Have you ever heard of THORchain? Are you interested in purchasing some but don’t know how to? Please read this article to find out all you need to know about the rune coin (THORchain) and how it works.
What is THORChain?
Thorchain is a blockchain-based system that operates rune, which is an offline cryptocurrency. Thorchain bridges thor tokens to other blockchains, including Ethereum and Bitcoin. It allows any company that issues thor tokens to trade them easily on thorchain’s decentralized exchange (DEX) without running their node.
Due to its nature as a decentralized exchange, thorchain requires no middlemen or third parties. All thor trading happens trustlessly on thorchain’s network of nodes.
Thorchain also uses a verification process to ensure that all nodes behave correctly and do not try to subvert the system for their benefit. Verified node operators must use real-world identity, which THORchain reviews before allocating thor tokens, which come in the form of runes.
How does THORchain work?
First, DEX and similar services allow users to trade cryptocurrencies without the need for a centralized party like an exchange. Instead of allowing all trades to happen on their site, THORchain distributes orders across multiple nodes.
How does THORchain ensure that order matching happens correctly?
Each THORchain node is an order book. These nodes compete to match the desired trades, resulting in the best price for both traders. The THORchain protocol stipulates that THORchain will not be able to gain funds by owning thor tokens themselves. To prevent this, thor tokens are owned by multiple entities across different countries, each following legal requirements for THORchain nodes.
How to buy Rune coins!
To buy, there are two ways. The first is from the exchanges that have listed THOR as a tradable token. This includes ForkDelta and Radar Relay, but they only work for Ethereum.
The second way is to use a decentralized application called Rune-qt or RuneDEX. It is available on GitHub, where users can download it and operate their node that hosts thorchain’s trade platform.
History of THORchain (Rune)
The THORChain project was founded in 2018 under the premise that centralized exchanges are flawed. Non-custodial crypto trading platforms were long-term solutions, so their team built an independent blockchain that they could bridge to external networks for cross-chain transactions like a DEX would do.
Future of Thorchain
Thorchain has a lot of potentials to be the future of cryptocurrency trading. It offers a decentralized exchange for people to trade their tokens without needing to go through an intermediary, which is problematic for many different reasons.
This system will also incentivize node operators by allowing them to set their rates, which allow traders to have autonomy over their success. Thorchain has also taken steps to ensure that it doesn’t have any bias in the market by distributing tokens across many different countries so that no one can take advantage.
One of thorchain’s main goals is to allow for cross-blockchain decentralized trading, which should help it stay relevant in the future even if one particular blockchain becomes more popular.
The official roadmap includes services that are aimed at institutions, including margin trading and lending tokens.
THORChain (Rune) FAQs
What is THOR?
Thor is a decentralized ERC20 token on the Ethereum blockchain, which thorchain will use to transact across blockchains. Its ticker symbol is THOR.
What are the benefits of Thorchain?
It has no limitations in terms of scalability, power consumption, and time latency.
How does Thorchain work?
Thorchain uses Predictive Algorithm to achieve consensus before an honest node is found guilty. Meanwhile, it also has a Multistakeholder Voting mechanism.
Why is it called “Thorchain”?
Because Thor’s Hammer Mjölnir is a good analogy for the consensus mechanism, it only allows those who are worthy of using it.
What is the purpose of using Thorchain?
The principal purpose of using Thorchain is to be used in different organizations and a very versatile manner.
How does Thorchain solve the problem in a decentralized environment?
The Thorchain consensus mechanism is designed to solve the limitations that other blockchains currently face, such as scalability, power consumption, and lagging.
What are thor tokens, and what is their use?
Thor tokens are used on thorchain’s network of decentralized DEX nodes to pay for any activity involving the trading of other cryptocurrencies. This includes setting up nodes, submitting orders, and verifying orders submitted by other nodes.
Thorchain (rune) aims to become the new brownie of the cryptocurrency world by integrating many bitcoin and zcash. Thorchain (rune) uses encryption techniques like ring signatures, range proofs, and dual-key stealth addresses to provide anonymity on transactions. Thorchain (rune) transactions are processed without miners or blocks, meaning they are cheaper and faster than bitcoin transactions.
Thorchain (rune) also solves the data storage problem by providing an immutable ledger on overlays like Interplanetary File System or IPFS in place of a chain of blocks.