Home to a wealth of investment and cryptocurrency products, most users know Crypto.com for its exchange, wallet and cryptocurrency-backed credit card services. However, many users may not be aware that Crypto.com also started its own blockchain, Cronos, powered by the CRO asset.
CRO is the native coin of Cronos, an open-source, decentralized blockchain developed to make payments faster and less expensive.
If you’re interested in learning more about the technology behind CRO and its potential future role as a payment system, our beginner’s guide is an excellent place to start. We’ll introduce you to the basics of blockchain technology and how CRO’s new platform will aim to solve some of the largest problems currently facing the Bitcoin blockchain structure. We’ll also teach you a little more about how you can add CRO to your cryptocurrency investment portfolio.
What is CRO?
CRO is the native token of the Cronos blockchain. Although CRO was originally developed as an ERC-20 token (meaning that it was built using the Ethereum network), Crypto.com Chain has recently announced the launch of its own public, open-source blockchain. If you previously owned CRO’s ERC-20 variant, Crypto.com Chain provides a custom Token Migration Web Tool that allows you to transfer your current ERC-20 tokens onto the new chain.
Crypto.com Coin (CRO) is a native token that powers the full suite of services offered by Crypto.com.
CRO powers the Cronos Chain, which allows you to use cryptocurrency to pay more online merchants when compared to current options. CRO acts as an intermediary currency, allowing you to convert your cryptocurrencies into fiat counterparts at a much-reduced cost. Cronos aims to provide a more affordable and accessible way to pay for online purchases using cryptocurrencies while also offering solutions for traditional problems associated with scaling Bitcoin.
Scaling is a major problem preventing the wider integration of blockchain technology. “Scalability” refers to a blockchain’s ability to cope with a large influx of transactions that occur on the blockchain simultaneously. If a blockchain isn’t optimized for scalability, users who initiate transactions beyond the blockchain’s threshold will remain in a queue. Those who paid the largest amount in commission retain first place in the queue.
Cronos aims to provide a solution to the problem of scalability by offering immediate payment confirmations while also supporting scaling in line with an increasing number of transactions. The target confirmation time of Crypto.com Chain is less than 1 second, and the platform promises to support more than 50,000 transactions per second when the implementation of the testnet is completed.
Benefits of CRO
The Cronos chain and its token, CRO, aim to solve a number of problems traditionally associated with widespread blockchain implementation, including:
- Instant transactions and lower fees: CRO’s primary goal is to support a faster payment network by introducing scaling solutions that increase as transaction load increases. In its final form, Cronos Chain plans to support about 50,000 transactions per second — significantly more transactions than are comfortably possible on Bitcoin’s blockchain.
- Enhanced support for merchants: Developers behind Crypto.com have taken steps to make CRO blockchain integration easier. The company has recently released its dedicated software development kit (SDK) for merchants to integrate the CRO blockchain solutions with a lower bar of technical prerequisite knowledge.
- Crypto.com Chain uses decentralized technology: Like many emerging solutions in the realm of decentralized finance (DiFi), CRO avoids using a single point of failure by spreading confirmations across a network of computers when verifying transactions. This makes CRO significantly more difficult to target in hacks and theft attempts when compared to payment systems that rely on a central 3rd party.
Blockchain Structure Definition and Functions
Though understanding blockchain technology might seem impossible at first glance, the truth is that all blockchains work in a relatively similar, straightforward manner.
At its most basic level, a blockchain is a shared, permanent database. For example, when you send Bitcoin from 1 wallet address to another, a record of your transaction is permanently recorded on the blockchain. Transactions are grouped into blocks every 10 minutes, then secured and added to the chain by the miners. Every user has access to the public blockchain records, and recording is necessary to prevent “double-spending” (sending the same asset to multiple wallets before a transaction is able to clear).
Blockchain technology provides users with a more effective and efficient way to transmit value and information — especially when used in conjunction with self-executing smart contracts.
History of CRO (crypto.com)
Founded in 2016, Crypto.com is a Hong Kong-based project that aims to introduce a wide range of use cases for blockchain technology. The platform is best known for its suite of practical cryptocurrency applications, which range from exchange to crypto-backed loan creation. Today, Crypto.com services more than 90 countries and maintains a worldwide user base of more than 10 million customers, investors and merchants.
Security and Node Types
Crypto.com Chain uses 2 types of nodes to ensure user security and safety.
- Council nodes: Also referred to as “validator nodes,” council nodes are used for transaction settlements, reading important network data and verifying all transactions made on the network. The Chain’s council nodes run on Tendermint’s BFT consensus mechanism and are generally responsible for platform governance.
- Community nodes: Community nodes (also referred to as “full nodes'') can be used by any member of the Chain. Community nodes can be used to settle one's own transactions, read data on the network or verify send and receive transactions.
Participants on Crypto.com
While open for public consensus, the Cronos Chain uses 4 distinct roles for participants on its network:
- Customers: Customers on the chain can use the network to make payments using cryptocurrencies. The structure of the chain’s blockchain allows for anonymous transactions.
- Merchants: The role of merchants on the chain is to accept payments in cryptocurrencies for the services and products they provide. The requirements to become a merchant on the chain are flexible in terms of both base fiat currency and cryptocurrencies accepted.
- Crypto customer acquirers: Customer acquirers manage the network’s crypto payments and are responsible for facilitating transactions on the chain. To qualify as an acquirer, a user must have a set amount of CRO locked up as collateral.
- Merchant Acquirers: Similar to customer acquirers, merchant acquirers manage transactions initiated from the side of merchants on the network. Merchant acquirers must also meet CRO minimums in the form of collateral.
Acting as the native token for the Cronos Chain, CRO, is primarily used as an intermediary currency settlement tool. All users on the chain will need to fund block transaction fees using CRO, and tokens can be earned as rewards for processing and verifying transactions on the network.
Continuing Research Into CRO
Performing your own due diligence is a must before making any type of cryptocurrency or traditional investment. When researching CRO, be sure that you’re reading about the blockchain project and not contract research organizations, which also tend to be abbreviated “CRO.” As is the case with any crypto investment, you should also set a strict budget when making your first purchase.
Frequently Asked Questions
How do you get CRO on Crypto.com?
You can get CRO from multiple sources on Crypto.com. You can purchase the tokens using the same method as you use to buy any other cryptocurrency, you can earn rewards when you stake your tokens or you can receive cashback in CRO when you use CRO to pay fees while trading.
Is CRO a good investment?
If you’re interested in the technology behind CRO, you may want to add this token to your portfolio. Be sure to perform plenty of research before you invest.
Does Crypto.com report to IRS?
Yes. Any CRO that you earn through Crypto.com will be reported to the IRS, as well as a record of any realized gains you’ve seen on your cryptocurrency investments. Thankfully, Crypto.com now offers its own tax client to make crypto tax reporting a little more manageable.
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About Sarah Horvath
Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.