Disclosure: I hold Bitcoin (BTC), Ethereum (ETH), Ripple XRP and IOTA (MIOTA). But this post is not about finance per se nor is it about promoting these currencies as investments. Rather this post is about envisioning the four kinds of markets that the respective technologies underlying each of these four cryptocoins can help grow and power. These aren’t simply currencies and stores of monetary value – they are technologies.
In order to gain a clearer view of the impacts of the incoming future of technologies and their economic, behavioral, cultural, political and other impacts, categorization can perform useful veil-lifting.
I’ll let the reader do the deep-dive research into the technologies underlying each of these currencies, but here is a peeled-away breakdown of their respective categories:
- Underlying technology: Blockchain
- Primary use: Decentralized financial currency. (Although the “powers that be” might change that 😉
- Underlying technology: Programmable blockchain
- Primary use: Global computational backbone for smart contracts (going beyond currency toward an open, virtually infinite, array of specific “plug in” decentralized solutions and applications). A sort-of energic hypertext lattice for getting things done
- Ripple XRP
- Underlying technology: Interledger Protocol, Ripple Connect
- Primary use: Real-time cross-border transfer of wealth through established financial institutions
- Underlying technology: Tangle (radical alternative to blockchain – lighter and more nimble)
- Primary use: Machine-to-machine transactions
Now, this list isn’t thorough – each of these technologies has more functionalities, capabilities and configurations than mentioned above. Many of the important features have been stripped-away to reveal the essence of what they mean. The point is to show that these solutions seek to solve these problems:
- Bitcoin: establishing a common and reliable digital currency
- Ethereum: empowering a distributed operating lattice for decentralized applications
- Ripple XRP: reducing the time of transfer and settlement of cross-border transactions among financial institutions
- IOTA: enabling payments among machines. It addresses the need for speed and fee-less demands of currency among connected technologies. (Yes, it’s a bit crazy to think about machines paying each other, but it’ll sink in. Think about your smart toaster paying a drone to take out a hit on you.)
Whether these specific “coins” succeed the slaughtering rapidity of techno-culture shocks remains to be seen. Yes, they are traded assets that can make you rich or poor. That’s certainly interesting, What matters much more than their capital markets is that each has attempted to confront crucial problems that can liberate the ramifying “potential energies” of other technologies that can plug in to them. Their premises spur economy-generating economies.
Don’t feel bad if you missed the Bitcoin gold-rush. That’s in the past. Sometimes understanding the world confers its own wealth (insert Latin aphorism here). If you run the currency of knowledge through the circuitry of imagination you gain the power of foresight.
That’s my two cents: take them and spread the wealth.