How often do you send a Tikkie to friends or family when you still get money back? It is nowadays one of the most used ways to transfer money in the Netherlands. That’s because it’s so easy to use. You enter an amount and then send the payment link via WhatsApp.
Unfortunately, it is not yet possible to make crypto payments in such an easy way. At least, that may be what you think. Because that is possible with Celo, which is a payment platform that tries to make encrypted payments as easy as possible. It wants to ensure that payments via crypto can be made easier. Watch this video below first.
What is Celo (CELO)?
Celo is a blockchain project that aims to make crypto payments as easy as possible. Instead of having to manage complex encrypted addresses, users can send cryptocurrencies using mobile phone numbers.
Sending the platform’s coins, Celo Dollars, is even possible for users who do not have the Celo app. Users can also send value via WhatsApp. However, in order to access this value, recipients will eventually need to download the app.
When a user opens a Celo account, they associate their phone numbers with a specific address. A cryptographic hash of the phone number is then stored on the blockchain .
Once users connect their mobile phone number to the app, the app sends an invitation code via SMS for users to enter to sync their number. Then the application sends three text messages to verify the synchronization.
It is possible to link multiple phone numbers to the same Celo address. This is useful if, for example, you have an organization.
There is also a cost associated with verifying the phone number. From there, the testnet gives users a small amount of Celo Dollars that they can experiment with. There is a tap that developers and early adopters can use to top up their Celo accounts. These are all testnet tokens that have no real value.
The simplicity of the application has led the CEO of Polychain Capital to describe the project as “the WhatsApp for money”.
Together with Polychain, Celo has attracted an army of notable investors to the project. Coinbase Ventures, Andreessen Horowitz’s, YardCapital and several other well-known investors contributed more than $36.5 million in support.
Including the token offer, Celo’s treasury now contains approximately $46.5 million. Celo co-founder Rene Reinsberg told Crypto Briefing that the proceeds from the latest fundraiser “will be used to fund ongoing development work and community grants that support the ecosystem.”
The team behind the project has an impressive technical and financial background, mostly coming from well-known ICT and internet companies. These are Celo’s key team members:
- Sep Kamvar (co-founder). Sep is also the inventor of a digital reputation system called OwnTrust.
- Rene Reinsberg (co-founder). He and Olszewski sold a machine learning startup to GoDaddy.
- Marek Olszewski (co-founder). He and Reinsberg sold a machine learning startup to GoDaddy.
How does Celo (CELO) work?
Technically, Celo was built using the Ethereum infrastructure and relies on a Proof of Stake (PoS) consensus algorithm . There are validators and nodes that verify transactions and secure the network.
But since Celo focuses on a mobile-first user base, using heavy and expensive validators is problematic. This is also the case with the Ethereum blockchain, for example. The team behind Celo wants to solve this, so that users will not be bothered by this.
Celo’s mobile application also functions as a thin client. Whenever a user makes a payment through the app, the thin client selects the cheapest and most latent full node in the area to confirm its transactions.
As with any blockchain-based network, there are fees associated with transactions. In the Celo system, these fees are included in the transactions sent to the full nodes. Each full node can choose the lowest minimum rate to process the transaction.
The more complete nodes there are, the more efficient the network will be. And when users see that they can make money by running a full node, they too will have an incentive to start a full node.
There is no cost to join the network at this level; you just need to run a node on a computer to start making money.
The validators must be much more robust than the entire group of nodes. This is because the number of validators is limited and also because the validators have much more power in the network. This level of the network is responsible for making protocol changes, performing security checks, and providing hardware and software to keep the network running.
They are paid for these contributions, in the same way as the validators in Tezos and Cosmos . Like these two networks, the Celo validators also have governance properties to help determine the direction of the protocol. Validators that do not act in the best interests of the network will be punished. Here’s an example of how the Celo ecosystem works
The benefits of Celo
Let’s take a look at the benefits of Celo. This will give you a better understanding of what this project is capable of.
First, Celo Dollars (CUSD) help facilitate stable transfer of digital value between users. It is a stable ERC-20 coin backed by reserves and pegged to the price of the US dollar.
Unlike Celo Dollars, there is a fixed supply of CELO. It is in this fixed cryptocurrency that Celo is able to manage price stability as well as much of its managerial operations. Users can create CUSD by sending one dollar from CELO to the Celo Foundation reserve. They can also destroy (burn) CUSD by converting it back into CELO.
Because a fixed stock of CELO is used, this will only benefit the price of the coin. After all, when demand rises and supply remains the same, the price will rise. Therefore, it can be beneficial for investors to get involved early in this project.
CELO users can join the network as a validator or group of validators, and propose and vote on changes to the protocol. They must first send a portion of the CELO to a smart contract where the funds are secured. The events that the users can participate in are also not mutually exclusive.
One can vote on a protocol change and choose a validator using the same locked CELO. Therefore, we can say that Celo has a decentralized governance, which also benefits the entire decentralization of the blockchain. When there is a centralized administration behind a project, the users often have little input.
Users who vote frequently and are active throughout the governance process can get various rewards. The ultimate goal of the network design is to encourage the widest possible participation, regardless of technical knowledge and financial situation.
The many advantages already give a good indication of what kind of project Celo is. Of course there are also disadvantages, as is the case with any crypto project. It is up to you to weigh these disadvantages against the advantages. This way you can determine for yourself whether it is smart to invest in Celo. After all, you want to earn money with your investment.
What is the Alliance for Prosperity?
There are obvious reasons why Celo wants to be one of the first highly secure, mobile-friendly blockchain networks. They focus on improving financial inclusion in traditionally neglected areas of the world. That is why the mobile application plays such an important role in this network.
For the uninitiated, it is well known that many of the world’s poorest regions have turned to the mobile phone to take a technological “leap forward”. For example, while they never knew landlines, cell phones are everywhere. In addition, the value of services offered by mobile devices is increasing every year.
A report by the Global System for Mobile Communications (GSMA) states that in 2018 at least $136 billion worth of transactions was digitized worldwide by mobile money agents. The number of mobile money agents even exceeds that of the commercial banking infrastructure.
To further this mission, the Celo Foundation has established a program called “Alliance for Prosperity”. This group of projects, investment funds and service providers is committed to improving financial conditions where they are needed most.
This alliance has made great strides since its inception, even attracting an audience similar to Facebook ‘s Project Libra. That is why so many comparisons have been made between the two companies.
In short, Celo is one of the most ambitious projects in the cryptocurrency space. It tackles a major societal problem by offering a new technology at scale. The design is built from the bottom up for ease of use and access.
Those interested just need to download the application. If the network catches on, there will be an additional incentive to participate at the full node or even the validator level. With any blockchain-based network, overcoming this critical adoption gap is the ultimate challenge.
How do I buy CELO coins?
Buying CELO coins is anything but tricky. This cryptocurrency is offered on almost every crypto exchange . However, it is not always smart to buy these on just any exchange. This is because of the potential dangers that can come with it.
If you want to buy CELO in a safe way, it is best to use Binance or Bitvavo . Here you also pay the best price for CELO. This is because these two platforms can offer high liquidity. So there are always enough coins that are offered and taken away.
Of course, you can also buy CELO on a decentralized crypto exchange, such as Uniswap or SushiSwap . However, these exchanges are a lot less secure than Binance or Bitvavo. This is because you have to go through more steps here to perform a transaction. The chance that things will go wrong is therefore many times greater. Therefore, it is better not to use this if you are still a beginner.
How can I store CELO?
It is important that a wallet supports CELO before you can store it in it. Fortunately, that is the case for most online wallets. Think of wallets from crypto exchanges such as Binance and Bitvavo. So you can store the coins here quickly and easily. However, this is not the safest way.
If you want to store your CELO in the safest way, it is best to choose a hardware wallet . This is a kind of USB stick that you can disconnect from your computer, and therefore also from the internet. The moment the USB stick is not connected to anything, no one can access the crypto coins in the wallet. Of course you still have to store the wallet in a safe way.
The best-known hardware wallets are Trezor and Ledger. Both have proven themselves among crypto traders and can be considered safe.
Making crypto payments should be a lot easier. Especially now that it is possible to make payments via Celo, where you can simply use a telephone number. No more difficult and long wallet addresses, which causes headaches for many people.
Still, it’s still a fairly new project that doesn’t have a lot of fame. Therefore it will have to prove itself. And it is not certain whether this will work. However, this also offers many opportunities. An unknown project often has a lot of potential growth in it. That means that if you act early, you can make nice profits.
However, you will always have to do your own research into a project before investing money in it. You can do this through a fundamental or technical analysis . Good luck!
Thanh Lanh Tran(1989) is Chief Editor from BitcoinUSD.com