User:ThePiachu/Crypto 2.0

Crypto 2.0

Crypto 2.0 systems (or second generation cryptocurrency system, Bitcoin 2.0) is a type of cryptocurrency network that allows its users to create and transact in any number of currencies, in contrast to only one currency supported by the first generation cryptocurrency systems such as Bitcoin. Many Crypto 2.0 systems also offer a number of other features, such as built-in crowdsales, turing-complete scripting, distributed exchange services and many more.

History

LETS (https://en.wikipedia.org/wiki/Local_exchange_trading_system) is an early predecessor of the modern Crypto 2.0 systems dating back to 1983. The LETSystem allowed its users to trade with one another by issuing interest-free lines of credit to each other.

The concept was later refined in 2004 by Ryan Fugger in his Ripple system (https://en.wikipedia.org/wiki/Ripple_%28payment_protocol%29) (sometimes referred to as RipplePay or Ripple Classic to distinguish from the later Ripple system developed by Ripple Labs). It allowed for similar trust-credit relationships to be established as in LETS, but on a distributed network.

Notable Crypto 2.0 systems

Colored Coins

Colored Coins are one of the simplest implementation of a Crypto 2.0 system. They assign a given Bitcoin transaction output a "color", marking it as representing a currency or other form of asset. If that transaction is then spent, the outputs represent the movement of ownership of that currency. There are some special rules for handling mixing of transactions with different or no colors.

http://coloredcoins.org/

https://en.bitcoin.it/wiki/Colored_Coins

Mastercoin / Omni

Mastercoin (now rebranded to Omni) is one of the most popular Crypto 2.0 systems using the Bitcoin blockchain for storing transaction data.

Most notable projects that released tokens on Mastercoin:

• MaidSafe (http://maidsafe.net/)
• Tether (https://tether.to/)

http://www.omnilayer.org/

Counterparty

Counterparty is the second most popular Crypto 2.0 platform built on top of the Bitcoin blockchain.

Counterparty is notable for initially releasing its tokens through a proof-of-burn. In order to get XCP, users would need to send bitcoins to a provably unspendable Bitcoin address.

Most notable projects that released tokens on Counterparty:

• Lets Talk Bitcoin (http://ltbcoin.com/)
• Swarm (http://www.swarmcorp.com/)

NXT

NXT is a standalone Crypto 2.0 platform that has a lot of additional features. The network has integrated:

• Messaging
• DNS
• Betting
• A distributed marketplace

New NXT blocks are created through the use of proof-of-stake algorithm.

http://nxter.org/

Ripple

Ripple is one of the first modern Crypto 2.0 systems released. It allows its users to create IOUs through a trust-debt mechanic. Unlike Ripple Classic or LETS that focused on building a distributed web of trust between users, Ripple is focused on creating a decentralized network of gateways.

Most notable Ripple gateways:

• BitStamp
• SnapSwap
• BTC2Ripple

Ethereum

Ethereum is the first Crypto 2.0 platform to focus on implementing a turing-complete scripting language. Instead of having dedicated code for allowing users to create new tokens or IOUs, the system will allow anyone to code those components in.

http://ethereum.org/

BitShares

BitShares (formerly known as BitSharesX), is a Crypto 2.0 platform that allows its users to create counterparty-less tokens denominated in gold, USD and other currencies trough shorting. Those tokens would not have a central issuer, and thus would be immune from a central point of failure.

BitShares' blocks are created using a decentralized-proof-of-stake algorithm.

http://bitshares.org/

Open Transactions

Open Transactions is a spiritual successor to LETS. It is the only notable Crypto 2.0 system without a blockchain (transactions are not stored in a public, distributed ledger). Instead, transactions are validated and confirmed by notary servers.

http://opentransactions.org/

External links

• Crypto 2.0 Comparison Chart