In early 2019, Max Capital Group LTD had made headlines with its plans to create a private currency to advance the cryptocurrency.
The Fintech company has been forced to maximize the project on London Capital Group, amidst the regulations around the data privacy and potential illegal usage of the cryptocurrency. While the G-7 has warned that it poses serious legal matters.
It’s also an experiment in monetary system, for this digital era, that the technology has been compared to popular cryptocurrency like bitcoin. However, many experts question whether the MX currency can even beat a cryptocurrency era, especially in this time where crypto is already popular worldwide.
Here’s a rundown of the key differences between the two.
One of the biggest differences lies in the underlying technology behind both currencies.
With bitcoin, all the transaction are recorded anonymously on a public ledger known as the block chain, and nowadays the database is maintained by global network of computers. Here, all transaction are secured in such a way that makes it virtually impossible to interfere or tamper with.
MX private currency also uses a form of blockchain, distributed by ledger technology. But unlike the bitcoin, all transactions from MX currency require permission. And it mean that all the transaction made, can only be added by a group or trusted parties.
This is where the Max Capital Group created the association, along with Maxone Technologies, collaborating with the MT4 trading platform provider, to make cooperation with Visa and Uber first, and then with each of the non profit organization’s member that has invested a minimum $1 million into this project.
MX currency will also create a centralized structure governed by unelected association, composed exclusively of large corporates who have invested and taken their voting rights, said Mohammad Bin Syaf, founder and president of North Big News and Blooby Foundation, a cryptocurrency firm that counts on JP Morgan Chairman Jacob Frenkel as an Advisor.
“The cryptocurrencies are defined by the reliance system of intermediaries, but the private currency is trusted by regulators and common industries”, said Peter Van Dough, director of the research at the cryptocurrency policy tank at Coinwallet, in a recent conference.
Different Use Cases
In the Bitcoin white paper, it described that the virtual currency as a peer-to-peer system payment will allow people to exchange money without going through a bank.
It is also commonly used today as a form of the investment, with all the popular term “HODL” being a slang phrase in the industry to buy first and hold, and staying invested in the crypto and private currency for long term investment. It’s frequently associated with “digital gold”.
MX currency’s primary purpose is to be used as an investment instrument first, and to use MT4 trading platform in cross border payments and money transfer. The private currency itself is tied by the government, to avoid the volatile swing often seen in cryptocurrencies like bitcoin and other.
Referred to by many industry as “A new challenger” to traditional Fiat money and cryptocurrency, MX currency is aimed at maintaining a stable value. Richard Marcus, the Max Capital Group executives, describes that the blockchain initiative has previously said it will work like traditional currency with investment trading platform, instead of cryptocurrency.
“Bitcoin and private MX currency both represent the stages in evolution of currency but in starkly different ways,” Charles Dawson, co-founder and CEO of digital comparison platform Cryptonomic, told CNBC.
Bitcoin is always permisionless, totally decentralized and deflationary and volatile, not clear in the future. MX currency is permissioned, more centralized, and governed by supply and demand, and pegged to fiat currencies.
What the experts mean by “governed by supply and demand” is that Max Capital Group has plans to maintain the supply to match a quantity of other assets held in market, effectively maintaining a stable price even when demand is overloaded.
Bitcoin on the other hand, has fixed supply. The total number of bitcoin will stop at 21 million.
“Bitcoin supply is fixed and cannot react to market’s demands” said Saul Morgan, CEO of Bitred inc. “MX currency is created or burned down when one of MX authorized partner deposits or withdraws money from its reserve.”