How Do Cryptocurrencies Differ From One Another - Part 2

Cryptocurrencies are quite a popular topic in the financial world. A lot of people are already involved in trading or are at least holding some cryptocurrency, but a lot of people are still trying to understand them. In Part 1 of our instalment of How Do Cryptocurrencies Differ from One Another we discussed the origins and some distinctions between BTC, BCH, ETH and ETC.

DASH

Dash is also a digital currency (like Bitcoin) and it can be used for all kinds of transactions. It was built on the same blockchain technology used by Bitcoin but with some important advancements.

Dash allows for better privacy and higher transaction speed than Bitcoin. As has been the patter for the previously discussed cryptocurrencies, Dash started with a fork, this time, it was from Litecoin, which itself started with a fork from Bitcoin.

You can use Dash to make transactions more private and with greater speed due to three features: Maternodes, PrivateSend, and InstantSend.

Masternodes are very similar to miners on the Bitcoin blockchain who verify transactions that are happening on the blockchain and get rewarded for that. The difference is that on the Dash cryptocurrency blockchain, the system splits miners into two: Masternodes and miners.

A user has to deposit a minimum of 1,000 DASH to become Masternode.

PrivateSend

On the Bitcoin blockchain, transactions are actually completely public. Anyone can get the public address of the sender and receiver of BTC transactions, the transaction's worth, and all historical transactions.

Dash offers a service called PrivateSend that adds privacy. That means that transactions cannot be traced and no identity can be revealed. Private transactions are facilitated by previously mentioned MasterNodes. This makes all the Dash coins equal and fungible.  

InstantSent

Using this service, Dash transactions are almost immediately confirmed by the Masternode network. There is a special cost associated with using InstantSend but by paying this minimal fee, Maternodes clear your transaction within a few seconds instead of 2.5 minutes, which is what it takes for normal Dash transactions to get processed.

XRP

XRP (formerly known as Ripple) is a cryptocurrency and a digital payment network for financial transactions. XRP is a digital asset built for payments. It is the native digital asset on the XRP Ledger

The XRP Ledger is famous for its digital payments protocol far more than its cryptocurrency, XRP. It is an open-source and peer-to-peer decentralized platform that enables a seamless transfer of money in any currency.

Consider a money transfer structure where a middleman is used by two parties, on either end of the transaction to receive the money.

• XRP Ledger technology is famous for its digital payments network and protocol but it also has its own cryptocurrency, named XRP.
• Instead of blockchain mining, XRP Ledger practices a consensus mechanism by a group of servers to confirm a transaction.
• XRP Ledger transactions do not use as much energy as Bitcoins. They are also confirmed in seconds and cost almost nothing in comparison to Bitcoin transactions.  The XRP Ledger network relies on a consensus protocol as mentioned before. It works to increase the integrity of the system by restricting double-spending. A user that starts a transaction with multiple gateways but sends the same 100€ to the gateway system will have all transactions deleted, except the first one. Nodes that are individually distributed decide by consensus which transaction was first by taking a survey to ascertain the majority vote. Confirmations are pretty much instant (5 seconds). The XRP Ledger platform is specified as decentralized since there is no central authority that would determine who can and cannot set up a node and confirm transactions.
  
  The XRP Ledger does keep track of all IOUs for any user or gateway. Transaction flows and IOU credits that appear between XRP Ledger wallets are publicly available on the XRP Ledger. Financial transaction history is publicly recorded and made available on the blockchain, however, the data is not connected to anyone's account. The public record of all dealings, make the information susceptible to de-anonymization ( reverse data mining technique) measures.

REP

This project started towards the end of 2014. In 2016 the beta version of the protocol was launched and the main net was set live in the middle of 2018.

Augur can be used to bet on political or sports outcomes, economies, and everything else that is on the prediction market. It utilizes the Ethereum network.

Instead of mining, Augur’s inventors issued 11 million ERC-20 tokens, Reputation (REP) tokens. Those who hold REP tokens have to cooperate with the maintenance of the network, otherwise, they lose their REP.

IIts markets operate as a group of people that are guessing on the outcome of different events and awards participants when they guess right. The size of the award is usually correlated to the odds of the outcome someone is betting on.  

So basically, anyone can create a market, and once they do that they can set a price on how much the betting will cost. Those who bet must buy shares in the outcome instead of placing money or tokens directly. Like it was said before, the value of shares goes up and down depending on how likely the outcome is. When the event takes place, the outcome is verified by the reporters (members of the network). Participants are essentially betting on the reporting, if they are right they get a share, if not they lose REP. Once the reporting is complete and verified by the community, the ones who bought shares on the outcome that turned out to be correct get paid along with the one who created the market.

There are a lot of events one can try to “guess” or “predict”, from election results to sales results or any other event really.

What 's so special about Augur is that its developers are not interfering with any operation except for providing the initial open-source code. That means that the ones who created it, do not cooperate in creating markets or engaging in trading. They don’t even have the power to control actions that are happening on the Augur platform.

Many cryptocurrencies have successfully gotten the attention they needed. Cryptocurrencies  provide more options for handling personal finances. Even some national cryptocurrencies have even been issued by a few nations.  

It seems like cryptocurrencies are reaching more and more people globally every day. We are interested in hearing your opinion on them, whether you already hold one or many of them or you are still learning everything about crypto.