Cryptocurrency Evaluation

First generation

1. Bitcoin

Characteristics

• Decentralized
• Incorruptible ledger

Second generation

1. Ethereum

Characteristics

• Tokenize anything quickly. E.g. real world assets could be tokenized to represent a value on Ethereum network
• Application level projects don’t have to manage their own security

Third generation

1. Uniswap
2. Aave
3. Chainlink(oracle)

Characteristics

• Defi instruments (e.g. interest, deposits, lending, derivatives)
• External data (weather, insurance)

Oracles

Oracles create definitie truth that bridges the real world to the blockchain(crypto world). Oracles are necessary because without oracles, blockchains cannot communicate to the outside world. Blockhains can only talk to each other and transfer values through tokens.

• Real world data can include
• Weather data for insurance purposes that farmers can use
• Goods arrival at a destination

Oracles can scale based on demand and oracle security can be increased based on the total values being used. Oracles can also be used by decentralized entities by centralized systems(web applications) that need a definitive truth.