Self-Actualisation in Blockchain Technology: How Does it Implement to The Crypto World
The blockchain landscape has evolved since the early Bitcoin era where hobbyists enjoyed the newness of integrated cryptography. Nowadays, developers are churning more and more facets of this technology—addressing real and virtual-world issues and bringing innovation to outdated industries. In the cryptocurrency sphere, self-actualising technology is a popular integration to coins pegged to an external asset, like stablecoins. Here’s what you need to know about how they’re seamlessly fused into the cryptocurrency ecosystem.
How Smart Contract Blockchains Changed Tech?
Out of all things blockchains can offer, smart contracts are some of the most revolutionary inventions to enter the programming world. Ethereum (ETH) spearheaded their use by integrating them into the network, allowing decentralised apps (dApps) to flood the market. Smart contracts operate through if-then actions, essentially allowing an automatic response to a trigger. For instance, in eCommerce, if a customer were to click “receive,” then the withheld payment will automatically be released to the seller. With no middlemen in between, the entire process is decentralised.
This Technology Is Necessary For Achieving Self-Actualisation.
Self-actualisation occurs when a cryptocurrency pegged to an external source is automatically deducted in conjunction with each sold coin. For instance, if Crypto A was pegged to the US dollar in a 1:1 ratio, every time an investor purchases Crypto A from a marketplace, the same amount in US dollars is deducted from the reserve. In short, it’s an automatic deduction of funds so that the fiat reserve is being reduced along with the supply of coins, ensuring that all assets are accounted for.
This process is enabled by smart contracts, which automate the self-actualising process, allowing the workflow to remain decentralised throughout its lifetime. That way, there would be no issues of middlemen tampering with the funds or making miscalculations.
Self-Actualising Cryptocurrencies
Generally, stablecoins like Tether (UDST) and USD Coin (USDC) are known to be self-actualising, as their reserve pool adjusts to the number of tokens in circulation. A newer form of cryptocurrency, anchored coins, is also implementing this technology. TPR Crypto is an example of a self-actualising anchored coin—while its value is pegged to the highest price of gold, it’s backed by a reserve of fiat USD. Every time a TPR is purchased from an exchange, the equivalent in USD is automatically withdrawn from the pool of funds.
Think of it as a stabilising property: as every asset is accounted for, there are no conflicts concerning the reserve’s ability to match the number of tokens in circulation and storage.
But How Is The Changing Supply Of Coins Accounted For?
Blockchains employ various supply algorithms to lightly control the market supply—a necessary protocol in ensuring that there isn’t a huge excess or deficit in tokens. Bitcoin has a maximum supply of 21 million coins, which are minable through the Proof-of-Work algorithm.
In contrast, some stablecoins and anchored coins like TPR use a non-collateralised algorithm, wherein coins are gradually rolled out based on supply and demand. If there isn’t a huge demand, then the network will automatically reduce the coins released on a schedule. If activity and demand are high, then more coins will be put in circulation. Unlike XRP, wherein Ripple controls the number of coins released, smart contracts allow the token release process to be completely decentralised.
Expanding Blockchain Use Cases
A benefit to self-actualisation is its ability to expand the use cases of blockchain technology. As it essentially ensures stability—by adapting to the movement and value of the tokens—it reassures the market that liquidity is occurring both online and offline. This makes the token highly usable in real-world transactions. With no risk of volatility and the assurance that every asset is accounted for, its primary value proposition involves shifting physical fiat funds to the digital realm.
Self-actualising tokens have a special place in the cryptocurrency ecosystem. Apart from being usable in peer-to-peer transactions, they also offer a hedge against the volatile market. Investors can convert their volatile currencies (BTC, ETH, etc) for USDT or TPR to stay within the crypto sphere—withdrawing to fiat can take time—as the market undergoes a fast, unfavourable plunge.
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