Friday, December 2, 2022

New Virtual Currencies Spark Questions About Crypto’s Purpose

New Virtual Currencies Spark Questions About Crypto’s Purpose

With bitcoin on a bull run this past year, several smaller currencies have stepped in to try their luck with consumers. But are investors and holders actually interested in the purpose of each one? Or are most simply looking to make a quick buck? We took a look at a few fairly different blockchain projects to examine why they should exist.

Also read: Litecoin Founder Charlie Lee Sells Entire LTC Holdings

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Blockchain startup, for example, is introducing users to a new virtual currency called EOS, and people are getting involved quickly. EOS has already managed to accumulate over $700 million USD in sales, while the company behind it is valued at over $4.5 billion.

A second entity known as Luna Coin comes with a unique twist. Users who share their DNA and personal information will be rewarded with a single token as the company’s way of saying “thank you.” For the most part, pharmaceutical companies have gathered this information from willing participants in the past without rewarding them, and Luna Coin is looking to change that.

“We view this as an asset, and want everybody to realize the value of the asset,” explained co-founder Michael Witz.

Privacy – What It Should Be All About

Third is a cryptocurrency called MobileCoin. Created by technologists Joshua Goldbard and Moxie Marlinspike (inventor of the encrypted messaging app Signal), the goal of MobileCoin is to enable even stronger privacy for users and defenses against online attacks.

“The innovations I want to see are ones that make cryptocurrency deployable in normal environments, without sacrificing the properties that distinguish cryptocurrency from existing payment mechanisms,” explained Marlinspike.

Where these coins (and many virtual coins for that matter) differ is in their intentions. One of the things that makes a digital currency successful is the original goal behind it. Is it designed to assist those without credit? Was it built to enhance security or give residents of undeveloped nations an opportunity for financial stability?

What’s the Idea Behind Specific Coins?

A coin’s power is determined by its purpose, and the makers of EOS freely admit their coin has no purpose. EOS could potentially just be another cryptocurrency designed to build a little revenue while offering modest competing to bitcoin. It’s worked so far, but how long a coin can last without a valid statement behind its existence is a hard question to answer.

Additionally, something like Luna Coin is undoubtedly starting out with noble intent (sharing one’s DNA with pharmaceutical companies to help produce life-sustaining drugs), but the idea of having to share one’s personal data defeats one key idea of cryptocurrency. With financial privacy often an attractive selling point in blockchain, the fact that one must share their health history and other information could deter some.

Furthermore, if Luna Coin fails to hit any valid marks, many participants may be inclined to feel duped.

Investors – Know Your Stuff

Regardless of the hype surrounding crypto, every coin needs to possess a solid reasoning system, or it runs the risk of disappearing quickly. The same rule applies to those investing in it. While there are a legit handful of investors that understand the ins-and-outs, many are simply hearing about bitcoin’s consistent rises and are want a piece of the action.

The fact that Coinbase could add over 100,000 new accounts over the course of one weekend shows that people are enthusiastic, though potentially ill-informed. How could so many people join over such a short period? It’s probably safe to say that some of these new investors didn’t exactly do their homework or research bitcoin enough before creating an exchange account; they were simply seeking cash, and thus run the risk of making mistakes along the way.

While the crypto run is happening, investing for the sake of investing or creating coins just to enhance the market isn’t going to help in the long run, and could even lead to potential crashes. Entities like bitcoin and ether have proven themselves because they have purpose, and if coins or those wanting to invest coins are looking to survive, they will need to live by the same mentality.

What’s your purpose behind investing in crypto? To make money? To be part of something revolutionary? Post your comments below.

Images via Pixabay

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