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ELI5 What are complementary cryptocurrencies?

Complementary cryptocurrencies are a similar concept to complementary fiat currencies.

They're not standalone cryptos which hold their own value but, as the name suggests, they serve as helpers to the main cryptocurrencies.

Tether USDT

Tether is one example of a complementary cryptocurrency.

Tether value depends on available supply which varies according to its current price. When there's more demand for Tether, there is currency emission to maintain 1:1 parity with the US Dollar. When there's less demand, Tethers are burned to make it more scarce.

ICO / Tokens

Standalone cryptocurrencies can also be considered complementary in some contexts.

For example, in ICO's the initial purchase requires that specific crypto. Ethereum is often used in this context. In this situation, Ethereum is not the main currency, but is only used to guarantee participation in the public offering.

Smart Cities

Some cities and local communities have also adopted their own tokens for local business.

For example, the city of Hull in the UK has its very own token called HullCoin. Citizens of Hull are able to do commerce, buy and sell anything using HullCoin.

In Dubai citizens can also use emCash to buy and sell goods.

In Lewisville, Texas, part of the greater Dallas, a candidate is proposing Blue Coin, a cryptocurrency specifically designed to support local police.

Eurakos is a complementary cryptocurrency developed at the University of Girona, designed to promote local commerce in Spain.

These are just some examples of complementary cryptocurrencies being used in real world situations.

Many more will appear in the near future as more local communities adopt their own cryptocurency.

Charity

Complementary cryptocurrencies can also be developed for charity and humanitarian work. When given proper training, poor communities can leverage cryptocurrencies to develop local businesses and promote development.

By deploying a regional coin, it is possible to avoid the higher fees of the main cryptocurrencies and maintain transaction fee structure low for the local project.

Conclusion

We hope this quick introduction to complementary cryptocurrencies has made the concept clearer.

Local communities, even charities and humanitarian work, can develop and adopt their own cryptocurrency to promote regional development.

Note that major cryptocurrencies, when used in specific situations, can also be considered complementary depending on context.

About the Author
Published by Crypto Bill - Bill is a writer, geek, crypto-curious polyheurist, a dog's best friend and coffee addict. Information security expert, encryption software with interests in P2P networking, decentralized applications (dApps), smart contracts and crypto based payment solutions. Learn More About Us