What are the characteristics of decentralized currency (what does decentralized currency mean)
What are the characteristics of decentralized coins? The essence of decentralized currency is a Electronic cash system based on blockchain technology, and its operation mode is point-to-point and no trust. And cryptocurrencies such as Bitcoin are also considered the most popular virtual commodity on the internet But what are the characteristics of decentralized coins? These characteristics mainly include:
1) disintermediation
2) Programmability 3) Decentralized anonymity
Among them, the difference between Ethereum and Bitcoin on the protocol level can be summed up in two aspects: the first type of token, such as BTC, does not rely on any third party for maintenance, nor does it need to use other platforms to process transactions The second type is Decentralized Token (Dai). According to the design of smart contracts, this type of token has different characteristics from other tokens The third type of token is the ERC-20 token or an ETH like ERC20 token. They achieve circulation and liquidity by issuing and distributing a specific number of tokens to users. At present, some decentralized projects are Ethercoin and Litecoin. But they do not have actual value, just no meaningful use or application scenarios, as they cannot directly obtain funds from users
What does decentralized currency mean
Decentralized currency (DMT) is an implementation form of blockchain technology. Its design purpose is to enable blockchain to be linked to real-world assets and freely transferable to users, traders, and other participants In the traditional world, people obtain funds or use them as a means of value reserve by purchasing and selling virtual goods or exchanging digital tokens. Decentralized currencies can be divided into two categories: the first is Bitcoin, which is considered a completely unlicensed and transferable cryptocurrency asset that is automatically issued by smart contracts. The second is the token issued on the public chain such as Ethereum based on Ethereum, namely the so-called “token”. These two tokens are developed using the Ethereum ERC20 standard, and their functions are similar to ETH2.0. However, they have not been launched on the test network yet, so these projects cannot get widespread attention. What is decentralized currency? Decentralized currency has two main characteristics: (1) liquidity and security; (2) Anonymity. Decentralized currency has the characteristic of immutability, allowing anyone to view what they hold and transfer it to their wallet address, thereby ensuring the security and transparency of transactions. However, due to the lack of open and transparent data, it is difficult for many users to understand the legal status of the project. At the same time, most ordinary investors are unwilling to exchange their cash into other types of Fiat money, causing high liquidity problems and risks Secondly, from an economic perspective, although a decentralized currency does not have a fixed economic foundation or central entity support, it may not necessarily guarantee its stable operation and unregulation. However, if all data in a system needs to be audited and verified before it can be used, it is necessary to prove real-world records, so that it cannot be assumed that a certain system has security vulnerabilities, such as issues with certain exchanges that may trigger hacker attacks. In addition, due to the excessive number of nodes on the network, in the event of theft, a huge amount of money may be lost.
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