Cryptocurrency As (One of) Blockchain Future

The names Bitcoin and blockchain are very much discussed recently in Indonesia. The two are often considered the same, but are actually different. Blockchain is operating system which stands on Bitcoin which is one type of digital currency (cryptocurrency).

Just as technology is constantly evolving, blockchain and cryptocurrencies have also made Pang Xue Kai founded Tokocrypto. Through Tokocrypto, Kai wants to make the cryptocurrency ecosystem more structured, so that people can finally feel the impact in the future.

In the #TuesdayStartup issue of the first week of July 2018, Kai will tell a lot from the early history of blockchain, what are the advantages and disadvantages of blockchain, to the next revolution of blockchain with cryptocurrency.

Blockchain travel revolution

The Bitcoin concept emerged during the global financial crisis in 2008, when many people lost faith in banks and central authorities. With blockchain technology, Bitcoin can eliminate dependence on a central authority, aka no central point of failure, and solve inefficiencies in the real world.

Satoshi Nakamoto saw currency control as too important to be left entirely to bankers and financial institutions. His work was published in 2008 on the cryptographic mailing list metzdowd.com. After that, the price of Bitcoin soared to reach Rp. 200 million per 1 BTC in December 2017. Then it dropped drastically to Rp. 60 million.

The volatility of the Bitcoin price is constantly changing, because the basic idea is that we cannot print more than the predetermined amount of 21 million BTC. While there are already more than 17 million BTC in circulation and every day miners compete with each other to get rewarded with new Bitcoins when transactions are successfully completed.

This is where blockchain 1.0 starts, but the advantages and disadvantages. Finally pushed for a system update to version 1.5 (2009-2015). In this version there are several cryptocurrencies that appear every day to fight with Bitcoin. As of now there are around 1.565 cryptocurrencies available over the internet and the number continues to grow. These include Litecoin, Dash, Ripple, and so on.

Then came blockchain 2.0 (2015). Previously cryptocurrencies were considered as currency only, blockchain was used to record transaction history. In this version Ethereum was born in 2015, it's more than just a currency. It also allows the creation of decentralized applications on the blockchain.

Born blockchain 2.5 (2015-2017) is known as a new blockchain that can be programmed with different technologies and specially developed solutions. Here are born new cryptocurrencies such as Vechain, Neo, Nem, Waltonchain, Vechain, and Komodo.

This version has drawbacks, there are network congestion problems due to the increasing number of users. This causes high fees and long validation times for example Ethereum needs 15 transactions per second (TPS). Besides, from an interoperability point of view, each blockchain is isolated and cannot communicate with each other. The electricity consumption is also high whenever mining cryptocurrencies.

Finally, blockchain 3.0 (2017-2018) is here to solve the problems in the previous version. For example, in overcoming scalability there are Ziliqa & Ethereum (Sharding), IOTA (Tangle), Bitcoin (Lighting Network), and Nano (Directed Acylic Graph). Interoperability exists with Icon & Aion (Cross-chain) and Bitcoin (Atomic Swap). Environmental issues with Ethereum & EOS (Proof-of-Stake).

Next technology

Will there be blockchain 4.0 next? What updates will happen? But what is certain is that cryptocurrency will continue to grow because it is very broad, difficult to combine, however, it can actually be classified as a commodity, security, and asset. In Indonesia, according to Kai, it is classified as a commodity and must be regulated as a commodity.

Most decentralized applications (DApps) are still underdeveloped and cryptocurrencies are facing skepticism. In fact, it still takes time to be accepted by the public and gain momentum for mass adoption. Like the telephone and the internet, in less than 30 years the internet has grown from just sending email to something that can't be replaced.

“Similarly, blockchain and cryptocurrencies have come a long way since the emergence of Bitcoin in 2009 as a decentralized currency,” explains Kai.

Even though the Bitcoin price continues to fall at the moment, many are looking forward to the development of the cryptocurrency industry as a whole. This prompted Kai to establish Tokocrypto in June 2017. Tokocrypto is a platform for digital asset investment with a simple, easy, and secure interface.

In addition to providing Exchange, it provides an ecosystem that connects business units to each other. There is Tokocrypto Launchpad as a new initiative to give its users the opportunity to invest in quality global blockchain projects. Because, all this time Kai saw that due to the lack of regulations for ICOs, many cryptocurrency investors were the targets of ICO scams.

"In the future, cryptocurrencies will continue to develop and not just be currency, with all the advantages of blockchain technology, digital assets from cryptocurrencies will become the next big thing. For that, through Tokocrypto, we want to educate the market," he concluded.