The crypto market is currently home to thousands of new currencies, however, the legitimacy of these remains uncertain. Prominent Bitcoin advocate, Andreas M. Antonopoulos shared a video detailing about how to identify a cryptocurrency.
‘Cryptocurrency Is A Marketing Term’
The cryptocurrency industry has witnessed the birth of several new coins. Bitcoin, the first cryptocurrency to be dropped into the market. Almost 12 years in the financial world, Bitcoin still remains on the top. However, most of the other cryptocurrencies enter the market claiming to fulfill the shortcomings of Bitcoin. While some claim to offer faster transactions and a few others like Monero offers better privacy. The list goes on as almost everyone in the field has been eyeing the creation of a better Bitcoin.
Bitcoin evangelist, Andreas Antonopoulos published a video on his YouTube channel Bitcoin Q&A, titled ‘What Makes a Currency a Cryptocurrency?’ In this video, Antonopoulos pointed out that there isn’t a statutory definition of the question “What is a cryptocurrency?” Cryptocurrency has evolved into a marketing term which suggests that any currency based on cryptography might be called cryptocurrency by certain individuals. However, this barely gives out any information about the whereabouts of the cryptocurrency and even fails to recognize if the cryptocurrency is interesting.
Andreas Antonopoulos’ Checklist
To overcome the hassles of identifying the ‘interesting factor’ of a cryptocurrency, Antonopoulos has formulated a checklist. This checklist is a list that the Bitcoin educator has also reportedly tried to popularize. The first point is decentralization. The reason behind the creation of the first cryptocurrency was to escape centralized blockades. However, several coins nowadays are fully centralized and still label themselves as cryptocurrency.
“The first question is, is it open? What does open mean? It means can anyone access it? Can anyone participate in the network without authorization or without vetting? Can any computer on the open internet simply connect to the network and be part of it and participate in the network?”
Being borderless has been one of the factors that any cryptocurrency should boast of. Antonopoulos also stressed the absence of discrimination of transactions based on the source-destination in cryptocurrencies. The magnitude of the immutability of the currency is also a part of the Bitcoin advocate’s checklist.
Apart from being borderless, neutral, censorship-resistant, decentralized and immutable, a cryptocurrency should be publicly verifiable, he added. Antonopoulos detailed about the same and said,
“Meaning can anyone verify the transactions that are happening? Can you audit it basically as a transparent and you can keep adding other criteria depending on the importance you give to these criteria.”
Bitcoin Is The Standard
Bitcoin is undoubtedly considered the standard for all cryptocurrencies and Antonopoulos revealed his inclination towards the coin as he considers it different from the rest. However, Antonopoulos suggested that coins that do not tick off every category on this list shouldn’t be stripped off its label of being a cryptocurrency as a few others might consider them interesting. Despite this, the Bitcoin advocate suggested that coins that do not fulfill these criteria are more of an “incremental innovation.”
Elaborating on a closed and controlled system he said,
“To me, it’s more like a database and not particularly interesting in its technology and certainly not very interesting in its political and social implications.”
Every industry has its own share of exploiters and the cryptocurrency industry has them in abundance. The crypto market consists of 5,000 altcoins and most of them are fake. Antonopoulos’s checklist could be used as your own in order to steer clear of fake and scammy cryptocurrencies.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at email@example.com