Digital assets are becoming a crucial medium of exchange for global commerce. However, the high cost of the transaction is limiting their universal acceptance. In simpler terms - currently, cryptocurrencies cannot be used to buy any kind of goods. The reason? BTC or Bitcoin transactions can take a long time to get confirmed. There are also risks of double-spend or chain org that can result in loss of money transferred. Furthermore, in the case of cryptocurrencies, the permanency of the transaction depends on the number of confirmations the receiver waits for. Therefore the amount of time required to finalise the transaction also increases.
However, this may not be practical in real-life situations like making merchant payments where speed is of the essence. This trade-off between speed and security is one of the primary challenges of using cryptocurrencies in real-world scenarios. This is where the Amp token comes into the picture.
AMP is based on ERC20 (an Etherum token) that’s used as collateral in the Flexa network. Amp cryptocurrency was launched in September 2020 to solve these two problems. Amp tokens were built in collaboration by Flexa and ConsenSys. It is an Ethereum based staking platform created to support the instant and verifiable collateralisation of any type of digital transfer of monetary nature.
How Amp Tokens Work
Amp serves as collateral for asset transfers. It provides speed and security to the transactions. To simplify further, the Amp token serves as a universal clearing layer and speeds up transfers by unlocking assets. These transactions would have otherwise required waiting for confirmations before they were shown at the receiver’s end. When Amp is used as collateral, it guarantees the value of transfers and their final settlement.
How? A collateral manager holds Amp in escrow. After the transaction is completely settled, the Amp collateral is released and made available for the collateralisation of other transfers. Amp tokens act as Decentralized collateral and can immediately sanction all merchant payments without the interruption or dependence on external protocols and network participants. Amp tokens act as the cryptocurrency collateral that decentralises risk within the network.
While accepting payments via Flexa using Amp, merchants usually pay a minimal fee of 1% (which is lower than other merchants’ fees). In case the merchant faces an issue like double payment, Flexa network reimburses the merchant. How do investors in Amp benefit?
- Investors can buy and stake Amp. These tokens can act as collateral against any loss. If the merchant does not receive the payment, the stakes Amp tokens are used as collateral against the loss by liquidating them.
Amp Token Price and the Future
Launched in September 2020, $42 Billion of Amp token is currently in supply. Since its launch, the Amp Price has increased by more than 430%. In our recent article, we outlined how Amp coin price has appreciated in the past year. Looking at the year-long trend, the future of Amp tokens looks promising. Amp will play an important role in making cryptocurrencies a universal mode of payment.
At Zebpay, one of the best cryptocurrency exchanges available in 162 countries, you can buy and sell Bitcoin, Ether, and other cryptocurrencies, and we recently launched Amp Tokens too. Buy Amp Tokens on our platform and start your crypto coin trading journey today.
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