Ethereum: Is there already an existing closed cash flow loop for the currency BTC?
Ethereum: Is there an already existing loop of closed cash flow for btc currency?
The concept of closed cash flow loops, where production and delivery of goods facilitates digital currencies such as Bitcoin (BTC), has attracted attention in recent years. In this article, we will explore whether there is an existing loop of a closed cash flow for BTC and examine what makes it unique.
What is a closed cash flow loop?
A closed financial flow loop refers to a system in which the production of goods or services is funded by sale of digital currencies such as bitcoin, and the delivery of these goods leaves directly from the customers. In this case, the manufacturer sells his goods at the BTC, which is then delivered to customers in exchange for BTC.
Ethereum’s loop for closed cash flows
Ethereum, the second largest currency of market capitalization, was key to developing the concept of closed financial flow loops. One such example is a platform based in Ethereum, Augur, which allows users to store and deliver goods by ERC-20 tokens. In this system, users can create digital contracts that determine delivery conditions, including the type of goods, price and payment structure.
Another notable example is the use of bitcoin as a loan collateral on decentralized borrowing platforms such as a joint. In these systems, borrings are encouraged to borrow their BTC lenders by receiving interest payments in the form of a new BTC. This creates a closed loop of a cash flow in which the production of the new BTC is funded by selling an old BTC.
Is there an existing loop of closed cash flow for BTC?
Although Augur and the combination of the examples of the system that use bitcoin as collateral, it is not clear whether they are a completely closed loop of cash flow for the entire CRIPTO currency market. However, several factors suggest that there are already existing loops of closed cash flows:
- Existing loops of closed cash flows
: research has shown that certain closed loops of cash flow exist in traditional markets, such as goods trading and currency exchange. For example, a study of economic questions magazine found that a significant proportion of Bitcoin transactions included loops of closed cash flows.
- Decentralized Exchange (DexS) : Dexs like Uniswap and Sushy chancewap allow users to trade ERC-20 tokens, including those supported by BTC. In these systems, users can create digital contracts that determine delivery conditions, which may represent a closed loop of a cash flow for BTC.
- Definitely borrowing platforms : Definite borrowing platforms such as Aave and Makerdao also use BTC as a collateral for loans, creating closed financial flow loops in traditional markets.
Conclusion
Although Ethereum is a closed loop of the cash flow of an interesting concept explored in various systems, it is not clear if there is an existing completely closed loop of cash flow for the entire cryptocurrency market. However, the existence of closed loops of cash flows in traditional markets and decentralized borrowing platforms suggests that a similar system can exist or be in development.
As the adoption and use of cryptocurrencies continues to grow, we will probably see that they appear more complex and sophisticated loops of closed cash flows. One thing is for sure: the future of digital currencies, including Bitcoin, is likely to include the development of new pay systems and financial instruments that take into account the unique characteristics of blockchain technology.