Before Bitcoin was invented, countless crypto currency systems were invented. But why did so many crypto currencies fail and only Bitcoin is known to us? In just ten years, Bitcoin has created a market value of hundreds of billions without relying on any centralized company’s operation. If Bitcoin is successful as a crypto currency, does it already represent the best crypto currency solution?
The Emergence of Bitcoin
We should start with CypherPunk. Early CypherPunk members included many IT elites, such as Assange — the founder of WikiLeaks, Bram Cohen — the author of BitTorrent protocol, Tim-Berners Lee — inventor of the World Wide Web, Nick Sabo — who proposed the concept of smart contracts, and Sean Parker — one of the founders of Facebook. Of course, it also includes Satoshi Nakamoto — the inventor of Bitcoin.
Before the birth of Bitcoin, CypherPunk members discussed and invented many crypto currencies and payment systems that ultimately failed. For example, in 1982, eCash invented by David Chaum and e-gold invented by Douglas Jackson. Their failure was attributed to the centralized operating organization. Once the central organization had a problem, the corresponding crypto currency would not exist.
In 1998, a person named Dai Wei created B-Money and proposed for the first time the application of distributed storage technology to crypto currency, clarified the concept of distributed accounting (the ledger), and proposed Proof of Work (PoW) consensus is used to create currency, but unfortunately B-Money was not able to solve the problem of double spending.
Bitcoin solved the double spending problem while inheriting B-Money decentralization and PoW consensus. Bitcoin was the first successful cryptocurrency from CypherPunk.
Looking back, we can see that the fundamental reason for the failure of all cryptocurrencies before Bitcoin is that they cannot achieve two goals: 1) Decentralization and 2) Avoiding double spending at the same time. Bitcoin achieved this through the “blockchain” method, which is the most beautiful thing that Bitcoin has brought to the world’s attention.
Is Bitcoin the Best Crypto Currency Solution?
Bitcoin, which achieves decentralization and avoids double spending, has become the most successful cryptocurrency from CypherPunk and it has continued to be known by people outside CypherPunk. As attention to Bitcoin continues to increase, many are interested in the mechanism that controls the total amount of 21 million coins as well as the halving every four years designed by Satoshi Nakamoto.
People began to compare Bitcoin with fiat money, believing that it is because of the monetary design of Satoshi Nakamoto’s total cap that they avoided the fate of similar fiat currencies being infinitely overissued by the government and devaluation. But because of this, more and more people regard Bitcoin as digital gold and consume it as an investment product rather than currency.
Satoshi Nakamoto did not design any large-scale payment and settlement solutions for Bitcoin. Currently, only 7 transactions per second processing speed makes Bitcoin completely unsuitable for the needs of daily payment and commercial settlement.
Although Bitcoin has succeeded in decentralization and double spending issues as well as obvious price growth, as a crypto currency, its monetary design is far from enough.
Dai Wei, the founder of B-Money, once said:
“This may have been partially my fault because when Satoshi wrote to me asking for comments on his draft paper, I never got back to him. Otherwise perhaps I could have dissuaded him (or them) from the ‘fixed supply of money’ idea.”
Dai Wei did not give more details, but in my opinion, the problem of Bitcoin’s currency is embodied in:
- The upper limit of the total amount. In history, a currency that can realize large-scale payments has no upper limit on its total supply.
- There is no elasticity of supply. Bitcoin supply at a fixed rate of one block every ten minutes and a single currency have affected Bitcoin price big rise and fall. It cannot become a relatively stable currency settlement unit.
If there is no upper limit on the total supply of Bitcoin and the corresponding supplementary elasticity is designed, then Bitcoin is likely to become a crypto currency that can be used for daily payments.
Under the condition of satisfying the currency requirements, there is another characteristic that must be satisfied: Real-time payment. At present, the best solution for real-time payment solution for Bitcoin is the Lightning Network.
However, even if the Lightning Network allows Bitcoin to transfer instantly, users will not pay with Bitcoin because Bitcoin has primarily established itself as a store of value. This is also the fundamental reason why the Lightning Network is not as popular as Bitcoin.
Since Bitcoin has some monetary problems, is there a better crypto currency that can solve Bitcoin’s monetary problems?
Will Hacash be a Better Crypto Currency Solution?
In 2018, a new crypto currency called Hacash was created. The genesis block was mined in February 2019, and the founder of Hacash disappeared mysteriously like Satoshi Nakamoto.
The remaining Chinese white paper answers in detail the goal that Hacash wants to achieve:
A crypto currency system for large-scale payments and real-time settlement.
Reading the white paper, you can find that Hacash is actually a currency, a crypto currency that inherits Bitcoin’s decentralization, PoW, and avoids double spending, while at the same time solves the problem of Bitcoin’s inability to make large-scale payments and the inelastic currency supply.
There are three coins in Hacash’s blockchain ecosystem, ranked by scarcity these three coins are: HACD(Hacash Diamond), BTC(Bitcoin), and HAC(Hacash).
HACD (Hacash Diamond) is indivisible, but it inherits the scarcity of Bitcoin. It is the “store of value” in that it is even more scarce than Bitcoin. Its total amount is limited to only 17 million. And the difficulty of mining each coin will continue to increase as each HACD is minted through mining.
Each diamond is identified by unique 6 letter characters, similar to license plates on your vehicle. Beyond just their scarcity, the “collectability” of entertaining or meaningful combinations of these 6 letter IDs can certainly play a part as a secondary market in their demand.
To obtain diamonds, you need to use HAC to bid. It is no exaggeration to say that one day the computing power required for HACD will rise to the point where it exhausts all the power in the world and minting of HACD will slow to a crawl.
As a non-native currency in Hacash, how does Bitcoin exist on the Hacash blockchain? Due to the same address creation model, Bitcoin can be transferred into Hacash in one direction, generating a certain amount of HAC, and rewarding those early transferers. The bitcoins transferred to the Hacash chain increase the overall value of the Hacash mainnet and generate a certain amount of HAC to maintain the relative stability of the HAC value.
HAC is the first currency produced in Hacash. Unlike Bitcoin, HAC has no upper limit. Its block reward mechanism follows the Fibonacci sequence. Within the first 6 years, block rewards will be 1, 1, 2, 3, 5, 8 per block as determined by block height (details in the whitepaper). Once the block rewards reach 8 HAC per block, the reward will remain at 8 for ten years, and then start to follow the sequence back down 5, 3, 2, 1,1, each block reward period lasting ten years; finally reaching 22 million in 66 years. After that, 1 HAC will be rewarded in each block forever.
If it is compared with Bitcoin’s 4-year halving mechanism for fairness, Bitcoin chose the method of gradually decreasing from 50, while Hacash chose the method of gradually increasing from 1 then decreasing from 1 to ensure better fairness of distribution at the beginning.
At the time when capital interested in crypto currencies was rampant in 2018 and ERC20 tokens continue to appear, a design such as HAC was really rare. This clever design avoids the early intervention of large computing power and capital that would threaten to monopolize the HAC blockchain.
Three currencies of different nature in Hacash: HACD with an upper limit and indivisible, Bitcoin with an upper limit and divisible, and HAC without an upper limit.
The different advantages and disadvantages as well as the complementary characteristics among these 3 currencies on the same blockchain constitute a natural currency system. They constitute a natural, decentralized exchange in the Hacash chain. The combination of these three currencies achieves an issuance mechanism fairer than Bitcoin, and solves the lack of market flexibility caused by Bitcoin’s single currency supply.
Overall, Hacash inherits the core elements of Bitcoin’s non-double-spending and decentralization, while allowing Bitcoin to evolve into a more monetary-use crypto currency through the HAC blockchain.
When Hacash satisfies as currency, it also faces the problem of real-time payment. In Hacash’s white paper, a large section introduces the channel chain settlement network. The channel chain settlement network allows everyone to create a decentralized Paypal, realize the real-time payment of HAC and BTC, and allow for nodes that open the settlement network to obtain corresponding benefits (transaction fees, commission fees, etc).
In addition to inheriting the core technology of Bitcoin and solving the large-scale settlement and monetary issues of Bitcoin, Hacash was also designed for level of equity control that Bitcoin does not have as well as optional privacy protection. These designs seem to point to a greater ambition to promote the large-scale application of crypto currency for individual and business use.
The Current State of Hacash
When I finished this article, the height of the Hacash browser was 169812 which means that a total of 169,812 HAC were mined, and 169812/288 = 589.625 days. It means that Hacash has existed for nearly two years.
I met Hacash in November 2019, I created Hacashpool in July 2020 and started to promote it on Twitter shortly thereafter. Its growth rate is amazing: From 5 miners to close to 250 in these short months. The community is very active, eager to learn and share knowledge. Everyone invested in the equipment within their own capacity to mine. They produced teaching materials and developed tools for everyone to use. This seems to make me feel that Hacash is still in 2010’s Bitcoin. Although not many people know about it, people who know it will like it more and more and recognize its value.
Bitcoin succeeded in making crypto currency familiar to us and pointed out a way for a currency common to all mankind. Hacash will build on the success of Bitcoin to realize the mission large-scale adoption of crypto currency, and thus give birth to a fairer financial system. Because the premise of a fair financial system is to have fair currency.
Looking back on the history of currency, we can find that every emergence of a better currency can led to the new development of human civilization and the explosive growth of the economy. The lucky ones who participated in the currency revolution in the early days became the richest group of people in that era.