It’s been over a decade since Bitcoin was introduced to global finance. In 2022, newer crypto assets are appearing in the market daily because of the increasing investments into the decentralized finance model Bitcoin brought forth first. While DeFi has come a long way in all these years, the lack of proper business distribution models for cryptocurrencies keeps them from going fully mainstream. Developers focus on what shall be the transaction method, consensus mechanism, blockchain model, etc. but not on how it will be marketed. It is a rather important dilemma to be tackled. In this post, we are going to be discussing cryptocurrencies distribution models in detail.
Introduction to Cryptocurrency Models
Cryptocurrencies have become a stable decentralized medium of encrypted data transfer and transactions. Their growing popularity has also made many developers and coders bring forth new blockchains with advanced functionalities, or fork the existing ones to create newer cryptocurrencies.
Amongst all this, preparing a proper model for a crypto asset’s business distribution is also important. The theme of the asset, who will be regulating it, what community gets benefits, what will be the marketing strategy, etc., are important aspects to look into. The short-term distribution model currently includes one-way transfers, two-way pegs, pre-sales, pre-mines, asset carryovers, etc. The financial aspects work fine with short-term distribution, but the current strategy of relying on crypto mining to let newer people into the crypto space leads to wealth concentration. Thus, a cryptocurrency model that supports wealth distribution and better marketing for the asset are desirable in current situations.
Useful Proof of Work as Distribution: A Relaxed Algorithm
Useful proof of work, in contrast to the traditional proof of work, is a simpler algorithm that removes all the irrelevant and complex computation processes. The built-in computational stack trace mechanism removes the obstacles in the proof of work distribution model. In the useful proof of work model, crypto assets can now be easily mined, which will lead to more flow of new currency into the market. This business model will be able to distribute wealth amongst all the holders, and the new investors coming in as well.
The programming environment in this new model does spot-checking and deposit sacrifices to ensure that the process gets completed with fewer irrelevancies. The algorithm is based on creating a Merkle tree by taking the program’s state after each computational step. This computational process and business model are somewhat tricky and require a lot of experience to handle, but they do have the potential to provide a better cryptocurrency distribution models.