Watching the BITCOIN & ETHEREUM buying frenzy of the last months, many people are trying to jump in the Cryptocurrency world. However they soon feel lost. The reason? They are finding out that there are thousands of projects. Each project releases its own coin or token and claim that this is a “cryptocurrency”.

But what is a “Cryptocurrency” exactly ? Who can give a serious answer to this question ?

Bitcoin logo

BITCOIN: Only here you can find the answer about “What is a cryptocurrency”

The legendary Bitcoin was the first cryptocurrency. The reasons behind its launch and its functionality can help us to understand what is a cryptocurrency.

Anonymous founders under the pseudonym “Satoshi Nakamoto” launched Bitcoin with these basic characteristics :

1) It created a transactions network that would offer freedom to the world. With its blockchain technology, everyone would be free to make borderless transactions without the need to trust any third party like a bank or a financial company. The coins are not issued or controlled by any centralized authority!

2) It was supposed to make everyone able to participate in its network with a PC. This is what we call mining procedure (Proof of Work model) and the members of the network could enjoy meaningful mining rewards.

3) It was designed in order to give everyone an equal chance to get it. This is called “Decentralized” coin distribution and its prerequisite is a fair launch with no premine and no ICO sales. Without any developer getting the lion’s share of the coin supply.

4) To act as a deflationary asset with a fixed maximum supply and a defined mining reward plan with halvings every 4 years for the block rewards.

5) To offer equal rights for all like a public transactions history accessible by everyone and anonymity for the transactions.

 

The five flaws of Bitcoin that came up over time

BITCOIN was certainly the greatest invention of the second Millenium. Even its anonymous founders possibly could not have imagined that it would be so successful.

However, exactly because of its huge popularity and wide use, some shortcomings arised for the totally immutable Bitcoin project:

1) Its poor scalability : BITCOIN is limited by the average block creation time every 10 minutes. So it could not offer more than 7 transactions per second which are not enough for the cryptocurrency users.

2) Its low supply : BITCOIN has just a few million coins as circulating supply (21M max supply). This fact together with its high popularity results to a high valuation and very long non-integer prices (for example 0.0000231 BTC) which are not very friendly for everyday use.

3) Its fees rised too much:  Its low coin supply in combination with its high valuation and popularity made its fees very high. The user for a single transfer can pay even $20-35 which for a sum of $100 is 20-35%! These numbers could be even worse soon. Of course small sum transactions with these fees are out of question.

4) The ASICs problem : Specialized mining devices (ASICs) that could solve Bitcoin’s algorithm soon dominated its network. The common PC miners could not get any mining rewards with the huge competition by the ASIC owners. This made the coin distribution of the Bitcoin coins more centralized, in the hands of very rich people only.

5) The lack of privacy : The BITCOIN provided some anonymity in the beginning. However all its transactions are recorded and are available in public view. With so many applications associating personal details with specific btc addresses, there is no anonymity at all now. The need for privacy options is more than obvious.

Bitcoin's weaknesses

How we ended up with so many “cryptocurrencies” ?

The aforementioned were the major challenges that other cryptocurrency projects had to find solutions for.

However we had an unfortunate event: In the very young cryptocurrency landscape, many developers tried to take advantage of the people’s ignorance. Μost newcomers in this brand new world, don’t understand the fundamental characteristics of Bitcoin. We described them in the first section of the article and these constitute the very essence of a cryptocurrency.

So, the majority of the cryptocurrency projects are advertising that they offered one or a couple of solutions for the five bitcoin’s shortcomings. But at the same time they have cancelled the most of, or even all, the five structural elements of a cryptocurrency!

The most usual violation of the basic cryptocurrency fundamentals is the presence of a central authority that not only takes decisions but it even issues digital coins.  Thousands of “crypto” projects actually  issue and control coins as a central authority, allocating them in specific founder’s addresses (PremineICO sales). Then, with heavy promotion they technically rise a high demand for these coins and tokens. This way, the founder who has a big part or even the whole coin supply of the project on his own hands, is making money out of nothing!

Thereby, these projects have already broken the first, the second and the third crypto fundamental rules that had been previously described. Unfortunately this is the most common breach. More than the 99% of the coins or tokens that claim to be a cryptocurrency right now, don’t fulfill the most (or even all) of the five fundamentals that the legendary Bitcoin has introduced.

Some very popular examples of projects that in reality are not cryptocurrencies

It is shocking that even popular projects like ADA, XRP, NEM and many more have acted exactly with the aforementioned method. Projects that we now find in the top positions of the cryptocurrency market’s capitalization list!

Another popular example that many people ignore is the ultra successful Ethereum. Ethereum is a 70% premined project. That means that the 70% of the initially ETH coins in circulation, were allocated to its developer adresses and sold in Initial Coin Offering.

Another characteristic of the Ethereum blockchain is that there is no maximum cap for the Ethereum coin supply. It implements a completely different approach that in combination with its “Defi” smart contract functionality leads to extreme inflation instead of deflation.

Finally, the ethereum chain and many others that followed its model, are acting as “tokenizing factories“. This functionality might seem quite interesting at a first glance but it actually inflicted an even bigger wave of fraudulent projects with useless tokens. These “easy to make” tokens that are automatically added in certain eth platforms, attracted even more fraudulent wannabe project founders. The aforesaid developers can now launch their next useless tokens even more easily. Then with marketing tricks they make these projects popular cashing out their premined coins and repeating this procedure again and again.

Thus, we can already see a series of negative effects because of the very increased traffic in the Ethereum blockchain. This situation has inflated the network fees to insane levels of even $150+. Yes… the user has to pay fees like $150 in order to move a sum of tokens or ethereum coins that might have a value of $50 or even lower (!). Countless tokens are stagnant in the ethereum blockchain because of this side effect and the worse thing is that many other projects try to copy the ETH inflative model.

what is ICO

The result of all these : The Good, the Bad and the Ugly!

The above have resulted to a very dangerous cryptocurrency landscape with:

The Good: Extremely few pure cryptocurrencies that truly serve the initial cryptocurrency idea. These are the real gems that shine but people cannot always see them because of the thousands other “noisy” projects.

The Bad: Many projects that in reality are premined company-driven projects and service providers. Here belong the most popular “defi” platforms as well. Their ecosystems are full with mostly meaningless tokens that are mostly included in the next, even worse category.

The Ugly: The worst of all, thousands of fraudulent and scam projects, with huge premined percentage, that provide no service or functionality at all. Most of them are tokens, built using the services of the most popular platforms of the second category.

 

What is a cryptocurrency

“Use Cases of our coin”:  a hype that you should be sceptical about!

Obviously, the projects of the second and especially the third category have no relation with the original cryptocurrency idea.

It is not bad for a project trying to provide a service or to build a use case for a price. However this is not a cryptocurrency. It is just a company using the blockchain technology. A company that serves the personal goals and ambitions of its founders and not a noble cause for the world community like the Bitcoin idea.

Many people seem to misunderstand the need for extra “use cases” that some projects (usually the service providers) intentionally tend to hype. We should be able to separate the projects that are in a bad need to get more use cases, “a reason for existence”. Since they have to prove why they had been premined with their founders getting the lion’s share or all the coins of the project in their pockets!  In constrast with the few real cryptocurrencies that their fair fundamentals and rules are the reasons to exist and enjoy popularity over time.

A cryptocurrency was supposed to free the people from any central authority issuing or controlling funds. A cryptocurrency was supposed to offer real Decentralization, fair rules and cheap borderless transactions.

The 99% of the cryptocurrency projects are totally unrelated with the above. In the best scenario, some of them act as companies and service providers . In the most usual scenario, they act as scam projects with one single target: To make their founders rich.

Besides, extra use cases or even “Defi” functionalities can be developed and added anytime in the future to the few pure cryptocurrencies of the first “Good” category. Though a fair past and transparent launch can never be added to the cryptocurrencies of the second and third categories.

 

pure cryptocurrencies

Some real crytocurrency gem examples

The real cryptocurrencies, that honour the five fundamental characteristics that Bitcoin has introduced, are very few. A very good research is needed in order to separate them among the many thousands of other projects.

Some good examples, except the legendary Bitcoin, are:

Litecoin (LTC): Acting with the logic of the Bitcoin, with fair launch and rules. It offered a faster alternative crypto with 10X higher supply than Bitcoin’s and lower fees. It is among the most popular real cryptocurrencies right now. Unfortunately it didn’t offer private transaction and the worst shortcoming is that it hadn’t ASIC resistant algorithm. Thereby ASIC miners have dominated its network.

Monero (XMR): A popular cryptocurrency for its by default private transactions. Monero offers much lower fees than Bitcoin, faster speed and decentralized coin distribution because it switched to ASIC resistant algorithm making everyone able to mine with his PC. However its supply is lower than Bitcoin’s and this could potentially make its fees expensive in the future. Additionally the decrease for its mining rewards is faster than Bitcoin’s. The 90% of its supply has already been mined despite the fact that it is 5 years younger than Bitcoin. This fact in combination with its already high popularity and increased mining competition, could possibly demotivate those who seek more meaningful mining rewards.

Digibyte (DGB): An impressive altcoin that offered many solutions to the most Bitcoin “flaws”. With its faster speed, high supply, very low fees and unique features.  Parallelly it made it to fulfill all the pure cryptocurrency fundamentals with only a small discord : it had a minor ~0.5% premine. It has a sophisticated 5x mining algos model combining ASIC, FPGA and PC miners. However the room for the PC miners is small and there is no privacy option.

 

BITCOINZ COIN

The exceptional case of BITCOINZ

BITCOINZ (BTCZ) is a pure cryptocurrency that offers solutions to all the five “flaws” of the legendary Bitcoin (described in the next paragraph).

At the same time BITCOINZ  fulfills all the five fundamentals of a pure cryptocurrency :

1) It was founded by anonymous founders and it is a 100% Community Driven project, with no central authority issuing coins.

2) 100% of its coin supply is distributed to its network’s supporters (miners) with the Proof of Work model. Everyone if free to join it with the mining procedure using just a PC.

3) It had the fairest launch ever with absolutely no premine and no initial coin offerings.

4) It is a deflationary asset as it has a fixed maximum supply and reduced coin emission over time with fair and slow mining halving plan.

5) It offers the same rights and level of privacy to everyone.

BitcoinZ characteristics

How BITCOINZ fixed all the flaws of the classic BITCOIN?

1) Its high scalability offers higher transaction speed and plenty of space for future improvements.

2) BITCOINZ’s high maximum supply is the ideal for easier prices without long non integer numbers.

3) Its fee model in combination with the 21B coin supply guarantees super low, next to zero fees. BitcoinZ is ideal for transfering even very small sums of under $1 with ~0% cost.

4) BITCOINZ’s ASIC resistant algorithm is protects the PC miners from the ASIC elites. This way it achieves a fair Network with truly decentralized distribution of coins to the world Community. Not to the rich people only.

5) BITCOINZ features private transactions offering true privacy for everyone.

Why BitcoinZ is the best crypto

Obviously, BITCOINZ is maybe the only cryptocurrency out there that achieves to fix all the five major BITCOIN’s flaws.

At the same time fulfilling and honoring all the Bitcoin’s five fundamentals. These are the aforementioned necessary pillars that should accompany every pure cryptocurrency.

Since a real cryptocurrency should be destined to offer a gift to the world Community. Freedom and Equality. Otherwise, a project is just a company based project that tries to take advantage of the Blockchain technology in order to make a founder or a closed team richer.

 

 Why BITCOINZ uses the “BITCOIN” name ?

It is worth mentioning that BITCOINZ is the oldest and maybe the only “BITCOIN” named project that can still be mined with a normal PC and it is not a Bitcoin blockchain fork, as it had its own genesis block!

The most of the other projects that have used the “Bitcoin” name did it afterwards either in a misleading way or they are copies of the BITCOIN’s blockchain and have given free coins (forkdrops) to the Bitcoin holders. In such a way, these projects try to enjoy a high free exposure by making the BITCOIN owners to search for them.

In contrary, BITCOINZ had its own unique blockchain exactly like Bitcoin did. Offering equal opportunities to everyone by distributing the 100% of its supply to the whole world Community and not to a closed team.

 

 

 Why BITCOINZ uses the “BITCOIN” name ?

It is worth mentioning that BITCOINZ is the oldest and maybe the only “BITCOIN” named project that can still be mined with a normal PC and it is not a Bitcoin blockchain fork, as it had its own genesis block!

The most of the other projects that have used the “Bitcoin” name did it afterwards either in a misleading way or they are copies of the BITCOIN’s blockchain and have given free coins (forkdrops) to the Bitcoin holders. In such a way, these projects try to enjoy a high free exposure by making the BITCOIN owners to search for them.

In contrary, BITCOINZ had its own unique blockchain exactly like Bitcoin did. Offering equal opportunities to everyone by distributing the 100% of its supply to the whole world Community and not to a closed team.

Bitcoin named coins in one table

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