Why Some of the Top Cryptocurrencies Aren’t Really Currencies!

How decentralized should a currency be to be listed as cryptocurrency?

Coinmarketcap has many crypto assets listed by their value. You can look through the details of thousands of different type of crypto assets, from coins to tokens, it has it all.

But how does one define a cryptocurrency? Should in-game assets be listed on their site as well or are they just not “too decentralized?”

Bitcoin seemingly enough decentralized to be considered the first cryptocurrency. Its censorship resistance is what gave it the edge to succeed when countless others couldn’t.

How to Define a Cryptocurrency?

The reason why Bitcoin came to be categorized as cryptocurrency was because of its ability to be anonymous and it allowed users to order transactions and prevent double spending, so by this definitions should this be the threshold by which cryptocurrencies are sorted?

Well… not many fall under this banner and this shows how complex cryptocurrencies really are. The two most obvious examples of this are Ripple and Stellar. For both these projects, you have to choose which entity or group of entities you wish to trust with solving the double-spending problem. However, those entities cannot be anonymous as this increases the risk of attacks.

This seems to be a problem when it comes down to a worldwide government crackdown because anonymity is the only way to save this system.

“What would happen if criminal activity was to increase and became rampant on these systems? Who would publicly declare themselves as the operators of the system? How difficult would it be for the government to outlaw the system?” These are some of the questions that pop up when it comes to projects like these.

It is true that Ripple and Stellar can only provide censorship resistance as long as the technology remains overly complex to regulators.

Some of the proof-of-stake systems are too centralized to be considered true cryptocurrencies. EOS is also similar to Stellar and Ripple where token holders vote on who will be processing transactions hence these entities cannot be anonymous.

Such systems can also be more expensive to run as compared to, for example, Bitcoin. As there is more on-chain activity and a general acceptance of increased resource requirements for operating a node. This problem was faced by Steem, which operates on a consensus algorithm similar to what is used by EOS. It was noted that this was one of the reasons why the company was forced to downsize its workforce.

Keeping all this in mind, it would be wise for crypto asset comparison websites to make it clear that not all cryptocurrencies are created equal. It’s time we celebrate diversity – even when it comes to cryptocurrencies!

Soha Ali

As vanilla as it sounds, a filmmaker in the making. Soha brings the irony out of the crypto world by contributing to the Unfiltered section of BlockPublisher. Contact the editor at editor.unfiltered@blockpublisher.com

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