Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => Other Popular Cryptos / Coins => Litecoin Forum => Topic started by: Domithra on April 02, 2018, 06:34:09 AM
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Abra’s primary feature is going to be offering users access to twenty different cryptocurrencies (with more coming in the future) along with fifty fiat currencies. Abra functions through the use of smart contracts to allow investors to gain exposure to other currencies without actually trading for them. A user can fund their account with 200 USD of Litecoin, and then buy exposure to other offered currencies. As the price changes in value, so does the initial investment, tied to a “synthetic currency” that represents the second-party currency without actually being exchanged for. Meaning, if a user were to contract 5 LTC worth of Ripple, and the price of Ripple doubles, that user can now cash out their investment for 10 LTC.
Litecoin plays a role in this process as being the network of choice for Abra smart contracts, in the form of the synthetic currencies, to function on. Originally, Abra was using Bitcoin as the scaffolding for its contracts, but switched to Litecoin’s blockchain for its improved efficiency. From the Abra blog,
“Abra has chosen Litecoin as the primary asset class for our investment platform although we now have the ability to move users between Bitcoin and Litecoin contracts. We chose Litecoin after a long and thorough research process to determine the asset class that met our criterion: secure, safe, scalable on-chain and off-chain, low mining fees.”
Following on the heels of this partnership with Litecoin, Abra’s CEO Bill Barhydt made waves by predicting the coming flood of institutional investors would make “all hell break loose,” in the valuation of cryptocurrency in 2018. While his company is in position to widen the appeal of crypto through app-based portals, it also provides a new avenue for investors and those looking for more advanced mechanics in buying and selling–particularly through the untapped feature of smart contracts.
The presence of Abra could drive up demand for Litecoin, in addition to the other currencies accepted for payment in lieu of a U.S. Bank account, while simultaneously simplifying the process of investing in altcoins. Rather than finding an exchange that offers trades for coins like Ripple, Dash and Stellar, Abra users can gain all of the benefits of price speculation while retaining their initial investment currency. Meaning, there is now incentive for users to retain and transact in one currency, as opposed to the far-flung current method of investing in tens or hundreds of cryptos. This could lead to investors, particularly those new to the market, valuing their portfolio in Litecoin (as most people would USD), thereby opening a long term view of holding and spending the currency as traditional fiat.
Lengthy but worth the reading