Thursday, 9 January 2014

World Coin





Making the case for Worldcoin as the next big Cryptocurrency


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The past few months have seen a large spike in interest over altcoins (cryptocurrencies that are not Bitcoin), many coins have seen pump and dumps and extreme volatility. Rather than becoming a deterrent, the almost violent movements in the coin markets have drawn in many players in what can be described as the “Wild West of Investments”.
The amount of mudslinging occurring during this period has made it hard for newcomers to sift the good coins from the bad. The following is both the reasoning for my support of Worldcoin and the factors that I think will help make a Cryptocurrency successful in the long term.

Liquidity:

Being able to move your money in and out of a currency is important. This is something that all cryptos are having trouble with, especially with larger amounts. Anti-money laundering and fraud regulations have made purchasing cryptos painful at times even with large USD-BTC exchanges in existence.
Having an exchange that allows you to withdraw from your bank is a huge advantage; though almost all of these exchanges are for btc. An exemption is Scharmbeck, which is a USD to WDC exchange currently in beta and scheduled to be public in February. This service offers WDC a huge advantage over other altcoins. The service tiers themselves work on a verification system, once you’re deemed to be a trusted client transfers happen almost instantaneously, which is a 1up over some BTC exchanges.

Speed:

This is probably the most underestimated and important attribute of a cryptocurrency. Sending btc to another address is already much quicker than traditional methods like wire transfers. However, to really move into mainstream business, speed will be a must. I’ve heard many try to dismiss this concern by saying that most businesses won’t need to wait for the confirmations but I’ll address this mindset later on. In my opinion, many mainstream, quick transaction businesses will be very reluctant to deal with payments without waiting for the confirmations or even 1 confirmation.
I really think that people underestimate the concerns of bricks and mortar businesses such as fast food joints, grocery shops and big box stores. I’m sure a coffee house isn’t too worried about a $4 dollar purchase and online stores have all the time in world to wait for confirmations until they start processing your order. The problems will start to show when you have busy lineups of shoppers paying for their groceries, where undoubtedly the level of trust will be broken by a few bad apples who want to scam the system. I don’t think at that point grocery stores will want to wait for minutes on end to see if a person really did send their payment. Time is money, it’s an age old saying and it’s very applicable to cryptocurrencies.
In a low volume, high trust environment everything seems okay, but when you turn up the frequency I think you will start running into some serious issues with btc’s 10 minute block target. This where I think WDC’s 30 second target is a huge advantage.

Business Practicality:

Continuing on from my last point, features like high speed are a bonus when trying to bring digital payment into the mainstream. Liquidity is also another factor that plays into this. From what I’ve noticed from the Worldcoin Foundation is that they’re very business oriented which will obviously work in their favor as I think cryptocurrencies will succeed more as a payment system rather than as an investment. The Scharmbeck exchange was actually the brainchild of the foundation, one of the many indicators that early supporters and creators are pushing for long-term infrastructure and not merely hyping investment.

Brand Image:

Human psychology plays a big role in the development of our world, things that are better can be beat out by an inferior rival that has a superior marketing plan. It’s a sad reality but it’s true. A lot of products/services are great but have been ignored/passed by because of a lack of information or understanding communicated to the viewer. This is a problem enduring by most cryptocurrencies including Bitcoin; there have been many complaints that “simple and clear” information for newcomers is a little complex and murky. Compared to most cryptocurrencies, WDC seems to have a plan of where it’s going and the website is fairly clear about its attributes/distinctions.
Another factor is the number of coins. I’ve heard this dismissed over and over because bitcoin is divisible. The fact is that human psychology doesn’t always care, a smaller number of coins is always going to be a deterrent to some if not many newcomers. I am one of those people that wish sites and wallets would price in micro btc instead of btc. A larger amount of currency is an advantage to overcoming some barriers though some crypto’s have a lot more than btc and wdc.
Some other noteworthy advantages: Scrypt algorithm helping to slow centralization of mining, miniscule amount of pre-mining (40k out 256m+), a very positive, motivated and polite(relatively speaking) community and known developers.

My Concern with BTC

I stated out with BTC early in 2013, I love the community and I’ve made some great friends but one thing that has really started to bother me more and more is the dismissive attitude from some in the community. BTC, like WDC is not perfect, it has its share of problems that are occurring or going to occur. I have been really disappointed in the writing off of some issues such as transaction speed or centralization. Excuses like “businesses won’t care” are not valid in my eyes because there are many businesses who obviously do care about things such as transaction speeds, this is something that needs to be addressed. Growing problems like ghash.io large mining power and possibility for manipulation are a big concern.
Just because things like the “high” price of btc being a turn-off may seem stupid doesn’t mean that they are not a problem! I think people need to take a step back and try to look at the world from other people’s perspective. Early adopters may have had similar mindsets but the rest of world contains people with varying technical skills, trust levels and patience.
BTC has a huge first mover advantage in the cryptocurrency sphere, my prediction is that it will grow in popularity in 2014; but the world is always craving for better and faster things and I think WDC is likely to satisfy some of that hunger.








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