time of writing this is nearly $500 billion USD.

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In early January, the market cap was hovering at the $800 billion USD mark. But the crypto-crash in January caused a stir in the digital marketplace. As the upswing currently continues, analysts of the crypto-community are looking at sustainability.

From smart contracts to decentralized apps (DAPPS), the cryptocurrencies of the future will have utility elements. Let’s take a closer look at the top three cryptocurrencies from a more technological point-of-view.

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1. Ethereum

Ethereum (ETH) is one of the most popular cryptocurrencies. Even though it has been around since 2015, Ethereum, or Ether, could revolutionize the way people and businesses utilize blockchain technology.

One of Ether’s most promising technological developments is decentralized applications (DAPPS). DAPPS are open source apps that serve up a high level of transparency, unlike centralized applications currently in use.

Decentralized Applications (DAPPS)

DAPPS are also more secure, since they are without a central point of failure. This makes them less prone to hacking and other online dangers. This makes them enticing to companies.

There are presently three distinct types of DAPPS . . .

  • Money Management DAPPS (Smart Contracts): This type of decentralized app facilitates the exchange of cryptocurrency via smart contracts. Once a smart contract is agreed upon between two parties and the agreement s met, payment is made.
  • Combination of Centralized and Decentralized Data: This type of DAPP relies on data from outside of the blockchain (blockchain based Oracle) to facilitate a transaction. For example, an insurance agent may use this type of decentralized app to obtain outside data, such as accident rates in a certain location prior to an exchange of money.
  • “Other” DAPPS: The third type of DAPP is slightly more vague in nature. For instance, these types of “other” decentralized apps can be applied to government systems, like voting. This could provide higher transparency and security to eliminate voter fraud.

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DAPPS are evolving and there is really no hard and true definition of decentralized applications quite yet. But the technology behind Ethereum’s DAPPS could make it a very important cryptocurrency in the very near future, among its other tech savvy endeavors.

2. Cardano

Cardano (ADA) is a relatively new cryptocurrency released in September last year. Cardano is new to the crypto-community, but could very well become the digital currency of the future.

“It is the first blockchain platform to evolve out of a scientific philosophy and a research-first driven approach,” stated Cardano.

The main aim of Cardano, a decentralized, open source blockchain, is to revolutionize smart contracts. The developers behind Cardano want to deliver a far more advanced smart contract platform.

Ouroboros

With a “collective” of engineers and researchers, Cardano may very well succeed in doing so. One of their major innovations in blockchain technology is Ouroboros, a new proof of stake algorithm. It essentially eliminates the energy need for proof of work protocols.

This has traditionally been an obstacle for blockchain. Ouroboros overcomes this obstacle, potentially opening blockchain technology up to wider use.

Daedalus ADA Wallet

Another tech savvy cryptocurrency innovation from Cardano is the Daedalus Wallet. Daedalus is a multi-platform, hierarchical deterministic (HD), secure wallet specifically for ADA.

Daedalus Wallet features include:

  • Ability to export paper certificates for maximum cold storage security.
  • Encrypted keys and spending passwords to minimize malware and other security breaches.
  • Supports unencrypted ADA redemption certificates.
  • Configurable assurance for users to view irreversible transactions.

As Cardano grows in the crypto-community, so will their innovations. They may make blockchain technology scalable, as cryptocurrency becomes a mainstream currency.

3. IOTA

IOTA (IOT) is definitely a cryptocurrency to watch when it comes to looking at digital currency from a technological point-of-view. Why? Well, imagine a public distributed ledger without blockchain technology.

This is what IOTA is developing, a cryptocurrency with no block, no chain, and no mining. Needless to say, IOTA works very differently than current blockchain technology.

Tangle

The next generation public distributed ledger utilizes Tangle, a structure that is based on a Directed Acyclic Graph. The Tangle ledger is scalable and lightweight, allowing users to use it without fees. IOTA developers believe it is a truly decentralized peer-to-peer network.

No Mining

Without miners, IOTA makes claim to a new way for transactions to be made. For instance, if you want to make a transaction, you must first approve two past transactions. This allows the entire network to achieve consensus.

Said to be the “missing puzzle missing puzzle piece for the Machine Economy to fully emerge,” IOTA could connect the Internet of Things (IoT) to cryptocurrency across all devices.

IOTA key features include:

  • No transaction fees.
  • Scalable transactions with no limit to transactions that can be verified within any time period.
  • No miners mean it is a truly decentralized ledger, more so than any blockchain technology.
  • New trinary hash function called CURL, allowing quantum immunity (Winternitz signatures).

There is a lot of appeal to IOTA when it comes to future innovation. A publicly distributed ledger without blockchain technology supporting it is definitely noteworthy. This could be the cryptocurrency that catapults digital currency to mainstream use.

Utility is the Future of Cryptocurrency

Smart contracts, decentralized applications (DAPPS), and blockchain-like technology without blocks, a chain, or miners are all technological advances to keep an eye on. Ethereum, Cardano, and IOTA are only a few rising digital currencies to watch as well. There are a number of ways to diversify your cryptocurrency portfolio based on technological advances.

As cryptocurrency becomes a utility for companies, banks, and governments, utility will become essential. The utility of any cryptocurrency will lead to its rise. The digital currencies that fail to innovate and provide utility may feel growing pains in the future. What cryptocurrency technology will be the most important in the years to come?

Nick Rojas combines 20 years of experience working with and consulting for small to medium business and a passion for journalism to help readers grow. He writes about technology, marketing, and social media for the aspiring entrepreneur. When Nick is not sharing his expertise, he can be found spending time at the beach with his dog Presto.

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