Cryptocurrencies do not all work the same way
Cryptocurrencies do not all work the same way. Many differences will exist between the crypto currencies and each will try to diversify at its launch in order to answer existing problems
In addition to the sector of activity and the use cases to which they seek to respond, crypto currencies will also differentiate in terms of their mechanism for validating transactions on their network.
Thus, Bitcoin, which is the iconic crypto currency, has a transaction validation based on the Proof of Work (Proof of Work) mechanism. It is a very resource-intensive and therefore energy-consuming mechanism. This is clearly a problem for the Bitcoin Blockchain and its future. Some even say that it is the Achilles heel of Bitcoin as explained in the following article: Is the need for electricity of Bitcoin his Achilles heel?
Faced with this issue, crypto currencies have emerged based on the Proof of Stake (Proof of Stake) mechanism to ensure the validation of their transactions. Proof of Issue allows in particular to solve the energy consumption problems of the Proof of Work mechanism. Of course, it does not only have advantages but it already brings a better in this very precise field.
Other crypto currencies have made the choice to launch relying on the DAG (Acyclic oriented graphs in French) for the heart of their network. For some, the DAGs would even be the next generation of Blockchain and should therefore be watched closely. IOTA cryptocurrency is for example the most advanced representative in the field of DAGs.
On the other hand, some crypto currencies will differentiate themselves by an innovative architecture trying to take advantage of the experience gained and the errors made by other cryptocurrencies. This is how Cardano was launched with a layered architecture that clearly separates the transaction accounting part of the smart contracts and decentralized applications part. This change of architecture highlighted the concept of 3rd generation crypto currencies for which Cardano is in the forefront. It must also allow to reach a higher level of scalability in order to be able to validate ever more transactions per second.
Finally, crypto currencies will differentiate by offering additional features to what exists. This is how Ethereum added the concept of decentralized applications and smart contracts when it was created. This was a major development compared to Bitcoin which is content to offer financial transactions in the current state.