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Top 5 Protocol Coins You Must Know About

Posted on October 23, 2019 By In Blockchain With no comments

The post Top 5 Protocol Coins You Must Know About appeared first on CoinSutra – Bitcoin Community.

I assume you have read my previous articles on protocol coins by now.

In case you haven’t, I suggest you go through it, or this current article will barely make any sense. Here is the link: Understanding Protocol Coins And Tokens

Protocol coins or tokens are cryptographic tokens that are required to access the service that the underlying protocol provides. Usually, the apps (or DApps) are created on these protocols similar to the DApps like (e.g., Augur, EtherDelta, etc.) built on top of the Ethereum protocol.

These (underlying protocols) are also referred to as blockchain protocols that reside on top of the existing protocol layers of the internet as shown below:

Internet-Protocols

So, what can be done in light of all of this?

Well, now it becomes important to discuss some of the blockchain protocols and their coins because this is an opportunity to capture their right value for the future. Also, investing in protocols wasn’t possible before the introduction of blockchain and cryptographic tokens. That’s why one should make the best use of this opportunity. This, however, is not an investment advice.

1. 0x (ZRX)

0x (ZRX)

The 0x protocol is a decentralized exchange protocol for ERC20 tokens. It is an open source protocol and has its native protocol token known as 0x (ZRX).

The idea behind 0x is straightforward. The founding team believes that there will be a lot of  DApps and different protocols that might need to interact with each other and synergize to provide the best service to their user in the future. In that case, a user won’t like to manage different tokens for different purposes all the time, and that’s where 0x exchange protocol will provide a seamless user experience and liquidity to the user.

0x token’s utility within the protocol enables publisher/relayers to charge a fee for their service (0x protocol is free to use). Also, 0x holders are entitled to participate in 0x protocol’s governance. Read our detailed guide on 0x here: A Beginner’s Guide To The 0x Protocol (ZRX).

Buy ZRX Now

2. Loopring (LRC)

Loopring (LRC)

Loopring is working in the same niche as 0x protocol but in a different fashion.

Loopring is an open source decentralized exchange protocol for exchanging ERC20 tokens, and it combines the off-chain order books with on-chain settlement contracts for making successful trades. It is a blockchain-agonistic protocol that can be deployed on different blockchains such as Ethereum, NEOQTUM, or EOS, etc. as long as they are capable of running smart contracts on them.

Plus, its native token LRC is used to facilitate fees between the user and Loopring’s ring miners, who facilitate order-matching and order-sharing to fulfill the orders at the best possible rates and take LRC in return for their service.

Buy LRC Now

3. Lisk

Lisk is another blockchain protocol that aims at empowering developers to build blockchain applications or DApps. Lisk makes it easy for developers to develop and deploy blockchain applications by providing them with the relevant tools in JavaScript, the world’s most popular programming language.

Lisk does it by providing a robust Lisk core and SDK (sidechain development kit), and the main chain which is fueled by LSK tokens. This acts as the gas on the main chain and sidechain to perform operations.

Buy LSK Now

4. Filecoin

The Filecoin protocol is a Decentralized Storage Network construction built on a blockchain with a native token (also called “Filecoin-FIL”). It is a marketplace protocol where clients spend tokens (FIL) for storing and retrieving data from the decentralized network and miners earn tokens (FIL) by storing and serving data for their clients.

It is much like Sia but implemented in a different fashion, the core tech pieces of which are listed below for your knowledge:

Note: Filecoin is still a project of the future and has not been launched yet.

Buy FIL Now (Futures)

5. Ethereum

Ethereum

Ethereum is one of the oldest protocols in the market after Bitcoin and is also the first blockchain project to have conceptualized the idea of blockchain protocols that are more than just money. Vitalik Buterin is the founder of the Ethereum project which aims to make Ethereum as the world’s only computer where the gas is paid in its native token Ether (ETH).

The official Ethereum project website says:

“Ethereum is a decentralized platform for applications that run exactly as programmed without any chance of fraud, censorship, or third-party interference.”

The inbuilt programming language Solidity is used to write smart contracts and DApps on the Ethereum blockchain. After that, the cryptocurrency asset (Ether) is used in executing operations on these apps and contracts, making Ether programmable money.

Another fact is that Ethereum is currently hosting 90% of the world’s DApps and smart contracts. A total of more than 999999 accounts have implemented some form of Ethereum contracts and more than 1300 DApps already exists on Ethereum.

  • Also, read: 9 Best DApps On Ethereum Platform That You Can Use Right now

Buy Etherum Now

Conclusion: Some More Protocol Coins or Tokens

Blockchain and cryptographic tokens have introduced us to a new breed of protocols that can be monetized, as well as help create tremendous value for human beings.

But making a genuine protocol with aligned incentives and game theory is very arduous. That’s why many of these protocols are destined to fail which calls out for extra caution while speculating or investing in them.

Some other protocol coins are:

Now it is time to hear from you: Tell us about your favorite blockchain protocol or protocol tokens.  Have I missed any good protocol here? Do let us know in the comments below.

If you like the post, don’t forget to share it with your friends!

Further suggested readings on CoinSutra:

The post Top 5 Protocol Coins You Must Know About appeared first on CoinSutra – Bitcoin Community.

Understanding Protocol Coins And Tokens – The Beginners Guide

Posted on October 23, 2019 By In Blockchain With no comments

The post Understanding Protocol Coins And Tokens – The Beginners Guide appeared first on CoinSutra – Bitcoin Community.

There is enormous confusion among the crypto investors in understanding different types of tokens or coins.

We have tried to explain the Difference Between Security Tokens & Utility Tokens, but there is another category that we deliberately didn’t speak about to avoid any further confusion.

This category is protocol tokens!

We all know about app coins and tokens, but protocol tokens didn’t exist in the past. However, courtesy of the ‘blockchain‘, we now have something called the ‘protocol tokens’.

It is OK if you are not able to relate to what I am saying, but eventually, you will be. Let me give you some simple examples from the evolution of the internet to make a good analogy of what is happening now, and what might happen in the future.

We all understand that the internet runs on the TCP/IP protocol. On top of it is HTTP, and then the application layer (Facebook, Twitter, Google, etc..)

TCP-IP-model

These shared protocols (TCP/IP/HTTP) have forever been used freely and improved over and over by enthusiasts or non-profit entities. And on top of these protocols, applications like Google, Twitter, Facebook, etc., were made which are now valued in billions of dollars because they control all the data of the users. And eventually, with time, they have become more and more valuable as they capture most of the economic incentives too.

While on the other hand, the underlying protocol layer despite being as much as integral hasn’t been able to create as much economic value neither for itself or its creators.

Web Protocol layer

This is because there was no method of data decentralization before ‘the blockchain’ and also no method of monetization of protocol layers existed because we never had ‘cryptographic tokens’.

But now with the know-how of ‘Blockchain/DLT’ and ‘cryptographic tokens’, the protocol layer can be monetized and can be aware of the value it is creating. That’s why a new web is going to replace the old centralized one, and it will look something like this:

Blockchain Protocol layer

Difficult to understand?

Let me give you a few reasons and examples:

Adding blockchain protocols that run via crypto tokens which can only be used through these specific tokens will push the value from application layer to the protocol layer, and that value will be reflected in tokens’ specific protocols.

The Web Of Blockchains

For example, Bitcoin and Ethereum are such protocols, and various apps are built upon them. And due to the coupled nature of protocol tokens and the services, the value of the protocol is expected to increase with adoption. And this might also reflect in the price of each protocol token in the future. (This is Metcalfe’s law)

What Are Protocol Coins?

Protocol coins or tokens are cryptographic tokens that are required to access the service that the underlying protocol provides. Usually, apps or DApps are created on these protocols, just like you have decentralized applications/exchanges built on Ethereum (e.g., Augur, EtherDelta, etc.)

That’s why, the shift from thin protocol layers (that used to have little value and economic activity) to fat protocol layers, which will be immensely valuable with increased adoption, has started. Also, this will, in time, be reflected in the value of the blockchain-based web stack that enthusiasts around the world are developing.

Internet-Stack-Vs-Blockhain-Stack

So finally, you can envisage a future (as shown below), where we will have the internet layer (TCP/IP), and then the blockchain layer or the blockchain protocols and on top of it will be their various applications.

Internet protocols

Examples Of Protocol Coins or Tokens

Note: This article doesn’t express any solicitation or investment advice from CoinSutra. These are very early days for protocol token-based internet, so if you decide to invest in these protocols, do so at your own risk. Also, some of these protocols might be redundant and useless in the future.

That’s all from my side in this article of protocol tokens. I hope this helps you in developing meaningful insights.

Also, if you have any questions regarding the same, feel free to ask in the comment section below! If you like the post, don’t forget to share it with your friends!

Further suggested readings on CoinSutra:

The post Understanding Protocol Coins And Tokens – The Beginners Guide appeared first on CoinSutra – Bitcoin Community.

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