Five forms of blockchain money available now.

You have probably heard about the blockchain - a collective data registry that supports Bitcoin. However, Bitcoin is far from the only example of using this technology, because in fact it can offer much more new things for the world of money and for other spheres of human activity than just Bitcoin.

In this article I will tell you about the five forms of money on the basis of the blockchain, which either have already become available to a wide range of applicants, or will soon become.

Truly anonymous money

Bitcoin was previously often mentioned in the context of anonymity, due to the fact that it was this property that used Silk Road and other online drug trading markets. In general, Bitcoin can be anonymous, if used extremely carefully. However, in the real world, such a blockchain property, as transparency, leads to the fact that transactions are often traceable. This is bad news not only for criminals, but also for all who have legitimate reasons to keep information about their finances in secret (that is, perhaps, for all of us). As a result, over the past 2 or 3 years, a mass of cryptocurrencies have appeared, offering enhanced measures to protect personal information.

Now Monero and Dash are the most popular ones. However, a considerable stir was caused by the recent emergence of a new generation of “confidential” currencies based on Zcash , a highly efficient protocol that uses strong cryptographic mechanisms to hide information about the sender, recipient and amount of funds transferred from prying eyes. One thing is certain: the integrity of personal financial information is hardly going out of fashion in the foreseeable future, and we will soon witness the emergence of even more advanced forms of anonymous blockchain money.

Fiat on the blockchain base

On the other side of the scale are conventional state-provided fiat money, well known to us and deserving of our trust, but put on new modern blockchain rails. A number of online payment services are already exploring the possibility of increasing the efficiency of their work using the blockchain. This, in particular, is about adding support for fast and inexpensive cross-border transfers and the first of its kind options for implementing this concept already exist.
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Each of the Tether wallets, for example, is provided with funds that are stored in an audited and insured bank account. Tokens, each of which is equivalent to $ 1, are created and destroyed according to the operations of depositing or withdrawing funds to the wallet. Means of service users are already circulating around the world almost without any difficulty and this is achieved using a software add-on for the Bitcoin network. Despite the fact that Tether dollars (USDT) are still highly dependent on the US government’s guarantee of their value, a combination of Bitcoin and blockchain allows them to be freed from the limitations of traditional payment systems, eliminating such disadvantages as blocking, refund of operations or high commissions on their conduct.

Digital gold

As a natural development of this principle, it is possible to imagine the release of blockchain-tokens, granting the right of partial or full ownership of any product. This was done by the startup DigixDAO , which in the course of an impressively successful company managed to attract $ 5.5 million in just 12 hours. As is the case with Tether, user assets are stored in insured and audited vaults. Tokens act as a unit of measurement for gold (1 unit = 1 ounce) and operate within the blockchain, in this case, based on the Ethereum platform of smart contracts, and not Bitcoin. And since this is a blockchain asset, each unit is very easy to divide, up to 0.001 g or about $ 0.04 at the current price and can be instantly “sent” to anywhere in the world.

These features suggest that gold can now again be used as one of the currencies of daily use, suitable for the 21st century. Senders pay a small commission on each transaction. An interesting peculiarity is connected with this: gold tokens collected in this way gradually accumulate and are distributed proportionally to the accounts of the participants in the crowdfunding campaign who supported the project.

Personal money and means of accumulation

Blockchain allows any company to issue its own currency. It can also take the form of traditional loyalty tokens, which will be traded on the secondary markets due to the open nature of the distributed registries. It is reasonable to assume that such tokens will be circulating as a kind of parallel kind of money, and some of them will even be used outside the networks in which they were issued. However, this principle can also be developed, which was done by the Incent project, which ec crowdfunding will be located on the Waves blockchain .

Due to the universality of Incent as a currency of loyalty, and ensuring its operation by an expanding ecosystem of merchants, the demand for it will lead to an increase in its price whenever the customer makes a purchase. Thus, we get a new variety of this asset class. You can invest in Incent for the subsequent profit, as over time the value of tokens will grow. Alternatively, you can spend it at Incent merchant shops. All this gives customers a number of reasons to truly become interested in a new approach to organizing loyalty programs, which go beyond the usual and widespread incentive schemes.

Reserve currencies of central banks

And finally, we cannot ignore the enormous interest that banks and government bodies show in the technology of distributed registries. A number of countries, including the UK, China, South Korea and Dubai, are investing heavily in the study of the blockchain technology, recognizing all the advantages that it offers in comparison with legacy systems. It is very likely that in the next ten years we will see how central banks will begin to issue currencies based on their own blockchain registries. To get a better idea of ​​how the blockchain can have an impact on the financial sector, read also RegTech . Companies working in this direction create prerequisites for a huge number of new financial solutions and opportunities.

Despite the fact that commercial banks will continue to maintain their role in the creation and provision of a certain part of the money supply, digital currency issued by central banks may become available to everyone. This means that families and companies will be able to get direct access to them, and the current model, according to which the country's main financial regulator distributes its reserves only among financial institutions, will become a thing of the past.