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Bitcoin may have set the standard and made cryptocurrencies a reality, but protocols with more functionality have been developed over the years. Weiss Ratings recently devised a unique model to identify some of the best networks using a few data points. This model measures the potential of a cryptocurrency to achieve specific goals, including governance capacity, high transaction speed, scalability solutions, flexibility to upgrade, energy efficiency, decentralization, and how much cryptocurrency technology has sophisticated monetary policy.
Cryptocurrencies like XRP, Ethereum and Cardano have developed technological solutions that solve different challenges in different sectors, including the financial sector.
Protocols for payment service providers
An example of a protocol that takes care of payment service providers is RippleNet. Its solution is aimed at institutional payment service providers such as financial services companies and banks that use Ripple’s solutions to provide easy global payment solutions. This technology has significantly contributed to the increase in XRP investments on platforms such as PrimeXBT, where users can trade the asset using CFDs with low fees and excellent security for their funds.
This platform works by connecting buyers and sellers. Imagine the case of Mr. Ed, who lives in Los Angeles and has a box of chocolates that he no longer needs. But he’s interested in watching a baseball game, but he doesn’t have a ticket. Then there’s Joan, who lives in New York and has extra tickets she doesn’t need. Interestingly, he wants a box of chocolates. Normally, these two are unlikely to find and exchange unwanted items.
However, with the Ripple platform, both can find each other and trade items. Additionally, this platform allows payment in multiple currencies, including Bitcoin. The minimum transaction fee is $ 0.00001.
Such advantages make this protocol so attractive to many investors on PrimeXBT as it allows users to send money faster, cheaper and more convenient.
Smart contract protocols
Ethereum is another platform with superior technology to Bitcoin. Blockchain-based applications allow you to create new digital assets, build decentralized companies, virtual worlds and manage properties. These applications, better known as dApps, are unstoppable and uncensored.
Dapps are web applications built on smart contracts. Instead of using a centralized database or server, these applications rely on the blockchain for storage and program logic. As a result, developers can create unstoppable applications.
Over a decade ago, the birth of Bitcoin made us re-evaluate what we consider a store of value. Technology has also helped us get an idea of what the future holds. And the protocols that followed have enhanced its capabilities, at least some like Ethereum through smart contracts and decentralized applications.
These dApps are resilient, transparent, distributed and incentivized. They changed the tech landscape.
Furthermore, the dApps are governed by autonomy and all changes and developments are decided by consensus. This gives the public the power to choose and allows for control. Blockchain validators are incentivized by using tokens. These awards motivate developers to build even better decentralized applications that are changing industries today.
Cardano is another excellent example of a platform that uses smart contracts to improve Bitcoin’s shortcomings. The platform has two main layers, the Cardano Settlement Layer (CSL) and the control layer. The CSL is used to settle transactions using ADA.
The level of control, which is still under development, will be used for smart contracts. The hierarchical structure of the cryptocurrency allows Cardano to be used as a medium of exchange and to generate smart contracts.
Cardano ensures security through the peer review process required for new updates. The founders of this platform want to ensure that any novelties introduced into the ecosystem are not compromised. Other cryptocurrencies have encountered problems with security. For example, The Verge has suffered multiple attacks. Other projects have been criticized for adding a new, untested algorithm.
Cardano’s new concept ensures that interested people first review all algorithms added to the platform.
Cardano also solves the scalability problem by taking ideas from cryptography researchers. Some of the ideas have been implemented and are being tested. However, most of the ideas are still in the research stage. Cardano hasn’t implemented any smart contract platform yet, but things look promising.
Conclusion
Since Bitcoin was launched, the resulting digital currencies have sought to develop solutions for different market and sector challenges. Solutions like RippleNet, dApps, and Cardano aim to provide solutions to challenges that Bitcoin doesn’t have.
However, there are many challenges that need to be overcome before the masses can widely adopt these protocols.
