More than a decade after its launch, bitcoin has so far failed in its original objective of establishing itself as a suitable substitute that fully fulfills the functions of money. Lacking intrinsic economic value, crypto prices are inherently volatile, as they are tied exclusively to the fluctuations of their demand—the opposite of what one would expect of a good unit of account.
Unsurprisingly, then, cryptos have so far failed to play a significant role as a reliable means of payment—with the exception of informal, illegal, or criminal transactions—leaving them as a vehicle for die-hard speculators, herd investors, and institutional asset managers belatedly lured by their alleged diversification advantages, if not just by FOMO-inducing hype. Cryptozoo: Beyond bitcoin A priori, stablecoins are in a different class altogether, their main purpose being precisely to overcome the intractable volatility of conventional cryptocurrencies.
Stablecoins come in two types. Two conditions are needed for the scheme to work. The first one is fairly obvious: There are no substitutes for actual reserve assets, the backing should be real and easily verifiable. Treasurys, with the rest comprised of assets that could rapidly lose value under financial stress. The second condition is more subtle and technical: Stablecoin deposits cannot be on-lent. Stablecoins are mainly used as a vehicle currency to support a wide range of endogamic DeFi products and services , posting collateral for other crypto operations or as insurance against hackers, lost keys, smart contract failures, and other cyber mishaps, without much contact with the real economy.
Add to that the absurd valuations, the endogamic trading prone to contagion and domino effects, the need of protection of small investors unfamiliar with the risks of opaque assets, the information gaps and the unclear legal status of crypto assets, and the lack of a liquidity backstop, and one starts to see why central banks around the globe have started to take the crypto revolution as a challenge to financial stability.
While this has led some observers to argue that stablecoins should be banned altogether, central banks have so far adopted a more nuanced two-way response, requiring that they be properly regulated —and throwing their own central bank digital currency CBDC into the mix. Is this a new crypto-related fad, or the future of digital payments?
In late , Wright had the idea to make a blockchain that only old and dated computers could use to mine. This could eliminate centralized mining by de-incentivizing large-scale mining operations, and honor the original vision of crypto pioneers. Known for being one of the first large-scale Bitcoin miners, Long has a large team of blockchain developers who have built over 50 successful blockchain projects.
Bad Crypto shared the idea with Long and challenged his team to create it. With the goal of making BADcoin a solution to the problem of centralized mining, they have built a multichain blockchain that is the hybrid of five blockchain algorithms. The kind of device you use to connect to the mining pool will determine which of the five algorithms you connect to.
BADcoin is fast. Anyone can mine it from any computer or smartphone that can connect to the internet. Bad Crypto has learned that a third party intends to set up the BADcoin Foundation to be the custodian of the blockchain. The foundation will help continue and encourage development on the project, market the project, and assist in getting listed on exchanges.
However, no one owns the BADcoin protocol. Anyone can build upon it and make it even better for the community.
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