In this article I cover the main aspects of blockchain technology, distributed ledger technology, and and decentralization. I will also introduce the currency called SmartCash, explaining what has been accomplished so far and what the road ahead holds.
Blockchain technology
Nowadays banking information is centralized, meaning it is is stored in respective banks' servers. The banks handle the transactions and it often takes days for bank wire transfers to finish.
On the contrary, blockchain creates a base for decentralized digital currencies. It's a transparent ledger where each transaction is recorded in the history and can not be altered. When transactions are made, timestamps, source and destination are added to a block that will be mined.
In a blockchain, all blocks depend on the hashes of previous blocks. So it's impossible to alter an earlier block without making all the later ones invalid. That's why it's called blockchain. A chain of "blocks" connected by hashes.
The miners solve a hashfunction by utilizing their GPU/CPU power and contribute with shares of the solution. The block is solved once the appropriate cryptographic nonce is found and the block reward is distributed to the miners.
The validity of the transaction within the blocks are then checked and confirmed by the collective computing power of miners within the network.
I made a graphic explaining the process in a simple way.
DLT Distributed Ledger Technology
To begin this section I will explain what a ledger is.
A ledger is a registry of entries. It's a kind of bookkeeping registry that is registering information of various kinds. Those can be financial records, public records (birth certificates), university degrees, contracts and so on.
The standard way of bookkeeping is made by a centralized third party that is registering all the transactions that are made. In crypto bookkeeping is done by a distributed ledger with help of a decentralized network. The network validates the transactions that are made and the ledger is open to everyone. This means that transactions are unalterable and secure.
Usecases for blockchain & cryptocurrencies
All the hype around cryptocurrencies are not just buzzwords and short-term moneymaking. In line with a quote from the Bitcoin white paper abstract, the ideology behind it was to be used as an electronic payment method.
‘’A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.’’ - Satoshi Nakamoto
While blockchains main use case is an electronic payment method, blockchain supplies a variety of additional use cases.
Looking into a currency like SmartCash provides further input on the matter. The upcoming InstantPay and SmartCard will be a great utility for real life implementation and utilization for crypto as a real currency.
Having a wallet on a physical card along with near instant payments. Currently transactions on the SmartCash using blockchain for take around 2 minutes. This will be even faster with incredible InstantPay system backed by over 10.000 nodes.
How do transactions differentiate from usual bank transfers?
The big difference between transactions between blockchain and banks is the absence of centralization and the speed. Normally bank transfers take days and require a lot of personal data to be approved.
The beauty of using blockchain for transactions is that they require no personal data to be submitted, along with incredible transaction speed. While Bitcoin has rather high fees comparable to bank transfers, SmartCash is close to free (less than a penny transaction fee) and is incredibly quick (less than 2 minutes for a confirmed, irreversible transaction).
What are the pros of decentralization and crypto?
- Decentralization encourages growth with distributed responsibility and decision-making.
- Accountability and transparency is also encouraged since the decision-making is split up.
- Makes the development more flexible and innovative.
- Improves the efficiency by letting several entities make decisions and lets people contribute from a grass-root type of level.
- Involvement is emphasized since everyone can contribute with ideas and things that promote the projects.
- The big difference between fiat and cryptocurrencies is that cryptocurrencies operate independently of central banks.
While both can be used as a store of value, cryptocurrencies follow their respective protocol algorithm while central banks control the supply of fiat currencies. - There is no countries name on cryptocurrencies and most of them are decentralized.
- Transactions are saved in an open, transparent ledger. No currency can be cheated into the system, meaning it is fraud proof.
- Cryptocurrencies are accessible to everyone and do not need personal information to proceed transactions.
- The value is independent and based on supply & demand.
An easy way to illustrate centralization vs decentralization
What is SmartCash?
SmartCash is a community governance, cooperation and growth focused blockchain based currency and a decentralized economy.
The embedded features, such as the SmartHive, lets the community share their ideas by proposals and create solutions that introduce new third parties and promotes growth of the project.
The currency can be earned by three different ways aside from buying it off an exchange:
- Mining: The usual PoW system where miners are rewarded from pools for contributing with shares when solving blocks.
- SmartRewards: A longterm holding, price-stabilization mechanism. If at least 1,000 SmartCash are held on one address between 25th -> 25th next month (snapshot date) without sending any funds from the address, they are awarded by 15% of the blockrewards during that period split proportionally between all eligible addresses.
- SmartNodes: A MasterNode network (with already a massive 10.000+ nodes) where 10% of block rewards go to one node at the time. The SmartNode network will be a supportive pillar for the upcoming InstantPay system.
What is InstantPay?
While SmartCash is already a very fast currency in terms of transactions, InstantPay with support of the node network will provide a close to instant payment system.
This is important to note because this is one thing that a currency needs to be viable for real world implementation and adoption. There are already a few merchants accepting SmartCash and with InstantPay this number will most definitely increase.
- User friendliness: Anyone should be able to use the payment system without problems. The payment process needs to be easy, without forcing people to give personal information or unnecessary procedures.
The web wallet that SmartCash made really provides in this matter. Try it out! - Like I just mentioned above, transaction speed is key! (a video demonstration showing a SmartCash transaction can be found here!). Nobody wants to wait 5 minutes for a transaction to finish when making a purchase. While transactions already are very fast compared to other blockchains, with InstantPay it will be suitable for in-store payments!
- Low fees: While Bitcoin is a good store of value and the first cryptocurrency, the big flaw with it are the transaction fees. There isn't much point to use a currency for small payments when the transaction fee is close to as high as the initial cost for the goods. Another good thing with SmartCash are the very low transaction fees which are less than 0.01$.
- Good customer support: There will always be people that needs help with for various causes in any branch, this is why a solid customer support is important to not leave anybody in the dark. As seen on the 2018 Roadmap a bit further down, SmartCash will create a 24/7 customer support platform to instantly be ready to assist.
What has SmartCash accomplished so far?
SmartCash is a relatively new cryptocurrency. Since July 2017 a number of neat projects has already been finished. Amongst those are: The SmartHive, SmartRewards, the voting platform, SmartNodes, merchant implementation, Web Wallet, Android Wallet and more! The reason for the impressive progress is partly the choice of having a decentralized organizational model with the Hive Structuring Teams. Those teams are split up for various tasks and promote the development of several projects at once. If more teams are needed, more will be created and will increase the capabilities of development even more!
Another reason is the SmartHive.
The SmartHive is a community fund where everyone can create proposals that promote the growth of the currency and the community votes on their stand towards the proposals. This is an important and unique feature which really makes a difference.
Voting and proposals can be found here: https://vote.smartcash.cc/
The 2018 Roadmap
Talking about roadmap, the recently released roadmap for 2018 holds an immense amount of interesting projects in the making. I will briefly cover the most important upcoming projects for SmartCash (in my opinion).
SmartCard: SmartCard opens up new business models for 3rd party merchants by introducing a physical card for SmartCash to be traded with. Here is some information about SmartCard: The card will be your encrypted private key. No private keys will be stored or logged and each card will have a recovery backup. It will also contain more convenient functionalities to avoid fraud. One of which is the PIN Reset which allows you to change the PIN code anytime you want.
ELECTRUM Wallet: As of now, the desktop wallet is the main wallet used for starting nodes and is a bit heavy on new users by requiring the blockchain download, some command prompts etc. The Electrum wallet will provide a light desktop wallet with great usability while it doesn't require the full blockchain download and requires less resources on your computer.
Reintroduction of privacy protocols: SmartCash will introduce the BIP-47 protocol which allows the reuse of an address without revealing transaction history. This is a great feature for merchants and users that want privacy.
The rest of the roadmap can be found here: https://smartcash.cc/roadmap/
Summary
I really hope the article was interesting and easy to understand, even if some of the information is quite basic. I do believe it's a good explanation for newcomers to the crypto space and people that aren't aware of how the underlying system behind blockchain and cryptocurrencies work. Feel free to share it with friends and family that need to learn about crypto!
I also hope you learned something about SmartCash! It is really a project that should be on your radar!
If you have any questions, need help or want to join the community:
Official Twitter:
https://twitter.com/scashofficial
Official Discord:
http://discord.smartcash.cc/?
If you would like to learn more about SmartCash please visit https://smartcash.cc/
Any upvotes, comments and resteems are greatly appreciated!
