Author: Edith M.

Edith is an investment writer, trader, and personal finance coach specializing in investments advice around the fintech niche. Her fields of expertise include stocks, commodities, forex, indices, bonds, and cryptocurrency investments.

Categories
Cryptocurrencies

All You Need to Know About USDC 

The idea behind Bitcoin, the first cryptocurrency, was a digital currency that could facilitate payments in a peer-to-peer, secure, trustless, and decentralized environment. But Satoshi Nakamoto probably hadn’t foreseen the extreme volatility that would be associated with Bitcoin and indeed the entire crypto market.

The idea behind Bitcoin, the first cryptocurrency, was a digital currency that could facilitate payments in a peer-to-peer, secure, trustless, and decentralized environment. But Satoshi Nakamoto probably hadn’t foreseen the extreme volatility that would be associated with Bitcoin and indeed the entire crypto market.

The idea behind Bitcoin, the first cryptocurrency, was a digital currency that could facilitate payments in a peer-to-peer, secure, trustless, and decentralized environment. But Satoshi Nakamoto probably hadn’t foreseen the extreme volatility that would be associated with Bitcoin and indeed the entire crypto market.

The unpredictable nature of cryptocurrencies has made them best suited for speculative investment and trading, and ill-suited for day to day transactions – the original vision.

Stablecoins have been proposed as the solution to this – users can have the best of both Fiat and cryptocurrency. USDC, a Circle company creation, is one of the stablecoins that are adding value to users by providing a secure, predictable, and reliable cryptocurrency.

What are Stablecoins?

Stablecoins are a class of cryptocurrencies whose value is backed by an external asset. The idea behind stablecoins is to offer the price stability of Fiat currency while preserving the security and privacy offered by cryptocurrencies. A stablecoin can be pegged to a Fiat currency, another crypto asset, or a commodity. Other stablecoins mitigate volatility by controlling supply, much like central banks control the supply of natural currencies.

Ideally, a currency should possess the ability to be used for everyday transactions, including payments. But the extremely volatile nature of cryptocurrencies renders them unsuitable for such everyday use. For example, would you buy pizza today with Bitcoin Cash coins, not knowing if their value will increase tomorrow? In the same vein, would a merchant accept payment via the same coins, while knowing their value might drop the same day?

Stablecoins step in to solve this problem. Via these coins, users can transact with the confidence that the currency value is not going to be knocked tomorrow, and that their transactions are safe and private.

What is USD Coin?

USD Coin (USDC) is a stablecoin that’s pegged to the US dollar. Launched in September 2018, it’s based on the Ethereum network, and it’s an alternative to other stablecoins that are also backed by the US dollar, such as Stellar and TrueUSD (TUSD). USDC was launched as a collaboration between Circle, a peer-to-peer payments company, and Coinbase, the crypto exchange company.

How does USDC Work?

Every USD coin is backed by a US dollar, and tokenization is the process by which US dollars are turned into USD tokens. This process involves three steps:

  1. A user sends US dollars to the token holder/issuer.
  2. The token holder utilizes a smart contract to create USD coins equivalent to the amount of US dollars.
  3. The issuer sends the USDC to the user while keeping the US dollars in a reserve.

The process of redeeming USDC for USD is not very different:

  1. A user sends a request to the USDC issuer to redeem an equivalent amount in USD for USDC tokens.
  2. Issuer sends a request to the USDC smart contract to exchange the tokens for an equivalent amount in USD
  3. Issuer sends the USD to the user’s bank account. The user receives the sent amount, exclusive of all transaction fees.

Issuers of USDC are required to maintain and provide full disclosure of the reserve and liaise with financial institutions to maintain full reserves of the USD dollar.

How to Use USD coin

USDC is an ERC20 token, and hence it’s compatible with any ERC20-compliant application.  To get started on the Circle USDC platform, you need to sign up for an account and link it with your bank account. This allows you to do any of the following:

  • Tokenize US dollars
  • Redeem USD coins
  • Send and receive USDC to/from any Ethereum wallet address

It’s free to tokenize USD and redeem USDC. However, you will be charged a $50 fee for any erroneous or rejected bank transfers.

The minimum amount of USD coins you can redeem is 100, but you can tokenize as many US dollars as you want. Both transactions only take place on business days.

How Does USDC Differ from Other Stablecoins?

In order to identify which category of stablecoins USDC belongs to, we need to first identify the four categories of stablecoins:

i) Fiat-collateralized: these are stablecoins that are backed by Fiat currency, and are centralized by nature. Examples include Tether (USDT), Gemini Dollar (GUSD), and Paxos Standard Token (PAX).

ii) Crypto-collateralized: these are stablecoins that are backed by crypto assets. Examples include Makercoin (MKR) and Havven (HAV)

iii) Algorithmic non-collateralized: these are stablecoins that rely on a mechanically-generated algorithm that changes the supply of the token if need be so that the price remains stable in a volatile market. These stablecoins are modeled after how central banks regulate national currencies. Examples include Basis and Kowala.

iv) Hybrid: these are stablecoins whose model combines any of the above approaches. An example project is Carbon. 

USDC falls in the first category of stablecoins. Generally, these stablecoins differ only subtly in structure or governance, but the idea remains the same: the backing by a real-life asset or value.

Tokenomics of USDC

As of April 3, 2020, USDC is trading at $1, with a market cap of $690, 167, 043, and a 24-hour volume of $1, 066, 065, 241. Its circulating supply is a total of 688, 989, 269. USDC’s total supply is 694, 228, 227. The coin is also #18 in market cap.

 Where to Buy and Store USDC

USD Coin can be purchased from any of several popular exchanges, including Coinbase, Coinbase Pro, Binance, OKEx, Kucoin, Binance, CoinEx, Poloniex, and so on.

Some exchanges will let you buy directly with Fiat, while in other exchanges, you will need to exchange Fiat for crypto and then exchange it for USDC. Some common pairs include BTC, ETH, BNB, XRP, LTC, and DASH.

After you purchase your USDC, you can store it in any Ethereum wallet. Popular options include MyEtherWallet, MetaMask, and Jaxx wallets. You might also consider the safer option of a hardware wallet. Some popular options include Ledger Nano S and Trezor. 

Conclusion

USDC is only two years old but has already catapulted to the top 20 in market rank. Perhaps this is a testament to the currency’s individual strength and potential, or it’s a demonstration of the potential of stablecoins in general. Either way, USDC doesn’t look to be slowing down any soon, and its users can be assured of a stable and reliable cryptocurrency.

 

Categories
Cryptocurrencies

Mycelium Wallet Review 2020: Features, Fees & Ease Of Use

On the Mycelium website, the Mycelium wallet is referred to as the ‘Default Bitcoin Wallet.’ Probably because Mycelium is by far the oldest and one of the most reputable smartphone-based bitcoin wallets. Introduced to the market in 2008, Mycelium has undergone a raft of improvements and integrations to make it the safest Bitcoin storage hubs. Over time, the wallet has also gained the title of the most versatile wallet given the numerous third-party services it has safely integrated onto its network. But what sets it apart from the rest of the smart app wallets?

On the Mycelium website, the Mycelium wallet is referred to as the ‘Default Bitcoin Wallet.’ Probably because Mycelium is by far the oldest and one of the most reputable smartphone-based bitcoin wallets. Introduced to the market in 2008, Mycelium has undergone a raft of improvements and integrations to make it the safest Bitcoin storage hubs. Over time, the wallet has also gained the title of the most versatile wallet given the numerous third-party services it has safely integrated onto its network. But what sets it apart from the rest of the smart app wallets?

On the Mycelium website, the Mycelium wallet is referred to as the ‘Default Bitcoin Wallet.’ Probably because Mycelium is by far the oldest and one of the most reputable smartphone-based bitcoin wallets. Introduced to the market in 2008, Mycelium has undergone a raft of improvements and integrations to make it the safest Bitcoin storage hubs. Over time, the wallet has also gained the title of the most versatile wallet given the numerous third-party services it has safely integrated onto its network. But what sets it apart from the rest of the smart app wallets?

We answer this by looking at some of Mycelium wallet’s security features, ease of use, and proposed updates to the wallet’s functionality. We will also tell you if the mobile wallet truly lives up to its reputation.

Mycelium Key features

Smartphone-based: Mycelium is an app-based crypto wallet implying that it is compatible with both Android and iOS operating systems. It is hosted on a smartphone, effectively making it one of the most portable and easily accessible bitcoin wallets.

Integrates with hardware wallet: Mycelium wallet’s versatility makes it possible to integrate the mobile phone wallet with popular hardware wallets. These include KeepKey, Ledger Nano S, and Trezor.

Hierarchical Deterministic: The fact that Mycelium is an HD wallet implies that one can derive future bitcoin addresses from the master seed, easing the wallet recovery process.

Mycelium local trader: Unlike exchange backed wallets like eToro, Coinbase or BitMex, Mycelium is a stand-alone wallet. It nonetheless features a decentralized exchange-like marketplace that facilitates the exchange of bitcoins for fiat currencies between users. Dubbed the “Mycelium Local Trader,” the marketplace also features an end-to-end encrypted chat service.

Integration with third-party service providers: Mycelium bitcoin wallet partners with three main third party service providers Cashila, Glidera, and Coinpult. Cashila makes it possible for Mycelium users within the Euro SEPA zone to settle their bills. Glidera allows US and Canadian users to buy bitcoins with their bank balances. Coinpult, on the other hand, makes it possible for Mycelium users to hedge bitcoins against popular currencies like USD.

Security features

Pin code protection: After downloading the mycelium wallet app and installing it in your device, you will be asked to set a unique pin code. It prevents illegal access to your wallet and private keys and will be required every time you wish to log in, check balances, and confirm transactions.

12-word recovery seed: During the installation, Mycelium provides you with a 12-word recovery seed that you can use to reclaim your wallet. You will need to recover your bitcoin private keys should you lose the phone or forget the Mycelium bitcoin wallet password.

Watch-Only accounts: A watch only account allows for the storage of just the bitcoin address and not its corresponding private keys. You can then track the receivables into your wallet and monitor the coin balance while making it impossible to send out coins from the wallet even if hackers accessed your login details.

Military-grade encryption: The Mycelium bitcoin wallet encrypts your bitcoin address and private keys therein with the military-grade AES-256 bit encryption technology. The two are also never stored on the Mycelium servers.

It does not collect private data: Mycelium further commits to not collect sensitive personal information from its product consumers. It will only obtain your bitcoin address, location, nickname, and trade history while promising not to share it with any third parties.

Currencies supported

Mycelium is a bitcoin wallet and will, therefore, only support the legacy cryptocurrency. 

Integration with different third party services and the introduction of the Mycelium Local Trader have nevertheless made it possible for Mycelium users to exchange Bitcoins for fiat currencies like USD and Euro. If you want access to a huge number of currencies without losing access to your Mycelium wallet, consider integrating it with such hardware wallets as Ledger Nano and Trezor that support 1000+ crypto coins and tokens.

Mycelium wallet cost and other fees

You won’t be charged to download, install, and interact with the Mycelium bitcoin wallet. A transaction fee of between $2 and $7, however, applies every time you send bitcoins or seek to exchange your coins with fiat currency. The fee varies depending on the size of the transaction.

Setting up the Mycelium wallet:

How to install Mycelium one wallet:

Step 1: Download the Mycelium bitcoin wallet from the Google playstore for android users or the App Store for iOS smartphones and proceed to install the App.

Step 2: After the installation, open the wallet and select the “Create New Wallet.”

Step 3: The first step in creating a wallet is setting your PIN. This will be required for all future logins, memorize it.

Step 4: After confirming the PIN code, the wallet will provide you with the recovery seed made of 12 random words. Write them down on a piece of paper and keep it safe.

Step 5: You are now set and can start sending and receiving bitcoins or transacting in the Mycelium local trader.

Sending and receiving coins:

To receive funds into your Mycelium bitcoin wallet:

Step 1: Log in to your Mycelium bitcoin wallet and select receive bitcoins

Step 2: The page will display a QR code and your bitcoin address.

Step 3: Have the sender scan the code or send them the address.

To send payments from your Mycelium bitcoin wallet:

Step 1: Log in to your Mycelium bitcoin account and select the SEND option under the BALANCE tab of the wallet

Step 2: Paste the receiver’s bitcoin address you had copied to the clipboard or type it manually.

Step 3: Choose the currency – Bitcoin, USD, EUR – you wish to send and enter the amount

Step 4: Confirm the details authorize the payout using the PIN code.

Mycelium hardware wallet pros and cons:

Pros:

  • Mycelium presents its users with a wide range of features that ease its use.
  • Its open-sourced code has been vetted vigorously to seal all security loopholes.
  • One of the few wallets with an independent fiat-to-crypto exchange
  • Integrates with several third-party service providers
  • Compatible with popular hardware wallets

Cons:

  • The mobile wallet isn’t as secure as hardware wallets that store private keys offline.
  • Will only support bitcoin cryptocurrency.
  • Bitcoin investigators can use the information the wallet collects to reverse-trace a transaction.
  • Mycelium is a hot wallet and not immune to hacking, phishing, and malware corruption threats.

Mycelium wallet compared to competitors:

Mycelium may be referred to as the default bitcoin wallet, but recent years have seen the offshoot of several smartphone crypto wallets like Jazz and Cryptonator. Unlike the two, Mycelium is open source, which gives an upper edge when it comes to the security and integrity of the mobile wallet. The two, however, take advantage of Mycelium’s rigid approach to the crypto market by supporting multiple digital currencies as Mycelium sticks to Bitcoin. One may also consider the Jazz wallet’s user interface quite friendlier. 

Upcoming ‘massive upgrades’

On their website, Mycelium argues that while their wallet has, for the longest time, been a great tool for Bitcoin users, its time to share this goodness with everyone else. To make this possible they have come up with a raft of proposed upgrades to the bitcoin wallet including:

  • Integrating inexpensive remitters
  • Introducing wallet-linked and in-wallet-issued debit cards
  • Escrow protected bets and transactions.
  • More efficient hedging and investment portfolios

Customer support:

Mycelium’s customer support starts with a relatively expanded FAQ page on their website. Wallet users can also ask for assistance by opening a support ticket or contacting them on the different Mycelium social media pages. Mycelium, however, doesn’t offer phone support.

Verdict: Does Mycelium live to its reputation?

Despite the entry of numerous smartphone-based crypto wallets into the play, Mycelium remains one of the most popular. Some of the factors giving it a competitive advantage include its ease of use, inexpensive transaction fees, and a proven track record of keeping client private keys secure. While we fault its decision to stick to bitcoin transactions despite there being over 1000 cryptocurrencies today, we still believe that it is worth having.

Categories
Cryptocurrencies

MyEther Wallet Review 2020: Features, Fees & Ease Of Use

On their website, MyEther refers to their web-based wallet as ‘Ethereum’s Original Wallet,’ specially designed to help individuals keep their private keys safe and interact with the Ethereum blockchain. Commonly referred to as the MEW Wallet, the open-sourced platform was designed to help crypto investors and traders manage their Ethereum and ERC-20 tokens. And despite the fact that it is a hot web-based wallet, it continues to enjoy massive popularity within the crypto community.

On their website, MyEther refers to their web-based wallet as ‘Ethereum’s Original Wallet,’ specially designed to help individuals keep their private keys safe and interact with the Ethereum blockchain. Commonly referred to as the MEW Wallet, the open-sourced platform was designed to help crypto investors and traders manage their Ethereum and ERC-20 tokens. And despite the fact that it is a hot web-based wallet, it continues to enjoy massive popularity within the crypto community.

On their website, MyEther refers to their web-based wallet as ‘Ethereum’s Original Wallet,’ specially designed to help individuals keep their private keys safe and interact with the Ethereum blockchain. Commonly referred to as the MEW Wallet, the open-sourced platform was designed to help crypto investors and traders manage their Ethereum and ERC-20 tokens. And despite the fact that it is a hot web-based wallet, it continues to enjoy massive popularity within the crypto community.

In this MyEther Wallet review, we will be seeking answers to what draws crypto users to the wallet. We will vet the crypto wallet’s features, security, cost, and ease of use before telling you if it is fit for use.

MyEther Wallet Key features

Web-based: MyEther Wallet is a hot, online-based crypto wallet that stores your private keys in your PC, mobile app, or offline in a USB Drive.

Launched a mobile app: MyEther wallet recently launched a mobile application for both Android and iOS users, dubbed MEWconnect. It has all the features and benefits of the MyEther app, with the added advantage of being available on the move.

Access to Ethereum blockchain: Unlike most crypto wallets that will only give you access to a storage unit for your digital assets, MyEther gives you access to the Ethereum blockchain network. You can also use the app to exchange Ethereum based coins and interact with all the network features like smart contracts, Decentralized apps, and ENS as well as sign and verify messages.

Compatible with hardware wallet: MyEther crypto wallet will also integrate with all popular hardware wallets like Ledger Nano, Trezor, and KeepKey. This not only adds an extra layer of security to the company but also makes it possible for you to hold more than just the Ethereum based coins and tokens.

Offline transactions: The MyEther crypto wallet is unique in the sense that it is available for offline transactions. You do not need to be online to send or receive different coins and wallets to the wallet.

Save private keys offline: Since its establishment, MyEther crypto wallet has undergone several operational and security adjustments. One of these is the ability to store private keys offline. Instead of maintaining your private keys over the cloud, you can now save them offline in a flash disk or written in a piece of paper.

Compatible with popular browsers: MyEther wallet is also compatible with all the popular browsers, including Firefox, Chrome, and Brave. You can access your ether wallet via MyEther wallet website or the different browser extensions.

Compatible with exchanges: You can also integrate the MyEther wallet with different crypto exchanges, including Changelly, that allow you to buy and sell your digital assets for other crypto or fiat currencies.

Security features

Password protection: Like most other online and offline crypto wallet, MyEther has a password as the foremost form deterrence against authorized access to the private keys stored therein. You will need to set this password during the wallet installation and activation stage.

Recovery Keystore: In addition to the password is yet another security layer that – the Keystore recovery seed. It’s a set of words generated by the wallet during setup, and it comes in handy should you forget your password.

Open-sourced technology: MyEther has open-sourced the technology used to develop this crypto wallet. This has encouraged cryptocurrency and bitcoin enthusiasts to vet it exhaustively and come up with security improvement recommendations that have helped make it one of the most secure web-based wallets.

Highly encrypted: MyEther wallet further encrypts the private keys and addresses stored in your crypto wallet as well as its associated passwords. This keeps the private keys stored therein safe from malware.

Does not collect private data: In yet another privacy approach, MyEther crypto wallet collects no more of your personal information than is necessary. The crypto wallet company further provides its clients with the assurance of not sharing this data with third parties.

Currencies supported

MyEther is an Ethereum wallet that will only support Ethereum, Ethereum Classic, and ERC 20 coins and tokens. Its compatibility with numerous hardware wallets like Ledger Nano and Trezor that support 1000s of coins has, however, expanded the wallet’s currency support exponentially.

MyEtherWallet wallet cost and other fees

You will not be charged a fee for downloading, installing, and interacting with MyEther wallet or the MEWconnect smartphone app.

MyEther is also one of the few crypto wallets that won’t impose fees for cryptocurrency transactions conducted within its platform. You will only have to pay negligible fees that go straight to Eth miners and not the platform itself.

The minimum fee for a transaction is usually 0.000441 Ether, but you can always choose custom fees if you wish to have your transaction processed in the shortest time possible. For acceptance into the next block, you pay 40 GWEI, acceptance into the next few blocks costs 20 GWEI, while acceptance within the next few minutes costs 2 GWEI.

*Note: 1,000,000 GWEI = 0.001 ETH

Setting up the MyEther Wallet :

How to install MyEther Wallet:

Step 1: Start by accessing the MyEther crypto wallet website and selecting the create new wallet option.

Step 2: On the next page, you will find a small tutorial on how to engage with the MyEther wallet. You can view the tutorial or simply skip.

Step 3: Next is the create a new wallet page that gives you the option of creating the wallet online or via the smartphone app.

Step 4: If you choose to create an account online, you first need to create and verify your wallet password before generating the recovery seed. If you chose the MEWconnect smartphone app, you have to start by downloading the app from the MyEther website, proceed to create a password, after which the app will provide you with the recovery seed.

Step 5: Save your recovery seed to your PC or USB

Sending and receiving coins:

To Send tokens from your MyEther Wallet:

Step 1: Open the web-based wallet account and click “Send Ether &Tokens.”

Step 2: Choose the payment account i.e., your private keys or connected hardware wallets

Step 3: Paste the wallet address, number of tokens you wish to send, and GAS.

Step 4: Click ‘Generate Transaction,” confirm recipient details and verify the transaction.

To receive payments into your MyEther Wallet:

Step 1: Log into your MyEther wallet.

Step 2: Click on the “Receive Ether & Tokens” tab to get your receiving address.

Step 3: Send the address to whoever is sending you the coins

Step 4: Receive Ether and supported ERC 20 tokens from

MyEther Wallet pros and cons

Pros:

  • Its open-source protocol keeps it highly secure and ahead of the competition.
  • The wallet is compatible with most hardware wallets, including Trezor and Ledger Nano.
  • The wallet supports both online and offline transactions.
  • New privacy settings make it possible to store your wallet’s recovery phrase heavily encrypted offline on PC or USB disk.
  • MyEther wallet is also compatible with such exchanges as Changelly making the transfer of funds and currency conversions relatively easy.

Cons:

  • MyEther is a hot wallet, and this exposes it to possible hacking and phishing attacks.
  • One may consider the MyEther app relatively complicated to set up and use
  • Will only support Ethereum and ER20 tokens, leaving behind popular currencies like Bitcoin.
  • The web-based wallet isn’t as secure and hard to breach as the hardware wallets.

MyEther Wallet compared to competitors:

MyEther ranks fairly when compared to such other online wallets as Coinbase and eToro. These two are exchange linked and have two key advantages over MyEther. First, they are exchange linked and therefore expose the trader to more trade and investment opportunities. Secondly, they support all the popular coins and currencies and even host initial coin offerings. Unlike the two, however, MyEther wallet’s protocol is open source, making it safer and more secure, plus it also has both online and offline transaction processing features.

Customer support:

MyEther has an elaborate and detailed FAQ page, as well as tutorial videos that explain how the site works in detail. Their website is also available in both English and Russian languages. They also have a live chat tool on the website and are easily accessible the different social media platforms.

Verdict: Does MyEtherWallet live to its reputation?

MyEther Wallet is one of the safest and most versatile web-based Ethereum blockchain wallets available today. Some of its key strengths lie in its compatibility with several hardware wallets that complement its security and the number of cryptos and tokens it can support. It also is one of the few crypto wallets with a companion smartphone app, both of which give you access to not just the wallet but the Ethereum blockchain. It, therefore, is our opinion that while its online nature puts it at a higher risk of hacking and phishing attacks than hardware wallets, it still is a reputable wallet and fit for beginners and active traders looking for a wallet that allows for fast transaction processing.

Categories
Crypto Daily Topic

Coronacoin: the Crypto that Lets You Bet on Death

As if Coronavirus was not enough for the world to grapple with, some crypto developers have now created a cryptocurrency that will allow investors to reap from infections and fatalities from the pandemic. On its website, the token brazenly declares itself “the world’s first crypto-backed by proof of death.”

As if Coronavirus was not enough for the world to grapple with, some crypto developers have now created a cryptocurrency that will allow investors to reap from infections and fatalities from the pandemic. On its website, the token brazenly declares itself “the world’s first crypto-backed by proof of death.”

As if Coronavirus was not enough for the world to grapple with, some crypto developers have now created a cryptocurrency that will allow investors to reap from infections and fatalities from the pandemic. On its website, the token brazenly declares itself “the world’s first crypto-backed by proof of death.”

The strange cryptocurrency lets people bet on the pandemic by earning profits, the more the virus spreads, and the more people die from it. The more this happens, the more valuable the coin becomes, increasing its demand.

The cryptocurrency calls itself NCOV, and it’s an ERC20 token. Its total supply is 7,604,953,650 – a figure that chillingly represents the world’s total population. According to the website, the coins will be burnt every 48 hours according to how many new infections and deaths have occurred since the last burn. The coin hopes to be deflationary using this strategy. As per the website, 298, 308 tokens have been burned as of March 23, 2020.

According to Reuters, the coin is created by seven developers – a majority based in Europe, and still, more are to come on board.

Saving Grace

Perhaps in a bid to redeem its image, the team is marketing the coin as “2019-nCoV relief effort.” On the website they claim that 20% of the supply will be donated monthly to the Red Cross. “We plan to gradually trade the 20% total supply for ETH over time and donate it. We also plan to increase the amount donated at once over time as trading starts to increase.” As proof that they are actually donating, the team provides the public address of the donation wallet on Etherscan.

Trading Coronacoin

With new Corona infections rising rapidly, the tokens are burning fast. “Some people speculate a large portion of the supply will be burned due to the spread of the virus, so they invest,” Sunny Kemp, a user who also identified himself as one of the developers, told Reuters. Responding to criticism that the project is a macabre gimmick, Kemp said, “There are currently active pandemic bonds issued by the World Health Organization. How is that different?”

The coin is being traded on the Saturn Network – an equally dubious platform, where it makes up nearly 60% of the exchange’s paltry volume. Decrypt, a crypto news and analysis website investigated the exchange and found that it falls short of common crypto exchange standards. Some of the grievances are that the exchange’s website is “stupidly slow,” with an “absolutely putrid user interface” and a “lamentable” user experience.  Decrypt also casts doubt on how decentralized the exchange truly is.

For interested investors, you need to get a MetaMask wallet and sign up at Saturn Exchange.

Raising Awareness?

According to Decrypt, Kemp claims that the project intends to create awareness of the pandemic. “We intend to launch tip bots so people can spread Coronavirus on social media. This will help build public awareness.” He also claimed that Coronatoken was “in talks with a biochemist who is working to develop drugs to fight the virus. These are the kinds of partnerships we want to build.”

Asked why build a cryptocurrency instead of regular fundraising, the team said they thought, “this would be a good way to raise awareness in a unique and interesting way.” About the probability of people falsely reporting new Corona incidences or encourage its spread, the team responded that they “recognize that aspect of the project. We would never advocate for anyone to do such a thing, obviously. It would be morally and probably legally wrong. We believe Corona token holders are responsible.”

Criticism

On Reddit, where the coin was first announced, many users were not thrilled with the idea. Only one user was impressed, commenting, “Thanks for the airdrops. I hope you can bring awareness to the spread of the virus, so people are prepared. The media is covering up what is really going on.”

Other Redditors criticized the project.

“Frankly, this is amoral,” said one.

“Tasteless,” offered another.

“Disgusting,” commented one more.

“This is why we can’t have nice things,” submitted another.

“You should be ashamed. I feel sorry for you and the rest of the team who play on people’s lives,” rebuked another.

Rising Pandemic

Coronavirus, now called COVID-19, is a novel type of virus that causes respiratory illness. As of March 23, 2020, at least 339, 000 people have contracted the infection, and more than 14,700 have died, according to a tally by Johns Hopkins University.

The virus was first identified in Wuhan, a city in China, in December 2019. The exact origin of the disease has not been identified, though it is suspected that it originated from a seafood market in the city.

The virus has spread to at least 177 countries and territories, prompting states to implement lockdowns to stem its spread.

Finance markets have taken a beating as a result of the virus, prompting fears of a global coronavirus recession.

What do you think of Coronacoin? Is it a creative way to raise awareness, or is it a brazen joke taken too far?

Categories
Cryptocurrencies

What Determines The Price Of One Bitcoin?

Bitcoin is the most dominant cryptocurrency out of the thousands that exist today. It is the largest in market cap, and it pretty much influences investor sentiment about the rest of the cryptocurrencies. Bitcoin was created by a mysterious developer with the pseudonym Satoshi Nakamoto. 

Bitcoin is the most dominant cryptocurrency out of the thousands that exist today. It is the largest in market cap, and it pretty much influences investor sentiment about the rest of the cryptocurrencies. Bitcoin was created by a mysterious developer with the pseudonym Satoshi Nakamoto. 

Bitcoin is the most dominant cryptocurrency out of the thousands that exist today. It is the largest in market cap, and it pretty much influences investor sentiment about the rest of the cryptocurrencies. Bitcoin was created by a mysterious developer with the pseudonym Satoshi Nakamoto. 

Bitcoin transactions i.e., buying, transferring, spending of bitcoins, are recorded on a public blockchain. Its transactions are pseudonymous, that is, a user’s personal credentials are not publicly displayed, but their public address/key is. This public address can be used to trace the owner of a transaction if need be.

Unlike conventional currency, Bitcoin is not issued by a central bank or rallied by the state. As such, monetary policies, interest rates, inflation, and so on do not apply to Bitcoin. 

Curious Bitcoin investors may thus be gnawed by this question:

What is it that determines the price of Bitcoin?

Several factors determine its valuation, and we’ll look at each below: 

Supply and Demand

Before we look at the supply and demand of Bitcoin, we need to look at what partially determines the supply and demand of fiat currency. Actions like adjusting the discount rate, Lowering or raising the reserve ratio, and so on can impact a country’s currency exchange rate.

Now the supply of Bitcoin is determined by other factors. To begin with, new bitcoins are generated at a fixed rate through a process known as mining. Mining involves verifying and confirming blocks of transactions and adding those transactions on the blockchain. The Bitcoin protocol is designed in a manner that the coins released into circulation will reduce over time. For instance, coins were generated at a rate of 6.9% in 2016, and this reduced to 4.4% in 2017 and to 4.0% in 2018. As fewer coins are released, demand increases. Demand being higher than supply will result in the price going up. 

Secondly, the supply of Bitcoin may be determined by the number of coins the system is programmed to allow. Bitcoin’s supply is capped at 21 million. When this number of coins has been generated, mining will no longer create new coins. Already, Bitcoin’s supply has reached 18.1 million – this represents 86.2% of the crypto’s supply at that particular time. 

Once we reach 21 million coins, the price of Bitcoin will depend on several factors. For instance, will it be a practical currency, i.e., usable in day-to-day transactions? Will it be legally recognized? Will it be in demand – which will be determined by the demand for cryptocurrencies in general? The controlled generation of bitcoins will no longer have an impact on its price.

Competition

Bitcoin may be the most important and recognized cryptocurrency, but there are thousands more vying for the world’s attention. As of March 2020, Bitcoin is still leading the pack in terms of market capitalization – but other cryptocurrencies are giving it a run for its money. Some of them aim to outdo Bitcoin in one functionality or another – either by solving a problem that bitcoin cannot solve, or improving a certain functionality, or being more innovative. 

Cryptocurrencies such as Ethereum, EOS, Litecoin, Ripple, Tether, and Binance coin are some of its closest competitors. Besides, there are few barriers to entry into the crypto space, and new cryptocurrencies are constantly making the news. However, Bitcoin still maintains the highest visibility for any cryptocurrency. This gives it a certain clout and an edge over the competition. 

Cost of Production

Bitcoin is a virtual currency, but its production is not very different from other products that incur a real-life cost. Bitcoin is famous for consuming electricity, the equivalent of entire countries. Generation of new coins – or ‘mining’ involves miners solving complicated math problems – with the first miner to solve the puzzle being rewarded with bitcoins and a fraction of transaction fees. 

But Bitcoin, unlike other produced products, has an algorithm that allows only one block to be found every ten minutes. This means that the more miners in the network, the more difficult it is to find the answer to the puzzle. This means more energy is consumed in the process. 

It also means the more producers (miners) that join in the competition, the more the problem is difficult – and thus more expensive – to solve. Research has demonstrated that Bitcoin’s price is indeed tied to its cost of production.

Availability on Crypto Exchanges

Very much like how equity investors trade stocks and bonds over stock exchanges, crypto investors also trade crypto-currencies over cryptocurrency exchanges like Coinbase Bitfinex, Binance, Poloniex, Coinmama, Bitpanda, and so on. Also, just like the traditional exchanges, Crypto exchanges allow investors to trade crypto in pairs, e.g., Bitcoin/Ether (BTC/ETH). 

The more popular an exchange is, the more traders and investors it draws. This increases market liquidity for currencies listed on the exchange, increasing their demand. Also, since these exchanges operate in jurisdictions where they are regulated, the presence of, let’s say, Bitcoin, implies regulatory compliance, rendering Bitcoin a legitimate currency in the eyes of the public and potential investors. This matters because the legal standing of cryptocurrencies is currently sort of in a gray area.

Regulation and Legal Matters

Bitcoin and other cryptocurrencies have become so popular that regulators are not sure how to classify them. For example, the Securities and Exchange Commission (SEC) classifies the digital assets as Securities, while the US Commodity Futures Trading Commission (CFTC) classifies them as commodities. This confusion over what kind of assets cryptocurrencies are, as well as the tumble over which regulator gets to set the rules, creates uncertainty that impacts the value of cryptocurrencies. 

Also, the finance market is now witnessing the introduction of new financial products – such as exchange-traded funds futures and other derivatives that use Bitcoin as the underlying asset. 

This impacts the price of Bitcoin. First, it expands bitcoin’s access to investors who could not afford to buy it. This increases Bitcoin’s demand. Secondly, it can mitigate the volatility of Bitcoin, since institutional Bitcoin derivatives’ investors can use their massive resources and market influence to bet on which direction Bitcoin’s price will move.

Governance Stability (or lack of) and Forking 

Bitcoin is a decentralized and autonomous network – meaning it’s not governed by any single entity. As such, it relies on network participants to process transactions and protect the network. Any updates to the Bitcoin protocol are done only after consensus is reached, meaning issues take longer to resolve as opposed to a centralized system where decisions are made by those at the top and implemented as quickly as possible. This is frustrating for the community and might cause many people to invest in other cryptocurrencies.  

Bitcoin’s scalability issue is another problem. Any blockchain’s volume of transactions depends on the size of the block, and Bitcoin’s current 1MB block size severely limits the number of transactions that can be processed in one second. This wasn’t an issue before cryptocurrencies became hugely popular, but the slow transactions on Bitcoin might push people towards cryptocurrencies with a faster transaction time. 

Bitcoin enthusiasts have been at loggerheads over how to best increase the speed of transactions. This can be achieved via one of two types of software updates – which are called forks. Soft forks constitute rules or updates that do not permanently split the blockchain and result in a new cryptocurrency. Hard forks constitute a permanent split of the blockchain and, with it, the birth of a new cryptocurrency. The Bitcoin blockchain has previously undergone hard forks that resulted in Bitcoin Cash and Bitcoin Gold cryptocurrencies. 

Hard forks do not just split the blockchain; they also split the community. The Bitcoin Cash fork was particularly acrimonious. When events like these happen, they splinter a cryptocurrency’s user base, which is also the investor base. This can reduce demand for that cryptocurrency, lowering its price. It can also negatively affect investor sentiment, which has the same effect. 

Conclusion

Now that you know how the Bitcoin price comes to be, you’re better placed to know how certain events, either internal or external, to Bitcoin, affects its price. And while no one can accurately predict the exact price of the currency, at least you can foresee potential movements in its price long before it happens. This can help you know better decide if to buy or sell. 

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Crypto Daily Topic

Should You HODL or Sell Your Cryptocurrencies?

It is often said that the stock market is a tool for transferring money from the impatient to the patient. This notion can be said to be true for the cryptocurrency market, too, since the two markets are similar in many ways. Just like you would with stocks, you can buy, sell, or hold onto cryptocurrencies for an extended period. 

It is often said that the stock market is a tool for transferring money from the impatient to the patient. This notion can be said to be true for the cryptocurrency market, too, since the two markets are similar in many ways. Just like you would with stocks, you can buy, sell, or hold onto cryptocurrencies for an extended period. 

It is often said that the stock market is a tool for transferring money from the impatient to the patient. This notion can be said to be true for the cryptocurrency market, too, since the two markets are similar in many ways. Just like you would with stocks, you can buy, sell, or hold onto cryptocurrencies for an extended period. 

The only difference between the two is that the stock market is more predictable compared to the highly volatile cryptocurrency market. As such, trading in the crypto market – whether you’re actively trading or holding your funds – can result in dramatic and sudden losses or profits. This volatility can be attributed to the fact that cryptocurrencies don’t have a concrete product backing them. Their value mainly stems from the market hype, demand, and their use in the real world.

Yet, no one invests in cryptocurrencies intending to lose money. This explains why holding or selling your cryptos might make sense for the two extremes of the market – bull and bear run. 

An Argument for and Against Holding Cryptocurrencies

In almost every crypto community, you’ll meet a few investors advising you to HODL your coins. The strategy has been proven to work, especially during the early years of cryptocurrencies. A case in point is coin holders who purchased Bitcoin when it was trading at less than $100. Over the years, these investors have seen a great return on investment, as Bitcoin’s value continues to increase.  

While this strategy has ultimately paid off, it has its demerits. First, coin holders often miss out on making additional profits as the market trends change over time. They continue to hold on to their cryptos even at a time when they should arguably sell a percentage of their positions, particularly during the market highs, to add on to their profits. 

Also, for new investors who get into the market when the prices are high, it can be quite hard to HODL when the market is “bleeding”. As a result, the investors end up making losses due to panic-selling as the crypto prices decline.

Holding is recommended if you are looking to make profits in the long term. Besides, as blockchain continues to gain mainstream attention, the value of cryptocurrencies is bound to increase. Of course, throughout this period, there will be dips and highs, which you can be leveraged to add a substantial amount of returns. Ideally, when the market is in a downward trend, you should hold your coins or, better still, buy some more. 

Buying at a lower price allows you to increase the number of coins that you hold. It works even better when you employ the dollar-cost averaging strategy. Once the asset’s price goes up by several folds above your initial investment, you might consider selling a percentage of your position. 

Should You Sell Your Cryptos? 

Selling or rather trading cryptos is defined as ‘fast nickel over slow dime’. This means that as a crypto trader, you are in the market for quick profits rather than huge profits over a long-term period. The rationale here is that the market’s volatility is a powerful instrument of gaining small but quick profits.

To realize profits, you’ll have to quickly liquidate your crypto-assets when the price starts to fall in order to hedge against further losses. When the bull starts to reign, you can then re-enter the market and sell the coins once the price rises by a great deal in a short amount of time.

Just like holding, selling has its share of disadvantages. To start with, In a bull market, you are likely to take profits too early before a coin reaches its highest price. In the worst-case scenario, you could also sell your coins during a downward trend, only for the market to turn bullish shortly afterward. 

Ideally, you should sell a cryptocurrency when it’s price sharply increases over a relatively short amount of time. Often, a significant increase in price without a strong demand to hold it up isn’t always sustainable.

Note that you shouldn’t sell all your coins at once, but rather just a portion of it and buy back when the prices start to fall. The exact percentage of coins you should sell depends on several factors, such as the total amount of coins in your possession as well as their liquidity. The general rule of thumb is to sell 20% of your coins. But if you own a large amount, consider lowering this percentage to maintain liquidity. 

Selling and buying back in at a lower price offers you the opportunity to regain your initial investment as well as to invest in a new cryptocurrency for diversification. This way, you spread the risk, protecting you in the event one asset takes a dive. 

Which One Is Better? 

There isn’t a straightforward answer as to which strategy is better between holding and selling. It’s all about finding the sweet spot between the two. This is to say that holding cryptocurrencies is better when punctuated with leveraging into and out of positions. 

For new investors, holding is your best bet as you try to learn the market. At the same time, it would be unwise to continue holding through, even when the market is on a bull run. The best approach is to cautiously leverage into profitable positions and gain short-term profits. Besides, trading is the only practical way to learn the market. 

Taking a closer look at the long-term price chart of a cryptocurrency can give you a rough idea of its price routine. Although this is by no means a foolproof prediction of future prices, the historical data can give you a fairly decent estimation of when to sell, hold, and buy to increase your position.

The key takeaway here is that investing is a long-term commitment. While you are at it, making smart investment choices such as selling for short-term profits and buying the dips will serve you just right in anticipation of huge gains in the long haul.

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Crypto Daily Topic

Myths about Blockchain and Cryptocurrencies

If there’s one space that’s rife with confusion, myths, untruths, and rumors, it’s the blockchain and crypto space. That’s because both technologies are still relatively young, and cryptocurrencies, in particular, confounds many with their explosive success and tenacity when many thought they were passing smoke.

If there’s one space that’s rife with confusion, myths, untruths, and rumors, it’s the blockchain and crypto space. That’s because both technologies are still relatively young, and cryptocurrencies, in particular, confounds many with their explosive success and tenacity when many thought they were passing smoke.

If there’s one space that’s rife with confusion, myths, untruths, and rumors, it’s the blockchain and crypto space. That’s because both technologies are still relatively young, and cryptocurrencies, in particular, confounds many with their explosive success and tenacity when many thought they were passing smoke.

Blockchain, on its part, has been touted as the panacea of many ills faced by the finance industry and businesses. Also, you’ll rarely hear its weaknesses mentioned, just the pros.

What are the facts, and what is fiction? Whether you’re an investor, an aspiring investor, or just watching from the sidelines, it’s important that you have a clear and realistic view of these technologies.

This piece debunks the most common myths about blockchain and cryptocurrencies.

1. Bitcoin Is Blockchain

Bitcoin is the first and most popular blockchain application. As such, many people confuse it with Bitcoin. Bitcoin is a cryptocurrency – the first-ever, introduced in 2009. It facilitates transactions in a peer-to-peer and decentralized environment. Transactions on the Bitcoin network do not need approval or supervision by a third party. Blockchain, on the other hand, is a distributed ledger that is stored in a cluster of computers. Blockchain records are secured by the use of cryptography.

2. Blockchain’s Only Application Is Cryptocurrency

It’s true that cryptocurrencies are the widest application of blockchain technology.  It’s also true that the two go together very well. But cryptocurrency is not the only use case for blockchain. Lots more industries can use blockchain and take advantage of its security, transparency, immutability, and so on. 

3. Crypto Transactions Are Anonymous

Lots of crypto users are under the impression that crypto transactions are anonymous.  In actual sense, transactions on public blockchains such as Bitcoin are recorded on the blockchain and can be traced to the owner. While your personally identifying credentials will not be published on the blockchain, your public address will.  Also, crypto exchanges are mandated by governments to identify users on their platform.

4. Blockchain Will Overhaul How Business Transactions Are Done

Blockchain is often touted as the technology that will change how businesses conduct, record, and manage transactions. But in some instances, blockchain might be more process-intensive, difficult to scale, and take more confirmation time than current methods. Blockchain is only necessary if there is a need for ultra-secure verification and immutability of records.

5. Cryptocurrencies are Volatile, So Blockchain Cannot Be Reliable

Since many people still get cryptocurrency and blockchain mixed up, there is a misconception that with cryptocurrencies being so volatile, blockchain must not be credible. But the behavior of cryptocurrencies has nothing to do with blockchain, their underlying technology.

6. Cryptocurrencies Are Best For Illegal Activity

Cryptocurrencies have two special features, decentralization and privacy. These are very attractive features for criminals.  But they are also attractive features for law-abiding people who wish to invest in them, and citizens of politically or economically unstable countries. If your country’s economy has the possibility of destabilizing or your assets are at the risk of being frozen by a tyrannical government, cryptocurrencies might come as a very handy choice.

7. Blockchain Technology Can Be the Backbone of a Global Economy

No entity, either private or public, owns or regulates the blockchain. For this reason, Bitcoin proponents hope private blockchains can support cryptocurrencies for varied use across sectors. The reality is that current blockchains are still too small to support a global scale of financial operations.

8. Digital Tokens Are Digital Coins

Many people still use these terms interchangeably.  But the two are fundamentally different concepts. Digital coins have only one utility. They also act as a store of value, much like fiat, and are also used to access the services of a blockchain. Examples are Bitcoin and Ether for the Bitcoin and Ethereum blockchains, respectively. 

Tokens, for their part, store complex kinds of value such as property, stock, art, utility, and so on. In other words, they represent ownership of real-life assets. Tokens are hosted by a blockchain such as Ethereum and are issued via an Initial Coin Offering (ICO).

9. There Is Only One Type of Blockchain 

Many non-blockchain insiders think that there is only one type of blockchain.  In truth, there are three types of blockchain: 

Public blockchains: these are open-source blockchains on which anyone anywhere can participate.  Anyone can read, write, audit, or review anything on the blockchain. 

Private blockchains:  these blockchains are only accessible to participants who have been authorized to do so. Also, only authorized people can record transactions.

Consortium blockchains: These are blockchains that are governed by a group of companies – usually in the same industry – who come together to share insights and make decisions that benefit them and industry.

10. Blockchain Records Are Immune to Hacking or Alteration

One of blockchain’s main selling points is its immutability of records and its unimpeachable security. Many people often think this means blockchains are utterly insecure from attacks. But no system can be 100% tamper-proof or secure. In the case of blockchain, the more distributed it is, the most secure it is considered to be. This is because its distribution eliminates a single point of failure in the sense that even if one node fails, other nodes will continue running the network.

Also, blockchains are vulnerable to bugs in the code, loopholes in smart contracts, and other ways through which bad actors can exploit them.

11. Blockchain Technology Is Only Applicable In Finance

This misconception arises from the fact that blockchain was first applied to cryptocurrencies – which are in the finance sphere and which have impacted it directly. However, blockchain has numerous other applications.  It can be used in real estate, supply chain, healthcare, identity, music, and many other areas.

12. Blockchain Is Trustless

One of the most bandied-about words in the blockchain space is ‘trustless.’  The truth is that even blockchain requires a degree of trust. Blockchain does not completely eliminate the need for trust; it only reduces it. A certain degree of trust is placed on the underlying cryptography of public blockchains, as it is placed in the validators of permissioned ones. Blockchain, at best, is ‘trust-minimizing.’

13. Blockchain Is a ‘Truth Machine’ 

Blockchain is very good for transferring data that is native to the respective blockchain.  However, for non-native data, “garbage in garbage out” still applies to blockchain. This is because blockchain cannot determine whether data from external sources is accurate or not. If such data is inaccurate, blockchain will just treat it as it would any other input, after certain conditions are met.

14. Cryptocurrencies Are A Quick Route to Riches

There is a persistent idea that cryptocurrencies can make you rich overnight. Indeed, early crypto investors made huge gains in the most the bullish year 2017. But we’re yet to see another bullish year such as 2017, and with the hard-to-predict nature of cryptocurrencies, it’s hard to know when another crypto boom will occur. 

Cryptocurrencies are certainly thrilling to invest in, but they are not a one-way ticket to riches and glory. As with any investment, it’s prudent you do your research before investing, as well as diversify your investment portfolio across different assets to spread risk.

15. Cryptocurrencies Do Not Have Value

Several factors have contributed to the notion that cryptocurrencies do not have any intrinsic value or that they are a fad that will go away.  For one, the asset class has proven difficult to classify. Many countries are still at a loss on how to classify them for tax purposes. On their part, investors are not sure how to treat them in regard to taxation or even for everyday use. 

In actuality, cryptocurrencies only become bigger, and their very own infrastructure, e.g., worldwide distribution, sets them up for the long haul. And just like any other currencies, cryptocurrencies can be used as a medium of exchange, and they also possess the value that is attributed to them by users.

16. Cryptocurrencies Are Not Secure

As cryptocurrencies have become more popular, they have become targets of scammers, hackers, and thieves. The majority of insecurity incidents happened at cryptocurrency exchanges, while in other cases, malicious actors exploited vulnerabilities in wallets and other aspects. For these reasons, potential investors might worry about investing in this type of asset. 

But they should also know that yes, cryptocurrencies are possible targets for theft and fraud, but they can also safeguard their crypto holdings by exercising caution. Some cautious behavior includes storing large amounts of crypto holdings in cold wallets, not accessing their online wallets via public Wi-Fi, enabling two-factor authentication, and always storing their crypto funds in safe exchanges.

17. Cryptocurrencies Are a Scam

There is the notion in some quarters that cryptocurrencies are a scam. Of course, some greedy elements have set out to take advantage of people’s interest in cryptocurrency by offering fake ICOs, creating Ponzi schemes, creating fake exchanges and wallets, and so on. 

Very much like how fraud exists in the traditional finance landscape, it also does in the digital currency world. Wise investors, however, do not rush in to every investment opportunity blindly. Instead, they take their time to research every potential investment opportunity, carry out due diligence on any crypto exchange or wallet, and so on.

Final Thoughts

Either people have a starry-eyed view of blockchain and cryptocurrencies, or they think very lowly of them based on rumors. The truth is more in between. There is no perfect technology, and while blockchain and crypto are certainly revolutionary, they have their limitations. In the same measure, they are not overhyped technologies that are only good for criminals, and they are not going to make you rich overnight. Always DYOR (do your own research) with regards to everything blockchain and crypto.

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Crypto Daily Topic

Blockchain vs Tangle: All you need to know

The issue of blockchain’s scalability is as old as blockchain itself. If you’re the tiniest bit familiar with the technology, chances are you’re aware of the blockchain’s inability to support millions of transactions at a scale that would enable it to compete with current money transfer systems such as Visa. 

The issue of blockchain’s scalability is as old as blockchain itself. If you’re the tiniest bit familiar with the technology, chances are you’re aware of the blockchain’s inability to support millions of transactions at a scale that would enable it to compete with current money transfer systems such as Visa. 

The issue of blockchain’s scalability is as old as blockchain itself. If you’re the tiniest bit familiar with the technology, chances are you’re aware of the blockchain’s inability to support millions of transactions at a scale that would enable it to compete with current money transfer systems such as Visa. 

When you wade deeper into the scalability debate, you’ll soon hear such terms as IOTA, Tangle, and directed acyclic graphs (DAG).  What do these terms mean, and is Tangle a threat to blockchain? 

In this piece, we’ll explain what Tangle is, how it stacks up to blockchain, and whether we can see a future where it replaces Bitcoin or becomes its formidable match. We’ll also give our verdict on which technology is currently more superior.

What Is Tangle?

The Tangle is a network that aims to achieve the same purpose as blockchain:  facilitate transactions in a trustless and decentralized environment. Tangle is an implementation of the directed acyclic graph (DAG) – which is also a distributed ledger like the blockchain. Also, much like the blockchain, DAGs do not have intervening authority or entity such as a bank or a government.

 This is where the similarities end. Tangle has special features designed to facilitate the ‘Internet of Things’ (IoT). IoT is a  universe of interrelated devices that can interact with one another through a multitude of little unique identifiers to enable them to execute the functions they were designed for without requiring human or computer intervention.

Unlike how it sounds, the internet of things is not that complicated a concept. Imagine a shower switching itself on 5 minutes before you arrive, or a coffee machine that makes coffee 5 minutes before you wake up, or a washing machine setting itself on – all without any sort of input from you.

If this technology is to work as it’s meant to, there must be an underlying network that can handle a  massive amount of transactions- from facilitating exchanges, to transferring data,  to sending of signals – all in a seamless, secure and fast network. 

Enter Tangle. This technology is based on DAG, which is designed to support a plethora of data interactions but will facilitate the IoT in a way that the blockchain cannot.  These features are like the following: 

No miners: Unlike the blockchain, there are no miners in the Tangle network.  This eliminates the need for fees, or miners being able to block some transactions.

More relaxed data transfer rules: This makes Tangle more agile than the blockchain and thus better for handling a vast amount of transactions.

Scalable data units: This feature facilitates the transfer of training bits of data, enabling Tangle to process micro-transactions.

The pros and cons of Tangle: 

Pros

  • Zero fees
  • Faster transaction times
  • Scalable

Cons 

  • The technology is not yet tested and proven
  • Does not support decentralized applications
  • Arguably less secure
  • Centralized – Tangle relies on a ‘central coordinator node’ that checkpoints valid transactions

What Is Blockchain?

Blockchain is the technology that supports cryptocurrencies such as Bitcoin, Ethereum Litecoin, and so on. Blockchain is a ledger that holds transaction blocks – which are linked to each other and secured using cryptography. Each block has a reference to the block that came before it, hence a ‘chain.’ 

Each node (miner) independently verifies the authenticity of a transaction – meaning that transactions are agreed upon via group consensus. The miner who confirms a block of transactions receives block rewards or a fraction of the transaction fees.  Miners usually invest considerable sums of money in a special mining computer known as application-specific integrated circuit (ASICs). 

Blockchains, like the Ethereum blockchain, can facilitate the creation of a special type of applications called decentralized applications (DApps). DApps are, unlike today’s applications (such as Facebook or Google), under no one’s authority or censorship. Also, DApps grant users the complete autonomy of their personal data – which is the complete opposite of how legacy applications handle users’ data.

Bitcoin’s Scalability Issues

The current blockchain architecture faces serious scalability issues. The fact that each node must verify transactions before they are added means confirmation is slow. The limited size of blocks, e.g., 1MB for the Bitcoin blockchain, is another bottleneck since a very limited amount of data can fit in each block. 

Now, as more people transact on the blockchain, the more clogged it becomes.  This means longer waiting times and increased fees, which leads to unsatisfied users. This has led to several hard forks of the Bitcoin blockchain –   all which sought faster transactions and lower fees.

Let’s take a quick look at the pros and cons of the blockchain. 

Pros: 

  • A proven history of reliability
  • A secure system that is difficult to compromise
  • Layer 2 Solutions such as the lightning network are being explored to remedy the scalability problem

Cons: 

  • The blockchain is not scalable on its own
  • High fees and long waiting times

Differences between Tangle and Blockchain

While only a few technical differences distinguish blockchain and Tangle, those differences are significant nevertheless. Let’s take a look: 

Structure – blockchain comprises a series of cryptographically connected data blocks. Tangle, on the other hand, consists of a group of data nodes that flow in just one direction. Also, blockchain can double back on itself in a circular manner, but Tangle can only move in one direction. (This means that Tangle can more rapidly transfer data.)

Security– blockchain offers better security thanks to its extremely meticulous block confirmation process that involves solving computational puzzles and verification of transactions via group consensus. On the other hand, Tangle’s security feature entails validating the two most recent transactions before confirming the next.  By this measure, blockchain is more secure than Tangle.

Decentralization – blockchain is undoubtedly decentralized since it operates on thousands of computers around the world, with no single authority overseeing transactions. Tangle is also billed as decentralized, but it utilizes a safeguard that it calls a ‘coordinator node.’  The presence of the safeguard renders Tangle centralized, one way or another. It’s hard to say that the tangle framework is entirely autonomous.

Tangle fans argue that the technology’s less detailed node addition protocol might make it less secure than blockchain, but it also makes it more agile. They stress that this makes Tangle better equipped to handle massive volumes of IoT interactions. But this uncertainty and its security, as well as its centralization problem, means the technology is far from ripe to fulfill its intended purpose, let alone compete with blockchain.

What is IOTA?

Tangle’s only application to date is the IOTA cryptocurrency. IOTA is named after IoT, which it’s designed to facilitate.  IOTA can handle a multitude of tiny transactions, which makes it ideal for the micro-transactions that run an internet of things.

As of March 30, 2020, IOTA is trading at $ 0.142212 at a market rank of 24 with a $ 395, 282, 148 market cap. 

For its part, Bitcoin is trading at $ 6, 316.03, and it ranks at number one with a market cap of $115, 552, 963, 908.

Blockchain Vs. Tangle: Which Is Better?

As the debate about which of the two technologies is better rages on, it helps to look at the specifics. To begin with, Tangle is yet to be proven as opposed to Bitcoin, which has been a mainstay for ten years now. Also, it doesn’t have nearly half of the number of users on the Bitcoin network.

Additionally, IOTA is at risk of a 34% attack, as opposed to Bitcoin’s 51%. This means that an attacker would only need to gain control of 34% of the IOTA network, rendering it less secure than blockchain.

As previously mentioned, IOTA utilizes a coordinator node that synchronizes data among all nodes, making it centralized.  This is in contrast with Bitcoin, whose nodes are equally distributed across the globe.

From these observations, it’s clear to see that blockchain maintains the upper hand in the battle between the two Technologies – at least for now.  This does not mean that IOTA’s completely written off. It is, on its own, a force to reckon with, as evidenced by its fiercely loyal community as well as a strong value proposition.

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Cryptocurrencies

What Is The Impact Of Cryptocurrencies On The Environment?

Cryptocurrencies came, saw, and disrupted the financial space – despite many predictions about their impending doom. They were labeled as a fad and as tools for enabling criminal activities.  But in a rally led by Bitcoin, cryptocurrencies have established themselves as legitimate and a force to be reckoned with in the finance space. 

Cryptocurrencies came, saw, and disrupted the financial space – despite many predictions about their impending doom. They were labeled as a fad and as tools for enabling criminal activities.  But in a rally led by Bitcoin, cryptocurrencies have established themselves as legitimate and a force to be reckoned with in the finance space. 

Cryptocurrencies came, saw, and disrupted the financial space – despite many predictions about their impending doom. They were labeled as a fad and as tools for enabling criminal activities.  But in a rally led by Bitcoin, cryptocurrencies have established themselves as legitimate and a force to be reckoned with in the finance space. 

However, digital assets still face criticism. One withering take was by Agustin Carstens, General Manager of the Bank of International Settlements, who called Bitcoin a combination of a bubble, a Ponzi scheme, and an environmental disaster.  

While the first two indictments are flat-out untrue, the third one deserves a closer inspection. Serious questions have been raised about the impact cryptocurrencies wield on the environment. 

Are cryptocurrencies power-hogging monsters, or is it a hollow indictment?

Cryptomining and More

The vast majority of cryptocurrencies have taken the model of Bitcoin, the first and the most successful cryptocurrency.  Bitcoin is a decentralized token, meaning it is not controlled or regulated by any bank or government. Instead, new coins are generated via ‘mining,’ a process in which computers across the globe solve complicated mathematical puzzles and earn some coins or a fraction of the transaction fees as a reward. 

The Bitcoin network is supported by blockchain technology – which includes a publicly distributed ledger that maintains a record of all transactions.  Transactions are in the form of blocks, which in turn are linked together and secured using cryptography. All records on the blockchain are shared across all users on the network – no matter where they are.

Cryptocurrency proponents content that the asset provides a unique alternative to the current financial system due to its cryptographically secured and anonymized infrastructure.  However, alarm bells have been ringing over the massive amounts of energy that goes into maintaining and generating new crypto coins.  

In a research by Digiconomists – a cryptocurrencies analysis site, titled “Bitcoin Energy Consumption Index,” Bitcoin used 32 terawatts of energy annually.  This energy could support nearly 3 million US households. Bitcoin also consumed more energy than Visa uses to process billions of transactions in a year. According to the site, the energy that Visa uses can power just 50, 000 US households.

Another concern has been that as cryptocurrencies gain more popularity, and their value increases, they require even more energy. For example, as Bitcoin increases in value, the computational puzzles become more difficult to solve, hence requiring more energy.

Cryptocurrencies and Fossil Fuels

The conversation about cryptocurrencies and the environment has taken another turn.  Environmentalists are concerned that cryptocurrencies are slowing down the effort to extract ourselves from the fossil fuels rabbit hole.

The vast amount of Bitcoin mining happens in China, where mining companies have set up huge mining operations in rural areas that have low-cost land and electricity.  Researchers from the University of Cambridge have called attention to the fact that much of the electricity being consumed in the mining rigs comes from abandoned coal-based power plants. 

Digiconomist also noted that the energy used by one Bitcoin mine in Inner Mongolia is equivalent to the energy required to fly a Boeing 747.

If you have been paying attention to the news, you must have noticed that burning coal and other fossil fuels massively contributes to the global carbon dioxide footprint, intensifying climate change.

What Do Miners Say?

Crypto miners have taken a defensive stance in the whole debate. They argue that crypto mining’s impact on the environment is nothing compared to that of physically extracting oil and other natural resources. 

Other miners have taken up more environmental-friendly strategies for their mining operations. An example is Vienna-based Hydrominer, a mining company that uses renewable hydroelectric power. The company’s co-founder, Nadine Damblon, however, thinks that the conversation is overblown. “Basically, we see an old argument here. People used to say that the streets would no longer be usable because they would be covered in horse manure -not long ago they said Google search engine would use up all the world’s energy.” 

She opines that as cryptocurrency evolves and develops, so will more energy-efficient technology be discovered. For her part, she’s already taken a step to employ a more eco-friendly mining process.

What Is Our Current Environmental Impact?

It’s fair to say that the impact of cryptocurrencies on the environment have been grossly exaggerated, especially when you compare it to how the current banking system consumes energy. 

In a 2014 study, Hass McCook, a bitcoin enthusiast, argued strongly for Bitcoin, stating: “Widely available public information strongly refutes claims that bitcoin is unsustainable, and shows that the social, environmental and economic impacts are a minuscule fraction of the impact that the legacy wealth and monetary system have on our society and environment.”

Right now, these are some of the biggest energy consumers in the current banking system: 

  •         24/7 server operations
  •         24/7 office towers 
  •         Cost of running ATM machines 
  •         Card readers 
  •         Data centers 
  •         Cost of running banks such as computer costs, air conditioning, and so on 

It’s worth noting that this list is by no means exhaustive. The use of a much more efficient system, cryptocurrency, would eliminate most of these and other hidden costs.

Who is Right?

Between overly conscious environmentalists and defensive miners, who is right in this debate? First of all, it’s important to note that although crypto mining gobbles up massive energy, analysts have not really arrived at a conclusion on the exact figures. 

Also, some people argue that the benefits of cryptocurrencies, including operational efficiency and their deflationary nature, outweighs the environmental toll.

A thorny issue in this debate has been the difficulty involved in trying to measure the exact environmental impact. This is partly because most currencies are either anonymous or have a degree of anonymity – making it difficult to generate a reasonable estimate of the energy they actually use.

But one analyst believes that the figures bode ill. Alex de Fries, a Bitcoin analyst, suggested in January 2018 that even the most energy-efficient mining Rings would still consume about 13 terawatts in total.  He said that that is the amount of energy that Slovenia uses. He painted a possible scenario where the machines in use are not as efficient as possible – in which case the energy used would be much higher – and even multiply as more miners jump into the bandwagon. 

De Vries’ view on the issue is largely uncompromising, suggesting that we don’t even need Bitcoin in the first place. “We are basically consuming thousands of times more energy for something we can already do at the moment. We can already do transactions, we don’t have to use Bitcoin if we trust our current system. I don’t see how Bitcoin justifies its energy use at the moment, given that most people do have a certain level of confidence in the current system.”

Closing Thoughts

Do cryptocurrencies pose a threat to the environment, or is the issue greatly exaggerated? As we have seen, the legacy banking system is not exactly as pure as snow. Cryptocurrencies present a safer, more trusted, and a faster way to conduct transactions.  They are disruptive, no doubt, but that does not mean that they are evil. And as the technology continues to evolve, more energy-efficient means will most certainly be adopted.

As for now, it can be said that the whole fuss about how cryptocurrencies are harming the environment is a lot of ado about little. This doesn’t mean that the crypto industry is exempt from environmental responsibility; it will have to come up with more environmentally conscious mining processes.

Categories
Crypto Daily Topic

How to Build a Long-term Cryptocurrency Portfolio

Historical data shows that the crypto market has returned over 900% since 2017. Of course, the journey hasn’t been all smooth, as evident from the often unprecedented dip and high trends of the market. But in the long haul, its valuation has been increasing as more investors join the trade. 

Historical data shows that the crypto market has returned over 900% since 2017. Of course, the journey hasn’t been all smooth, as evident from the often unprecedented dip and high trends of the market. But in the long haul, its valuation has been increasing as more investors join the trade. 

Historical data shows that the crypto market has returned over 900% since 2017. Of course, the journey hasn’t been all smooth, as evident from the often unprecedented dip and high trends of the market. But in the long haul, its valuation has been increasing as more investors join the trade. 

With this in mind, the idea of targeting long-term gains is more appealing than chasing short-term profits, which are often not as much as the former. 

While investing in the long-term promises greater returns, it should be noted that the method requires patience and keeping your emotions under check in all market tides. To achieve this, you should only invest an amount that you can live without; so no matter what happens, you won’t have the urge to sell your cryptos to sustain yourself. Also, having a cushion to fall back on will prevent you from panic-selling. 

Why Should you Consider long-term Crypto Investment? 

Foregoing the short-term profits in favor of long-term gains is not only highly rewarding but also less risky. As such, you don’t have to worry about missing out on leveraging into a position or timing the market.  

Day trading/short-term investment is characterized by numerous transactions whose fees can quickly accumulate and eat into your profits. But when investing in the long-term, all you have to do is pick a few cryptocurrencies and then wait. This helps reduce the number of transactions, saving you the fees that come with active trading. 

Indicators of Long-term Value

Building a long-term portfolio boils down to the type of digital currencies you invest in. With over a thousand cryptocurrencies in the market, it can be overwhelming to choose one that pays off in the long run. Here are a few factors to consider when choosing cryptocurrencies for your long-term life portfolio: 

1) Market Cap

Generally, the market cap of a digital coin is its trading price multiplied by its circulating supply. Usually, cryptos with a higher market price are less volatile compared to those with a lower market cap. 

Large market cap coins like Bitcoin and Ethereum dominate the crypto market, which is an indication of their long-term viability. Even in bear markets, these coins tend to weather the storm and keep their value relatively higher. 

At the same time, it doesn’t mean that you shouldn’t invest in cryptos with a lower market capitalization. In fact, such coins may eventually outdo the dominant coins in terms of returns since they are still in the budding stage.

However, the lower-cap cryptos tend to be risky since not all of them grow exponentially as anticipated, with some even being fraud projects. As such, it makes sense to scrutinize the viability of lower-market cap coins before investing in one. 

Besides their potential to offer great returns, coins with a lower market cap are an ideal diversification tool. Rather than allocating all your funds to the dominant coins, you may consider allocating a certain percentage to the lower-market cap coins. But first, you need to assess your risk tolerance. In this case, if you are a conservative investor, allocate a higher percentage of your funds to coins with a higher market cap, and the vice versa is true. 

2) Utility Value

The true measure of a coin’s ability to survive for long in the market is whether it has a real-world user base or a concrete project backing it up. 

A coin’s utility value can be determined by its user base. For instance, Bitcoin has the largest number of users in the crypto market, thus holds more utility value compared to a less used digital coin. In the case of ETH, the coin derives its value from the Ethereum blockchain, which allows developers to build decentralized apps. Other cryptocurrencies with real-world use include Stellar, Ripple, and WanChain.

Other worthy considerations to help you determine a coin’s value include its governance and market opportunity. In this case, a coin’s governance means a solid framework regulating its supply, for instance, the mining process of the coin. Market opportunity, on the other hand, refers to a coin’s ability to provide a solution to the problem it intends to solve. 

3) Industry

The industry in which a coin is tied to not only predicts its long-term growth but also offers an opportunity to spread your risk. Apart from Bitcoin, most of the cryptocurrencies are designed to offer solutions to a particular industry. For instance, Vechain and Waltonchain intend to improve the supply chain industry. If, from your analysis, you believe that the two coins will steadily increase in value, you may consider investing additional capital in them. 

You can also spread your investment across other coins linked to the computing, networking, and financial industries to achieve a diversified portfolio. 

Don’t Be Too Rigid 

Now that you understand the essential steps in building a long-term portfolio don’t confine your earning potential to the structure of your portfolio. This means that you don’t have to completely stay away from short-term profits. When you spot a rising trend early enough, be sure to sell part of holdings to make a profit. 

It’s easy to be carried away by the quick profit to the point of disrupting your long-term portfolio. For this reason, you may consider adding a few low priced coins in your portfolio. These coins tend to offer better short-term gains, especially in a bullish market. Most importantly, adding them into your portfolio means that you won’t have to sell your long-term holdings in pursuit of the quick rewards. As such, you won’t compromise your long-term goal. 

Conclusion 

While the above tips will help you build a long-term portfolio, you should note that the crypto-market is highly volatile. To keep up with the trends, it demands that you regularly track and rebalance your portfolio in line with your objectives. Also, it’s a good idea to keep tabs on market events such as government laws in your jurisdiction regarding cryptocurrencies. These events usually have an impact on price movements. 

Categories
Crypto Daily Topic

What Does the Introduction of Bitcoin ETFs mean to Crypto Investors? 

Over the last few years, key stakeholders in the cryptocurrency industry have been advocating for the approval of Bitcoin exchange-traded funds (ETFs). Unfortunately, the Security Exchange Commission (SEC) has rejected the ETFs on the basis of the market’s volatility. 

Over the last few years, key stakeholders in the cryptocurrency industry have been advocating for the approval of Bitcoin exchange-traded funds (ETFs). Unfortunately, the Security Exchange Commission (SEC) has rejected the ETFs on the basis of the market’s volatility. 

Over the last few years, key stakeholders in the cryptocurrency industry have been advocating for the approval of Bitcoin exchange-traded funds (ETFs). Unfortunately, the Security Exchange Commission (SEC) has rejected the ETFs on the basis of the market’s volatility. 

But what exactly are Bitcoin ETFs, and how are they different from actively trading the digital currency on crypto exchanges? 

To answer this question, we need to take a step back and examine how ETFs work in their most basic form. 

What is a Bitcoin ETF? 

Essentially, an exchange-traded fund (ETF) is an investment vehicle that tracks the performance of assets such as securities, bonds, and commodities like gold and oil. The fund can easily be traded on an exchange just like stocks, hence the name. ETFs allow investors to diversify their portfolio without actually owning the underlying assets. 

In the case of Bitcoin ETF, the backing asset will likely be bitcoin futures or actual bitcoins stored in wallets. For investors, holding shares in a bitcoin ETF would mean that you don’t have to worry about the complexity of actively trading Bitcoins in the market, or about safety. This is because the investors’ money is tied to the price of Bitcoin and not the digital currency itself. 

Advantages of Bitcoin ETFs 

Bitcoin ETFs come with some advantages which are crucial to the maturation of the entire cryptocurrency market. 

Big Money Interest

Bitcoin ETFs are a gateway to roping in mainstream investors into the cryptocurrency market. The main incentive here is that the ETF is regulated by brokers, and this increases investor confidence. That said, it will be easier for institutional investors to put their money into the fund in order to diversify their portfolios. Additionally, Bitcoin ETFs make it possible for the less than tech-savvy investors to invest in Bitcoin, thus helping them avoid risky token sales or blockchain-based projects. 

Increased Bitcoin Value

Usually, an ETF dealing with a commodity such as gold keeps a large amount of the commodity in reserve. Likewise, a Bitcoin ETF will be backed by large reserves of the digital coin stored in wallets. As the fund purchases more bitcoin to keep in reserve, the market value of the digital asset will increase.

More so, the fund will redirect the investor money into the Bitcoin global market. In turn, Bitcoin’s price will become more stable, making it more valuable. 

Added Legitimacy

Bitcoin itself isn’t completely illegal but still faces restrictions from various governments. However, if Bitcoin ETFs were to be approved on a major exchange under the regulation of a body such as the SEC, it would become more accepted by the general public. This would also prompt investment managers to include the fund in tax-sheltered retirement plans such as 401ks and mutual funds.  

Cons of Bitcoin ETFs

While there are advantages that come with the addition of Bitcoin ETFs in the market, there are a couple of valid reasons why the funds may be a bad idea. 

First, the funds might take away the decentralized nature of bitcoin holdings. This opinion is tied to the fact that investors don’t own the private keys of the underlying asset. The investors own shares in Bitcoin, which is not the same as owning the asset itself. As such, the fund custodians will have absolute authority on making crucial decisions such as which chain to support in the event of a fork, and even whether or not to issue forked coins to investors. 

Moreover, the entry of big money investors means that there is a high possibility of Bitcoin price manipulation through shorting. These investors may sway even the entire crypto-market to their advantage at the expense of other small-scale investors. It can get even worse considering that Bitcoin ETFs are open to any investors, including those that don’t understand or appreciate blockchain technology. The entry of such investors in the market may jeopardize the intrinsic value of the technology since they are largely more concerned with making profits than the growth and development of blockchain. 

Investing in Bitcoin ETFs

Clearly, the advantages of Bitcoin ETF outweighs its cons.  Although the fund is yet to be approved on U.S. exchanges, there are several functional Blockchain ETFs in European exchanges. Unlike Bitcoin ETFs, blockchain ETFs do not follow bitcoin prices but instead track the performance of companies linked to the blockchain space. Be aware, though, that the ETFs come with tax implications as per the provisions of the Financial Account Tax Compliance Act (FATCA).

Right now, the only Bitcoin financial product available to U.S. investors is  Bitcoin ETN. The two products are similar in that they relieve investors of the burden of owning the asset. However, ETNs are regarded as debt notes rather than a pool of assets. They are often issued by banks and are structured as bonds in the sense that they are unsecured. The only downside of ETNs is that if the underlying issuer goes bankrupt, investors are likely to lose their money. Perhaps this explains why Bitcoin ETNs haven’t gained much traction. 

Conclusion 

Bitcoin ETFs offer a new way of investing in the cryptocurrency market. As an investment vehicle, ETFs serve as a tool for driving Bitcoin adoption as global investors bet on the price of the underlying asset. But it is important to note that the real potential of ETFs is the sheer speculation from the crypto community. Unfortunately, the few ETFs that are in the market can’t be used to ascertain these speculations since they are exclusively offered to specific investors.

Even if ETFs live up to the hype, they still have a long way to go considering that Bitcoin futures still lag behind in terms of trading volume. For now, crypto investors can find consolation in the fact that European exchanges, as well as over-the-counter Bitcoin financial products, are paving the way for the inception of Bitcoin-based ETFs. 

Categories
Cryptocurrencies

Why you Should Consider Staking Cryptocurrencies

The most popular way to make money in the crypto industry is trading or mining. But recently, the two methods are proving difficult due to unprecedented market trends and the high electric power consumption associated with mining. 

The most popular way to make money in the crypto industry is trading or mining. But recently, the two methods are proving difficult due to unprecedented market trends and the high electric power consumption associated with mining. 

The most popular way to make money in the crypto industry is trading or mining. But recently, the two methods are proving difficult due to unprecedented market trends and the high electric power consumption associated with mining. 

Unknown to many, you can earn passive income from owning and holding a digital currency in a wallet for a fixed period of time. It’s pretty much like saving money in a fixed deposit account. The longer the money stays in the account, the more interest you earn. What makes coin staking even more lucrative is the fact that you can reinvest your earned coin tokens to reap more returns. So, you don’t have to study complex price charts or try to time the market. You earn guaranteed income regardless of market highs and lows. 

How the Coin Staking Process Works

Cryptocurrency staking is derived from the “Proof-of-Stake” (POS) algorithm. See, in the case of Proof-of-Work, the creation of new blocks, as well as validation of transactions, relies on solving complex mathematical calculations. This process relies heavily on the mining power of a GPU/CPU, which is why it’s an expensive method. The higher the mining power, the more coins rewards a miner earns. 

Rather than using expensive mining hardware, POS validates transactions and generates new blocks using coins stored in a wallet (network nodes). It’s important to note that not every coin holder is chosen to validate a transaction. Usually, users who have staked significant amounts of coins stand a better chance of being chosen as the next validators. 

Alternatively, you may consider joining a staking pool to increase your chances of validating new blocks and earning coin rewards. Basically, a staking pool works by merging resources of several coin holders to form a stronger staking power. The block rewards are then shared proportionally to an individual’s contribution. 

Advantages and Disadvantages of Coin Staking

In addition to being a more energy-efficient way of earning more coins, crypto staking also offers a wide range of benefits, including: 

☑️Protected Value

The coins mined using computational power risk losing their value over time due to the use of the mining hardware and ASIC. On the other hand, coins earned through staking do not increase or appreciate in value with time. Their value can only fluctuate with the market trends. 

☑️Reduces Centralization Risk

Coin staking eliminates the need for owning expensive mining equipment and other entry barriers such as the technical know-how and knowledge of the market patterns. This is especially the case with staking pools where the entry requirements are relatively low. As such, it offers an opportunity for more investors to join the network, thereby decentralizing its control. 

☑️Enhanced Security

Besides staking cryptos on an online wallet, there are a couple of blockchain networks that allow investors to stake coins in their cold wallets. This method is commonly known as cold staking, and it goes a long way into securing your earnings. Cold staking is particularly useful to stakeholders with large amounts of coins that would otherwise be susceptible to theft if stored in an online wallet.

☑️Reduces the Chance of a 51% Attack

The 51% attack is a common problem in the Proof-of-Work algorithm, where coin rewards are earned through mining. The attack refers to a case whereby a user or group of users controlling the majority of the mining power end up monopolizing the creation of new blocks. As such, they prevent the small-scale miners from completing blocks, which in turn denies them coin rewards. Besides reversing transactions, such attacks also lead to the outflow of small-scale miners as well as a decline of the coin’s value. 

Thanks to the Proof-of-Stake improved architecture, it’s almost impossible for one party to earn extra profits and become the majority holder. Even in the event where a perpetrator succeeds in controlling the largest share, the community can coordinate a hard-fork and delete the offending validator’s holdings. As a result, the price of the coin may increase due to the supply crunch. 

The only drawback of staking cryptocurrencies is that you’ll need to lock them for a fixed period without using them. In a bullish market, locking your coins for long may not be a huge problem. The problem occurs in bearish market conditions, especially when the amount earned through staking is not enough to cover the price depreciation. As such, it makes sense to stake a specific amount of coins depending on your risk tolerance. 

How to Get Started Staking Cryptocurrencies

Staking cryptocurrencies may sound easy and straightforward in theory, but it actually demands a considerable degree of input if you’re to make any reasonable returns. 

i) Choose a Coin to Stake

Finding a good Proof-of-Stake coin requires extensive research of the crypto market. At first, you may easily be lured by POS coins offering the highest percentage of returns. Usually, such coins end up being saturated in the market, making it hard for your stakes to maintain their value. Also, due to their high supply in the market, these coins tend to require a huge financial investment for one to begin staking. 

An ideal POS coin strikes a good balance between returns and the initial investment required. This way, it’s able to maintain a steady value making it suitable for generating passive income rather than being a speculative investment. 

ii) Determine the Minimum Requirements

All POS coins have a minimum number of tokens required in order to begin staking. Dash, for instance, requires about 1000 DASH coins while ETH requires not less than 32 coins. This amount can be brought down to attainable limits by joining a staking pool. But you should be prepared to pay a certain percentage of your rewards to the pool provider as payment for the service. 

Alternatively, you can also invest in coins such as PIVX, NEO, and PART that don’t require a minimum investment amount. However, they don’t pay as well as their counterparts. 

iii) Hot or Cold Staking

For those coins that require staking in an online wallet, you’ll need around-the-clock connection to the internet. A standard computer might serve you just right, preferably one that consumes less power. Small single-board computers such as Raspberry pi and PocketBeagle can also get the job done and even save much more on power bills. 

Cold staking is the best alternative if you want to eliminate the power and internet bills entirely. Coins staked in a hardware wallet are also safer than those in a hot wallet. 

Conclusion

As market volatility and the high cost of mining continues to turn away investors, coin staking is finding its place as an alternative method of earning income from the crypto market. Most importantly, through its long-term approach, coin staking puts the crypto-space on the road to maturation as more investors welcome the idea of earning returns from staking. 

Categories
Cryptocurrencies

Keepkey Hardware Wallet Review 2020: Is It Safe And Reliable?

On the KeepKey website, this USB-like crypto hardware wallet is described as the ‘next frontier of crypto security.’ But the Keepkey wallet is better known for its sleek design, especially its unique full OLED screen on the side of the USB that’s wide enough to fit the entire crypto address. Notably, the coin has also gained massive popularity by virtue of having Ken Hodler, a renowned crypto industry expert, as its Chief Engineer.

On the KeepKey website, this USB-like crypto hardware wallet is described as the ‘next frontier of crypto security.’ But the Keepkey wallet is better known for its sleek design, especially its unique full OLED screen on the side of the USB that’s wide enough to fit the entire crypto address. Notably, the coin has also gained massive popularity by virtue of having Ken Hodler, a renowned crypto industry expert, as its Chief Engineer.

On the KeepKey website, this USB-like crypto hardware wallet is described as the ‘next frontier of crypto security.’ But the Keepkey wallet is better known for its sleek design, especially its unique full OLED screen on the side of the USB that’s wide enough to fit the entire crypto address. Notably, the coin has also gained massive popularity by virtue of having Ken Hodler, a renowned crypto industry expert, as its Chief Engineer.

But does this hardware wallet live up to its reputation? We answer this by looking at its key features, security, and design in this KeepKey review. We will also look at how the hierarchical deterministic wallet fairs in the face of its peers with regards to ease of use and tell you if it is a reliable crypto store for your digital assets.

KeepKey Key features

  • Wide screen: KeepKey has one of the largest OLED displays that allows you to view the entire cryptocurrency address without scrolling.
  • Shapeshift integration: KeepKey hardware crypto wallet was developed by KeepKey in 2015 and proceeded to acquire Multibit, a bitcoin wallet company, in 2016. In 2017, KeepKey was acquired by Shapeshift and currently serves as the native hardware wallet for the crypto exchange. The integration makes trading and investment easy due to the ease of moving your assets in and out of the exchange.
  • Compatible with all OS types: The KeepKey wallet is also compatible with all the popular operating systems, namely Windows 8+, macOS 10.8+, and Linux. It is also compatible with Android smartphones and features a Google Chrome extension.
  • Software wallet integration: KeepKey integrates with such software wallets as MultiBit and Electrum, as well as the smartphone-based Mycelium for the smooth transfer of digital assets.
  • Sleek design: KeepKey has a smooth, sleek, and well-thought design crafted with the need to appeal and boost wallet security in mind.

Security features

First, in its long line of security features is the fact that KeepKey hardware crypto wallet stores your private keys offline. Additional security measures like:

☑️Pin code protection: The KeepKey hardware crypto wallet is pin protected. You get to set the pin during the wallet setup and will be required every time you want to access the wallet, view crypto balances, and initiate a transaction. 

☑️Number randomization: The number randomization feature of the KeepKey wallet randomly shuffles the PIN numbers from time to time to prevent malware from copying your code and using it and gaining access to your digital assets.

☑️Recovery sentence: The private keys for all your cryptocurrencies are stored in and will not leave the hardware crypto wallet. During setup, however, KeepKey provides you with a recovery seed of 12-24 words unique to your device that you can use to retrieve the private keys in case the hardware wallet is stolen, lost, or damaged.

☑️Passphrase: In addition to the pin code and the recovery word, KeepKey also provides you with the option of a passphrase that you can attach to the recovery phrase. Unlike most of the other KeepKey security features, however, passphrase doesn’t have a recovery, and losing it may mean the forfeiture of your private keys. The company, therefore, advises its KeepKey wallet users to only use this feature if they understand the consequences of its use.

☑️Physical button: KeepKey hardware wallet also has one button that comes in handy during the setup stage but also doubles up as a security tool. Every transaction involving the private keys in your wallet has to be authorized by long pressing this button. It ensures that even if a hacker was able to remotely access your wallet, they wouldn’t be able to transfer your digital assets as long as you have access to the device.

☑️Desktop app: The KeepKey wallet has a digital app that is vital during the setup process by completing the single button on the wallet.

Currencies supported

KeepKey supports the seven most popular cryptocurrencies available today that include Bitcoin, Litecoin, Dogecoin, Bitcoin Cash, Dash, Bitcoin Gold, Ethetreum, and DigiByte. In addition to these, the wallet supports over 40 ERC-20 tokens and coins, including Tether and TrueUSD stable coins. The numbers are too low when compared to equally competitive wallets that support 1000s of coins and tokens.

  •         AELF (ELE)
  •         Aeterenity (AE)
  •         Aragon (ANT)
  •         Augur (REP)
  •         Basic Attention Token (BAT)
  •         Binance Coin (BNB)
  •         Bancor (BNT)
  •         Civic (CVC)
  •         Storj (STORJ)
  •         com (MCO)
  •         CyberMiles (CMT)
  •         Dai (DAI)
  •         Decentraland (MANA)
  •         DigixDAO (DGD)
  •         District0x (DNT)
  •         Edgeless (EDG)
  •         FirstBlood (1st)
  •         FunFair (FUN)
  •         Gifto (GTO)
  •         Gnosis (GNO)
  •         Golem (GNT)
  •         ICONOMI (ICN)
  •         IOST (IOST)
  •         iExec (RLC)
  •         TrueUSD (TUSD)
  •         Maker (MKR)
  •         Matchpool (GUP)
  •         Melon (MLN)
  •         Metal (MTL)
  •         Numeraire (NMR)
  •         OmiseGO (OMG)
  •         Polymath (POLY)
  •         Populus (PPT)
  •         Ripio Credit Network (RCN)
  •         SALT (SALT)
  •         SingularDTV (SNGLS)
  •         SpankChain (SPANK)
  •         Status (SNT)
  •         0x (ZRX)
  •         0xBitcoin (0xBTC)

Keeepkey is nevertheless trying to catch up and recently integrated the MyEtherWallet into its platform that makes it possible for its users to access and hold 1000+ coins and tokens online.

Keep key wallet cost and other fees

When KeepKey first hit the market in 2015, it was arguably one of the most expensive hardware wallets available at the time, priced at $239. With the successive acquisitions and integration of different technological solutions and exposure to the global markets, however, KeepKey has gradually reduced its price to the relatively affordable and highly competitive $49.

You will not incur any cost for the use or maintenance of the KeepKey hardware crypto wallet. You will only be required to part with the regular trading fees if you chose to trade on their integrated shapeshift exchange. 

Setting up the KeepKey wallet:

Configuring the wallet:

Our review found setting up the hardware wallet and readying it for use relatively complicated. The fact that the device only has one button especially makes navigation through the device monitor highly tedious. You have to use at least the KeepKey key chrome app and the KeepKey chrome extension to effectively configure the wallet and set up such security parameters as the pin code and passphrase as well as the generation of the recovery sentence. The process is quite straightforward, requires little to no guidance, and takes less than five minutes overall.

Sending and receiving coins:

The process of sending and receiving coins to your KeepKey hardware wallet is slightly different from the one adopted by other online or hardware wallets. Unlike most online transactions, involving software wallets where the transaction is completed online, KeepKey transactions have to be verified and approved on the hardware device before they are marked as complete on the blockchains.

When sending coins from the wallet, for instance, you start by logging in to your KeepKey client account on the KeepKey chrome extension. Click on the cryptocoin you wish to send, and the screen displays the sending page where you key in the receiver’s address and amounts you wish to send. You will then receive a sender’s prompt on the device display requesting you to authorize the payment by long-pressing the wallet’s button.

Note: The wallet has its default crypto account as Bitcoins, and you, therefore, have to create an account for any other cryptocoin you wish to hold here.

Receiving payments into your KeepKey wallet is equally straightforward. Start by logging in to your KeepKey client account and selecting the receive coin option. The client and the wallet device will both display your wallet address and QR code that you need to copy and send to the person from whom you seek to receive funds.

KeepKey hardware wallet pros and cons:

Pros:

  • Keepkey has a modernized, sleek, and attractive design
  • Keepkey stores all your digital assets securely and offline
  • The hardware wallet embraces layered security features that include a randomized pin code
  • At $49, the wallet is competitively priced and offers value for money

Cons:

  • Has a complicated setup process that requires a third-party browser extension
  • Has no recovery feature for the passphrase that if lost makes your wallet inaccessible
  • Its wide display makes the wallet less portable than its competitors
  • One may consider their support of 40 digital coins limiting

KeepKey wallet compared to competitors:

When compared against some of the most popular online crypto wallets like Coinbase and eToro, Keepkey’s outmatches them when it comes to keeping digital assets secure. But the two blow it out the waters with regards to ease of use. And while they all are integrated into pretty popular crypto trading platforms, KeepKey may be said to have a rather complicated send/receive funds functionality.

When stacked against equally popular hardware wallets like Trezor and Ledger Nano, Keepkey’s sleek design, especially the massive display, carries the day. It is also fairly priced when compared to most of the hardware crypto wallets. Its single button that complements its sleek design is, however, its biggest downfall when it comes to ease of use. The two are also relatively easier to install and set up.

Verdict: Is the KeepKey wallet worth buying?

Keepkey is an expertly crafted hardware wallet for cryptocurrencies with solid security features. It particularly outfoxes competition with its wide display and a multi-layered security system. Its biggest shortcomings stem from its limited support of cryptocurrencies and altcoins as well as a relatively complicated setup process. These have nonetheless not stopped it from topping the lists of most popular hardware crypto wallets, and we believe that if KeepKey made an effort to support more crypto coins, it would compete more favorably with the dominant hardware wallets.

Categories
Crypto Daily Topic

Pot and Crypto: Why Should the Cannabis Industry Embrace Blockchain? 

With an anticipated growth of about $30 billion and an expanding job market, it’s evident that the cannabis industry is set to become one of the strongest pillars of global economies. This explains why various legislatures are legalizing marijuana both for recreational and medical use. 

With an anticipated growth of about $30 billion and an expanding job market, it’s evident that the cannabis industry is set to become one of the strongest pillars of global economies. This explains why various legislatures are legalizing marijuana both for recreational and medical use. 

With an anticipated growth of about $30 billion and an expanding job market, it’s evident that the cannabis industry is set to become one of the strongest pillars of global economies. This explains why various legislatures are legalizing marijuana both for recreational and medical use. 

But the major strides in the industry have not been without pain points. From the ever-changing regulatory rules, unreliable payment solutions, to inefficient supply chain management – all these create uncertainty within the industry. As a result, the industry hasn’t been successful at drawing in steady investors.  

As blockchain continues to find use in various industries, the technology will prove to be even more useful in the cannabis market to help entrepreneurs mitigate some of the problems plaguing the industry.

Here are some of the solutions blockchain can offer 

Monitoring Purchases

In states where marijuana is legal, there is a maximum limit that consumers can buy at any given time. The limit is set to curb the resale of marijuana in the black market by making it costly to buy marijuana in bulk. But, there are loopholes in this rule whereby a consumer can buy the maximum daily limit of marijuana in one dispensary, and then head to another to buy some more. 

When this happens, a retail dispensary risks going out of business as the state can revoke its license. Moreover, the extra amount of marijuana purchased ends up being resold in the black market, resulting in a loss of revenue in terms of taxes. 

By using blockchain to record and verify purchases, marijuana dispensaries can ensure that their customers don’t exceed the purchase limit set by the local government. These records are tamper-proof and transparent for all retailers to see, especially those operating in the same blockchain network. The technology can be integrated into consumer verification IDs and inventory management systems to prevent retail operators from acting in non-compliance. 

Quality Assurance

For medical marijuana users, the quality of CBD products is highly appreciated in order to reap the full benefits of the hemp plant. Unfortunately, quality control bodies such as the Food and Drug Administration (FDA) consider CBD products as a supplement. As such, they don’t scrutinize the labels to authenticate the quality of these products. 

To guarantee quality at all times, cannabis businesses can use blockchain to store all the information of a hemp plant right from its seedling stage to a saleable product. This includes the laboratory results indicating the correct concentration of THC and CBD in a product. Such levels of transparency go a long way in winning consumers’ trust. 

Big corporations such as CVS pharmacy, Walgreens, and Walmart who are strict on the quality of CBD products, can also leverage blockchain to ascertain if a product is up to standard. Doing so will make it difficult to corrupt the quality of a product and eliminate the tedious paperwork involved in the process. 

Payment Processing

Given the dynamic nature of the laws regulating the cannabis industry, most banks shy away from providing services to the industry players. For starters, the lack of banking services has forced the industry to operate as a cash-only business. As is often the case, businesses operating on fiat currency only are highly susceptible to theft and fraud. Also, as sales increase, accounting for the high volume of cash becomes hectic, creating inaccurate financial statements that lead to taxation hurdles.  

In this case, cryptocurrencies can be used as a payment method, ensuring fast, secure, and affordable transactions among industry stakeholders. All the payments will be recorded in a secure and distributed ledger system that helps in auditing as well as maintaining tax liability. 

Legalization of Marijuana

So far, only a handful of nations have legalized marijuana. Considering the proven medical benefits of the hemp plant, it’s unfortunate that some countries still criminalize pot. But, there is a likelihood that some would be open to legalizing weed as long as its use is regulated by law. 

The integration of blockchain technology into the cannabis industry will make it easy for everyone in the supply chain to abide by all the regulations put in place. The authorities will be in a position to curb illegal marijuana businesses as well as limit its use to prevent abuse. So, marijuana will be sold to the right people for the right use, contributing to its legalization.  

Decentralize Electronic Medical Record

Electronic Medical Records (EMRs) promise efficiency in the health sector as long as they are properly integrated into the system. But it can be concluded that the health sector hasn’t achieved much success in leveraging EMR to offer medical services. A good example is the cannabis industry where some individuals have acquired marijuana medical cards by forging fake health records

These individuals cause an increase in the demand for marijuana due to their impulse buying practices. Consequently, those who have legitimate medical conditions end up paying more for medical marijuana and may even fail to get some. 

Blockchain-based EMRs can help ensure that medical marijuana cards are given to those who rightfully deserve them. As an immutable and distributed ledger system, any patient’s data is permanently recorded, such that it would be impossible for unauthorized persons to distort it. The record can also be shared across various hospitals to help doctors and marijuana retailers determine the patients who truly need medical marijuana. 

Use Cases of Blockchain in Cannabis 

Currently, there are already more than ten blockchains uniquely designed for the cannabis industry. Some of them even offer their own cryptocurrency to help meet the banking needs of the cannabis industry. 

i) Paragon 

This network is committed to enhancing transparency from seed to sale tracking, as well as coming up with regulatory solutions in the cannabis industry. The network even has an in-house laboratory that works to ensure quality is maintained. Its crypto coin, Paragon Coin, can be used to make payments within the industry supply chain.

ii) Potcoin

Potcoin is mainly focused on offering financial services to the marijuana industry. It allows the transfer of funds via a digital wallet, from customers, businesses to suppliers. 

iii) CanSoS

CanaSos is a social network platform that helps consumers locate nearby retailers and discover new CBD products and marijuana strains. The users can review marijuana products, answer questions, and earn points that can be redeemed for PerkCoins. The coins can be used to buy marijuana or withdrawn for fiat currency. 

Conclusion 

The cannabis industry is a relatively new market that is yet to be widely accepted in all parts of the world. The same can be said about blockchain, which makes the two a perfect match for each other. As the marijuana market expands, blockchain is well poised to solve the current problems limiting the industry’s growth and even the unprecedented ones on the horizon. 

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Crypto Daily Topic

Blockchain and Healthcare

With blockchain technology taking space in all manner of industries, we will inevitably talk about blockchain application in one of the most crucial sectors – healthcare. If there ever was an industry that could benefit from blockchain’s immutability, transparency, and centralization, it is healthcare.

With blockchain technology taking space in all manner of industries, we will inevitably talk about blockchain application in one of the most crucial sectors – healthcare. If there ever was an industry that could benefit from blockchain’s immutability, transparency, and centralization, it is healthcare.

With blockchain technology taking space in all manner of industries, we will inevitably talk about blockchain application in one of the most crucial sectors – healthcare. If there ever was an industry that could benefit from blockchain’s immutability, transparency, and centralization, it is healthcare.

However, currently, there is not much to write home about – as far as healthcare and blockchain are concerned.

In this guide, we are going to take a look at the ways in which blockchain would disrupt the healthcare space. We’ll also look at what the situation is like right now, as well as projections for the future.

Healthcare and Innovation

To put it mildly, the healthcare industry has been slow with innovation. That may sound controversial – given the incredible advancements in healthcare and medicine over the years. But when you look at different industries, the healthcare ecosystem still seems to be operating the same way it did years ago.

So what do we mean by saying innovation has been slow in this sector?

When it comes to vertical innovation, there’s no arguing that the space has done excellently well. But the same cannot be said about horizontal innovation.

Let’s demystify this below.  

Vertical Innovation vs. Horizontal Innovation

Vertical innovation refers to industry-specific innovation, while horizontal innovation means innovation that can be adopted by any industry. 

When we think of advances in diagnoses and treatment of different conditions, it is very clear the healthcare industry has done so well in vertical innovation, but it sorely lacks in horizontal innovation. 

Things like APIs and cloud computing are examples of horizontal innovation that any multiple fields can adopt to make their processes more efficient. The healthcare industry isn’t big on that – considering most hospitals still employ files and papers to document information.

Blockchain as a Horizontal Innovation

A blockchain is a distributed ledger that is managed by multiple computers and with no single authority overseeing its transactions. It has blocks of data linked to each other through state-of-the-art encryption, and any information entered in it cannot be deleted by anyone. Blockchain has become such as an important technology due to these reasons: 

  • It is decentralized – no single authority or entity calls the shots 
  • Data is cryptographically secured
  • No one can delete the information after it goes on the blockchain
  • It is completely transparent, meaning anyone in the network can confirm information whenever they want to. 

Public and Private Blockchains

There are two main types of blockchains: public and private blockchains. Both types of blockchains provide a peer-to-peer, decentralized, and immutable ecosystem. 

Now, on public blockchains, everyone who has access can participate in the network. Public blockchains also have storage and scalability issues that impede them from storing large volumes of data or cause them to have high latency – e.g., Bitcoin has a latency of 10 minutes. This latency is potentially life-threatening in the context of healthcare. 

Also, public blockchains require immense energy to solve computational puzzles. It is inconceivable that healthcare institutions would spend huge sums of money to foot such massive power bills. Also, public blockchains, by virtue of being public are open, are accessible to anyone. This is obviously a no-no in healthcare since sensitive patient data is involved.  

As you can see, public blockchains are impractical for application in healthcare. 

Enter private blockchains, which have the following features:

  • Fast transactions
  • Privacy of patient healthcare records
  • Tight security

 Courtesy of these features, private blockchains are more fit – and practical, for the healthcare industry.  

What Can Blockchain Do For the Healthcare Space?

1. A New Catalyst for Interoperability in Healthcare

The importance of interoperability in healthcare cannot be overstated. It could, for instance, solve the problem of mismatched patience Electronic Health Records, which has led to detrimental mistakes on patient care in the past.

With blockchain, healthcare personnel will be able to benefit from secure access to electronic healthcare record information sans the time-consuming involvement of intermediaries.

2. Cost-effective and Seamless Exchange and Access of Information

Blockchain would support the near real-time processing of requests, as well as enable the faster and more secure exchange of patient health records between and among concerned parties. It would also reduce overhead costs and, in the process, provide an economic incentive for healthcare organizations.

3. Smart contracts

The current healthcare system is riddled with bureaucracy and third-party intermediaries that contribute to expensive costs. Transactions are also fraught with inconsistency and manipulation. Blockchain-based smart contracts would solve this by removing costly intermediaries, as well as inconsistent rules which reduce trust. By providing immutable, transparent records, smart contracts would inject much-needed transparency in the healthcare ecosystem.

Other Advantages of the Healthcare Blockchain

Apart from these use cases, there are other advantages the healthcare ecosystem could obtain from integrating blockchain. 

i) Thanks to the immutability of blockchain records, patients can give access to their health records to healthcare personnel without the fear of it being altered or tampered with. The integrity of patient records will remain intact, no matter how many people get access to it. 

ii) Medical records added on the blockchain will remain completely secure

iii) Patients have control over who gets access to their medical data. Any party who wishes to get access to the data has to ask permission from the patient.

iv) The blockchain can be used creatively to incentivize patients to stay healthy, to follow a certain healthcare plan, or to participate in healthcare research. They can be rewarded with tokens if they do so.

v) Blockchain can help pharmacy companies track drugs from the point of origin. This would help stamp out the common stealing of drugs from the supply chain that is done so as to be sold to illegal consumers. It would also eliminate fraud, such as falsified medication.  

vi) A blockchain could help various medical research institutes around the world to consolidate their research in one place for easier management and reference. 

vii) Blockchain could help stamp out insurance fraud that is so prevalent in the healthcare industry. This happens when patients and unscrupulous providers provide falsified claims to receive payable benefits. 

Challenges and Considerations

For blockchain to be integrated fully in blockchain, it needs to support the following: 

  • A ubiquitous and secure infrastructure 
  • A verifiable and authentic identity database for participants
  • Consistent and reliable authorization of access to health information 

However, the current blockchain set up cannot adequately support these requirements because of limitations in security, privacy, storage, speed, and interoperability. 

Blockchain presents numerous opportunities for healthcare, but it simply hasn’t yet reached the desirable scale in which it can be applied. For this reason, several technical challenges need to be first addressed before we can harness blockchain for the benefit of healthcare. 

The Future

While the healthcare industry is far from adopting blockchain full-scale, it looks like the signs are pointing a future where that will be.

For instance, a report by BIS research shows that if the healthcare industry incorporates blockchain, it can save up to $100 billion per year by 2025. Blockchain technology would save the industry in costs related to data breaches, IT, operations, support functions, personnel, and counterfeit and insurance

The report also stated that “a global blockchain in the healthcare market is expected to grow at a compound annual growth rate of 63.85% from 2018 to 2025. The use of blockchain for healthcare will contribute to the largest market share throughout the forecast period, reaching a value of $1.89 billion by 2025…”

According to the report and the rate at which blockchain is currently being recruited for all types of industries, it makes sense to be optimistic about the future of blockchain in healthcare.  

Conclusion

There is no doubt that blockchain promises unique opportunities and a transformative future for healthcare. It can help reduce complexities, streamline processes, enable secure information keeping, enable trustless coordination among various parties, and reduce costs. It’s time for the healthcare ecosystem to adopt this technology that will help it realize much-needed horizontal innovation.

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Crypto Daily Topic

The Future of Cryptocurrencies 

About 10 or 11 years ago, the world couldn’t have foreseen a new class of digital currencies that would threaten to upset the global financial order. As of now, cryptocurrencies are firmly the leading tradable asset – overtaking others that were since the beginning of trading. And a cryptocurrency that’s not even out yet – Libra, sent economic experts into a panic mode as they decried the influence it would have on the world’s finance system. 

About 10 or 11 years ago, the world couldn’t have foreseen a new class of digital currencies that would threaten to upset the global financial order. As of now, cryptocurrencies are firmly the leading tradable asset – overtaking others that were since the beginning of trading. And a cryptocurrency that’s not even out yet – Libra, sent economic experts into a panic mode as they decried the influence it would have on the world’s finance system. 

About 10 or 11 years ago, the world couldn’t have foreseen a new class of digital currencies that would threaten to upset the global financial order. As of now, cryptocurrencies are firmly the leading tradable asset – overtaking others that were since the beginning of trading. And a cryptocurrency that’s not even out yet – Libra, sent economic experts into a panic mode as they decried the influence it would have on the world’s finance system. 

While those are positive highlights, the cryptocurrency industry is encumbered by challenges that might curtail its mainstream success, at least in the short run. Also, crypto, as we know it now, is primarily driven by investor speculation and trading. We’re still far from the day when we can use it to pay for coffee in the drive-thru. 

So what is the future of cryptocurrencies? What developments are we likely to see in the space in the coming years? And the seemingly outdated but still relevant question: should you invest in cryptocurrencies? 

What is Cryptocurrency?

Cryptocurrency is an internet-based currency that uses cryptography to secure and facilitate transactions. Cryptocurrencies utilize blockchain technology to achieve decentralization, transparency, and immutability. Cryptocurrency came into life with the creation of Bitcoin in 2009. The crypto was a slow burner up until April 2013 when it peaked at $266 after surging ten times in February and March of that year. From then on, the media and the Investment community started taking notice. 

Bitcoin has gone on to achieve the record high of $20, 089, but like any other cryptocurrency, it is subject to wild price swings, and as such, a stable price for the crypto is very rare. Bitcoin’s success has inspired thousands of more cryptocurrencies – some falling by the wayside, others achieving remarkable success. Currently, there are more than 3000 cryptocurrencies in existence. And cryptocurrency has proven to be a formidable force in the trading and investment world, leading other asset classes last year to be the best performing asset class in 2019.  

Will cryptocurrencies dethrone traditional currency and go mainstream? Will it become ubiquitous one day? Or is it just a fad?

Let’s look at developments that are likely to unfold: 

i) From Investment to Utility

In the last decade, cryptocurrencies were used mainly for speculation and investment. Trading was the main activity driving the use and existence of cryptocurrency. This will not change at least in foreseeable years, but it’s highly likely that we will start to see the use of crypto for non-trading activities such as staking, borrowing, lending, payments, commerce, and so on.

ii) Increased scrutiny

The cryptocurrency features of decentralization and anonymity have made it the go-to currency for illegal activities such as money laundering, weapons procurement, drug dealing, trafficking, smuggling, and so on. This has put it in the spotlight of regulatory and government agencies.

Cryptocurrency is already regulated in regions such as the European Union, while other countries like China have banned it outright. However, even with jurisdictions that have taken steps to regulate it, there isn’t a consensus on how to do so. Some regulations target crypto exchanges, while others intend to control trading. 

There is a split in opinion on the ramifications of regulating cryptocurrencies. Some countries believe that clamping down too hard on cryptocurrency will stifle innovation – prompting them to take the more cautious approach of watching from the distance but also stepping up to curb illegalities such as phony ICOs and crypto Ponzi schemes.

iii) More Stablecoins

Stablecoins are a new class of cryptocurrencies that are backed by real-life assets such as fiat currency. Stablecoins are meant to offer some price stability and mitigate the volatility of cryptocurrencies. Since they are backed by real-world currency, it means they are cushioned against the price swings of normal currencies. These price swings render cryptocurrencies unsuitable for day-to-day use as a medium of exchange. Stablecoins aim to offer the best of both worlds – the security, privacy, and fast transactions of crypto, as well as the volatility-free use as a means of payment.  

Some stablecoins have already entered the crypto fold, including Maker coin, Gemini dollar, and Tether. Libra is yet another stable coin that’s slated for release this year. Libra, for one, is notable since it’s a project spearheaded by Facebook, which has over 2 billion users across the globe. Due to the massive user base, the release of Libra would shake up not just the crypto world, but the world economy as we know it. This explains why its announcement was met with ire by financial bodies and regulators – with the argument that it would threaten and undermine the global financial system.

iv) Scalability

Lack of scalability has been the bane of cryptocurrencies’ existence. Scalability here means the speed at which cryptocurrencies can process transactions. So far, legacy blockchains such as Bitcoin and Ethereum have proven incapable of handling transactions at a level that would allow them to compete with, let alone overtake traditional payment models such as Visa. For instance, Bitcoin can only process 7 transactions per second while Visa can handle up to 1700 transactions per second. As you can see, cryptocurrencies have a lot to do if at all they’re to become viable mainstream currencies. 

Already, we’re seeing scaling solutions such as SegWit, the Lightning Network, Rootstock, and so on. These technologies differ greatly in the way they function, but they’re all geared towards the common goal of improving scalability on the blockchain. We’re likely to see more cryptocurrencies adopting these technologies, possibly putting them toe to toe with the traditional payment models. 

Challenges, and the Future

While cryptocurrencies have their revolutionary qualities, they also have their own limitations. For example, a crypto holder can lose their fortune through a computer crash, loss or damage of their physical crypto wallet, or their virtual wallet being hacked. This is a problem that can be solved through technological advances in the future.

What may be harder to solve is the curse of stricter regulation and intensified scrutiny that hangs over cryptocurrencies, the more they proliferate. This threat may slow down the advancement of this space, and undermine the very premise of their continued advancement or even existence. 

Also, businesses across the world now accept cryptocurrencies for transactions, but that number is still very much in the minority. If cryptocurrencies are to achieve mainstream recognition, they first have to find widespread use among populations. But remember that they have a complexity to them that may deter their widespread adoption. 

For a cryptocurrency to become part of the global financial club, it has to satisfy certain criteria. First, it will have to be just mathematically complex enough to deter fraud, but be easy to understand at the same time. It would also need to be decentralized to enable peer-to-peer transactions without third-party interference, but also be secure enough. Again, it would need to safeguard the privacy and anonymity of users without being a conduit for financial crime and nefarious activity.

Should You Invest In Cryptocurrencies? 

Cryptocurrencies, as anyone in the crypto community knows, can be a lucrative venture. Stories are told of crypto millionaires who struck luck by investing in the asset. That doesn’t mean you should dip both your feet in the water. Cryptocurrencies are a remarkably speculative asset class – with unpredictable price swings, and your money can be wiped away overnight if you are not careful. 

For instance, Bitcoin famously once plunged from $260 to about $130 in 6 hours. If you’re more of a conservative investor who doesn’t find thrill in that nature of volatility, you probably should look for more stable or predictable kinds of investments. 

Final Thoughts 

It’s hard to picture what the future of cryptocurrencies looks like. The technology itself is self-limiting in certain ways – like being too complex for much of the hoi polloi. Regulation is another threat that hangs over it all the time.

But going by the explosive success the industry has achieved in ten years since Bitcoin, including trouncing other asset classes, we simply can’t know what to expect. The crypto scene is highly dynamic, and things are constantly changing. What’s certain is that the future of cryptocurrencies holds a few more surprises.

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Cryptocurrencies

How to Identify a Phony ICO

Every new week we hear of yet another new cryptocurrency being launched. Launching of cryptocurrencies and Initial Coin Offerings (ICOs) go hand in hand – as new crypto projects seek financing for the project. Due to their novel nature – in terms of technology and market behavior, cryptocurrencies are a very attractive investment for investors.  […]

Every new week we hear of yet another new cryptocurrency being launched. Launching of cryptocurrencies and Initial Coin Offerings (ICOs) go hand in hand – as new crypto projects seek financing for the project. Due to their novel nature – in terms of technology and market behavior, cryptocurrencies are a very attractive investment for investors.  […]

Every new week we hear of yet another new cryptocurrency being launched. Launching of cryptocurrencies and Initial Coin Offerings (ICOs) go hand in hand – as new crypto projects seek financing for the project. Due to their novel nature – in terms of technology and market behavior, cryptocurrencies are a very attractive investment for investors. 

Thus, any new and flashy crypto project is likely to attract a horde of both experienced and novice traders. Scammers know this, which is why phony projects have been able to successfully con millions of dollars from oblivious investors.

How do you stay alert? How do you avoid sinking your precious savings in a fraudulent ICO? The crypto space is incredibly dynamic, and even the savviest investor can find themselves sideswiped pretty fast. That doesn’t mean you can’t have some antennae out to help you detect crypto ICO fraud. 

This piece arms you with what you need to know so you won’t fall victim to the ICO scam clothed in grand promises and irresistible investment returns.

i) Find Out About the Team

Nothing will familiarize you with an ICO better than the team behind it. To determine whether an ICO is fake or not, check who the developer and the administrative team are. If it’s a legit project, these people will not only be out in the open but also have some history in a relevant field such as cryptocurrency, finance, or technology. If the team has a somewhat questionable history with these fields, you might want to get out.

Other scammers will name drop trusted names within the industry, claiming to have their backing for the project. To determine the veracity of this, a quick Google search is all you need. Also, check whether the people behind the project have mentioned it in their verified social media pages. If the search turns up nothing, you should take that as a red flag. And even if they mention the project and their social media activity generally looks dubious – like no interaction with followers that should also be a big, flashing, red sign.

ii) Study the Whitepaper

The foundation of any ICO is its whitepaper. A white paper should contain the background, motivation, goals, strategy, potential challenges, and a roadmap for the implementation of any blockchain or crypto project. A white paper can tell you so much. Read it thoroughly. Check to see the sources referenced in the paper. Does it have financial models that have been explored by other experts before? Does it address legal concerns? Does it talk about tools like SWOT analysis? Does it have a timeline for implementation?

These guidelines are for when a potential blockchain-based project has a white paper, to begin with. If it doesn’t have one, then you shouldn’t even think twice about it. Note, though, that it’s still possible for a fake ICO to produce a very convincing white paper. In that case, you need to check if it answers all your questions. What sets it apart? How does it aim to thrive in the already competitive blockchain space? How does it intend to achieve its goals? Finally, even if the white paper ticks all your boxes, always rely on your gut instinct. If too much as the littlest thing sets you off the wrong way, perhaps something is wrong.

iii) Look at the Token Sale

ICOs usually depend on crowd sales to fund projects. Know this: the crowdfunding process should be completely transparent. A legitimate ICO will make public sales figures so that potential investors can see and track them easily over time.

If a company is making it difficult for the public to track the progress of its crowd sale, this signifies a lack of honesty and perhaps underhanded dealings. Watch out for excuses, such as protecting the privacy of individual contributors. This is just a ploy to hide the progress of the ICO and prevent people from seeing how much money has been raised and how much time is remaining. Sometimes, scam ICOs will use this trick to generate a sense of urgency and fear of missing out (FOMO) in potential investors – so that they can collect more money.

iv) Is The Project Feasible?

This may sound obvious, but blockchain projects poised for success are those that have a solid and feasible set of goals. Crypto and blockchain are already wildly competitive spaces. A new project should be able to demonstrate what difference it brings and how it plans to outdo competitors. Many projects started out with pomp and circumstance, only to sputter away after the center couldn’t hold any longer. A project should sell a compelling concept that sustains interest in the long haul. 

The issue of transparency also arises. Projects that have an outstanding proposal are more likely to put themselves in the open as much as possible. If a project regularly updates the community with achieved milestones, that means it is legitimate and feasible.

v) Caution Is Your Friend

The crypto space offers opportunities galore for those who have done their research and can read the fine print before jumping into any investment. People have made millions out of this industry. Due to this promise, it is very tempting to want to jump into the next hot new project. And scammers know this, which is why they will not hesitate to flash seemingly irresistible projects in the eyes of naive investors.

Be wary of projects that sound too good to be true. Scrutinize new projects up to the last detail. Watch out for any single piece of important information that seems to be missing. Also, check for outside sources to establish the credential of any projects. 

Check if it has supporting communities on social media and other online forums. Remember, a project doesn’t need to be fake, so you can lose money; it can also be just poorly designed or too weak to succeed.

vi) Beware of Improbable Promises

Investing was never a surefire endeavor – not in stocks, not in commodities, and certainly not in blockchain projects. If a project comes out promising nothing but sky-high results, then it’s probably a scam.

 If someone is promising you a massive ROI before anything even kicks off, or guaranteeing you impressive profits, you need to be very suspicious.

Also, watch out for a project creator who tells you they already raised millions of dollars and that you need to join in now. It is an attempt to convince you to shell out your money, so you don’t miss out on the “golden opportunity.”

vii) Check Under The Hood

Some phony projects are just peddling vaporware. Which is why you need to confirm the software of any new crypto project that you want to invest in.

Check GitHub. Is the product listed on there? Also, is there a community where you can ask questions about the functionality and features of the crypto? You can even ask the developers to show you a prototype.

viii) How Are They Handling Your Money?

The way a project is handling your contributions can reveal a lot. For example, your funds should not be sent directly to an exchange site like, say, Binance. This would mean the creators can automatically cash out the money – without any accountability at all.

Also, how are they vetting contribution sources? Are they following anti-money laundering (AML) procedures? Are they adhering to know your customer (KYC) regulations? 

If the project team is not complying with best practices, it means they are operating outside of the law. And if they’re operating outside of the law, then you’re not supposed to be giving them your money.

Final Thoughts

The cryptocurrency market is fast-paced and exciting. It can make you pretty handsome returns, but you can also lose your savings in a heartbeat. This isn’t to deter you from trying your hand in the market. It’s a call to caution – more measured steps and due diligence before you fork out your cash for any investment. By following these guidelines, you should be able to gauge if that flashy ICO is worth your time and money.

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Crypto Daily Topic

Understanding Cryptocurrency Metrics

The crypto market is flooded with thousands of coins, and every new week we hear of another one joining the bandwagon. With this level of proliferation, it can be daunting to pick apart the real thing from the chaff. Cryptocurrency metrics go beyond the market cap or popularity of a coin. These are pretty limited […]

The crypto market is flooded with thousands of coins, and every new week we hear of another one joining the bandwagon. With this level of proliferation, it can be daunting to pick apart the real thing from the chaff. Cryptocurrency metrics go beyond the market cap or popularity of a coin. These are pretty limited […]

The crypto market is flooded with thousands of coins, and every new week we hear of another one joining the bandwagon. With this level of proliferation, it can be daunting to pick apart the real thing from the chaff.

Cryptocurrency metrics go beyond the market cap or popularity of a coin. These are pretty limited ways of determining the measure of a cryptocurrency’s utility. So how do you distinguish between a robust currency poised for long-term success and a weak or fake one? 

Alternative metrics that can help you track and understand the value of different cryptos.

i) Decentralization of Nodes

How many nodes does a cryptocurrency have in its network? Nodes are the computers supporting the network from around the world. The more nodes a network has, the safer it is. Having a few nodes makes it easier to attack a network. Why does having decentralized nodes matter?

Resilience under attacks: having many nodes in a network makes it almost impossible to carry out a 51-percent attack.

Censorship-resistance: having a wide base of nodes makes it hard for states or governments to control or shut down the network. Nodes from around the world can replace each other in case some country manages to clamp down on node running.

Store of value guarantee: if many nodes are supporting a network, it means that the network is credible and can be trusted as a store of value.

ii) Main Developers

Who are the main developers behind the project? Do they have the relevant experience to create a robust cryptocurrency? Developers should also be able to provide regular updates about the network to ensure users of their and their funds’ security and privacy.

For instance, Bitcoin is regularly checked for security by hundreds of developers who are enthusiastic about the crypto. Developers should also be able to regularly fix bugs and come up with new functions to improve the functionality of the network. They should also be able to add useful new layers to the network, for example, sidechains – which can, for example, improve transaction speed by unclogging the network.

Developers also need to be able to sustain the value proposition of a cryptocurrency. They are also important for brand support of the cryptocurrency.  For instance, Ethereum boasts a solid reputation thanks to its creator Vitalik Buterin who is actively involved in the development of the network.

There is also the need for an opposing side to the main developers. For instance, Ethereum Classic and Bitcoin Cash act as a check and catalysis for functionality upgrades for Ethereum and bitcoin, respectively.

iii) The Solution the Coin Provides

Does the cryptocurrency have new insights for space? Does it have any unique features that solve problems that its predecessors have not been able to? Look at Zcash’s technology, zk-Snark, which allows the network to anonymize transaction histories.  Consider also Ethereum’s trailblazing smart contracts and decentralized applications that allow people to create contracts without the need for expensive intermediaries and create uncensorable applications, respectively.

iv) Daily Transactions Volume

A cryptocurrency should be able to maintain a certain level of daily transactions. If a cryptocurrency cannot achieve a certain daily threshold, it will slowly fade.  To check how many transactions a network is supporting, visit sites such as:

  •   BTC/ BCH: txhighway.com, blockchain.com
  •   Ethereum: etherscan.io
  • bitinfocharts.com

 By comparing your favorite coins, you can discover unexpected results that will help you decide which cryptocurrency is worth investing in.

v) The Number of In-Use Wallets

A network should show the number of non-empty wallets growing at an appreciable rate. A network should gain at least 175, 000 wallets per year.

This shows the network has active users – a non-negotiable for any crypto.

vi) Network Hashrate

This is a metric that shows how much computational power a network is using. A high hash rate signifies a healthy network. It means the network is being supported by many nodes, which, as we saw above, is a good sign.

vii) Daily Trade Volume

The trade volume of a cryptocurrency is demonstrated by such things as being available on many exchanges, having many trading pairs, and so on. If a cryptocurrency has been on the team for several years and it has a weak daily trade volume, that should tell you one or two things about its worth in the market.

viii) 24-hour Price Change

The crypto market is known for its wild price swings. But that does not mean that gains or losses of 250% to 900% in a span of 24 hours are normal. Such swings should point to something unusual behind the scenes, such as the crypto being centralized or some artificial price action.

Final Thoughts

For you to measure the value of that crypto, you’ve been angling, check out the above metrics and see if the numbers point to a healthy, thriving coin, or one that’s floundering. The more decentralized a network is, the stronger and safer it is. If its daily transaction volume shows active interaction with the network, then it’s a safe bet. Also, a coin’s value proposition must bring something fresh to the crypto space, or it risks fading into irrelevance in the ultra-competitive crypto market.

By utilizing these metrics, you’re on solid footing the next time you’re shopping around for crypto to invest in.

Categories
Crypto Daily Topic

Cryptocurrencies and Ponzi schemes

According to a report by Chainalysis, crypto Ponzi schemes are now the biggest crypto crime. In 2019, Ponzi schemes accounted for 92% of proceedings from crypto crimes. Ponzi schemes are financial fraud schemes that trick unwitting people into investing money in a non-existent enterprise. Ponzi schemers sustain the fraud but paying out profits to initial […]

According to a report by Chainalysis, crypto Ponzi schemes are now the biggest crypto crime. In 2019, Ponzi schemes accounted for 92% of proceedings from crypto crimes. Ponzi schemes are financial fraud schemes that trick unwitting people into investing money in a non-existent enterprise. Ponzi schemers sustain the fraud but paying out profits to initial […]

According to a report by Chainalysis, crypto Ponzi schemes are now the biggest crypto crime. In 2019, Ponzi schemes accounted for 92% of proceedings from crypto crimes.

Ponzi schemes are financial fraud schemes that trick unwitting people into investing money in a non-existent enterprise. Ponzi schemers sustain the fraud but paying out profits to initial investors using the money that new investors have pumped into the project. Ponzi schemes are able to sustain this lie for a while – but the facade starts cracking when they can no longer attract new investors, and old investors start getting concerned.

Ponzi schemers are now moving into the cryptocurrency space to try their luck. This is because many people are still unfamiliar with cryptocurrency or how the technology really works, rendering them vulnerable to any investment lie mixed with some truths. There is also the sentiment about cryptocurrency being a “get-rich-quick” investment. The crypto space also has few checks and balances – thanks to its decentralized and deregulated nature – making it easy to defraud unsuspecting investors and evade the law – even if just for a while.  

OneCoin: the Greatest Crypto Ponzi scheme of All Time

OneCoin is perhaps the cryptocurrency Ponzi scheme that takes the crown. US prosecutors have concluded that the scheme raked in approximately $4 billion from investors around the globe. From Palestine to the UK to Uganda to India to the US, people from all over the world were duped into sinking money into “the next Bitcoin.” 

In China alone, authorities recovered $267.5 million and prosecuted over 90 people in connection with the scheme. 

Dr. Ruja Ignatova, the mastermind behind the scheme, has been missing since 2017. The last that was heard of her is that she boarded a plane from Sofia to Athens never to be seen or heard from again. 

OneCoin was launched by Ignatova, a Bulgarian, who according to her LinkedIn profile, is an Oxford graduate and a former McKinsey employee. 

On the surface, you couldn’t have suspected anything was amiss. After all, OneCoin supposedly worked like any other cryptocurrency that generated new coins via mining and could be used to facilitate global payments. Also, it came with a safe and secure wallet, and it had a “total supply of 120 billion” coins. 

Network participants were required to buy educational materials that included cryptocurrencies, trading, and trading analysis, investments, and so on. 

Participants could also receive discounted packages and referral rewards if they got more users to join the network. 

Ostensibly, OneCoin was a “centralized network” where the team “took care of all technical aspects.” In truth, however, OneCoins were engineered by the scammers who programmed it from $0.56 to around $ 33.68. 

Also, it was later debunked that OneCoin never really had a blockchain, with police saying that it lacked “a true blockchain that is public and verifiable.”

The Launch of Onecoin

In June of 2016, Dr. Ruja appeared on stage at a flashy event on the Wembley Stadium in London, dressed resplendently in a ball gown complete with long earrings. With superlative after superlative, she described OneCoin as the next big thing, including that OneCoin would be “the biggest out there,” and it would “write history.” She told hundreds (or perhaps thousands) of screaming fans that OneCoin was the “most transparent, most powerful, and most legal” cryptocurrency. She concluded with this classic: “In two years, nobody will speak about bitcoin anymore!”

Despite OneCoin allegedly growing rapidly and stories of success, investors were starting to get concerned. A long-touted crypto exchange that would let users exchange one coin into Fiat was being constantly postponed. At an event in Lisbon where organizers would allay investor concerns, Dr. Ruja was a no-show. 

FBI records indicate that she flew on a Ryanair flight from Sofia to Athens on October 25, 2016, and that is the last that investigators know for now. A BBC article surmises that she might be living in Frankfurt under a fake identity. 

She has been charged in absentia with securities and wire fraud and money laundering. Her brother, Konstantin Ignatov, has been convicted for money laundering and fraud. A US lawyer Mark Scott has also been convicted for money laundering in connection with the OneCoin scam.

How to Smell a Cryptocurrency Ponzi scheme From Miles Away

The OneCoin story is a juicy one, but in there lies very important lessons for every aspiring cryptocurrency investor. Investors who put money into the project will likely never be able to recover it. Even though authorities might successfully recoup some of the money, the probability that individual investors around the world will be fully compensated is very low. Their money’s gone, just like that. 

So how can you protect yourself from these kinds of scams? After all, such fraudsters are not going anywhere; in fact, they are constantly reinventing the game. 

Always look out for these red lights: 

i) Massive and Consistent Returns

This is perhaps the most obvious tell-tale sign of a Ponzi scheme. No investment can consistently return massive profits almost without risk. So when you see a project bragging about an impossibly high rate of returns, think twice. The general rule is: if it is too good to be true, it probably is.

ii) Returns Dependent on Referrals

If an investment project relies too much on referrals, then that is a red alert. Referral and commissions are the main routes through which participants will earn in most Ponzi schemes. If you see this kind of a model in any enterprise, it means the business itself is unprofitable, and sooner or later, it will cave in. 

iii) Unclear Ownership

Who owns the company? Are the founders in the shadows, or is information about the company inconsistent? If you know what to look for, a simple Google search should be able to reveal any shadiness. 

iv) Need To Join For More Information

To escape the law, many websites of crypto schemes will put up the facade of a legitimate business such as a wallet service, a cloud mining platform, etc. Then they will tell you that to access the investment portion, you need to sign up first. This should set off your alarm bells.

v) Closed-source or Non-Public Blockchain

The tradition of cryptocurrencies is to exist in the open. But scam coins will usually hide their source code such that others in the development space cannot review it. Also, their blockchain is not up for public participation.

Final Thoughts 

As you can see, crypto Ponzi schemes are well and alive. Fraudsters are rushing in to cash in on the allure that cryptocurrencies hold, and if you’re not careful, it’s easy to get roiled in a Ponzi scheme and lose your savings in a flash. These nuggets should help protect you from falling victim to a crypto Ponzi scheme.

Categories
Cryptocurrencies

What are DAOs and DACs? 

The days are long gone when bitcoin was the hype surrounding blockchain technology. The blockchain space had expanded in ways no one could have envisioned when the technology was still in infancy. One of the most exciting topics in the space right now is that of decentralized autonomous entities. 

The days are long gone when bitcoin was the hype surrounding blockchain technology. The blockchain space had expanded in ways no one could have envisioned when the technology was still in infancy. One of the most exciting topics in the space right now is that of decentralized autonomous entities. 

The days are long gone when bitcoin was the hype surrounding blockchain technology. The blockchain space had expanded in ways no one could have envisioned when the technology was still in infancy. One of the most exciting topics in the space right now is that of decentralized autonomous entities. 

Decentralized autonomous organizations (DAOs) are an entirely new phenomenon that might very well shake up the current organizational set up as we know it. This piece breaks down DAOs, together with their equally interesting subgroup known as decentralized autonomous companies (DACs). 

What are DAOs and DACs? Where do humans fit in, if at all? What does this mean for the future of the corporate space? Let’s find out.

Decentralized Organizations 

To begin to explore decentralized autonomous organizations and decentralized autonomous corporations (companies), we need to first understand the concept of decentralized organizations. A decentralized organization follows the very same concept of traditional organizations – only this time, it decentralizes it. A traditional organization features a hierarchical structure with human beings interacting with each other and running operations based on a set of rules. 

Now, a decentralized organization also features human beings interacting with each other, but this time following a protocol that is coded and enforced on the blockchain. A decentralized organization does not mean that operations are automated. Rather, decisions and operations and the direction of the organization are still determined by humans.

Concepts underlying DAOs and DACs

There are several concepts that are underlying the entire DAO and DAC model that we need to familiarize ourselves with, first. Let’s get a grasp of them below:

☑️Smart contracts: A smart contract is a contract that is self-verifying and self-enforcing when certain conditions have been met. A smart contract is much like a traditional contract but without the intermediaries like lawyers, accountants, and so on. Since a smart contract does not need third parties to oversee is execution, it’s way more economical in terms of time and costs.

☑️Autonomous agent: These are software entities that can conduct a set of operations on behalf of a user or another program. Autonomous agents are either completely autonomous or possess a certain degree of autonomy. Autonomous agents act with inspiration or understanding of the user’s wishes or desires.

☑️Internal capital: This is property belonging to an organization and which can be transferred to other parties. Internal capital can either be physical or virtual.

☑️Decentralized application: This is an application that runs on a distributed network. These applications are not controlled by any single authority, neither can they be shut down or experience downtime since they run on a distributed network of computers, thus eliminating a single point of failure. 

Decentralized Autonomous Organizations (DAOs) 

A DAO is an entity that operates purely on the internet and whose operations are autonomous, though these operations are input by humans. To understand what a DAO is, it helps to think in terms of what it is not. 

Let’s begin by looking at decentralized applications (DAs). A DAO is a DA, but with internal capital. This means that a DAO has some sort of property that has value, and it can use this property to reward certain activities or transfer that property to some external entities. A DAO also utilizes autonomous agents to carry out some activities in place of humans. 

So we can say a DAO relies on human input to kick off operations – with the operations being automated, that is, independent of human intervention. As such, a DAO can be described as being automated at the center, but having human action at the edges.

Decentralized Autonomous Companies/Corporations (DACs) 

Now we come to DACs. DACs are a subset of (DAOs). We can look at it this way: all DACs are DAOs, but not all DAOs are DACs. One standout feature of DACs is that they are profit-driven. A DAC has stakeholders who have a right to the share of profits that it generates.

What Are The Benefits Of DAOs and DACS?  

Both DAOs and DACS present with some benefits of their underlying automation-at-the-center, humans-at-edge model. 

i) A Borderless and Non-Jurisdictional Organization  

Let’s contrast this with the traditional model of organizations. These organizations possess a corporate personality, exist within a physical space, provide physical goods and services, and operations are run by paid employees. This system is subject to a ton of regulations and rules, as well as legal, accounting, and energy costs. 

A DAO can circumvent some or even all of these issues. This doesn’t mean that a DAO will be exempt from corporate laws. Regulators will most likely take this position: If it looks like a duck and quacks like a duck, it’s probably a duck. However, the very nature of a DAO will enable it to sidestep some of the issues that a traditional organization can simply not avoid. 

 ii) An Increased Sense of Ownership for Members

The traditional model of companies concentrates much of the decision-making power and money at the top. Shareholders take the biggest piece of the pie, followed by executives, then top-level management. The average employee is consigned to the very bottom of the rung. This model is not the most ideal for modern corporate space. Research shows a hierarchical structure negatively impacts employee satisfaction, job quality, loyalty, and morale. 

DAOs can solve this by providing everyone with a monetary and decision-making stake, as well as fostering feelings of belonging and ‘buy-in’. This results in more motivated employees who will dedicate the time and effort into the long-term success and thriving of an organization. 

iii) Ability to Foster New Business Relationships 

The importance of business-to-business relationships cannot be overstated. Arrangements such as joint ventures, partnerships, and so on can enable companies to work together and save resources, promote trust, and define their own market-friendly rules. The ability for this to happen in an open, transparent, and autonomous manner is a win for all parties involved.

iv) Early Preparation for the Future of Decentralized Organizations 

With the increasing recognition and adoption of blockchain and smart contracts, it’s a matter of time before businesses take it “on-chain”. In the future, contracts and online agreements that do not have some sort of smart contract functionality will be treated with suspicion because people will see it as an unwillingness to do business in a trustless environment.  

The question “what are you hiding?” will not be too off the mark. As such, on-chain based organizations will be best positioned to take advantage of the opportunities of the model as well as trailblaze the field. Also, blockchain makes things more efficient – and this will enable such companies to knock off the competition and become a source of pride for their members. 

What’s So Special About The DAO and DAC Model?   

The DAO and DAC model proposes utilizing the blockchain to automate the vast majority of internal functions, as well as external engagements. The big vision here is an ecosystem of automated, borderless organizations all running on enterprise blockchains. What is so special about this model? Why should businesses and, indeed, the world pay attention? 

Openness means total transparency in the organization’s operations. The blockchain-based way of doing things means functions such as voting, financial records and payroll management, constitutional procedures, and so on are done in a completely transparent fashion. Minority shareholders never have to worry that the majority of shareholders are partaking in dubious activities. 

Also, members are sure that there is no misappropriation of funds taking place. A blockchain-based business can also utilize a multi-signature wallet that requires every member to authorize transactions. In short, there is fairness and risks are mitigated. 

Automation through smart contracts takes everything to a new level of excitement. Employees can be assured that there are funds to reward them for their work before they can begin on projects. Employers can ascertain that employee credentials are up to the mark, and outside engagements can be arranged without the need for outsourcing.

The DAO model is blockchain-native. Decentralized applications will enable companies to utilize blockchain technology to a certain extent. But DAOs will take things to new levels by incorporating functionalities into the blockchain structure. This will lead to frictionless operations and create an environment where enterprises can reap the full benefits of blockchain.

Final Thoughts 

These organizations are not just a theoretical concept. Projects like Aragon, Bitshares, and Colony have already taken the mantle in this space. Satoshidice, an online casino, is another unexpected entity that embodies what a DAC is. With projects like these already up and running, it’s clear that we’ve barely scratched the surface of what the DAO model is truly capable of becoming. 

Categories
Cryptocurrencies

How Can Blockchain Improve the Music Industry?

Music is a universal language that connects all of us, regardless of where we come from or what language we speak. Music makes us move and dance and lifts our moods and spirit. But how much do we know about what goes on behind the creative scenes? Unlike the music itself, the goings-on in the music industry are not as harmonious.

Music is a universal language that connects all of us, regardless of where we come from or what language we speak. Music makes us move and dance and lifts our moods and spirit. But how much do we know about what goes on behind the creative scenes? Unlike the music itself, the goings-on in the music industry are not as harmonious.

Music is a universal language that connects all of us, regardless of where we come from or what language we speak. Music makes us move and dance and lifts our moods and spirit. But how much do we know about what goes on behind the creative scenes? Unlike the music itself, the goings-on in the music industry are not as harmonious.

From delayed payments to a lack of transparency to artists earning way too little, the current way of doing things in the music industry is too fractured. The industry is rife with conflict between artists and managers and artists and distributing services. Claims of distributing content without permission or unclear revenue splitting methods are some of the persistent bones of contention. 

But this may change soon, thanks to the decentralized, immutable, and transparent blockchain. Blockchain is transforming the way the music industry handles contracts, how artists receive their deserved pay, and how royalties and copyrights are managed.

This piece explores this topic deeper by identifying the ways blockchain can improve relationships among various parties in music and how artists can catch a break from the currently skewed revenue-sharing model. We’ll also be looking at some exciting blockchain-based projects that are leading in this space.

Blockchain and Music: Use Cases

i) Decentralization

In the current musical setup, centralized entities, e.g., Apple Music, are the ones who provide music to the masses. This means they control what music is aired and that they (entities) are subject to the regulations (and whims) of the country they reside in, or indeed external governments with vested interests. This means they can delist musical content when instructed to do so. This can be illustrated by Apple Music removing the contributions of Chinese pro-democracy singers Li Zhi, Anthony Wong, and Dennis Ho – due to pressure from the Chinese government. 

Blockchain-based music distribution would be immune to this kind of censorship or unilateralism. With blockchain, no one can delete artists from musical platforms, and no one would be capable of taking any music down from the platform. Artists will be able to distribute what they like whenever they like, and to whomever they like. No government or states would have any say or influence whatsoever on what kind of content is played.

ii) Fairer Royalty Systems

The music industry constantly finds itself mired in financial squabbles over unpaid royalties. For instance, Spotify, the streaming giant, had to pay up to 30 million dollars in settlements after being sued by music publishing and songwriters over uncompensated work.

This fiasco testifies to the never-ending misunderstanding over who is owed what that plays out in the traditional music setup.

Blockchain would solve this problem by providing transparency and value for everyone involved. It can do this by tracking royalties then ensuring that they go to their rightful owners, as well as ensure various contributors are compensated for their input into a song. Smart contracts powered by blockchain can also streamline payments so that artists are paid for songs as soon as they are played or downloaded. This is in contrast to the current scenario where they have to wait for weeks, months, or even years to receive payment.

iii) Better Revenue-Sharing Model

Currently, musical artists are getting the short end of the stick. For instance, musicians got a meager 12% out of the total $43 billion in revenue for the music industry in 2017. And this was an improvement from the 7% cut that they got in 2000.

While recording companies and distributors bear much of the financial risk, the revenue distribution still seems unfair. Blockchain-enabled distribution platforms world cut out the many intermediaries involved in music distribution – ensuring only the contributing parties are on the payroll. This way, artists can go home with a fairer compensation for their work.

iv) New Monetization Models

With blockchain technology, artists can discover new ways of making money instead of relying on the traditional revenue model. The traditional model brings in money from touring, playing live, licensing fees, and so on.

Instead of depending solely on these revenue streams, artists can generate more revenue via blockchain-based models. For instance, they could come up with a cryptocurrency for a specific song or album. Through this cryptocurrency, they can create a virtual “stock market” through which listeners can purchase pieces of the rights of the song. Artists can then receive money from the money trickling down from the purchases. Blockchain-based smart contracts would ensure security, fairness, and transparency in this model.

v) A Global Music Registry

One of the challenges the music industry is grappling with currently is lack of a verified global registry of musical works. Attempts to build one have come to naught – resulting in the waste of millions of dollars.

A global music registry that identifies music rights holders would help streamline the royalties and rights management of music globally. Blockchain would help this by providing an open and transparent protocol where all musicians, composers, and other associated parties can have their rights managed more efficiently and fairly. 

vi) Change the Concept of Advances

An advance in the music industry refers to the pre-payment of royalties, whether by a label or a distributor to an artist. This arrangement has its share of problems. First, artists will have to recoup the advance at a later date, and the recording company bears the larger share of the overhead risk. 

Blockchain could change how advances are made – by distributing the risk among various stakeholders, facilitating a fairer distribution of royalties, and offloading much of the risk from the recording company.

Examples of Blockchain-Based Musical Projects 

MediaChain: This is a blockchain-based company that organizes open-source information with the use of unique identifiers for every single piece of information. Via the MediaChain platform, artists can also see to it that they paid fairly. By utilizing smart contracts, MediaChain allows artists to stipulate their royalties and rights without the need to integrate third-party intermediaries or contingencies.  The company has already been acquired by the streaming giant Spotify to assist in streamlining royalty and rights management in the music industry.

Ujo: This is a decentralized, blockchain-based platform on which artists can upload music, self-publish, and manage licensing and distribution. The Ethereum-based platform manages a database for music ownership rights and distributes royalties fairly and transparently via the use of smart contracts.

Choon: This is an Ethereum-based digital streaming platform that fairly and timely compensates artists for their work. On the Choon platform, artists can create smart contracts that ensure every contributor is fairly rewarded.  Rather than wait for weeks, months, or years to compensate artists, Choon rewards them almost immediately according to the number of streams the blockchain has recorded on any given day. Choon also features a crowdfunding function that allows burgeoning artists to gain a solid footing in the game. The platform also allows music fans to create personalized playlists and get paid for it.

VOISE: This is a blockchain-powered application that has its own token. The platform’s token enables artists to get paid for their music in a peer-to-peer marketplace. VOISE provides a collaborative platform through which artists can upload music according to fan preferences while getting almost 100% of revenue from the music. Artists using the VOISE platform can also determine how much listeners will pay for consuming their content. Artists can also offer free sample tracks to lucky listeners and receive feedback and support from the community.

Concluding Thoughts

Blockchain is making things better for music. Artists can get their fair pay without contention; risks can be shouldered by various parties so that record labels do not bear the brunt. Fans can participate in the music-making process, and artists can find support within the community. Everybody wins.

What we are yet to see, though, is the full-scale adoption of the technology in the industry. Perhaps this is because movers and shakers of the industry are yet to discover the revolutionary potential of blockchain, or because transitioning into a new way of doing things is easier than done. Either way, the music industry stands to benefit massively from blockchain, and the sooner it wakes up to this fact, the better.

Categories
Crypto Daily Topic

Here’s How Blockchain is Redefining the Gaming Industry

Revenue from the gaming industry is projected to increase from $135 billion to over $300 billion by 2025. As has always been the case, the industry relies heavily on new technologies to propel its growth. With blockchain technology finding use across various industries, the gaming sector is banking on this technology not just to increase the industry’s revenue but also to improve gamers’ experience. Besides, with the rise of eGaming, this is the best time to integrate blockchain in the gaming industry in anticipation of the crypto-market maturation.

Revenue from the gaming industry is projected to increase from $135 billion to over $300 billion by 2025. As has always been the case, the industry relies heavily on new technologies to propel its growth. With blockchain technology finding use across various industries, the gaming sector is banking on this technology not just to increase the industry’s revenue but also to improve gamers’ experience. Besides, with the rise of eGaming, this is the best time to integrate blockchain in the gaming industry in anticipation of the crypto-market maturation.

Revenue from the gaming industry is projected to increase from $135 billion to over $300 billion by 2025. As has always been the case, the industry relies heavily on new technologies to propel its growth. With blockchain technology finding use across various industries, the gaming sector is banking on this technology not just to increase the industry’s revenue but also to improve gamers’ experience. Besides, with the rise of eGaming, this is the best time to integrate blockchain in the gaming industry in anticipation of the crypto-market maturation.

Advantages blockchain has in store for the gaming industry

i) Improved Transparency and Decentralisation

Though fairness is of utmost importance with any kind of game, it matters, even more when you’re playing for money in games such as online casinos and sports betting. As a player, you need to be certain that the results of the game aren’t manipulated in any way. 

Thanks to blockchain’s immutable nature, crypto-based sports betting sites and online casinos boast high integrity since all game proceedings are made public for players to verify. Most importantly, the technology itself isn’t controlled by any central authority. This goes a long way into ensuring that gaming companies cannot know game results, for example, the dealing of a particular card. 

It should be noted that these advantages aren’t confined to online gambling only. Online multiplayer games such as multiplayer online battle area (MOBA) and War Riders have also benefited from blockchain technology. These games usually award prize money to the best team of players. In such cases, blockchain can be used to guarantee fair-play.     

ii) Regulate Gaming Economies

For quite a long time now, virtual gaming assets in battle royale games have been under the control of game developers. The players are only allowed to purchase the assets and use them to advance their play, while the developers have the power to change or remove these items as they wish.

Blockchain is, however, shifting game-asset ownership from the developers to players. The technology has successfully been employed in games such as Gods Unchained, where ownership of the gaming assets is transferred to a gamer through smart contracts. Of course, certain conditions have to be met first before a player can take up ownership. These conditions include purchasing assets or completing certain levels. 

As a result, players now have the freedom to auction, rent, or sell their gaming assets for fiat currencies. This new form of liquidity attracts more players, increasing revenue for game developers while rewarding players at the same time. 

iii) Secures game assets

For most online gamers, there is a constant concern about privacy and the safety of personal details, especially when purchasing game assets or funding your online casino wallet. The same can be said about game developers whereby lack of online security means that fraudsters can easily counterfeit gaming assets and sell them off – decreasing the value of all other assets.

These problems can be mitigated by blockchain-based games that offer high security and privacy protection. As such, all payment details made by the players are encoded by the cryptographic protocol, protecting players’ privacy. Equally, the gaming items are secured, meaning their value is protected since fraudsters can’t counterfeit any item. 

iv) Explore New Gaming Universes

By linking in-game data to the distributed ledger, gamers can trade their items between different games. Also, they can recycle their gaming assets while experimenting with their characters on different games. Of course, this can only happen on games sharing the same blockchain network where the gaming items are represented by similar digital tokens. 

Problems Facing Blockchain Gaming

The exciting world of blockchain gaming has a lot to offer, but it faces several obstacles, most of which are related to the underlying protocol. 

Cost: There are transactional costs that come with completing certain functions in a blockchain-based game. For instance, buying gaming items or upgrading a character. However, negligible these costs may seem, they do compound to significant amounts over time. 

Speed: Most of the blockchain games in the market right now focus on using the technology primarily for asset creation and regulating asset trading. If a game was to incorporate the technology in all its functionalities, it would be too slow for any quality gaming experience. Even the few games that run completely on the blockchain may not be appealing to players who value high-quality graphics and elaborate gaming experience. 

Scalability: Irrespective of the industry, scalability has always been the biggest problem facing blockchain. In the gaming industry where numerous transactions take place all at once, the current blockchains don’t have the capacity to support such a load. This explains why blockchain games are inherently slow and even expensive to run. If blockchain games are to achieve mass adoption, the technology needs to be enhanced to handle the increased transactions. 

Competition: Judging from the current landscape of the industry, blockchain games are mostly developed by small independent groups, usually known as indie games. These groups face stiff competition from well-established gaming companies who haven’t shown any interest in adopting blockchain. 

The big companies control a wide share of the market, so it’s hard for indie games to penetrate the market and pioneer the adoption of blockchain gaming. Hopefully, with blue-chip gaming companies such as Ubisoft, who are planning on experimenting with the technology, blockchain gaming has a shot at going mainstream. 

Conclusion

Blockchain is an ideal solution to some of the challenges facing the gaming industry. From ensuring fairness, improving gaming economies, to decentralizing the gaming experience, the technology is set to revolutionize the industry. With time, some of the hindrances standing in the way of blockchain gaming systems might be solved as the technology matures. Besides, it was developed about a decade ago, meaning it still has a lot of time to evolve and solve its own problems.

Categories
Cryptocurrencies

What Does it Take to Launch A Successful ICO?

For the last three years, Initial Coin Offerings (ICOs) have been compared to the dot-com bubble of the early 2000s. The two are much alike in that they led to significant loss of investors’ money. The only difference being that ICOs caused an 85% drop in the crypto market cap, which is steeper than the dot-com’s bubble – 78% crash.  

For the last three years, Initial Coin Offerings (ICOs) have been compared to the dot-com bubble of the early 2000s. The two are much alike in that they led to significant loss of investors’ money. The only difference being that ICOs caused an 85% drop in the crypto market cap, which is steeper than the dot-com’s bubble – 78% crash.  

For the last three years, Initial Coin Offerings (ICOs) have been compared to the dot-com bubble of the early 2000s. The two are much alike in that they led to significant loss of investors’ money. The only difference being that ICOs caused an 85% drop in the crypto market cap, which is steeper than the dot-com’s bubble – 78% crash.  

Well, the ICO bubble may have popped as recent data suggests, but there are valuable lessons to be drawn from its failure. These lessons can be used to form the basis of what it takes to launch a successful ICO despite the prevailing skepticism around such projects. 

How to launch a successful ICo

i) Formulate a Sound Business Model

Similar to traditional businesses, most ICO projects fail due to the lack of a strategic business plan. As such, ICO investors are willing to invest in a project that has a sound business model with a concrete idea of the product or solution the project offers to the market. To achieve this, you need to objectively study the market, know your audience, and weigh your project’s contribution to the crypto community. 

Once you have all the relevant data, it is always recommended to write a whitepaper for the investors to review. Essentially, a whitepaper is a comprehensive description of your entire project and its goals. Be sure to also include crucial details such as development strategies, legal issues, and available resources. Sure, a well-crafted whitepaper isn’t a guarantee of success. But a poorly written whitepaper with an impractical approach to achieving the project’s goals will certainly turn investors away. 

ii) Create Value for Your Token

Ideally, an ICO campaign will launch its own tokens that give investors access to the service or product set to be launched. If your token is to gain value, it will need to be in high market demand to attract more investors. Note that demand can be created only if your business model offers better solutions than your competitors. Besides, there are numerous project offerings in the market, so you have to make yours stand out. 

Provided you have a solid business plan, there are two main approaches to increasing the value of your token. The first is designing a token distribution plan, and the other one is deciding on the exact number of tokens to be issued. To start with, the token distribution plan is done through private sales pre-sales or crowd sales. Private sales are closed ICO sales targeting high profile investors and professional investors. The idea here is to raise a significant amount of funds and leverage the influence of wealthy investors to gain the attention of others during the public sale. 

Pre-sales are usually held in preparation for the main public sale. They are usually done to raise awareness of the token among the general public. The crowd sale targets investors, including those with limited amounts of investment. 

In each stage of the token sale, decide in advance how many tokens will be issued in total. 

You should also create room for issuance of additional tokens just to maintain market equilibrium. 

iii) Build Your Team

Much of an ICO’s success depends on the team behind the project. From the marketing team, product developers, engineers, to the initial investors; they all need to be in sync with the objectives of your ICO project. It is also wise to include a lawyer in your core team to help you streamline the legal process of launching the ICO. Currently, there aren’t any lawyers specializing in crypto space, but an experienced lawyer in corporate formation can serve you just right. 

Other members of your team, such as financial experts and developers, should have a good reputation in the blockchain industry. This goes a long way into giving your project the credibility it deserves to win reliable investors. A good team should consist of members who can complement each other’s skillset and even bring like-minded professionals on board. 

You might also consider having well-known advisers and promoters in alliance with your team. Although this doesn’t always translate to success, these individuals will help vouch for your project. 

Keep in mind that a team doesn’t entail those tied directly to the project only. Your target customers also have a place in your team. Advertising might win you some customers, but it’s an expensive approach considering that not everyone is interested in ICOs. A good place to start is by interacting with your customer base is through established online crypto communities such as Bitcointalk, Steemit, and Reddit. You can also work closely with YouTubers specializing in cryptocurrency. This way, once you start your marketing campaign, the audience will already be familiar with your offering and be likely to be swayed into investing. 

iv) Build an Online Presence

Having an online presence is not only a viable marketing tool but also a good way to give your project a touch of legitimacy. 

You can start by creating a website that showcases the necessary details of your project. As such, it makes sense to post an online whitepaper of your project on the website. Most importantly, remember to create a ‘team’ section on your web where all the project stakeholders appear. This section should be detailed, explaining the role of each team member, including their previous work and the milestones they have achieved. Be sure to include a passport size picture of each member above their profile. 

You also need to know that only a handful of investors read the whitepaper to the very last page. For this reason, it is a good idea to have a ‘roadmap’ section on your website to concisely outline realistic goals of the project, including the set timeframes to achieve these objectives. 

Your online presence wouldn’t be complete without creating social media platforms. You should have one platform for your entire project, and several others for every member of your team. The platforms provide an interaction medium between your brand and customers. 

v) Launching Your ICO

Launching an ICO is a pretty straightforward process, especially if you observed the aforementioned procedures. But there are a few twists and turns to navigate before you can put your ICO out to the world.

The first hurdle to overcome is deciding the location in which to launch your ICO. Different countries have varying policies regarding fundraising, particularly in the crypto space. For instance, offering your ICO tokens to U.S residents may not be a good idea since the tokens will be subject to the Securities and Exchange Commission (SEC) regulations. This will come with its share of legal problems given that the U.S government hasn’t exactly warmed up to blockchain. Instead, aim to launch your campaign in ICO-friendly countries such as the British Virgin Islands, Singapore, Hong Kong, Switzerland, and the Cayman Islands. 

Lastly, determine the token pricing strategy to use based on your goals. Generally, there are four token pricing strategies: 

  • Undetermined price: This method is divided into several price stages, whereby the token price in the initial stage is fixed. As more investors come in, the price increases as the stages advance. 
  • Fixed price per token: In this method, the tokens are offered at a set price that doesn’t change with the number of investors. This is to say that investors can buy as many tokens as they wish without affecting the price. To avoid market overvaluation, the tokens are frozen for a pre-set period, after which they are made available for trading on the market. 
  • Random price token: This strategy doesn’t have a fixed price for the token. Instead, tokens are issued to investors as per their amount of funds. 
  • Price decreases over time: As the name suggests, the tokens are offered at a higher price than decreases as the sale period passes.

Conclusion 

ICOs are a revolutionary way through which the average investor can access investment opportunities that would be otherwise reserved for venture capitalists and institutional investors. This provides blockchain entrepreneurs with a platform to actualize their business goals and contribute to the advancement of the entire blockchain space. However, setting up an ICO project and finally raising funds isn’t as easy as it was a couple of years ago. As such, the above-mentioned guidelines will help you adjust to the changes in the ICO market, bringing you closer to the objectives of your ICO project. 

Categories
Crypto Daily Topic

Blockchain and Identity: Here’s all there is to know

The ability to have control of our own identities has never been more pertinent than today. This is the internet age – and that has massive implications for our privacy, security, and autonomy over our own identities. Two issues emerge: that of populations not having an identity, as well as the implications of entrusting our identities with big and powerful organizations.

The ability to have control of our own identities has never been more pertinent than today. This is the internet age – and that has massive implications for our privacy, security, and autonomy over our own identities. Two issues emerge: that of populations not having an identity, as well as the implications of entrusting our identities with big and powerful organizations.

The ability to have control of our own identities has never been more pertinent than today. This is the internet age – and that has massive implications for our privacy, security, and autonomy over our own identities. Two issues emerge: that of populations not having an identity, as well as the implications of entrusting our identities with big and powerful organizations.

Recent research shows that a staggering 89% of consumers do believe that organizations are not doing enough to protect their data, while more than half of CEOs admit that consumers are not mistaken to think this. 

So how can we get past this stalemate? 

Blockchain technology has demonstrated its ability to change how things are done across industries. Can it also help with the thorny issue of identity management? The answer is yes, and an increasing number of platforms utilizing blockchain are emerging that aim to empower users with more control over their own identity. Also, a new concept – that of self-sovereignty- has emerged thanks to blockchain technology. 

We are going to look at what exactly identity is, explore the concept of self-sovereignty, and look at how blockchain can help us manage our identities better. We’ll also take a peek at some of the exciting organizations that are using blockchain to give users more autonomy and control over their identities.

What is Identity? 

Personal identity is a human right, according to article 8 of the UN’s Convention on the rights of the child. A person’s identity comprises: 

  • Their first and last name
  • Date of birth
  • Nationality  
  • An identifier, such as passport number, ID number, driving license, and so on. 

We cannot overemphasize the importance of having an identity. Without having a form of identification, one cannot access government services, own property, have a bank account, or be employed full-time. Without an identity, it’s so hard to participate in society because you cannot prove that you are who you say you are. 

Despite identity being so important, the current identity space is far from ideal. Data – such as passport number, social security numbers, and driving licenses is all stored in centralized servers by centralized organizations. This means three things: 

  • People can only get identities from centralized organizations
  • These centralized organizations can tamper with your identity data 
  • Identities are subject to theft

Let’s get a look at each of these:

1. Centralized Entities Giving Out Identities

Currently, centralized organizations have the power and the right to validate and issue identities to people. This system has left so many people in the world without an identity. According to the United Nations, 1.1 billion people in the world have no way to prove their identity. Due to this, these people have been left without access to basic financial services such as opening a bank account. This means that these people are excluded from the global financial system. As such, it is difficult for these people to escape the cycle of poverty. 

2. Data Mishandling

To participate in the current social media landscape, you need to create an identity. For instance, you need to create a Facebook account to use Facebook, just like you need to create an Instagram account to use Instagram. 

This gives these centralized organizations power over our identities. Think of it – we’re giving these organizations our identities, which they’re using to create identity silos.

We have seen what happens when we trust organizations with our data. The 2016 Facebook and Cambridge Analytica scandal is an excellent example of how powerful organizations can abuse user data. 

What was the Facebook Cambridge Analytica scandal?

The scandal involved Cambridge Analytica getting their hands on Facebook user data. The data that was leaked included public profiles, birthdays, city of residence, and page likes. For some users, things like a timeline, a news feed, and private messages were accessed. Around 87 million people were victims of this data breach – 70.6 million users being from the US.

The kind of data collected was detailed enough to enable Cambridge Analytica to create psychographic profiles. Psychographic profiles are a psychological mapping of people based on demographics. Using these psychographic profiles, Cambridge Analytica was able to curate political messages in favor of certain political leanings. These messages were then targeted at people, helping to sway populations for certain political candidates in the US, the UK, and Mexico. 

3. Identity theft

Identity theft is another issue with the current identity setup. For example, someone can steal your identity to use it to take out a loan using your credit card. A prominent example of this is the Bari Nessel case in San Diego, California. Bari Nessel would employ people and, in the process, obtain their personal information. She used the information of one employee to take out huge amounts of loans using their credit card. 

Another case, with more dire consequences this time, is that of Equifax, a US-based credit reporting company that was hacked in 2017. Through the hack, the data of half the US population was stolen, including names, birthdays, residential addresses, social security numbers, etc. 

What Did This Attack Reveal?

First of all, we don’t really have control over our data. We trust third-party companies to keep it secure for us, but seeing as they are centralized platforms – they have a single point of failure, meaning one attack is enough to breach the privacy of millions. 

Also, it’s hard to know if the company knew they were under attack but chose not to inform users nevertheless. So, there is also the issue of lack of transparency. 

What Lessons Can We Learn From This?

  • Centralized entities can issue identities to only who they want, and when they want
  • We trust third parties to secure our personal information
  • These third parties are not fail-safe 
  • Some third parties can be downright shady with the way they handle our data

Incorporating the blockchain into identity management would solve all these problems. Let’s take a quick look at what blockchain technology is. 

What Is Blockchain Technology?

Blockchain is a technology that was first brought to life by Satoshi Nakamoto in 2008. A blockchain consists of a distributed ledger with timestamped transactions. Distributed means that the ledger is controlled by thousands of computers all over the world. Each ledger has blocks of data that are linked to each other using cryptography. Blockchain has three very special features: 

  • Decentralized – the data is not controlled or owned by any one single authority
  • Immutable – once data is recorded on the blockchain it cannot be deleted or interfered with in any way
  • Transparent – anyone can see all data that has been entered on the blockchain

So how will blockchain solve the current identity management issues?

  • It will be impossible to replicate data – Blockchain can make it impossible for more than one person to claim the same identity. The same way it prevents double-spending of coins is the same way it will prevent the replication of identity details.
  • It will be hard to tamper with personal information – Blockchain can make it impossible to steal or hack personal information.
  • It will be hard to tamper with data information management processes – Blockchain can make the identity management processes trustless. This means removing human emotions, intentions, or negligence from the equation.

Self-Sovereign Identity 

Self-sovereign identity is the concept or idea that people should own and control their own identity. Blockchain can enable and facilitate self-sovereign identity. 

Blockchain would promote self -sovereign identity by facilitating the following characteristics: 

  • Minimalistic – availing only the amount of data needed for a particular task
  • Resilient – identity will not be censored or deleted 
  • Persistent – it will be impossible to take somebody’s identity from them 
  • Portable – it will be possible to access your identifying information from anywhere in the world 
  • Consent – your identifying information will be used only when you agree to it

More Power to Users 

Blockchain can also give people more choices on how to manage their personal information. 

Through the blockchain, individuals can:

i) Manage multiple identities

This means that an individual can have different identities with different personas for different types of contexts – for example, having different identities for the workplace, for friends, for family, and so on. Blockchain can facilitate all these different identities and give a key to each of these identities. This means the user has the discretion to use any persona they like – in different types of situations.

ii) Authenticate their identities anonymously

Blockchain can help users deploy anonymous authentication to ensure maximum security. This means that users can anonymously use uniquely identifying attributes to identify themselves in a given situation.

Projects Working On Blockchain-based Digital Identity

Several exciting projects are currently working to solve the current identity management problem using blockchain-based solutions. 

  • Sovrin: This is a non-profit organization that aims to enable individuals to achieve self- sovereign digital identity. Sovrin provides users with a secure and private network for individuals to manage and share their verifiable identity credentials. 
  • Civic: Civic provides a blockchain-based protocol on which users can manage their digital identities better. On the platform, users can create their virtual identities and keep them together with other personal information.
  • uPort: Created by the blockchain solutions company ConsenSys, uPort is a self-sovereign identity protocol that runs on Ethereum. The platform consists of smart contracts developer tools and a mobile app. Users can create a personal identity through smart contracts and secure it with the key in the mobile app. Even if your device is lost, you can still recover your identity credentials.

Closing Thoughts

The current digital management system is, to put it mildly, broken. Blockchain can fix this. Blockchain-based identification would afford us more security, more transparency, and more control over our identities. Blockchain can also bring more equality in the world by helping millions of people without an identity to get one. This way, they can play a bigger part in their societies and access their rightful services just like everyone else. 

Already, several blockchain-based projects have taken the mantle in this regard. Let’s wait and see how they will shape the space.

Categories
Cryptocurrencies

What are CryptoKitties?

-When Satoshi Nakamoto created the blockchain, he had far more far-reaching goals in mind: a secure technology that would power the world’s first cryptocurrency. And indeed, cryptocurrencies are the biggest adoption of blockchain today.

-When Satoshi Nakamoto created the blockchain, he had far more far-reaching goals in mind: a secure technology that would power the world’s first cryptocurrency. And indeed, cryptocurrencies are the biggest adoption of blockchain today.

-When Satoshi Nakamoto created the blockchain, he had far more far-reaching goals in mind: a secure technology that would power the world’s first cryptocurrency. And indeed, cryptocurrencies are the biggest adoption of blockchain today.

But then came Ethereum, the blockchain that showed us that blockchain was capable of more. On the platform, users can create smart contracts and build decentralized applications (DApps) – which are applications that cannot be censored or controlled by anyone.

Then one team came and utilized DApps in a way that was completely unprecedented – by creating a game that allows people to buy, breed, and trade cats. The game has taken the world, not just the blockchain world, by storm. Enthusiastic players have poured millions of dollars into the game. Several articles have been published about “kitty phenomena.” Even Ethereum’s Vitalik Buterin himself has given it a shout out – and that is saying something.

So what’s CryptoKitties? This article sets to exploring the intriguing blockchain-powered “kitty verse.”

The Team behind CryptoKitties

Crypto Kitties is the brainchild of a company called Axiom Zen. This company creates many sorts of projects using novel technologies like virtual reality and blockchain.  

Based in both San Francisco and Vancouver, the “award-winning venture studio” CryptoKitties wants you to “Collect and trade CryptoKitties in one of the world’s first blockchain games. Breed your rarest cats to create the purrfect furry friend. The future is meow!”

What is a Genetic Algorithm? 

A genetic algorithm is a computer science optimization technique that’s inspired by the natural selection process. It works by generating ‘kids’ from a pool of parent solutions that uses bio-inspired operators such as selection, crossover, and mutation. The genetic algorithm represents the genes in the form of numbers. The numbers represent the proteins and other elements that we humans have in our bodies.   

  • Selection: Selection means retaining the best parents with the best genes from one generation to the other. 
  • Crossover: This means taking the two common variables of the two parents and retaining them in the child, just like how real-life people retain features from both parents. 
  • Mutation: This involves taking a parent and randomly mutating some of their ‘genes’ to create a child. 

Why are we talking about the Genetic Algorithm? Because it’s the technology that CryptoKitties uses to create new kitties. By using a crossover mechanism, a child genome is “sired” from the gene pool of two-parent kitties. This child genome is what grows up to be a new kitty. 

The CryptoKitty Smart Contract 

The entire cryptokitty smart contract is broken down into smaller and more manageable contracts. The ‘inheritance tree’ of the contracts is like this: 

  • contract KittyAccessControl 
  • contract KittyBase is KittyAccessControl 
  • contract KityyOwnership is KittyBase  
  • contract KittyBreeding is KityyOwnership  
  • contract KittyAuction is KittyBreeding
  • contract KittyMinting is KittyAuction
  • contract KittyCore is KittyMinting

The KittyCore here is the contract that tracks ownership and transfer of kitties. It’s The one that greenlights the siring of new kitties 

Where Do New Kitties Come From? 

The first cat was adopted on December 2, 2017. Since then, a new cat was born every 15 minutes until November 2018 when the first generation kitties no longer existed. 

The white pa-purr (what the developers really, truly call the white paper) states that only 50, 000 generation-0 kitties will ever exist. 

Of course, CryptoKitties can breed with each other to birth newborn kitties. Any kitty can be a ‘sire’ or a ‘dame’ for a breeding pair. After breeding takes place, the owner of the dame will be given the baby kitty – who will have ‘cattributes’ of their parents, as well as random cattributes. In rare cases, a ‘fancy cat’ with custom cattributes will be born. 

There’s no limit to how many CryptoKitties can exist. On the CryptoKitties market, you can also pay to breed your kitty with another person’s kitty – if you like that kitty’s cattributes. 

How to Buy and Store CryptoKitties?

Before you get started with anything, there are three things that you need:

Before you can begin to buy CryptoKitties, you need to have the following: 

  • Chrome or Firefox Browser 
  • The Metamask Wallet 
  • Ether in the Metamask Wallet. You can exchange fiat currency for Ether from any of several exchanges, including Coinbase, Kraken, Bitfinex, GDAX, Gemini, and so on. 

Once you have those, it’s pretty straightforward. Go to the CryptoKitties website and choose the kitty of your preference. Don’t you like any? No problem. Simply search for a ‘Gen 0’ kitty under the ‘Gen 0’ tab. 

To sire new kitties, go to the ‘Siring’ tab. On there, you’ll see all the kitties that have been put up for siring. Go ahead and choose the kitty that you’d like to have mated with yours. 

Now, how do you store your kitties? You can keep them in the MetasMask wallet if you’d like to be viewing and also trading them. But if you’d like to HODL your kitties, you can store them in a cold storage wallet that supports ERC-721 tokens e.g., Ledger Nano S.

Gas Consumption of CryptoKitties

CryptoKitties are one of the reasons scalability of the Ethereum blockchain has come into sharp focus. This is because the game became so popular that it clogged up the Ethereum network such that transactions would take days before confirmation. Due to this, the creators of the game had to increase ‘birthing’ fees.

Axiom, the company behind the game, said this in a Medium article:

“The excitement and adoption we’ve seen this week has been overwhelming, and we couldn’t be happier! However, the Ethereum network is completely full. The only way to keep CryptoKitties from lagging is to increase the gas prices so that all transactions can complete quickly. We know that increased gas prices will mean that some of you will need to slow down your breeding regimen, and we are incredibly disappointed by that. But who knows? Maybe this slowdown will just mean that you’ll love the Kitties you already have that much more.”

From this episode, it was clearer than ever that the Ethereum blockchain and, indeed, the current entire blockchain setup is not really capable of handling mainstream demands. That means that they have to work on the scalability issue before they can play the role of a decentralized, peer-to-peer future.

Built on Ethereum 

As of early 2020, CryptoKitties runs on the Ethereum network. Smart contracts oversee every aspect of the buying and selling of kitties. As such, no one can change, remove, or change a kitty once it has been birthed. The person that holds a CryptoKitty can hold it, let it mate with another kitty, or trade it if they feel like. 

The game also uses Ether as the medium for transactions. It’s still not possible to buy CryptoKitties with fiat currency as of now. However, the developing team hopes to make this option available in the future.

Final Musings (Meowsings!)

Whether you’re a cat lover or not, CryptoKitties allows you to immerse yourself in a unique gaming experience of Kitty verse and make lucrative profits while at it. The game is an illustration of what blockchain is capable of. 

Who would have thought that Satoshi’s technology would one day be used for purely recreational purposes? CryptoKitties’ wild popularity just shows that blockchain games can be a hit, as long as they provide some form of value to the masses. More than industry applications, this could be the very pathway to taking blockchain mainstream.

Categories
Crypto Daily Topic

Atomic Swaps: The Definitive guide

Cryptocurrencies were invented so that we could have deregulated, decentralized and peer-to-peer finance. What perhaps was not factored in was how we could trade one currency for another in the same kind of environment. Centralized exchanges – which are platforms through which individuals can trade one crypto to another, fill this gap. But these exchanges are not the most ideal crypto exchange platforms – because of issues that are inherent to them, and also because they do not live up to the tenets of cryptocurrency. 

Cryptocurrencies were invented so that we could have deregulated, decentralized and peer-to-peer finance. What perhaps was not factored in was how we could trade one currency for another in the same kind of environment. Centralized exchanges – which are platforms through which individuals can trade one crypto to another, fill this gap. But these exchanges are not the most ideal crypto exchange platforms – because of issues that are inherent to them, and also because they do not live up to the tenets of cryptocurrency. 

Cryptocurrencies were invented so that we could have deregulated, decentralized and peer-to-peer finance. What perhaps was not factored in was how we could trade one currency for another in the same kind of environment. Centralized exchanges – which are platforms through which individuals can trade one crypto to another, fill this gap. But these exchanges are not the most ideal crypto exchange platforms – because of issues that are inherent to them, and also because they do not live up to the tenets of cryptocurrency. 

Enter atomic swaps – a technology that could be the solution to this problem. Atomic swaps is a technique that lets you trade crypto coins directly with other crypto holders. Also known as atomic cross-chain trading, this technology relies on smart contracts to automatically execute trades between two parties when both parties meet their end of the bargain.

Atomic swaps have the potential to revolutionize how we transfer crypto value.

History of Atomic Swaps

The concept of a trustless, decentralized, and peer-to-peer method of exchanging crypto was being floated since 2012 when cryptos were beginning to pick up and become a force in the trading arena. In July of that year, Sergio Demian Lerner created what was the first draft of such a protocol. The idea was a good one, but it was never really worked on. 

There wasn’t a breakthrough until May 2013 when Tler Nolan created the first full account of how such a protocol can work – through atomic swaps. Though many other developers have come up with their own iterations of trustless and decentralized exchange protocols, Nolan is credited as the inventor of the technology.

The Problem with Centralized Crypto Exchanges

  • Susceptibility to Hacks

 Centralized exchanges always have the possibility of getting hacked hanging over them. This is because cryptocurrency is a very appealing asset to fraudsters. (Isn’t it to all of us?) And these fraudsters are always devising new ways to get around security settings.

  • Subject to Bad Management

Centralized exchanges are managed by people, and people are fallible. Simple mistakes or seemingly harmless loopholes could undo a centralized exchange – and with it investor funds – very fast.

  • Inability to handle high demand

Centralized exchanges can simply not handle high volumes of demand, especially a sudden increase.

  • Subject to Censorship and Regulation

Centralized exchanges are much like other businesses. Since they operate in jurisdictions, they are subject to the arbitrary whims of such jurisdictions. Cryptocurrency exists to avoid this very issue.

How Atomic Swaps Work

Atomic swaps work by letting the two transacting parties make a shared “secret.” The parties will swap the agreed cryptos if and only if their secrets are an exact match. This way, if a third party happens to barge in on the transaction, they have no way of meddling with the transaction since they don’t know the secret.

This whole process is executed by something known as Hashed Timelock Contracts (HTLCs).

HTLCs are a type of payment channels that ensure both parties to the transaction hold up their end of the bargain for the swap to be successful. A hashlock uses a cryptographic algorithm that allows either party to access the funds when and only when they have signed up their side of the transaction.

The timelock is a sort of insurance policy that will see to it that both parties get back their funds in the event the transaction has not gone through during a specified time frame. 

The HTLC is made to create an environment where both parties rely on each other for the exchange to be successful. If, for whatever reason, the transaction is unsuccessful (e.g., network failure or one party not meeting their end of the deal), the timelock returns the funds to the rightful owners.

On-chain and Off-Chain Atomic Swaps

Atomic swaps can take place either on-chain or off-chain.

An on-chain atomic swap takes place on either currency’s blockchain. For an on-chain swap to be successful, both currencies must share the same hashing algorithm, and they both must also support HTLC. The first-ever on-chain swap was executed by Litecoin and Decred in September of 2017.

An off-chain swap takes place outside of the blockchain – in what is called a “layer 2.” Bitcoin and Litecoin were the first to conduct an off-chain swap in November of 2017. 

 Advantages of Atomic Swaps

  • Atomic swaps will help users of different cryptocurrency networks interact with each other. This contributes to the interoperability of these networks.
  • Atomic swaps facilitate “currency agnosticism” of the crypto ecosystem. This means the crypto market will be open to everyone rather than having a segmented market where people are holding to just one of a few coins. In other words, no matter which coin you use, you can transfer it to anyone, and anyone can do the same for you.
  • Atomic swaps facilitate trustless, fee-less and peer-to-peer, uncensorable currency exchanges
  • They remove the need for third-party intermediaries hence making the swap as direct as possible.
  • Atomic swaps give users complete control over their money, instead of entrusting it to centralized exchanges that are prone to governance issues and corruption. Moreover, the issue of banned withdrawals, account deactivation, or wallet maintenance problems is gone. 
  • Direct wallet-wallet crypto trading is the epitome of decentralization finance. Centralized exchanges are prone to state regulation – which renders them centralized platforms.
  • Atomic swaps are faster, period. The whole Know Your Customer procedures and other confirmation steps required by centralized exchanges slow down the trading process.
  • In an atomic swap, the need for an intermediary token is removed. E.g., if you want to buy Decred and you have LTC, you may need to trade that LTC for BTC – which you’ll then trade for Decred. Atomic swaps remove this long process by allowing you to trade at a go.
  • Trading at an exchange means you’ll be charged a lot of fees. And these exchanges set these fees and can increase them at will.

Limitations of Atomic Swaps

Atomic swaps look like the ideal way to swap cryptocurrencies among users, but unfortunately, we’re yet to reach the point where its adoption is a straightforward process. This is why:

i) Adoption

The current iteration of the technology needs the involved cryptocurrencies to meet three conditions:

Both must share a hash algorithm

Both cryptos must be able to initiate timelock contracts

Both cryptos must have certain programming functionalities 

These prerequisite characteristics lock out so many cryptocurrencies, as well as companies and users, that can give the technology a try as of now.

ii) Speed

Atomic swaps have the ability to get swaps done in an instant – but right now, it still needs a ton of work before it can get to the point of handling large volumes of data.

iii) Lack of Compatibility

Right now, a lot of existing wallets do not support atomic swaps. This impedes the wide-scale adoption of the technology.

Final Thoughts

Atomic swaps will help solve the problems of interoperability and lack of scalability in the current crypto space. The technology also has the potential to expand the growth of the crypto industry, as well as open up new avenues for truly decentralized and peer-to-peer transactions – which is the way it’s supposed to be. We can only hope that the technology will be enhanced and refined to be better positioned for this worthy task.

Categories
Blockchain and DLT

Ethereum Virtual Machine: Everything you’ll ever need to know

Many people acquainting themselves with the Ethereum ecosystem tend to overlook the Ethereum Virtual Machine, yet it provides really interesting tidbits into how the Ethereum ecosystem works.

Many people acquainting themselves with the Ethereum ecosystem tend to overlook the Ethereum Virtual Machine, yet it provides really interesting tidbits into how the Ethereum ecosystem works.

Many people acquainting themselves with the Ethereum ecosystem tend to overlook the Ethereum Virtual Machine, yet it provides really interesting tidbits into how the Ethereum ecosystem works.

The Ethereum Virtual Machine (EVM) is the core innovation of Ethereum. It is a Turing complete software that enables anyone to run any program, provided they have enough memory space. The EVM helps developers build blockchain applications faster, more easily, and more efficiently. It provides the platform for creating countless blockchain applications in one single place, instead of having to create a new blockchain for every new application.

The EVM also prevents denial of service attacks – which are attacks targeted at making a network unavailable to users. It also ensures programs running on the blockchain do not have access to each other’s state, thus eliminating any potential interference.

Turing Complete

EVM is a quasi-Turing complete software. Turing complete is named after Alan Turing, the innovator of the Turing machine. A Turing complete machine can solve any problem fed into it, as long as there are enough time and memory space.

EVM is quasi-Turing complete because its computations are bound by gas – which in effect limits the number of calculations that it can solve.

Gas and EVM Bytecode

On Ethereum, transactions are powered by ‘gas,’ which in essence is the fee that users pay. The concept of gas can be seen in two ways: gas and gas price. 

Gas is the measuring tool of how much fee is needed for a particular transaction, while gas price is how much Ether you’re willing to spend to purchase a unit of gas. Gas price is measured in ‘Wei.’

A Wei is the smallest unit of Ether – with one Ether comprising 10^18 Wei.  

If an individual wishes to conduct a transaction on Ethereum, they must set the gas limit and gas price attached to that transaction. If they don’t possess the required gas for that transaction, it will ‘run out of gas’ and hence be invalid. 

Gas can limit the number of transactions on the EVM, in this way:

  • Blocks on the Ethereum blockchain have a gas limit, meaning the gas spend on any transaction cannot exceed a particular amount
  • The gas is attached to the gas price, even if the gas limit was removed, it would be impractical to solve just any problem fed into it. 

EVM has its own programming language called the ‘EVM bytecode.’ When a code is written in a higher-concept programming language like Ethereum’s own Solidity, it is compiled in the bytecode so that EVM can interpret it. 

Transaction-based State Machine 

The EVM is a crucial part of the Ethereum infrastructure since it handles internal state and computations, account information pertaining to addresses, balances, gas price, and so on. The EVM must always keep track of the numerous network components so it can support transactions. 

A state machine is a term in computer science that refers to a machine that can read inputs fed into it and then, upon interpreting those inputs, produce certain outputs. This is how transactions on the EVM are carried out. At the start, there is a blank slate. When transactions are occurring, any point in that duration describes the current state of Ethereum. For a state transaction to occur, the ‘inputs’ entered must be valid. A transaction is validated once it successfully goes through the mining process. 

This mining process is referred to as proof-of-work (PoW) and takes place when certain network participants expend computing power so as to verify a block of transactions and add those transactions on the blockchain. Successfully completing a block gets a miner rewarded with Ether – the native token of the Ethereum blockchain. 

Now, onto the components that the EVM must continually keep track of: the Account State, World State, Storage State, Block Information, and Runtime Environment Information. 

Account State

The Ethereum platform comprises many small accounts that can interact with each other, thanks to its message-passing infrastructure. These accounts can be divided into two types: externally owned accounts and contract accounts. Externally owned accounts are controlled by their owners via private keys, while contract accounts are controlled by the contract code.

An externally owned account can send messages to other externally owned accounts and also contract accounts via the use of a private key. Communication between these types of accounts can be considered as just value transfer.

However, passing between an externally owned account and a contract account triggers the execution of the contract account code. This causes the contract account to execute the instructions in the code, for example, transferring or creating new tokens.

Unlike externally owned accounts, contract accounts cannot initiate new transactions by themselves. 

Instead, they are reactive – meaning they can only engage in transactions in response to other transactions that have been passed to them either from externally owned accounts or other contract accounts.

Three elements characterize the account state, and these are as below:

Nonce – For externally owned accounts, this is the value of how many transactions were sent from the account’s address. For contract accounts, this is how many contracts were created by the account.

Balance – This is how many Weis are owned by the account address

CodeHash – This is the immutable hash value of the EVM code for the corresponding account.

World State

This is a ‘global’ state that comprises a mapping between 160-bit address identifiers and the account state. The mapping is maintained in a data framework called the Merkle Patricia Tree – which in turn consists of nodes with:

  • Numerous leaf nodes at the bottom of the tree that houses the underlying data
  • A set of intermediate nodes with each node consisting of two child nodes
  • A single root hash born from the hash of the previous child nodes, representing the top of the tree structure

Storage State

The storage state is state information for specific accounts. This information is maintained on the EVM at runtime.

Block Information

These are state values that enable transactions to take place, and they comprise: 

  • Block hash – which is the hash of the youngest validated block
  • Coinbase – the recipient’s address
  • Timestamp – the current block’s timestamp
  • Number – the number or position of the current block
  • Difficulty – the difficulty value of the current block 
  • Gas limit – the maximum gas that can be spent on the current block 

Runtime Environment Information

This is information that allows for transactions to be executed. It includes the following: 

  • Gas Price – Current gas attached to a transaction 
  • Codesize – The size of transactions’ source code 
  • Caller – The address of the account that is conducting the transaction
  • Origin – The address of the transaction’s initiator   

Outside the Network

The EVM is situated outside the main Ethereum network, making it a perfect testing environment. Individuals and companies that wish to create smart contracts can do so on the platform, and this will not any way affect normal blockchain operations. They can also use the platform to hone their smart contract creation skills so they can eventually create more robust and applicable smart contracts.

Closing Thoughts

Smart contracts are central to a decentralized world – and the EVM is an excellent platform for developers to curate smart contracts that will make the world a better place. Being a free and highly developed tool for this process, we can’t think of a better platform where people can perfect – and ultimately showcase their coding smarts.

 

Categories
Cryptocurrencies

The R3 Corda Project

Many people think that blockchain and distributed ledger technology are the same things. But as you will realize in this article, blockchain is one type of distributed ledger technology. There is no doubt that blockchain outshines all other types of distributed ledgers. After all, blockchain’s first application was Bitcoin – which is, to put it like this: a celebrity digital currency.

Many people think that blockchain and distributed ledger technology are the same things. But as you will realize in this article, blockchain is one type of distributed ledger technology. There is no doubt that blockchain outshines all other types of distributed ledgers. After all, blockchain’s first application was Bitcoin – which is, to put it like this: a celebrity digital currency.

Many people think that blockchain and distributed ledger technology are the same things. But as you will realize in this article, blockchain is one type of distributed ledger technology. There is no doubt that blockchain outshines all other types of distributed ledgers. After all, blockchain’s first application was Bitcoin – which is, to put it like this: a celebrity digital currency.

Distributed ledger technology provides several benefits – one of them being decentralization. Decentralization removes a single point of failure in systems, as well as granting all participants of a network equal access to data.

The R3 Corda project takes advantage of distributed ledger technology to create an open-source enterprise-grade platform on which businesses can transact with each other in a private, affordable, and efficient smart contract platform.

The R3 blockchain consortium was formed in 2013 and has over 200 members from diverse sectors.

The Corda Model

The Corda platform model is underpinned by three core concepts, which are:

i) State Objects: These represent an agreement between two or more parties. State objects are governed by what is known as a Contract Code – whose work is implemented in portions of human-readable legal text.

ii) Transactions: These are activities that oversee a state object from start to completion.

iii) Flow Framework: This is the infrastructure that enables parties to coordinate activities without the need for a central controller.

Business Principles of Corda

  • Inclusion. Members can discover and transact with each other in a free, single, and open network.
  • Assured Identity. Parties will have the knowledge of who is who in the network
  • Privacy. The only parties who will be privy to the details of a transaction are the involved parties only.
  • Shared logic. All characteristics of an agreement managed by the system will be described in computer code that is shared among concerned parties to ensure the consistency and validity of agreements.
  • Legal footing. Any deal that is recorded on the ledger is admissible evidence and legally binding for all parties involved – in case of any dispute.
  • Authoritative. Any information on the ledger is considered authoritative. There are no ‘shadows’ of authoritative data that are kept somewhere else. What parties see is what they get.
  • Immutability. Data entered on the ledger is final and cannot be deleted. In case of any errors, parties will wait until the next transaction to address it.
  • Open. The system is open in every aspect: open source, participation, development, governance, and standards so that it balances its diverse user needs in a transparent fashion.

The R3 Corda’s Architectural Vision

 R3 Corda aims to create a blockchain environment that is underpinned by the following features:

 i) Scale. The network will scale to support billions of transactions daily across industries

 ii) Longevity. Different versions of Corda will be able to run side by side, and applications can run on later versions, without having to change any code.

 iii) Secure. The platform will operate as though expecting an adversary at any time. So, security settings are forever on high alert.

iv) Stable. The network will evolve carefully, with each version maintaining consensus critical network standards to avoid bugs.

v) Interoperable. On the platform, multiple applications will be able to coexist and interact with each other. 

Notaries

Corda aims to achieve more scalability than the existing distributed ledgers, including blockchain, as well as provide much more security than the one found on blockchains. 

The platform will achieve this by including “Notaries” in their network. Notaries on Corda function much like miners on the blockchain, but without the massive energy costs associated with mining. Notaries validate transactions by time-stamping them. Only after a transaction has been time-stamped can it be recorded on the immutable ledger. 

Notaries can either be centralized (in which case they will be R3 nodes themselves or banks) or distributed (in which case they will use a consensus algorithm, mostly the Practical Byzantine Fault-tolerance Programming.)

Corda and Smart Contracts

Corda enforces its business logic via the use of smart contracts. A smart contract on the R3 Corda platform is a simple function through which a user can accept or reject a proposal. Users can also compose smart contracts using simple and reusable tools.

A transaction is valid when and only if the contract code is associated with a state agrees. A transaction’s initiator has to construct a transaction that adheres to the constraints of that transaction.

Corda uses the Java Virtual Machine6 –- which has a wealth of libraries and a large skill base, for the creation of smart contracts.

How Corda Achieves a Global Distributed Consensus

Corda has three main tools to help it achieve a globally distributed consensus:

  1. Smart Contract Logic – Which specifies constraints to ensure transactions are valid as per pre-set rules and procedures.
  2. Uniqueness and timestamping of services known as notary pools that order transactions temporarily and eliminate conflicts
  3. A ‘Flow Framework’ that simplifies complex protocols between and among distrusting parties

Not a Blockchain

Corda is an implementation of distributed ledger technology by a company called R3. The implementation is modeled after Bitcoin’s UTXO model.

Corda is not a blockchain. It has some similarities with blockchain, but it’s leaner and enables a plug-and-play model.  Mike Hearn, a member of the leading team, writes: “There is no blockchain…Corda is not tied to any particular consensus algorithm.”

Corda’s approach makes it stands out as one of the leading consortia in the DLT/blockchain space.

CorDapps

CorDapps are the Corda platform’s version of decentralized applications. Developers can create their own CorDapps from scratch using the Java CorDapp Template or the Kotlin CorDapp Template.

Corda has also developed a set of CorDapp examples that can serve as templates for developers. These templates are free for access and will demonstrate to developers how to implement core functionalities of CorDapps.

Here are some examples of Cordapp Projects

Auction CorDapp – A CorDapp that allows users to carry out public or private auctions

Be-Well – A CorDapp that allows clients to purchase wellness services via brokers 

Cordite – An open-source, enterprise-ready and finance grade CorDapp that provides decentralized economics and governance services 

Delivery vs. Payment Asset Transfers – A CorDapp that lets users develop delivery-vs-payment of an asset coordinated by a clearinghouse

Oraclize API – An oracle service that uses authenticity proofs to prove that data fetched from the original source has retained its integrity.

What’s In It for Businesses?

By signing up on the R3 Corda platform, organizations can:

  • Streamline complex processes and hence reduce operational costs and risks
  • Acquire new, cutting-edge ways of doing business and hence gain a competitive advantage in the market
  • Increase revenue by a connecting to and monetizing new networks
  • Create a climate of trust between various players

Final Thoughts

The Corda project is showing the world the power of distributed ledger technology. It’s right up there with other projects that rely on blockchain, like the Hyperledger project. Corda provides a great solution for businesses to streamline processes, reduce overhead costs, and achieve business results faster. Through its CorDapps platform, users can create decentralized apps that create useful solutions for society.

Categories
Cryptocurrencies

Enterprise Ethereum Alliance: A comprehensive guide

A lot can happen in a decade. And in the blockchain and cryptocurrency space, a lot has happened – and that’s remarkable, seeing we started using those terms just about ten years ago. From thousands of cryptocurrencies launched to entire organizations coming together to further the blockchain agenda – the industry is growing stronger. 

A lot can happen in a decade. And in the blockchain and cryptocurrency space, a lot has happened – and that’s remarkable, seeing we started using those terms just about ten years ago. From thousands of cryptocurrencies launched to entire organizations coming together to further the blockchain agenda – the industry is growing stronger. 

A lot can happen in a decade. And in the blockchain and cryptocurrency space, a lot has happened – and that’s remarkable, seeing we started using those terms just about ten years ago. From thousands of cryptocurrencies launched to entire organizations coming together to further the blockchain agenda – the industry is growing stronger. 

The Enterprise Ethereum Alliance (EEA) is one of these organizations – and it exists to make it easier for individuals and businesses all over the world to collaborate and build private versions of the Ethereum blockchain for their business needs.  

The alliance has over 150 members – which is impressive, seeing as it only started with 30. 

What is EEA’s Vision? 

EEA is motivated by four goals:

i) Build a standard open-source specification 

EEA will define open-source standards for the operation of Ethereum blockchain across member organizations. 

ii) Address enterprise requirements

The EEA will help member organizations deploy blockchain technology wherever applicable.   

iii) Evolve in tandem with the Ethereum blockchain 

EEA members will get blockchain experts and best practices from the Ethereum blockchain. Hence, both public and private versions of the Ethereum blockchain will grow alongside each other.

iv)Strive for global interoperability 

The EEA will strive to realize the interoperability of the blockchains.

How Does EEA Help the Ethereum Blockchain?

The EEA hopes to help the Ethereum blockchain in these ways: 

  • Governance for Ethereum’s Enterprise Applications

The alliance will design a framework through which smart contracts can be optimized and implemented for companies and businesses. Thanks to this, companies will have an easier task of transferring real-world applications onto the blockchain. 

  • Enhance Compatibility and the Public Ethereum

The EEA will plug in new features based on real-life uses cases and contribute to Ethereum’s smart contracts business potential – and the way businesses conduct business.   

  • Ensure Rapid Technical Innovations

Developers interested in creating smart contracts and decentralized applications on the Ethereum blockchain will have an easier time doing so, thanks to more familiar frameworks and more standardized technical procedures and tools.

Ethereum Enterprise Alliance and Hyperledger 

In October 2018, the EEA and Hyperledger – an umbrella project for open-source blockchain frameworks announced they would be working together for the benefit of blockchain. This was good news for the crypto space since both bodies have a wealth of blockchain expertise between them. The two organizations were being seen as competitors before – but coming together means they can tap the synergies in each other and do great things for blockchain. 

“This is a time of great opportunity. Collaborating through mutual associate membership, provides more opportunities for both organizations to work more closely together,” said Ron Resnick, an executive director of the Ethereum Enterprise Alliance. 

The two organizations will help drive the adoption of blockchain by businesses and companies all over the world and, in the process, bring blockchain benefits to the world. 

The new arrangement will also allow for greater sharing between the two organizations. For example, Hyperledger developers can benefit from EEA’s certification programs, and EEA members working to achieve certain standards can get help from the Hyperledger platform to implement them. 

Members of the EEA

EEA is a collaboration of an eclectic mix of companies. 

Some heavyweights in the alliance are Intel, Microsoft, Santander, ING, Ethereum Foundation, Scotiabank, PricewaterhouseCoopers, and Standard Chartered Bank. 

The most interesting member might be JP Morgan Chase & Co. This is because the company’s CEO, Jamie Dimon, has been on record declaring his lack of faith in Bitcoin, Ethereum’s main competitor. His dislike for Bitcoin is so strong that he said he would fire any JP Morgan employee who traded Bitcoin. So, it’s puzzling that he would disparage Bitcoin and throw his support behind Ethereum. 

How to Become a Member of EEA

Anyone can become an EEA member, provided they meet the criteria. Members can be individuals, groups, or organizations. The criteria for joining is as below: 

  • Applicant must be promoting Ethereum-based enterprise applications one way or another. 
  • Applicant must agree to the EEA policies, guidelines – which include Intellectual Property, Non-Disclosure, and Antitrust.
  • Applicant must comply with their country’s laws and regulations 
  • Once a member, applicants must pay an annual membership fee. The fee is as follows: $3,000 for individuals, groups, and companies with less than 50 employees, $10,000 for companies with 51 to 500 employees, $15,000 for companies with 501 to 5,000 employees, and $25,000 for companies with more than $5,000 employees. 

Benefits of the EEA

One of the benefits of the Enterprise Ethereum Alliance is events. The EEA organizes several events each year that create great opportunities for members to meet, network, and share and discuss ideas. Anyone that wishes to connect with the Ethereum agenda in a more meaningful way can benefit from those events. The events take place in many places across the world; some events have been held in London, New York, Denver, Hangzhou, and many others. This opens up the opportunity for businesses from diverse areas of the world to attend. 

Another benefit is members can create strong relationships within the Ethereum community. Apart from discussing serious topics like regulations, creating decentralized applications, and so on, there are also sometimes cocktail receptions that bring people together to have fun, bond, and let loose a bit. 

EEA members can also have detailed bios on the website – where they can talk about their company as well as their Ethereum agenda. This makes for increased international visibility for their company – which comes with increased presence and authority in their industry. As well, members can view each other’s information and create mutually beneficial connections.  

Why Organizations Are Joining the EEA

There are several reasons why the EEA has been a hit. 

Ethereum is the most popular cryptocurrency next to Bitcoin. It is the second-largest in market cap and has maintained that position for a very long time. Also, a lot of the most popular cryptocurrencies today started as Ethereum-based projects – think Tron, EOS, Binance Coin, and so on.  

Ethereum is also home to the ingenious smart contract technology that makes getting into a contract simpler and cheaper than ever before. Smart contracts are self-verifying and self-executing, which removes the need for intermediaries like lawyers, banks, and so on. Many people are interested in technology to see how they can benefit from it.  

Then there are Ethereum’s decentralized applications (DApps), which hold massive potential. DApps are applications that are uncensorable and give users complete control over their personal information – unlike centralized applications like Google, Facebook, etc. For many developers, Ethereum is the go-to blockchain for creating DApps. The reason for this is Ethereum’s solid reputation as the blockchain that made the technology possible. Another reason is the Ethereum Virtual Machine that gives developers access to friendly tools. 

Closing Thoughts

The Enterprise Ethereum Alliance has become a formidable organization in the blockchain space thanks to the value proposition of the Ethereum blockchain and powerful companies that are backing it up. EEA also helped Ethereum’s token – Ether to gain a solid footing in the crypto market. This should be good news for Ethereum investors – they’re assured that Ethereum is not a fad cryptocurrency that’s going to disappear with the wind. And, blockchain enthusiasts should also rest at ease knowing that there are organizations out there that are working daily to advance the cause of technology.  

Categories
Blockchain and DLT

Enterprise Blockchains: Everything you will ever need to know

A quick search on the internet about the most popular technologies will almost inevitably yield blockchain as one. Brought into existence by Satoshi Nakamoto, the creator of Bitcoin, blockchain was once dismissed as a fleeting fad, but now it’s one of the most talked-about and valued technologies. So much that industry after industry is exploring to see how it can help them accomplish tasks in faster, cheaper, more transparent, and more accurate fashions. 

A quick search on the internet about the most popular technologies will almost inevitably yield blockchain as one. Brought into existence by Satoshi Nakamoto, the creator of Bitcoin, blockchain was once dismissed as a fleeting fad, but now it’s one of the most talked-about and valued technologies. So much that industry after industry is exploring to see how it can help them accomplish tasks in faster, cheaper, more transparent, and more accurate fashions. 

A quick search on the internet about the most popular technologies will almost inevitably yield blockchain as one. Brought into existence by Satoshi Nakamoto, the creator of Bitcoin, blockchain was once dismissed as a fleeting fad, but now it’s one of the most talked-about and valued technologies. So much that industry after industry is exploring to see how it can help them accomplish tasks in faster, cheaper, more transparent, and more accurate fashions. 

In this article, we’ll be looking at the application of blockchain in enterprises, types of blockchain, and which ones are suitable for enterprises, challenges facing full-scale adoption of enterprise blockchain, and more, but first, what is enterprise blockchain?

What is Enterprise Blockchain?

Enterprise blockchain is a blockchain system that can be used to drive or support enterprise-level processes.

Blockchain will soon positively disrupt the enterprise sector thanks to its revolutionary qualities of immutability, transparency, and decentralization.

Different Types of Blockchains for Blockchain Enterprises

Let’s take a look at the blockchain options available for enterprise blockchains today, namely public and private blockchains.  

We’ll look at their similarities as well as what sets them apart, and why one type is more suitable than the other for enterprise-level use.

Similarities:

  • They offer a decentralized, peer-to-peer platform
  • Each network participant has a copy of the blockchain
  • They both guarantee immutability – or inalterability of records  

Public Blockchains

When you think of Bitcoin, Ethereum, and Litecoin, etc. you’re thinking of public blockchains. Public blockchains are open ecosystems in which anyone and everyone can participate. But public chains are impractical for enterprise use. This is because:

  • Block sizes found in these chains are simply inadequate to store the massive data handled in enterprises
  • There are scalability and throughput issues. For example, Bitcoin can process just seven transactions per second. Its confirmation time for blocks is 10 minutes – which is an unacceptable latency for the millions of transactions that enterprises need to put out.
  • They require massive amounts of computational energy – rendering them unsuitable for long-term and massive scale use
  • Their openness, while good for transparency, is also a problem because it compromises on privacy

Private Blockchains

Private blockchains, also called permissioned blockchains are just that – private. Unlike public chains, access to a private blockchain requires authorization. Access could be given through either:

  • Being an existing participant
  • Being given access by an authorized person
  • Being part of a consortium

Linux Foundation’s Hyperledger Fabric is a good example of a permissioned blockchain network. This blockchain is designed specifically for enterprise applications. 

Required Features of Enterprise-level Blockchains

i) High Performance

For blockchains to be able to be adopted for enterprise use, they need to demonstrate strong and fast performances. This means:

  • The ability to compartmentalize tasks
  • The ability to effect asynchronous communication between elements
  • Faster consensus protocols
  • The ability to carry out varied computations simultaneously
  • Ability to self-execute

ii) High Resilience

High resilience means blockchains must have the ability to bounce back fast from downtimes and failure. It also means that the blockchains must be able to avoid these instances in the first place.

iii) Privacy and Security

Privacy is non-negotiable when it comes to enterprise blockchains. This means they must be able to support secure communications and storage as well as the integrity of a company’s data and profile.

Examples of Enterprise Blockchains in Use

Some companies have already jumped on the enterprise blockchain bandwagon.

Let’s look at examples in various categories:

Finance: Santander, JP Morgan, Royal Bank of Canada, Goldman Sachs, and First Bank of America are just a few of the hundreds of banks that are deploying blockchain technology. Such banks are either involved with the Ethereum Enterprise Alliance, Hyperledger, or the R3 Corda project.

Payments: American Express and Visa are examples of payment companies that are using blockchain to implement various payment procedures.

Automobiles: Volkswagen, Renault, and Lamborghini are examples of vehicle companies that are employing blockchain tech to enhance accuracy, better telematics and mileage tracking, and so on.

Aviation: Airbus, Lufthansa, and Air France are exploring blockchain for purposes such as jet plane part tracking, registration of components, record-keeping of maintenance schedules, flight conditions, and so on.

Features of Blockchain Technology

In this section, we are going to look at the features of blockchain that businesses would want to exploit.

☑️Decentralization

Decentralization means having a peer-to-peer distributed network. This structure has no central authority; neither is it subject to the idealistic whims of one particular person or entity. On the other hand, a centralized system has a single point of failure. This makes it vulnerable to hacking, downtimes, and other vulnerabilities. It is also subject to censorship from authorities.

☑️Immutability

This means once information is stored on the blockchain, it is inalterable. This reduces the chances of corruption, fraud, and meddling. 

☑️Transparency

Blockchain puts up everything for everyone in the network to see. A great example is a transparency in the food industry. Blockchain can help track food from farm to table. This not only boosts consumer confidence but also saves money for suppliers and farmers since when a certain batch of food is infected, it’s easy to trace the exact source of that food.

☑️Blockchain is Cheaper

This point can be best illustrated by banks – which use millions of dollars to conduct Know Your Customer and Customer Due Diligence procedures. With blockchain, customers would simply need to upload their credentials on the site, and banks would access it from there, as opposed to investing in staff and machines to do so – a costly process in terms of time and money.

☑️Blockchain is Faster

To illustrate this, consider the case for SAP collaborating with ATB Financial and Ripple to send a blockchain payment from Alberta, Canada, to Reisebank in Germany. The €667 transaction took 10 seconds – and this would have taken 2 to 6 business days in a traditional payment channel. Ten seconds compared to 2-6 business days is worth paying attention to. 

Implementation Challenges

While blockchain is a revolutionary idea for enterprises, it can be harder implementing it than you imagine. Let’s look at the challenges impeding wide-scale adoption of blockchain in the business world:

Lack of interoperability: If we’re to have blockchains supporting enterprise processes in every sector of our lives, we need blockchains to be interoperable – that means having the ability to interact with each other and having the knowledge of what’s going on in the other chains. That would facilitate more streamlined processes.

Legacy Networks: Let’s be realistic; the current systems run on legacy; that is, legacy networks that are supported by old technology. Changing this infrastructure from the ground up would require a massive investment of time and money – which is not exactly a priority for many businesses.

Skillset: Blockchain is not the easiest skill to master. If you’re to integrate blockchain solutions in your company, you would need to hire people with blockchain skills. It can be not only daunting looking for one but also prohibitively expensive.

Final Thoughts

Enterprise blockchains could help businesses streamline processes and, in the process, realize more profits and build confidence in customers. Multiple companies from a diverse range of platforms have already onboarded the technology, while others are in the exploration stage. Given the positive transformation that blockchain is capable of ushering in, the technology has yet to see its best days in terms of adoption and even wider recognition, its current obstacles notwithstanding.

Categories
Crypto Daily Topic

How Ponzi Schemes Work – Everything Explained in steps

Ponzi schemes are financial fraud schemes that many investors know they need to watch out for, but they don’t actually know what exactly they are, or even how to watch out for one. Never mind that clever scammers are constantly improvising new ways to cheat unsuspecting investors out of their savings. And though the idea behind a Ponzi scheme is the same, it can be bent in many ways to con others.

Ponzi schemes are financial fraud schemes that many investors know they need to watch out for, but they don’t actually know what exactly they are, or even how to watch out for one. Never mind that clever scammers are constantly improvising new ways to cheat unsuspecting investors out of their savings. And though the idea behind a Ponzi scheme is the same, it can be bent in many ways to con others.

Ponzi schemes are financial fraud schemes that many investors know they need to watch out for, but they don’t actually know what exactly they are, or even how to watch out for one. Never mind that clever scammers are constantly improvising new ways to cheat unsuspecting investors out of their savings. And though the idea behind a Ponzi scheme is the same, it can be bent in many ways to con others.

A Ponzi scheme is an investment scam that promises high returns for little or zero risk. The schemer sustains this lie by taking new money from new investors and using it to pay older investors, and on and on it goes until it’s no longer sustainable and it goes bust.

So how do you know that a potential investment you’re angling for is really a Ponzi scheme? And how do Ponzi schemes pull it off? Also, why is it called a Ponzi scheme? 

Origins of the Ponzi scheme 

The Ponzi scheme is named after Charles Ponzi, who orchestrated one in 1919. Ponzi raked in millions of dollars after he duped investors with a stamp collection speculation scheme. 

Those days, the postal service had an international reply coupon system that allowed people to pre-purchase coupons and include it in their correspondence. The recipient would take the coupon to a local post office and have it exchanged with the official postage stamps required to send a reply. In other words, the international reply coupon was a voucher that enabled the recipient to purchase a stamp required to post the reply. 

Postage prices would naturally fluctuate, meaning stamps were cheaper in some countries than others. Ponzi would purchase cheaper reply coupons in other countries and sell them in the United States at a profit. 

This type of trade is known as arbitrage, and it’s a perfectly legal practice. But Ponzi took it to an illegal and greedy level.     

Ponzi sucked in investors by promising returns of 50% in 45 days or 100% in 90 days. Since his postage stamp scheme was a success, investors rushed in droves. Every day, more investors would hear of the potentially lucrative investment and hand over their cash to him. But instead of investing the money, he redistributed it to initial investors – claiming to have made profits – while keeping some to himself.

Just like a house of cards, the scheme finally crumbled when people started to wonder how he was buying and selling millions of coupons out of the 27,000 that actually existed in the whole world. The Boston Post began investigating his company – the ‘Securities Exchange Company.’ This investigation exposed him as a fraudster, and he was subsequently arrested on August 12, 1920, and charged with mail fraud, larceny, and other crimes.  

The Working of a Ponzi Scheme

The Ponzi scheme has inspired countless other swindlers from all corners of the world, only this time they don’t have to front their deceitful scheme with international reply coupons. 

Ponzi schemes rely on a basic framework – which involves paying off initial investors with the funds you collect from new investors. All one has to do is attract new investors who are willing to invest in what looks to be a very attractive business venture, lack of sufficient information on the investment notwithstanding. All that matters to these investors is the unbelievably good returns on investment.

After the scammer has convinced a few people to shell out their money, they might take some of the funds and buy some flashy car or rent a fancy office space. These props are meant to impress the next round of investors. They will then use the next round of money from new investors to give some returns to the earlier investors while keeping a slice of it for themselves. 

The second round of investors will, of course, need a payout. The schemer will go hunting for the next batch of investors – whose money they will use to pay the second batch investors. It’s a matter of wash, rinse, and repeat. 

Of course, things will start getting complicated soon enough. The schemer has to keep recruiting new investors to the Ponzi scheme so as to pay back previous investors. This is no easy task for a mere mortal. (Which is why most successful Ponzi schemes are masterminded by several people working together – but even those schemes have the same ending.) The scheme simply eventually becomes unsustainable and collapses. 

How to Detect a Ponzi scheme

For the inexperienced, it can be hard to spot a Ponzi scheme. But if you know what to look for, you can easily avoid one. Here are the red, flashing signs: 

☑️Unregistered investments: This one is obvious – any investment should be duly registered with state regulators. An investment that’s operating in the shadows – without official info on company management, products, services, history, financial reports, etc. is the first sign that you need to run.  

☑️Unrealistic returns: If it sounds to be good to be true, it probably is. When you’re approached with an opportunity that looks off the charts, you need to treat it very suspiciously. Investigate it thoroughly before you invest a single cent. 

☑️Very steady returns: Naturally, real investments fluctuate with market sentiment, and so on. If your returns from an investment are always steady and consistent, it’s time for a double-check. 

☑️Guaranteed returns: Every investment bears a certain degree of risk. Be wary of investment opportunities boasting of “guaranteed” returns with little or no risk. 

☑️Unlicensed sellers: Federal and state laws require investment firms to be licensed under the relevant authorities. An unlicensed individual or firm could be a Ponzi scheme.  

☑️Secretive and/or too complex strategies: If an investment is described using words or vocabulary that you don’t understand, avoid it. The same goes for investments whose information you can’t get. 

☑️Issues with paperwork: When you keep getting things like account statement errors, it could be a sign that your money is not where it was promised. 

☑️Difficulty receiving payments: If you’re having issues receiving payments or cashing out, you should be suspicious. Sometimes Ponzi scheme engineers will try to convince investors not to cash out with vacuous promises of even higher returns. 

Ponzi schemes vs. Pyramid Schemes 

Many people associate Ponzi schemes with pyramid schemes and even use the two terms interchangeably. While both are rip-off schemes, they are not exactly the same. 

In a Ponzi scheme, the schemer will only ask you to put your money in an investment. They will not require anything of you beyond that. On the other hand, a pyramid schemer will make you think you have the power to make money yourself. The schemer will tell you to recruit new members and bring in money – which is the same thing you will tell your recruiters. Eventually, the pool of potential recruiters dries up due to market saturation, and the whole thing crumbles. 

Final Thoughts

Even though you may know how to detect a Ponzi scheme, you need to know these types of schemes can happen even to the best. So how can you protect yourself? By diversification. Every financial adviser worth their salt will tell you to diversify your portfolio. This means investing in multiple assets in different sectors. No one investment should constitute more than 5% of your whole portfolio. This way, even if you end up the victim of a Ponzi scheme, you don’t lose all your savings. But even then, always remember to conduct your due diligence before putting your money in any investment.

Categories
Crypto Daily Topic

Blockchain and Finance

Since Satoshi Nakamoto introduced blockchain to the world ten years ago, the technology has found utility in all sorts of interesting places – from supply chains to healthcare to media to finance. Blockchain, a technology whose idea was floated in the computing world but only brought to life in 2009, possesses certain features that have made it a highly sought after technology. And now, dozens of industries are scrambling to get a piece of it.

Since Satoshi Nakamoto introduced blockchain to the world ten years ago, the technology has found utility in all sorts of interesting places – from supply chains to healthcare to media to finance. Blockchain, a technology whose idea was floated in the computing world but only brought to life in 2009, possesses certain features that have made it a highly sought after technology. And now, dozens of industries are scrambling to get a piece of it.

Since Satoshi Nakamoto introduced blockchain to the world ten years ago, the technology has found utility in all sorts of interesting places – from supply chains to healthcare to media to finance. Blockchain, a technology whose idea was floated in the computing world but only brought to life in 2009, possesses certain features that have made it a highly sought after technology. And now, dozens of industries are scrambling to get a piece of it.

Finance, being one of the industries that literally keep the world moving, is at the forefront in the exploration of blockchain.

But before we see how that is, let’s get a closer look at blockchain and see why it’s so special.

What Is Blockchain?

A blockchain is a distributed ledger that stores time-stamped transactions in the form of blocks and is open to everyone on the network. Blockchain’s records are immutable – meaning once information is entered, it’s unalterable – or extremely difficult to change. Each block of transactions is linked to each other using cryptography.

Cryptography itself is the coding of information so that unauthorized third parties cannot interpret it. The technique goes back to 44 BC when Julius Caesar used cryptography to communicate to his generals in a manner that his enemies would not crack the meaning.

Ten years after the first application of blockchain by Bitcoin, the technology has become such a hit due to the following reasons:

  • It is decentralized – meaning it’s not controlled by any one single authority
  • Information is secured using the highest levels of cryptography
  • It is immutable – hence tamper-proof – which reduces chances of fraud
  • It is transparent – meaning it’s open for all network participants

Blockchain has three identifying features that have made it so popular. These are:

Decentralization: In a decentralized system, information is distributed across the network such that everyone in the system has access to the information. Transacting parties can do so directly with each other without the intervention of a third party. Also, you and only you have control over your money. You don’t have to go through the bank to spend or send money to anyone.  

Transparency: When it comes to transparency in blockchain, it means that an individual’s transaction history is in the public domain through their public address. The world has simply never had this level of transparency before. This means the global financial system can finally be held to more accountability.

Immutability: Immutability in blockchain means that information that has been entered on the blockchain cannot be altered or tampered with. This is a very welcome feature in finance because it would ensure the integrity of financial records and eliminate fraud.

Blockchain and Banking

One of the sectors that blockchain would help is finance, which is somewhat ironic since blockchain was first introduced to bypass the existing system. The Harvard Review puts it this way: “The blockchain will do to the financial system what the internet did to the media.” 

The internet came and democratized information. Today, all anyone needs to access certain information is to enter a keyword on a search engine. If blockchain adoption goes mainstream, getting access to financial services – no matter where you are in the world – would be as easy as tapping a button.

So, where can blockchain be applied in finance?

Blockchain tech can be applied to an endless list of finance areas– from insurance to payments, to record-keeping, and so on. In this article, we’ll focus on three areas: faster cross-border payments, cheaper Know Your Customer procedures, and trade finance. 

Faster Cross-Border Payments

If you’ve ever sent or received money from overseas, then you know how tedious and expensive the process can be. On average, a recipient receives their money after about 2-5 working days. And if the money is sent on a Friday, you will receive it on Tuesday since financial institutions are closed on weekends. 

Why does it take so long? Because there are numerous intermediaries involved. And every intermediary has thousands, if not millions, of similar transactions that they are processing. 

But with blockchain, transactions take place in a peer-to-peer, decentralized environment – which saves time and money. Transactions are settled instantly, removing the need for third-party intermediaries. 

Cheaper Know Your Customer (KYC) Procedures 

Banks lose an astonishing amount of money through KYC procedures. The average bank spends an average of £40m a year on KYC compliance, and some banks can even spend up to £300m. These jaw-dropping expenses are to be blamed on ever-changing regulation policies, and some banks still following outdated compliance methods, like paper-based processes. 

Blockchain will solve this problem by empowering people to have control over their personally-identifying information. Customers can upload their identities on the blockchain, and banks can request access to it. 

Also, banks can be granted KYC access to a common repository on a blockchain that they are a part of. Since the information is not controlled by anyone, anyone who is part of the network can access it and share it with anyone. 

According to a Santander-Innoventures report, banks can save up to $15 to 20 billion a year in infrastructure costs by 2022. 

Trade Finance

Just like with cross-border payments, the current trade finance is encumbered with a bunch of parties who make the process slow and tedious. And these parties don’t even trust each other – so they have to involve even more intermediaries like banks and clearinghouses. Blockchain can help solve this problem through the use of smart contracts.  

Smart contracts are self-verifying and self-executing contracts. These contracts are loaded agreements in the form of code. Once all parties involved meet their end of the bargain, the contract self-executes.

How would smart contracts help with trade finance? Since they are self-executing, they can transfer values such as money, title deeds, and so on – removing the need for intermediaries such as banks clearinghouses and with it, the would-be fees. This process is not just cheaper, but also time-saving. An ecosystem is created in which trust is not a prerequisite for doing business.

These three examples highlight how various capabilities of blockchain can be harnessed to transform finance.

Below, let’s take a look at the broader benefits of the technology for the finance sector.

Benefits of Blockchain

Security: Blockchain’s distributed architecture eliminates single points of failure since data is spread all over multiple nodes. Also, its immutable nature is tamper-proof, which removes the possibility of manipulation and fraud.

Transparency: Blockchain utilizes mutualized processes – acting as a single source of truth for all authorized participants

Trust: Blockchain’s immutability and transparency provides a climate of confidence and trust

Streamlined processes: Blockchain processes are faster have reduced downtimes, and have reduced potential for error and delay. It also removes a lot of procedures that would waste time in a traditional setting.

Challenges Blocking Blockchain’s Adoption

While blockchain technology promises a new dawn for finance, it faces obstacles that make it unsuitable for mainstream financial adoption. These obstacles are as follows: 

  1. Lack of scalability: the current blockchain architecture is currently simply unable to cope with high large volumes of demand – i.e., customers in their millions – in one second.
  2. The use of key cryptography: One can only access their assets with their private key. If those keys are lost, misplaced or damaged, you lose your funds – and there’s no recourse
  3. Lack of interoperability: Currently, it’s impossible for blockchains to know what’s going on on other blockchains. This impedes their widespread adoption.

Final Thoughts 

Even though blockchain was introduced to outpace traditional finance, the latter could actually use the former and be better suited to cope with the ever-changing dynamics of customer preferences and needs. When blockchain wizards come up with ways to beat the current obstacles faced by blockchain, it will be an exciting time for finance. 

 

 

Categories
Crypto Daily Topic

The Role of Cross-chain Technology in Blockchain 

What would it be like if all blockchain projects could work together? Think of a universal blockchain system – one that would be used everywhere across all industries. Take Stellar blockchain, for instance, a project that makes it easy for users to come up with cross-border transactions even in remote, high-latency areas. Vechain blockchain, on the other hand, has almost similar capabilities, but with the aim to enhance supply chain management and business processes.

What would it be like if all blockchain projects could work together? Think of a universal blockchain system – one that would be used everywhere across all industries. Take Stellar blockchain, for instance, a project that makes it easy for users to come up with cross-border transactions even in remote, high-latency areas. Vechain blockchain, on the other hand, has almost similar capabilities, but with the aim to enhance supply chain management and business processes.

What would it be like if all blockchain projects could work together? Think of a universal blockchain system – one that would be used everywhere across all industries. Take Stellar blockchain, for instance, a project that makes it easy for users to come up with cross-border transactions even in remote, high-latency areas. Vechain blockchain, on the other hand, has almost similar capabilities, but with the aim to enhance supply chain management and business processes.

Now, if the two, and indeed all blockchains, could work in harmony, some of the technical and economical scalability problems within the entire blockchain ecosystem would be solved.

Unfortunately, these two projects – like all other blockchain projects, operate in isolation – denying users the opportunity to benefit fully from the capabilities of the decentralized ledger technology. More so, if blockchain as a whole is to achieve mainstream adoption, all blockchain networks need to work in harmony.

Is Blockchain Interoperability Worth It?

Simply put, blockchain interoperability is the ability of different blockchain networks to interact with each other and share information without restrictions.

With the rise of numerous blockchain projects, none of these networks have knowledge of the information in other networks. While blockchain networks can communicate and share information, the problem is this has to be done with the intervention of a third-party e.g., crypto-exchanges – which are platforms on which traders exchange digital currency pairs

As is always the case; however, whenever there is an intermediary between two parties, expensive transaction costs are inevitable. Besides, the fact that an intermediary is involved undermines ‘decentralization,’ which is the core principle of blockchain technology.

Now, the increase in the number of blockchain projects is a good thing since it expands the growth of the technology – but it also fragments the market. This is especially true with each new project seeking to outdo the former – by solving a problem that the predecessor project apparently couldn’t solve.

Ironically, these projects end up making a trade-off between their security, speed, or level of decentralization as they attempt to out-do each other. Eventually, user experience is eroded – while also hindering the transition of the industry into the mainstream.

As you can see, blockchain interoperability is important not just for improving user experience but also for establishing a unified ecosystem. This would remove the need for blockchain projects to compete against each other, as well as protect the value of the entire blockchain industry.

What is Cross-chain Technology?

Cross-chain is an emerging technology that aims to facilitate interoperability between blockchains. As such, different blockchain networks can exchange information and value without the need for an intermediary.

Say, for example, you’ve been using the Bitcoin blockchain network, but you want to complete a transaction that requires smart contract capabilities provided by the Ethereum blockchain. With cross-chain technology, you can transfer your Bitcoins over to the Ethereum blockchain to complete the smart contract transaction without the involvement of an exchange platform.

As such, cross-chain technology facilitates the transfer of information as well as value from Bitcoin’s network to Ethereum blockchain – two networks sharing a common protocol- improving user experience and enhancing efficiency.

The most popular case of cross-chain in action is the atomic swap that was executed in 2017 between Litecoin and Decred. Another one followed where Bitcoins were exchanged for Litecoins. Note that in these two instances, only tokens were exchanged, and assets didn’t have to be moved from one blockchain to the other. But it is anticipated that with advanced cross-chain technology, it will be possible to move an asset from one blockchain to another.

Currently, we have a few exciting cross-chain technology platforms within the crypto-space and even in traditional fiat currency transactions. Here are some of them:

Fusion

Fusion is an ambitious crypto-financial platform that aims to enable cross-chain transactions between decentralized assets such as blockchain tokens and cryptocurrencies as well as centralized assets such as bonds, securities, among others.

To achieve this, Fusion allows APIs to integrate several data sources, blockchain tokens, and off-chain values into a single public blockchain network. This way, it is possible to trace any asset and tokens on the network. In the process, multi-coin smart contracts are created, enabling users of different blockchains to interact with each other on a trustless basis.

For security, Fusion utilizes bookkeeping nodes to control the private network keys. These nodes are the parties involved in the transaction. To ensure that a single node does not obtain full control of the assets in the network, Fusion uses a proprietary technology known as Distributed Control Rights Management (DCRM). As the name suggests, the tool distributes the control of private keys throughout the public blockchain so that all parties have equal control of assets.

WanChain

Much like Fusion, WanChain cross-chain project is tailored towards the finance and banking industry. The project aims to bring all digital assets under one blockchain so that users can exchange the assets across different blockchains using the platform’s native coin – Wancoin. All cross-chain transactions are recorded on a tamper-proof distributed ledger system, which makes the platform ideal for banks and other large institutions.

On the security front, WanChain distributes the control of private keys to all nodes on the network, so that one party doesn’t have full control over the digital assets. Unlike Fusion, which supports cross-chain transactions involving traditional assets, WanChain solely focuses on crypto-assets.

Polkadot

Polkadot is a cross-chain project that focuses on enabling the scalability of decentralized computation. To achieve this, the project utilizes a proprietary technology known as parallelizable chains, or in a simpler term, ‘parachains.’

Parachains are smaller forms of blockchains. This means that transactions can be spread over a wide area in the Polkadot blockchain while ensuring high levels of security as provided by the relay chains on which parachains are attached to. The relay chains also enable the parachains to perform independent computations since their communication is secured. By nature, parachains differ in characteristics, making them efficient without being tied down to a specific blockchain language or virtual machine.

Conclusion

For blockchain technology to succeed, it needs to be united under one protocol. This calls for integration and seamless communication of all blockchain projects, incentivizing the wider market to adopt blockchain technology since they can all share relevant information regardless of the project they are using.

Fortunately, with cross-chain technology, blockchain interoperability is becoming a reality allowing users to not only exchange value and information but also save money and time – which would be impossible with independent blockchain projects.

 

Categories
Cryptocurrencies

Is Neo an Ethereum Killer? 

If you’re active in the crypto space, then you’ve definitely heard of Neo, a.k.a Ethereum Killer, a.k.a Ethereum of China. Ethereum seems the common denominator in both tags – probably because the two platforms have so much in common so much that China sees it as the challenger and the Asian equivalent of Ethereum. 

If you’re active in the crypto space, then you’ve definitely heard of Neo, a.k.a Ethereum Killer, a.k.a Ethereum of China. Ethereum seems the common denominator in both tags – probably because the two platforms have so much in common so much that China sees it as the challenger and the Asian equivalent of Ethereum. 

If you’re active in the crypto space, then you’ve definitely heard of Neo, a.k.a Ethereum Killer, a.k.a Ethereum of China. Ethereum seems the common denominator in both tags – probably because the two platforms have so much in common so much that China sees it as the challenger and the Asian equivalent of Ethereum. 

However, the platform has taken a different path from Ethereum in some ways, and it’s those ways that merit it some closer examination. 

The name Neo is Greek, and it means new, young, fresh, recent.

Is Neo really fresh? And is it worth the unofficial crown of Ethereum Killer? There is a lot of hype surrounding Neo, but when you lift the lid, you find there are actually some interesting things to discover.

What is Neo?

History of the Neo Blockchain

Neo is the brainchild of Da Hongfei and Erik Zhang. The two have extensive experience in blockchain, having previously formed Onchain, a successful blockchain research, and development company. The Neo project was funded by two ICOs, the first one which happened in a 10-days span in October 2015 and raised $555,000, while the second ICO raised $4. 5 million. 

Components of the NEO System

Neo has a few interesting technical features that make up the Neo ecosystem. These are:  

A Delegated Byzantine Fault Tolerance (DBFT) algorithm – Neo uses a DBFT consensus mechanism that enables the network to resist malicious attempts 

Neo Contract – A mechanism through which developers can create smart contracts in a safe, scalable and high-performance environment using a variety of programming languages 

NeoFS – A decentralized storage that utilizes distributed hash table technology  

NeoQ – a cryptographic mechanism that creates problems that are unsolvable by quantum computers, ensuring the Neo blockchain is quantum-proof. Quantum computing poses a real threat to the blockchain. Many experts agree that it could unravel the blockchain as we know it. NeoQ aims to prevent quantum computing from destroying the Neo ecosystem.   

The Neo Smart Contract System

Neo’s smart contract system comprises three parts: NeoVM (Neo Virtual Machine), IntereopService, and DevPack. Let’s take a closer look at each: 

  • NeoVM

NeoVM is a lightweight virtual machine that’s similar to a virtual CPU and executes smart contracts on the Neo platform. 

  • InteropService 

This is a function that helps smart contracts on the platform have more utility. It enables smart contracts to interact with data from outside the Neo blockchain without putting the system at security risks. This data couple be either transaction, asset, or contract information, and so on. InteropService also hosts smart contracts as storage.

  • DevPack 

This a language compiler that enables developers to create contracts in various languages. 

Neo: Tokenomics

As of March 6, 2020, Neo was trading at $12.28 and ranking at#19 with a market cap of $858, 998, 683. It had a 24-hour volume of $800, 365, 774, a circulating supply of 70, 538, 831, a total supply of 100m, and a maximum supply of the same value. Its all-time high was Jan 15, 2018 (Jan 2015), while its all-time low was $0. 072287 (Oct 21, 2016)

Neo’s Smart Economy

Neo wants to facilitate what it refers to as the “smart economy.” The smart economy comprises these components: 

  • Digital assets
  • Digital identity 
  • Smart contracts 

Digital Assets

A digital asset is anything that’s formatted in a binary form and comes with the right to use it. A digital asset must include the right to use, so it is considered as one. 

Blockchain has enabled a safer environment where individuals own digital assets. With technology, digital assets can be stored in a decentralized, secure, trusted, and third-party-free environment. 

There exists two forms of digital assets that an individual can utilize: 

  1. Global assets 
  2. Contract assets 

Global assets are recognizable by other smart contracts and clients in the system, while a contract asset is recognized only by the smart contract owner. 

Neo Blockchain and Digital Identity

IGI Global defines digital identity as “the data that uniquely describes a person or thing and contains information about the subject’s relationships.”

Digital identities are essential for the digitization of assets to work. 

The Neo platform utilizes the X.509 digital identity standard as well as the Web of Trust point-to-point certificate issuance models. 

Neo verifies identity-based on these features: 

  • Facial features
  • Fingerprints 
  • Voice activation 
  • SMS and others 

Smart Contracts 

Smart contacts that are contracts that take place on a blockchain – making them digital, trustless, and borderless. These contracts are coded so that they will self-execute when specific conditions are met. 

A smart contract must be immutable (unalterable) and be able to run on multiple computers without compromising the integrity of the network. As such, a smart contract needs to have the following qualities: 

  1. Deterministic
  2. Terminable
  3. Isolated  

What does each of these mean? Let’s get a closer look: 

Deterministic: This means that a program will always produce the same output to a given input. E.g., if 4+2=6, then 4+2 will be six every single time. Deterministic systems are designed to eliminate randomness out of a system.  

Terminable: This means that a contract should be able to come to completion after a set period so that it doesn’t go into an endless loop that will waste time and drain resources.    

Isolated: This means that individual contracts will be kept isolated in case of any bugs and malware that they may contain, knowingly or unknowingly. This is so to save the system from being affected by such bugs. 

Is Neo Similar to Ethereum?

Both Neo and Ethereum inevitably have several things in common, but they also differ in some key ways. 

Similarities 

  • Both blockchains provide a platform for developers all over the world to create smart contracts and decentralized applications
  • Both have native coins that power transactions: Ethereum has Ether, and Neo has GAS. 
  • Both have Turing complete, meaning any problem can be solved as long as the machine has enough memory space 

But what makes Neo interesting is not its similarities with Ethereum, but the differences. Neo is one of those projects that get branded “Ethereum Killer” since they do way better than Ethereum in regard to certain functionalities. 

For example, developers can use any codebase out of so many in the Neo platform, including C#, VB.Net, F#, Java, Kotlin, and more. Ethereum, on the other hand, only supports Solidity, its proprietary programming code that requires developers to master it before they can create applications on the platform. This is sort of a barrier to entry that could lock out many developers from the Ethereum ecosystem. 

The Two Tokens: Neo and Gas

The Neo ecosystem has two native tokens: Neo and GAS. These tokens serve different but complementary roles. 

Neo tokens are used to transfer value in the network. Having Neo tokens gives you a stake in the Neo blockchain. Users need to hold Neo tokens to be rewarded with GAS.

GAS tokens are used to enable seamless transactions in the Neo network. You pay GAS for using the Neo blockchain, e.g., subscription fees.  

Is Neo the Ethereum of China? 

Neo is often called the Ethereum of China due to its similarities with Ethereum. It is known in the crypto space that the Chinese government – which is well-known for its chilly attitude towards cryptocurrency – has warmed up to Neo and seeks to position it as the smart contract and DApps industry leader. Of course, this attitude could be a double-edged sword: it could legitimize the platform, but it could also alienate it from the rest of the world.  

How to Buy and Store Neo

You can buy or trade other cryptocurrencies such as Bitcoin and Ethereum in popular exchanges such as eToro, Coinswitch, Huobi, Changelly, Kucoin, Binance, Bitfinex, and so on. 

Some platforms allow you to purchase Neo with fiat money, while others only allow crypto.

Once you’ve bought Neo, it is recommended that you don’t let it sit on the exchange since exchanges are prone to hacking and other attacks. And since crypto transactions are irreversible, once your crypto is gone, it’s gone. 

We recommend storing your funds in tried-and-true wallets such as Guarda, Atomic wallet, NEON Gui – the official Neo wallet for desktop, and so on. Hardware wallets are always the safest option, though, and we recommend Ledger Nano X and Ledger Nano S. 

Neo: Final Thoughts

Neo is certainly ahead of other blockchain and cryptocurrency projects even if just by virtue of its unique Delegated Byzantine Fault Tolerance Mechanism or its getting ahead of the potentially harmful quantum computing. It excels yet again by allowing individuals to digitize assets and developers to build decentralized apps on its network using super-versatile tools. Perhaps Neo is ‘fresh’ after all. The question is, will it keep fresh? Its cheerleaders are banking on that. 

 

 

Categories
Crypto Daily Topic Cryptocurrencies

Ethereum Vs Ethereum Classic

Crypto newcomers will immediately notice two types of Ethereum in the space: Ethereum and Ethereum and Ethereum Classic. What they won’t know is the unfortunate story, turned intrigue, that spawned the existence of these two cryptocurrencies. Ethereum, the most popular blockchain after Bitcoin, was forced to split into Ethereum (ETH) and Ethereum Classic (ETC) in one of the most pivotal events in blockchain and cryptocurrency history. 

Crypto newcomers will immediately notice two types of Ethereum in the space: Ethereum and Ethereum and Ethereum Classic. What they won’t know is the unfortunate story, turned intrigue, that spawned the existence of these two cryptocurrencies. Ethereum, the most popular blockchain after Bitcoin, was forced to split into Ethereum (ETH) and Ethereum Classic (ETC) in one of the most pivotal events in blockchain and cryptocurrency history. 

Crypto newcomers will immediately notice two types of Ethereum in the space: Ethereum and Ethereum and Ethereum Classic. What they won’t know is the unfortunate story, turned intrigue, that spawned the existence of these two cryptocurrencies. Ethereum, the most popular blockchain after Bitcoin, was forced to split into Ethereum (ETH) and Ethereum Classic (ETC) in one of the most pivotal events in blockchain and cryptocurrency history. 

What is Ethereum? 

In broad strokes, Ethereum is an open software blockchain platform on which developers can build and deploy smart contracts and decentralized applications. 

Smart contracts are digital contracts that are self-verifying, self-executing, and do not require intermediaries to represent the contracting parties. Smart contracts are run and are deployed on the blockchain, and they automatically self-enforce when conditions of the agreement are met. Since they run on a blockchain, smart contracts are immune from censorship, fraud, and any sort of outside interference.

Decentralized applications (DApps) on their part are applications that run on a decentralized, peer-to-peer, and deregulated platform. DApps allow the user to retain their personal data, as opposed to centralized applications where user data is in the hands of the organization. Smart contract is the technology that connects DApps to the blockchain.

Enter DAO 

The formation of Ethereum and Ethereum Classic can be traced back to an organization called DAO, or the Decentralized Autonomous Organization. 

DAO was an automated and decentralized organization. It was a sort of venture capital fund that ran without the organizational hierarchy that’s typical with normal organizations. DAO was going to fund DApps built on the Ethereum blockchain. 

DAO was set up to give investors decision-making power over which potential DApp projects would receive funding. Investors would need to purchase DAO tokens – which gave them a stake in the DAO system. DAO tokens were purchased using Ether. 

For a DApp to be green-lit for funding, it had to be whitelisted by ‘curators’ who were basically reputable figureheads in the Ethereum space. Next, the approved DApps would be voted on DAO investors – or the token holders. If the proposal received a 20% approval, it would receive funding, so it gets started. 

This flexible process, together with the transparency and the overall potential of the DAO, was unprecedented, and scores of investors jumped in, hoping to get a piece of the action. In a record 28 days, the project had raised over $150 million of ether. 

Of course, that was all fine and dandy, but what if an investor wanted to get out? What if an approved DApp did not exactly tickle your fancy, was there a way to opt out? As with anything blockchain, the DAO was a democratic process, so yes, there was a way out – called the “split function.”  

Using this function, you could not only get back your ether, but you could also create your version of DAO known as “Child DAO.” If enough DAO token holders joined you, you could even start accepting your own proposals. The only condition was you had to hold out on spending your ether for the next 28 days.  

But it was this same Split Function that brought DAO to its knees. It exposed a huge loophole in the system that could be manipulated by a bad actor. Many people pointed this out, but DAO creators brushed it aside as not a big issue. Except it was, and it was exploited, and the aftermath was the undesirable split of Ethereum into Ethereum and Ethereum and Ethereum Classic. 

The Big and Bad DAO Attack 

The reckoning came on June 17, 2016. A person, or persons, exploited the Split Function and managed to siphon $50m dollars. And because hindsight is 20/20, it’s very clear to see how straightforward the attack was, and how it could have easily been avoided. 

Now, if one wanted to opt-out Of DAO, all they had to do was to submit a request. The Split Function would then do the following: 

  • Refund the user their ether in exchange for their DAO tokens 
  • Update the transaction in the blockchain, as well as the internal token balance 

What the attacker did was they made a recursive function of the request – meaning they made the request repeatedly for the same amount of DAO tokens 

  • The split function happened this way: 
  • DAO receives DAO tokens and gives the user the requested ether 
  • Before DAO can update the transaction, the user makes other requests for the same amount of Ether, making the code repeat the process over and over. 

By the end of it all, $50 million worth of ether was transferred to a child DAO. As you can imagine, the entire Ethereum and DAO community was sent into a panicking frenzy after it was discovered what was going on.   

Now’ it’s very important to point out that the attack took place courtesy to loopholes in the DAO and not Ethereum. 

DAO ran on Ethereum, and DAO had issues. Ethereum was merely the host of the DAO. 

Dao Attack: The Aftermath

Now after the attack happened, people naturally had questions about whether Ethereum and cryptocurrencies, in general, could be trusted. Even though Ethereum was not to blame, a lot of people couldn’t pick apart between it and DAO. Ether nosedived from $20 to $13. 

Now despite the hacker executing the attack, they couldn’t get access to the funds since the DAO smart contract had enforced the 28-day rule – that you couldn’t spend the ether after exiting DAO. This gave the community three options moving forward: 

  • No step would be taken: Some people were against making any changes since that would mean contravening the immutability tenet of blockchain. These people took the “code is law approach.”
  • Execute a soft fork: The majority of the community voted to implement a soft fork. The idea was to segregate the blocks that were involved in the hacker’s transactions so they wouldn’t be able to move the funds. However, this posed another problem: a soft fork opened way for a denial-of-service (DoS) attack, which meant an attacker could manipulate miners to perform malicious transactions. 
  • Implement a hard fork: A hard fork was now the only way to go. Hard forking meant a section of the Ethereum blockchain would branch out at a particular point – which was the point just before the DAO attack. 

After the fork, two completely different chains were born. The new chain went with the name Ethereum, or ETH. A section of the Ethereum community that was against the fork remained ‘loyal’ to the old chain, which in turn took up the name Ethereum Classic (ETC).  

The fork enabled DAO to refund investors the money that had been taken away. For every 100 of DAO, DAO token holders would be given 1 ETH. This caused a sharp disagreement, which added more fuel to the Anti-Hard Fork drive and contributed to the formation of Ethereum Classic.

You need to understand the magnitude of this hard fork. Remember, Ethereum was the most important cryptocurrency after Bitcoin. A hard fork shook not just the Ethereum community but the entire blockchain and crypto space. Gavin Wood, Ethereum’s co-founder, called this moment “the single most important moment in cryptocurrency history since the birth of Bitcoin.”

ETC vs. ETH – An Ideological Split 

The Ethereum split came down to a difference in ideology. The people that stuck with the old chain believed that cryptocurrency is supposed to be resilient against the whimsical decisions of people. According to them, a hard fork was a sellout, a betrayal of what cryptocurrency stood for. If you were splitting the Ethereum blockchain, you were defeating the very purpose of its existence – to represent a non-corrupt finance system. 

ETH Vs. ETC

Because these two are a split of the same chain and given the contentious history between them, it’s only natural that comparisons will be drawn. 

The biggest problem with ETC is that it is not backward compatible with the ETH hard fork. Also, the movers and shakers of the Ethereum community went with the new chain. This means users of the old chain will not have access to any updates on the new chain, like the upcoming move from Proof of Work to Proof of Stake. 

For ETH, the issue is the new chain violated the “code is law” principle. There is also the glaring question of: how can we know the chain will not be capriciously hard forked again in the future? Are there already hard forks forming different versions of ETH? Even though the latter is conspiracy theories, it creates a climate of distrust in the public, which could lead to a devaluation of the coin.    

Having said that, let’s look at the pros and cons of each cryptocurrency: 

ETC

Pros

  • Adheres to the immutability tenet of blockchain 
  • Has the support of some big-time loyalists 

Cons

  • Users cannot enjoy any updates on ETH
  • The support of the vast majority of heavyweights in the community moved to ETH

ETH 

Pros

  • Has the support of the majority of the earliest big-time developers including Ethereum’s founder Vitalik Buterin 
  • It is possible to update the software with new changes 
  • Enjoys a higher hash rate
  • Has the backing of the Enterprise Ethereum Alliance (EEA)  

Cons

  • Betrayed the philosophy of immutability 

How Do ETH and ETC Stack Up in the Market? 

As of February 06, 2020, ETH is the more successful cryptocurrency of the two coins – at a market rank position #2 next only to Bitcoin. The crypto is trading at $236.42, while ETC is trading at $8.17 while ranking at #18. ETH has a market cap of 26 billion, while ETC stands at $950 million. 

ETH has enjoyed an all-time high of $1.432.88 (Jan 13, 2018), while ETC’S all-time was only $47.77 (Dec 21, 2017). 

ETC Vs. ETH – Final Words

In the never-ending ETC vs. ETH competition, ETH always comes out the winner as the vast majority of Ethereum developers, users and supporters have stuck by its side. ETH may have violated some blockchain principles, but the community bundled together and made something great out of the absolute disaster that was the DAO hack. That is a victory it will always have up in its notch. 

ETC, on the other hand, remains stained by the DAO attack, and the argument that it’s held together by sympathizers, blockchain loyalists, and pure market speculation. 

What’s for certain is that both chains have their loyal bases, and each of them has clout that’s unique to them. As for the battle between them, the common phrase, “it’s not over yet,” applies.

 

 

Categories
Crypto Daily Topic

How Safe Are Bitcoin Casinos? 

According to a recent research article, about $4 billion worth of cryptocurrencies were stolen through security breaches in 2019. Mostly, these hacks targeted exchanges that hold a significant amount of cryptos in hot wallets – which are vulnerable to attacks thanks to their online status.  And hackers are continually innovating new ways of leveraging loopholes, and even outdoing the current cybersecurity measures used by most crypto-asset holding services. 

According to a recent research article, about $4 billion worth of cryptocurrencies were stolen through security breaches in 2019. Mostly, these hacks targeted exchanges that hold a significant amount of cryptos in hot wallets – which are vulnerable to attacks thanks to their online status.  And hackers are continually innovating new ways of leveraging loopholes, and even outdoing the current cybersecurity measures used by most crypto-asset holding services. 

According to a recent research article, about $4 billion worth of cryptocurrencies were stolen through security breaches in 2019. Mostly, these hacks targeted exchanges that hold a significant amount of cryptos in hot wallets – which are vulnerable to attacks thanks to their online status.  And hackers are continually innovating new ways of leveraging loopholes, and even outdoing the current cybersecurity measures used by most crypto-asset holding services. 

In light of this, it would be understandable if you worried about entrusting your Bitcoins to any third party, regardless of the industry. 

While there is yet to be a major heist targeted at Bitcoin casinos, it doesn’t mean that your wagers are entirely safe.  In this article, we look into how you can protect your Bitcoin holdings when interacting with any Bitcoin casino as well as how to choose legitimate Bitcoin casinos.  

Choosing a Legitimate Bitcoin Casino 

Although nothing can guarantee you that you’ll win every bet you place, it helps to choose a trustworthy Bitcoin casino. So, keep the following considerations in mind for your safety while playing in an online Bitcoin casino: 

Transparency 

Ideally, online casinos run on self-developed software known as a provably fair algorithm to manage games and even act as a dealer in a pool of players. But, you shouldn’t take their word for it. 

As such, any online bitcoin casino worth its salt will go the extra mile to win users’ trust by publishing how their software algorithm works. This way, users can vet and verify that each outcome is randomly selected without interference from third-parties. 

License and Registration

Similar to any other business, an online casino must be licensed and registered with a governing body that oversees its operations. However, there are a few discrepancies as far as the regulation of bitcoin casinos is concerned. This is because some countries have completely banned the use of Bitcoin or other cryptocurrencies. 

Nonetheless, a good number of bitcoin casinos have certifications showing that they have passed the strict evaluations of Gaming Laboratories International (GLI). GLI is a game licensing body committed to ensuring a fair online gaming environment. What sets this regulator apart from the rest is that its testing and inspection are carried out independently, based on the stringent standards set by the licensing body itself. 

Funding and Withdrawal Terms

Most bitcoin casinos accept cryptocurrency deposits, but withdrawals are made through your bank or online wallets such as PayPal. In such a case, your banking details can be intercepted by an authorized party, if the casino has put in place privacy and security measures. 

The industry-standard technology for establishing a secure connection is the Secure Sockets Layer (SSL). A Bitcoin casino with this technology in place ensures that you make private and anonymous deposits and withdrawals using your credit card or bank, without an interception. This security protocol also protects the entire site from cybersecurity threats – safeguarding your wagers while also ensuring the site works perfectly.  

Also, pay attention to the withdrawal terms. Some casinos impose terms that prompt users to extend their playtime before they can cash out. Extended playtime often lowers your chances of winning. So, be wary of unfair withdrawal conditions. 

Your Wallet of Choice

Unbeknownst to many, the type of Bitcoin wallet you use to fund your casino account determines your safety when using the platform. 

There are two main types of crypto wallets, hot and cold wallets. The hot wallets are considered to be less safe than their cold counterparts since they are constantly connected to the internet. 

Cold wallets are likened to a saving account, in the sense that they can be used to store cryptos for a long time with minimal interference. Every time you want to spend the stored digital assets, you’ll have to verify your identity by clicking on a button on the hardware wallet. 

Even though you are provided with a hot wallet upon setting up your bitcoin casino account, it’s best that you deposit only a small amount of Bitcoins in this wallet and keep the rest in a cold wallet. 

Responsive Customer Support

It gives you peace of mind knowing that you can rely on competent client service representatives in case of delayed payouts, technical glitches, or any other issues. Moreover, considering the anonymity of Bitcoin casinos, customer support is the only physical link you have with the casino operators. 

A casino with responsive customer support shows the commitment of the operators to ensure that the platform works efficiently and that the users’ interests are a priority. 

Check Out Reviews

Genuine reviews from previous and current users are the surest way of ascertaining whether a casino is safe or not. 

A simple Google search of the casino of your choice is a good place to start. But you might consider going an extra step to contact various users of the platform, especially if they have no problem sharing their experience with the casino. Usually, if a lot of users have a problem with a casino, it’s better to avoid it than risking. Still, if a casino has fewer reviews, you should probably play safe by risking smaller amounts of Bitcoins or avoiding it altogether. 

Most importantly, keep an eye on phony bitcoin casinos, as listed on Casino.org, the world’s largest independent online gaming authority. Currently, there are a few blacklisted casinos on the site deemed to be unsafe due to their unsavoury business practices. 

Conclusion

Bitcoin has revolutionized the online gambling industry thanks to its underlying blockchain protocol. Transactions are faster and more affordable compared to traditional casinos since there are no third-parties involved in the cash-out process. More so, due to the cryptographic nature of cryptocurrencies, Bitcoin casinos are more secure than those using fiat currencies. 

Yet, the same high level of security and privacy offered by Bitcoin casinos can sometimes be detrimental to users’ safety, considering that the transactions are anonymous and irreversible. For this reason, choosing a reputable Bitcoin casino is paramount in safeguarding your wagers from unfair play or game manipulation. 

Even when using a trusted casino, it is recommended that you refrain from storing your Bitcoin holdings in the provided wallet for a long time. Ideally, you should withdraw winnings straight away and store them in your private wallet. 

Categories
Blockchain and DLT

Introducing Cosmos, the Internet of Blockchains

When Satoshi Nakamoto introduced Bitcoin to the world, he likely did not see the extent to which the technology would be adopted in the coming years. The Ethereum blockchain entered a few years later and demonstrated to everyone that blockchain is a versatile technology. Right now, these are the two most dominant blockchains in terms of market cap and public awareness. But they are also the poster children for the shortcomings of blockchain tech.

When Satoshi Nakamoto introduced Bitcoin to the world, he likely did not see the extent to which the technology would be adopted in the coming years. The Ethereum blockchain entered a few years later and demonstrated to everyone that blockchain is a versatile technology. Right now, these are the two most dominant blockchains in terms of market cap and public awareness. But they are also the poster children for the shortcomings of blockchain tech.

When Satoshi Nakamoto introduced Bitcoin to the world, he likely did not see the extent to which the technology would be adopted in the coming years. The Ethereum blockchain entered a few years later and demonstrated to everyone that blockchain is a versatile technology. Right now, these are the two most dominant blockchains in terms of market cap and public awareness. But they are also the foster children for the shortcomings of blockchain tech.

Every week we hear of another blockchain project that’s going to be better than Bitcoin and Ethereum. Some projects have gone on to be a roaring success in this regard – while others fall by the wayside.

Cosmos is one of the latest projects to make bold claims about being able to fix two of the biggest blockchain flaws: lack of interoperability and scalability. This article is going to lay bare every relevant thing you need to know about Cosmos: how it works, its core components, and its potential use cases. But first, let’s get a brief understanding of the scalability and interoperability problem.

The Scalability and Interoperability Problem of the Blockchain

The existing blockchain model is, to say the least, flawed. Consider, for instance, Bitcoin and Ethereum, which have transactions per second speeds of 7 and 15, respectively. Compare that with Visa, which processes around 1,700 transactions per second. This speaks to the scalability problem of these blockchains. 

To address this problem, several proposals have been advanced, including SegWit and the Lightning Network. And while these offer ingenious solutions, they have their weaknesses that render them useful only for a limited period of time. Segwit, for example, will eventually lead to massive consumption of resources as everything, including transactions and bandwidth, increases. For its part, the Lightning Network can currently only handle microtransactions.

The other issue with the blockchain is the lack of interoperability. Today, cryptocurrencies such as Ethereum, Litecoin, Dash, etc. have no way of interacting with others. This makes each blockchain a ‘silo’ that cannot share information with the other. The lack of interoperability also means banks have no way to interact with blockchains – a fact that has given rise to crypto exchanges.

But again, that right there is another problem. Exchanges are centralized – which does not just contravene the principles of cryptocurrencies but also renders them susceptible to hacking and other malicious attacks. Also, they’re prone to downtimes during spikes in demand and blackouts when the system is undergoing upgrades.

What is Cosmos?

Cosmos is a blockchain project with the ambition to be the “internet of blockchains.” The Cosmos architecture comprises multiple parallel blockchains called ‘Zones’ connected to a central blockchain referred to as ‘Hub.’

Zones can exchange value i.e., tokens with each other and generally interact with each other without impinging in each other’s sovereignty.

Who’s Behind Cosmos?

Cosmos is the idea of the Interchain Foundation (ICF), a foundation that funds and collaborates with projects in research, engineering, social good, and community. ICF has contracted the Tendermint team to work on Cosmos.

Tendermint is the team behind the Tendermint consensus algorithm.

The Tendermint team comprises three chief players: Jae Kwon, Ethan Buchman, and Peng Zhong. Kwon is the co-founder of “I done this,” a productivity app for work teams. He has also made contributions to projects like Scamble.io, Flywheel networks, and Yelp. Buchman has 2+ years of experience in science research and blockchain. Zhong is the founder of Nylira, a web development firm.

How the Cosmos Blockchain Works

Tendermint is the basis of the Cosmos infrastructure.

It is a customizable platform on which to build blockchain applications. First, you need to know any blockchain protocol has the three main layers: network, consensus, and the application layer. Tendermint prepackages the first two layers so that developers can fully concentrate on applications by saving a ton of time on complex code. Tendermint has the following benefits:

  • It can handle 10,000 transactions per second
  • It is a simple light client, making it suitable for mobile and IoT
  • It has fork-accountability which helps prevent attacks such as attempts at double-spending

What is IBC and Hubs and Zones?

IBC (Inter-Blockchain Communications protocol) is another important player in the Cosmos ecosystem. IBC is a software that connects the ‘zones’ and ‘hubs’ in the network to allow the exchange of coins among various chains.

In Cosmos speak, varying chains are referred to as heterogeneous chains. This is because each chain is sovereign and features its own architecture.

Now let’s get into hubs and zones.

The Cosmos architecture follows what’s called a Hubs and Zones model. The Hub is a central blockchain on which multiple independent blockchains, called Zones, are connected. The Zones can communicate with each other via the Hub by utilizing IBC.

Now obviously, the Hub occupies a very important role in the Cosmos ecosystem, and for this reason, it’s very important that it’s highly secured. This is achieved by having a globally distributed and decentralized cluster of validators. This cushions it against would-be attacks such as censorships or attempts at splitting the network.

The Atom Token

 Atom is the native token for the Cosmos network. It is neither a store of value nor a medium of exchange, but rather for staking coins. To become a validator for the Zones, participants must stake a certain number of coins. Upon validation of blocks, validators earn Atom block rewards and a fraction of transaction fees.

As of March 5, 2020, the following were the tokenomics for the Atom token. Atom traded at $3.85 with a market capitalization of 735m. It ranked at #23 in the market, with a 24-hour volume of $150, 596,824, a circulating supply of 190, 688, 439, and a total supply of 237, 928, 231. Its all-time high was $.8.31 on March 16, 2019, while its all-time low was $1.91 on September 5, 2019.

Governance of the Blockchain Ecosystem

The Cosmos blockchain has a strict governance model and rightfully so – given its crucial role. Validators are tasked with preserving the well-being of the system and approving changes to the protocol via a vote. For this to happen, the following conditions must be met:

  • Validators commit a certain value of tokens – either Atom or any other
  • If validators fail to vote for a proposal within a given timeframe, they receive the punishment of temporary suspension

For proposals, validators may answer with either of the following:

  • Yea
  • YeaWithForce
  • Nay
  • NayWithForce
  • Abstain

Based on the result, the following scenarios may emerge:

  • If a strict majority votes Yea or YeaWithForce, the proposal is passed
  • If a strict majority votes Nay of NayWithForce, the proposal is dropped
  • More than a third of validators can, however, veto a majority decision “with force.”
  • When a strict majority decision is vetoed, everyone involved is punished by losing a day’s worth of block fees

Some Use Cases for Cosmos Blockchain

The Cosmos blockchain could potentially improve the blockchain space in these interesting ways:

  • Decentralized exchanges: Since Cosmos excels at connecting multiple chains, it can obviously link many other ecosystems together. This includes decentralized (authorization-less, peer-to-peer) exchanges.
  • Cross-chain transactions: Perhaps the most obvious use case, chains in the Cosmos network can easily avail services of each other through the Hub
  • Ethereum Scaling: Any Ethereum-based chain connected to the Hub will also be supported by the Tendermint system, allowing it to scale faster

Final Thoughts

Cosmos’ selling point is impressive, but it’s not the only blockchain proposal promising to be the panacea of blockchain problems. However, its integration of the Tendermint core is certainly a highlight and will be critical to improving the scaling and interoperability of blockchain. Cosmos’ success hinges heavily on its adoption by a big number of blockchains – especially the big names. Can Cosmos pull this off, is it worth the fanfare? We can only watch.

Categories
Crypto Daily Topic

The Best Books to Read and Understand Blockchain

Ten years after blockchain arrived, it’s still one of the most misunderstood or plainly ununderstood technologies of our time. This is because it arrived with the fuss of Bitcoin – which was the first of what everyone knew about cryptocurrencies – themselves a misunderstood and sometimes frowned-upon phenomenon.

Ten years after blockchain arrived, it’s still one of the most misunderstood or plainly ununderstood technologies of our time. This is because it arrived with the fuss of Bitcoin – which was the first of what everyone knew about cryptocurrencies – themselves a misunderstood and sometimes frowned-upon phenomenon.

Ten years after blockchain arrived, it’s still one of the most misunderstood or plainly ununderstood technologies of our time. This is because it arrived with the fuss of Bitcoin – which was the first of what everyone knew about cryptocurrencies – themselves a misunderstood and sometimes frowned-upon phenomenon.

For instance, blockchain is still synonymized with Bitcoin despite the two meaning completely different things. Blockchain is the technology that powers Bitcoin and other cryptocurrencies like Ethereum, Dash, and so on.

Blockchain always spurred curiosity from the first day. And it still does – especially with all sorts of industries – from finance to healthcare to supply chains to media exploring the technology. And even more significantly, entire organizations have been established just to further the technology.

As such, many people are increasingly looking to understand this technology better. If you’re one of those people, then you’re in luck. This article brings you the best ten books that you should read to get a firm grip on blockchain tech, as well as on cryptocurrencies – its first application.

That said, why wait? Here are the best books to read and understand blockchain.

i) Blockchain Revolution by Don and Alex Tapscott

This book is written by a father and son duo, and it attempts to illuminate the impact of cryptocurrencies on the world. Per the “Blockchain Revolution,” blockchain technology opens a bigger space that will change what we do on the internet, how we do it, and who can do it. The Tapscotts contend that blockchain will massively change – for the good – the delivery of financial services and how we treat personal identity and data. The technology will also change how we enter into business contracts and will be integral to the Internet of Things technologies.

Blockchain Revolution also discusses how technology is shifting the world of money, transactions, and business. The Tapscotts see blockchain as a simple yet revolutionary technology that provides financial transactions with both anonymity and security. The authors observe that the technology is still nascent, and they recognize that technology is yet to be fully exploited and that it holds even more potential for the future.

ii) The Book of Satoshi by Phil Champagne

Champagne took upon himself the role of compiling the various writings of Satoshi Nakamoto, the still-mysterious originator of Bitcoin. These writings are important because they provide crypto fans with the thinking of the person(s) who brought the world blockchain technology.

As of early 2020, the Nakamoto persona is still shrouded in mystery as far as real life is concerned.  The only way for anyone to get nearly close to knowing this persona is by reading the publications he made in the early days of Bitcoin – when he was corresponding with other developers concerning the cryptocurrency.

The Book of Satoshi comprises chronologically organized emails, online posts, as well as the very original Bitcoin white paper by Nakamoto. It also includes Nakamoto’s illustrations on how Bitcoin works.

iii) The Truth Machine by Michael Casey and Paul Vigna

This book is penned by two Wall Street Journal journalists – both of who have covered the blockchain space for years. In “The Truth Machine,” Casey and Vigna talk about the blockchain wave and its vast potential. They demystify the blockchain and talk about why it can bring back our control of identities, personal data, and assets, and how it can include people who have been excluded from the global financial system.

In a truly journalistic fashion, the two talk about the potential for blockchain to help society rediscover faith in itself. They lay bare the disruption that blockchain promises for all kinds of industries, from legal to finance to shipping.

The duo discusses the potential of blockchain to replace the systems we’ve relied on centuries – some trusted and others not so much – with a radical model powered by blockchain. The two also opine that we should care about blockchain – because it moves humanity forward, not backward.

iv) Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond by Chris Burniske and Jack Tartar

In “Cryptoassets,” Burniske and Tatar explore blockchain from a financial point of view, but they also dive into various technological concepts once in a while. Cryptoassets is written for anyone who is interested in investing in Bitcoin and other cryptocurrencies.

The authors kick off their book by going down the Bitcoin road: its birth during the 2008 financial crisis and its very basics. They do an excellent job of helping the reader understand the key differences between Bitcoin and blockchain technology – which is welcome because many people still mistakenly think the two are the same thing. The two further dive into other assets that have emerged after Bitcoin – including crypto tokens and crypto commodities.

You will find every practical detail about investing in cryptocurrencies here – from crypto wallets to crypto exchanges, to initial coin offerings.

v) The Blockchain Developer by Elad Elrom

This book caters to blockchain developers, which is why you’ll find all the nitty-gritty about how you can create your own blockchain, decentralized applications, and more. The book starts with a broad overview of blockchain technology and its structure before going full force into the granular information that every aspiring developer will be pleased to find.

Some sections in the book also focus on the most well-known blockchains. The author hopes these sections will be helpful to developers who want to create apps for already existing blockchains. Another section of the book also explores blockchain applications beyond cryptocurrencies.

vi) Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money by Nathaniel Popper

Despite its tongue-in-cheek title, this book is very popular among many blockchain cheerleaders many crypto investors and traders owe thanks to this book.  That’s because the book provides an insider view of sorts – Popper brings to readers the first-hand opinions, perspectives, and ideas of some of the earliest movers and shakers in the Bitcoin space.

His engaging manner enables you to see why Bitcoin and, indeed, the blockchain industry have risen to where they are today. Digital Gold is one of the books that went there before other books had, and it’s one of the best starting points for understanding the blockchain.

vii) The Bitcoin Standard: The Decentralized Alternative to Central Banking by Saifedean Ammous

This is another publication that’s right up there with the best in terms of blockchain and blockchain investments. Bitcoin Standard dives deep into the historical context of Bitcoin as well as the unique economic features that have enabled it to become the successful asset it is today. The book also looks at the economic, social, and political implications of the cryptocurrency.

Ammous takes a thrilling walk down the stairs of the history of finance – from when people traded with primitive shells to government debt. With this solid background, he lays down next to the workings of Bitcoin in an intuitive way. He also addresses pertinent questions such as: is Bitcoin wasting energy? Is it for criminals? Who controls it? Can it be killed?

viii) Ethereum: Blockchains, Digital Assets, Smart Contracts, Decentralized Autonomous Organizations by Henning Diedrich

This book is all about recognizing Ethereum for being the blockchain that opened blockchain technology into far more applications than as a platform for digital money. It’s Ethereum that provided developers from all over the world the ability to create smart contracts and ERC-20 token standard through which they can build decentralized apps (DApps) on the Ethereum blockchain.

And this is just what Diedrich gets deep into – the Ethereum platform, smart contracts, decentralized applications, and decentralized autonomous organizations (DAOs). He has attempted to explain this book in the simplest manner possible, making it easy to understand even for newcomers. Better yet, if you’re planning to build your own Dapp on Ethereum, this is your go-to book.

ix) The Internet of Money by Andreas M. Antonopoulos

Andreas M. Antonopoulos is one of the most respected voices in the Bitcoin and blockchain space and a host of the “Let’s Talk Bitcoin” podcast. He’s a Bitcoin evangelist who left his job as a tech consultant to embark fully on popularizing Bitcoin and blockchain.

The Internet of Money, a phrase which, by the way, he was among the first to use, is a collection of cryptocurrency and blockchain talks that he gave in crypto forums all over the world from 2013 to early 2016. In the book, Antonopoulos advocates for and takes an optimistic view of the future of Bitcoin.

x) The Basics of Bitcoins and Blockchains by Antony Lewis

Lewis is one of the founders of itBit, one of the earliest crypto exchanges – and has contributed to the crypto and blockchain space in various ways for almost a decade. In the book, Lewis breaks down blockchain in an enjoyable and easy-to-understand way.

The Basics breaks down cryptocurrencies, Initial Coin Offerings, tokens, enterprise blockchains, and other essentials – without the hype. The book assumes no prior knowledge of the reader in blockchain, cryptocurrencies, cryptography, finance, or any other relevant area. For this reason, it’s a trusty companion for readers who are looking to understand blockchain from the ground up. On his website, Lewis even suggests reading this book “will make you taller, funnier, better-looking and richer.” If you aspire to these qualities, then you should probably try this book.

Final Thoughts

Whether you’re a newcomer in the blockchain space or a long-time enthusiast, these books will provide a fresh perspective into how you conceive the phenomenon. Blockchain is here to stay, and it’s one that’s very likely to take over our entire industries in the future. And despite the technology being discussed every day all over the media, nothing will initiate you better than a good, old-fashioned book.

Categories
Cryptocurrencies

Breaking down ZCash

The first-ever blockchain, Bitcoin, is pretty much an open ledger where all and sundry can see your transactions, and those transactions can be traced back to you, if need be. While this level of transparency is partly what endeared many to Bitcoin, it is not amenable to the notions of privacy that are increasingly prevalent in today’s world.

The first-ever blockchain, Bitcoin, is pretty much an open ledger where all and sundry can see your transactions, and those transactions can be traced back to you, if need be. While this level of transparency is partly what endeared many to Bitcoin, it is not amenable to the notions of privacy that are increasingly prevalent in today’s world.

The first-ever blockchain, Bitcoin, is pretty much an open ledger where all and sundry can see your transactions, and those transactions can be traced back to you, if need be. While this level of transparency is partly what endeared many to Bitcoin, it is not amenable to the notions of privacy that are increasingly prevalent in today’s world.

Is there a way we can take advantage of blockchain technology without sacrificing privacy? Several cryptocurrencies intending to answer that very question have sprung up in recent years. Zcash, a crypto-based on the Bitcoin code base, is one of them.

This article scratches beneath the surface of this privacy coin to look at how it works, who created it, and how it stacks up against other cryptocurrencies in terms of performance.

What is Zcash?

Zcash is a decentralized, peer-to-peer, and privacy-focused cryptocurrency. It is based on the Bitcoin code and was launched in October 2016. It was first called the Zerocoin protocol, then the Zerocash system before finally going by the name Zcash.

Zooko Wilcox, the founder of Zcash, describes it as “another blockchain and cryptographic money which permits private exchanges (and by and large private information) in an open blockchain. This permits organizations, buyers, and new applications to control who gets the chance to see the points of interest of their exchanges, even while utilizing a worldwide, authorization-less blockchain.”

The Team behind Zcash

Zcash is the product of a mix of engineers, scientists, and designers around the world. In the team are graduates from some of the leading universities from around the world, including MIT, Johns Hopkins, and Tel Aviv University. The team’s leader and also founder OF Zcash is Zooko Wilcox, who has 20+ years of experience in open and decentralized systems as well as cryptography.

There’s also the Zcash Foundation, a non-profit whose mandate is maintaining and constantly improving the Zcash protocol to accurately represent the interests of current and future users as well as the community. The foundation was launched in 2017.

How Zcash Works and Its Privacy Model

Zcash works by encrypting transaction details via zk-SNARK – a zero-knowledge proof protocol. Before we talk about zk-SNARK, let’s first get an idea of what zero-knowledge proof is.

What is Zero-Knowledge Proof (ZKP)

 The concept of zero-knowledge proof harks back to the 1980s when 3 MIT researchers – Shafi Goldwasser, Silvio Micali, and Charles Rackoff were working on interactive proof systems, and they stumbled on the idea of having knowledge of proof without revealing that knowledge.

The zero-knowledge proof concept has two parties: the prover and the verifier. A prover can prove to the verifier that they possess certain information without revealing what that information is. A ZKP must possess the following parameters:

  • Completeness: The statement must be true so that a verifier can be convinced of it without proof
  • Soundness: The statement must be true in a way that a lie in its stead would not convince the verifier
  • Zero-knowledge: The verifier has no idea what the information is

What is Zk-Snarks?

Zk-Snark stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge.” Zk-Snarks are mathematical proof constructs that see to it that a transaction takes place without its details being divulged. These details include sender, recipient, and amount. Zk-Snarks also plays the role of preventing double-spending.

The Problem with Bitcoin’s Transparency

Bitcoin is the first cryptocurrency and one that a lot of cryptocurrencies are modeled after. On the Bitcoin blockchain, the world can see the details of transactions that took place, such as the public key. This transparency is a welcome idea, especially when preventing criminal activity from being conducted using the currency. But it’s also the crypto’s pitfall, especially in modern times when privacy is highly valued and protected.

Businesses also have the need to keep their most sensitive information away from the eyes of competitors and other interested parties. Companies also want to keep employee information, including salaries, from other employees and the public in general. Both these scenarios are not possible on the public Bitcoin blockchain.

Zcash’s Selective Disclosure

On the Zcash platform, transactions can either be “transparent” or “shielded.” Transparent transactions happen through the t-addr, or ‘transparent addresses while shielded addresses happen through the z-addr, or the zero-proof address. This is what’s referred to as “selective disclosure” of Zcash transactions. Users can choose whether to send funds using transparent or shielded addresses. Usually, a user can send funds publicly to a private address and vice versa.

This selective disclosure affords users the choice to comply with industry, tax, and legal obligations when and if required. For example, a user can prove that they own at least a thousand dollars without revealing the exact amount. As well, you can use this feature to comply with auditing requirements by providing payments.

Tokenomics of Zcash

Zcash is a fork of Bitcoin and has the same maximum supply of 21 million as Bitcoin. Zcash’s coins will all be mined by 2032, and block rewards get halved every four years as a deflationary measure. As of March 3, 2020, Zcash is trading at $51.85 with a market cap of $478, 526, 912, and #27 ranking. Its 24-hour volume is $370, 092, 058, and it has a circulating supply of 9, 228, 331, and a total supply of the same value. Zcash has an all-time high of $5, 942.80 on October 29, 2016, and an all-time low of $25.45 on November 25, 2019.

Where to Buy and Store Zcash (ZEC)

You can purchase ZEC from these exchanges, among other popular ones: Coinbase, Cointree, Gemini, Bithumb, Kraken, Huobi, YoBit.Net, Changelly, and etoro. Some exchanges will allow you to buy directly with fiat currency, while others will require you to first purchase Bitcoin or another crypto such as Ethereum to trade it for Zcash.

You can store your ZEC on the Linux command line client wallet known as zcashd. This option is good for you only if you know your way around computers or are sufficiently tech-savvy. There’s also a desktop wallet by the Cash foundation that supports Linux, Windows, and Mac. Other desktop options include Jaxx and Exodus.

If you’re more into hardware wallets – and you should – since they’re the safest option, you’re in luck because user favorites such as Ledger and Trezor both support the coin.

The Bottom Line

Zcash is a cryptocurrency that provides the decentralized, peer-to-peer model of transactions while keeping them private. Users, businesses, and organizations looking to combine the benefits of blockchain technology with privacy are right at home with Z-cash. They also get to comply with regulations without giving everything away. Zcash offers the world the benefits of blockchain without sacrificing their privacy. And with the world valuing privacy more than ever, Zcash is set to move only forward.

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Cryptocurrencies

Weaknesses of Blockchain

Blockchain, the technology that underlies cryptocurrencies, constitutes distributed ledgers shared across nodes (computers) participating in the network. These ledgers record data in a sequential fashion after cryptographically securing it. Once data is recorded on the blockchain, it can’t be deleted. This, among many other features of blockchain, like transparency and being deregulated, has given blockchain tech a revolutionary reputation.

Blockchain, the technology that underlies cryptocurrencies, constitutes distributed ledgers shared across nodes (computers) participating in the network. These ledgers record data in a sequential fashion after cryptographically securing it. Once data is recorded on the blockchain, it can’t be deleted. This, among many other features of blockchain, like transparency and being deregulated, has given blockchain tech a revolutionary reputation.

Blockchain, the technology that underlies cryptocurrencies, constitutes distributed ledgers shared across nodes (computers) participating in the network. These ledgers record data in a sequential fashion after cryptographically securing it. Once data is recorded on the blockchain, it can’t be deleted. This, among many other features of blockchain, like transparency and being deregulated, has given blockchain tech a revolutionary reputation.

But some of these features have also proven to be the Achilles heel for blockchain. This article dives into some of the weaknesses of blockchain as it stands today.

i) 51% Attack

Consensus algorithms that help protect blockchains, like the bitcoin blockchain, have proven resilient over the years.

However, there’s the 51% attack threat that’s always hanging over these blockchains like the sword of Damocles. A 51% attack would occur if an entity managed to gain control over 50%+ of the network. This would disrupt the network by allowing such things as double-spending, excluding valid transactions, or altering the correct order of transactions.

ii) Data Modification, Or Lack of It

Once data is recorded on the blockchain, it’s immutable. Immutable means it’s unalterable. While this promotes accountability and reduces chances of fraud, it’s not always favorable for blockchain. Humans are prone to making mistakes, and once inaccurate information is stored on the blockchain, it can never be changed.

iii) No Customer Protection

Blockchain technology operates on the basis of the individual holding power over the asset they are verifying on the blockchain – whether it’s a title deed, a cryptocurrency, etc. Naturally, transactions go sour sometimes. In a scenario where this happens, the only way to overturn the transaction is if both parties agree, which might prove a tall order. This is unlike a centralized system where an arbiter mediates between two conflicting sides.

iv) Slow Settlements

Before any transaction is verified on the blockchain, all nodes must come to a consensus about the validity of the transaction. This is way slower than say, a bank verifying your transaction at the counter. And in the time between when a transaction is lodged and when it’s verified, a malicious actor can enter and execute malicious transactions.

v) Miners Can Be Selfish

On blockchains such as Bitcoin’s, mining is a process that incentivizes network participants to commit computer processing power and then gets rewards in the form of coins or a fraction of transaction keys. However, this has a downside. Miners may not be very concerned about settling the optimal number of transactions. All they care about might be finding the next block as quickly as possible in order to verify it and get rewarded.

There’s also the case of Selfish Mining, a.k.a block withholding attack, in which a miner finds and validates a block but does not broadcast it to the rest of the network. This results in the miner having more ‘proof-of-work’ than other miners in the pool and increasing their odds of unfairly getting more block rewards.

vi) Private Keys

Blockchain uses what are known as private keys to give crypto owners full control over their funds and data. Users need their private keys to access their funds and conduct transactions. This means if you own cryptocurrency, the security of funds is solely on you. In other words, you’re your own bank.  Once a user loses their private key (either by forgetting the seed phrase or misplacing their hardware wallet), their crypto holdings are effectively lost, and there is no recourse.

vii) Inefficiency

Blockchains that, for instance, use proof-of-work consensus mechanisms, are incredibly inefficient. This is because they store the entire history of transactions that ever occurred on the blockchain. This takes up massive storage capacities across devices. To make a transaction, the entire downloading and verification process needs to be completed. This could take several days – spelling crippling inefficiency about the network.

Viii) Storage Issues

As blockchains get more popular, it means more and more users are interacting with the network. This increases the size of the blockchain. We’re talking about hundreds of gigabytes of storage. This puts the network at the risk of losing nodes when people find the ledger too huge to download and store in their devices. And this puts the health of the blockchain in jeopardy since the health of a blockchain partly depends on how many nodes are supporting the network.

ix) Scalability Issues

To demonstrate the scalability issue of blockchain, let’s look at the most widely applied blockchain – the Bitcoin blockchain. It takes around 10 minutes for a transaction to be verified, translating into an average of 7 transactions per second. Compare this with Visa, which processes an average of 2,000 transactions per second. What this means is blockchains are still a long way off from achieving the level of scalability that they would need to be able to serve millions of customers around the world.

Final Thoughts

The idea here is not to discredit blockchain but point out how the technology could improve. Blockchain is not referred to as revolutionary for no reason. Developers are coming up with new solutions for blockchain’s weak spots every other day. Some of these are the Lightning Network, a technology that promises to improve Bitcoin’s scalability by offloading some transaction data off the blockchain so as to facilitate faster transactions. Industries of all types are also exploring technology so as to achieve more efficiency in processes. Despite its weaknesses, blockchain remains a technology to reckon with.

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Crypto Daily Topic

What Does It Take to become a Blockchain Developer? [Updated]

In the crypto world, blockchain technology is essentially a ledger system on which cryptocurrency transaction data is recorded. Every entry is permanent and immutable, meaning it can’t be altered in any way. The data is then verified through consensus by multiple nodes, which are basically computers, making the technology secure and reliable. 

In the crypto world, blockchain technology is essentially a ledger system on which cryptocurrency transaction data is recorded. Every entry is permanent and immutable, meaning it can’t be altered in any way. The data is then verified through consensus by multiple nodes, which are basically computers, making the technology secure and reliable. 

In the crypto world, blockchain technology is essentially a ledger system on which cryptocurrency transaction data is recorded. Every entry is permanent and immutable, meaning it can’t be altered in any way. The data is then verified through consensus by multiple nodes, which are basically computers, making the technology secure and reliable. 

Given its benefits, virtually all industries, from banking, real estate, health-care, music, to logistics, are working towards integrating blockchain technology into their framework. As technology permeates across industries, there is a rising demand for skilled blockchain developers to help optimize the protocol to suit the needs of a specific industry. 

Considering that the technology is still in its budding stage, starting a career as a blockchain developer places you at the front seat to drive its growth. For those working in the tech field, chances are, they have the necessary foundation required to start a career as a blockchain developer. However, if you have no tech skills whatsoever, it’s still possible to become a blockchain developer, but it’ll take a bit more work and dedication to learn the basics. A good place to start is first understanding the most common programming languages used in most cryptocurrency projects. These languages include; Java, Python, JavaScript, Swift, and Solidity. 

Regardless of your skills level here’s are the essential skills required to kick-start your career as a Bitcoin developer: 

Understand the Principles of Blockchain 

Since most of the developer’s work involves interacting with blockchain technology, it makes sense to have a good grasp of how the entire protocol works. You also need to understand the foundational concepts of blockchain architecture such as; cryptographic hash functions, consensus, and distributed ledger technology. 

To understand these concepts, it’s advised to read through the Bitcoin Whitepaper. However, you’ll need a little bit of guidance to direct your learning curve, which is signing up for short-term certification courses on the same will be helpful. 

Data Structures Proficiency 

Data structures are an integral part of development. In the case of blockchain development, it becomes even more important since blockchain relies on data structures to build scalable and tamper-proof records. 

Besides, as a blockchain developer, you’ll spend most of your time working with data structures such as Merkle trees and petricia trees, among others, as you try to configure the network to meet specific needs. 

Smart Contract Development 

Smart contracts are one of the key components of blockchain technology, especially in a business-focused environment. The concept came into the spotlight after Ethereum used it in its protocol. Since then, almost all upcoming blockchain projects are striving to incorporate smart contracts in their functionality. Solidity, Viper, and Chaincode; are among the top programming languages used to develop smart contracts. So, it pays to invest time in learning these languages. 

Cryptography 

In a blockchain network, cryptography and data structures complement each other, to establish the integrity of the network. Asymmetric cryptography, in particular, is used in blockchain to generate digital signatures for verifying transactions. Also, cryptography algorithms help secure data on the blockchain. 

Web Development 

The majority of blockchain developers end up working in designing decentralized applications. Additionally, blockchain technology uses a huge variety of web-based services and APIs. As a blockchain developer, this demands that you understand both front-end and back-end development, which involves creating an intuitive user interface, request handling for the decentralized apps, and API handling. 

Once you have a good understanding of the concepts above, you need to know that there are two main types of blockchain developers. These are core blockchain developers and blockchain software, developers. Let’s look at what each one of them entails: 

i) Core Blockchain Developers

Core blockchain developers focus on developing the blockchain technology itself, including designing the consensus protocols. They can also advise companies on how to structure their Initial Coin Offerings (ICOs) as well as supervise and plan blockchain projects. 

ii) Blockchain Software Developers

Blockchain software developers use the blockchain protocol to build or design decentralized apps. As such, they can work together with the core developers to come up with unique software based on the protocol developed by the core developers. It is also the role of a blockchain software developer to design smart contracts and the other web development roles, as mentioned earlier.

Currently, most job opportunities lie in decentralized app development, as various industries and businesses strive to incorporate blockchain into their processes. 

Self-taught or Formal Education for Blockchain Developers 

Deciding to become a blockchain developer is one thing, choosing a mode of learning is a whole different thing. 

For starters, taking the self-taught route is appealing to those who already have a career in the tech industry. There are numerous online courses to guide you, so you only learn the required content. You can sign up for Coursera or Udemy courses or checkout GitHub repositories for guided content. Online learning platforms on the same, can also help sharpen your self-taught skills as you interact with other blockchain developers. 

If you are completely new to the tech world and possess no skills, formal education focused on basic concepts such as programming and software development is your best bet if you want to start a career as a blockchain developer. Some colleges these days even offer blockchain development courses as certification programs. So, once you enroll in such a college, you’ll not only learn the basic tech skills but also become a blockchain developer at the end of your program.

Nonetheless, you can as well learn the basic tech skills from online courses and other dedicated pages. Once you have mastered the concepts, including those mentioned above, you can then transition to become a blockchain developer by taking up courses on the same. 

Whether you sign up for online courses or enroll for formal education, remember the only way to perfect your skills and boost your resume is by getting hands-on experience. So, try working on solo projects or collaborating with like-minded developers. There are various online open-source projects you can contribute to sharpen your skills and get the much-needed experience. 

Conclusion

Blockchain is considered the next wave of tech innovation. This explains why well-established tech companies such as IBM, Microsoft, and Samsung are showing interest in this revolutionary technology, as they look to be at the forefront of the growing innovation. Moreover, as the technology is maturing and finding its roots across various industries, this is the best time to start your career as a blockchain developer. 

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Crypto Daily Topic

Ether Futures: The Definitive Guide

Speaking at an interview late last year, the new chairman of the U.S Commodity Futures Trading Commission (CFTC), Heath Tarbert, said that Ethereum Futures are likely to be launched sometime this year. 

Speaking at an interview late last year, the new chairman of the U.S Commodity Futures Trading Commission (CFTC), Heath Tarbert, said that Ethereum Futures are likely to be launched sometime this year. 

Speaking at an interview late last year, the new chairman of the U.S Commodity Futures Trading Commission (CFTC), Heath Tarbert, said that Ethereum Futures are likely to be launched sometime this year. 

Such a bold declaration, coming from the regulator of one of the largest derivatives markets in the world, will undoubtedly attract institutional investors who are looking to hedge losses in their fiat settled portfolios. 

But before we can examine the impact of ether futures on the crypto market, there is a good chance that the futures contract will not be launched as soon as expected. If at all it will even be possible to launch them in the first place. 

The Road to Launching Ether futures Contract

While CFCT is planning on launching Ethereum futures, the contracts have already been launched, and investors started to trade them on exchanges based outside the U.S. By extrapolating the market behavior on these exchanges, it’s safe to say that ether futures won’t trade in high volumes as anticipated.

On BitMEX, Huobi, and Deribit exchanges, where investors are actively trading ether futures, the contracts’ trading volume is less than 10% compared to that of bitcoin futures. It could be because Bitcoin futures were the first crypto derivatives to be launched, and have actually been in existence for quite some time now. As such, many investors view bitcoin futures as the crypto-asset of choice. Also, the difference in trading volume may be due to the fact that Ethereum is still maturing, and maybe it will eventually catch-up at its own time. 

Even without considering the trading volume, the launch of ether futures may not come to fruition due to the coin’s upcoming change in algorithm. The proposed change in algorithm will see Ethereum move from proof-of-work to proof-of-stake algorithm, making the coin more of a security than a commodity. 

Unlike proof-of-work where holders receive coin rewards randomly, once Ether moves to proof-of-stake, the coin holders will receive annualized rewards. As such, since the returns will be more regular and predictable, the entire Ethereum network will fall under the jurisdiction of the U.S. Security Exchange Commission (SEC). As it is widely known, SEC hasn’t warmed up to the whole idea of crypto-assets. This will likely delay the launch of Ether futures for quite a long time.

More so, the change in algorithm, which will be executed via hard forking, makes investing in Ethereum network riskier now than it would be if hard forking was executed when the network was in its infancy stage.  

Effects on The Crypto-market

Assuming that all goes well and ether futures are launched, the most immediate impact will be on Ethereum prices. 

Going back in time, the launch of Bitcoin futures coincided with the coin’s all-time high prices in the year 2017. Bitcoin pessimists were, therefore, able to enter the market via the futures, leading to a fall of  Bitcoin demand in the spot market. The lower the demand, the lower the prices.

The change in Bitcoin’s price dynamics, prompted the pessimists, as well as the initial coin holders, to short-sell in an effort to make returns off the falling prices, making the prices to decline further. 

History may repeat itself in Ethereum’s case, especially considering that the crypto-market is driven mainly by speculative investors. Yet, the Ethereum blockchain platform has the potential to shift the ETH market prices from speculation demand to benefit-driven valuation. This is possible due to the smart contract feature of the coin’s underlying protocol that allows users to complete transactions such as making a purchase without employing a third-party to oversee the whole process.  

Simply put, ETH isn’t just focused on cashing in the chips; instead, it’s focused on having a real-world use. This way, it’ll stick around for a long time and derive value from its transactional benefits. 

As Wall Street continues to work hard towards embracing cryptocurrencies, the launch of ether futures is critical, as it will incentivize deep pocket investors to enter ETH trade without necessarily owning the underlying asset. This might spark off an aggressive short-selling spree, but it might be a healthy thing for the market since it’ll help shift the focus to the real value of Ether. 

Companies who had raised money through ETH tokens – ERC20 – will, however, be affected if eth futures end up triggering short-selling panic. To hedge against further losses, these companies may resort to selling their token’s value for BTC or fiat currencies. In any case, whatever the resultants effect will likely increase Ether’s trading volume. 

With the increasing trading volume, more tools will be developed for seamless trading. Transactions will be faster, and even the current problems in the crypto-market, such as scalability, may eventually be solved. 

Besides the trading volumes and increased investment, Ether futures will help stabilize prices of the coin itself and, to a certain degree, those of Bitcoin. See, futures are, essentially, contracts to buy or sell a certain amount of an asset at a specific day and time. This is particularly useful when the underlying asset is highly volatile, which is the case with Ether. The rationale is that futures enhance liquidity, which is inversely proportional to volatility. 

Conclusion 

There are lots of mixed reactions about the expected launch of Ether futures. With Bitcoin options also hitting the market in the first quarter of 2020, perhaps, it’s best that ether futures are put on hold. 

For ETH, it’s futures may not attract a significant number of investors, since they are not the first of their kind to be launched. Nonetheless, their market debut will signify the maturation of the crypto-market, earning it mainstream acceptance. If the futures turn out to be as successful as Bitcoin’s, it might open the way for ETH options and other sophisticated trading instruments. 

However, before that, Ether will have to first mitigate the regulatory handle brought about by its algorithm change. Currently, analysts fear that the ETH may start out as a commodity but end up having a tangible value as it gets more decentralized. 

 

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Crypto Daily Topic

The Recent Bitcoin Surge: Is it a Mirror of the 2017 Bull Run? 

Towards the tail end of 2019, Bitcoin stagnated in the ranges of $7,000 to $8,000. However, at the beginning of this year, 2020, its price increased steadily to the highs of $9,443.96 and continued to show signs of strength. As the anticipation for even higher prices continues to grow, its quite clear that Bitcoin market was in a bull run, and perhaps will continue to be bullish for the better part of this year. 

Towards the tail end of 2019, Bitcoin stagnated in the ranges of $7,000 to $8,000. However, at the beginning of this year, 2020, its price increased steadily to the highs of $9,443.96 and continued to show signs of strength. As the anticipation for even higher prices continues to grow, its quite clear that Bitcoin market was in a bull run, and perhaps will continue to be bullish for the better part of this year. 

Towards the tail end of 2019, Bitcoin stagnated in the ranges of $7,000 to $8,000. However, at the beginning of this year, 2020, its price increased steadily to the highs of $9,443.96 and continued to show signs of strength. As the anticipation for even higher prices continues to grow, its quite clear that Bitcoin market was in a bull run, and perhaps will continue to be bullish for the better part of this year. 

The projected bull run can be linked to the fact that the digital coin’s daily entities are close to those leading up to the 2017 bull run. In this case, the daily entities suggest that an increasing number of people are using Bitcoin – a relevant milestone in launching a bull market. On top of it all, the bull may continue to reign for longer if the highly anticipated Bitcoin halving goes as expected.

But before we can ascertain that this year’s bull run is similar or different from that of 2017, we need to go back and look at the factors that led up to bull market in the first place. By doing so, it will enable us to point out the differences/ similarities between the year 2020 bull run and that of 2017

Factors that Stirred the Bitcoin Market in 2017 

Rising from the lows of less than $1,000 to as high as $20,000 all within a year, proved that Bitcoin could defy the traditional laws of asset valuation. However, the surge in price can be explained by several factors:

FOMO is Real

The 2017 bull run was mainly fueled by the Fear of Missing Out (FOMO). Only a sizable number of retailers knew what bitcoin is or understood how it works. The majority of them were trading the digital currency since they saw it rise in value and made other traders rich overnight.

Consequently, there was spiked adoption of Bitcoin by the public leading to the high demand for the coin. The higher the demand, the higher the price. Yet, the coin itself wasn’t quite ready for the wide adoption, which explains the drastic reduction in price in the early beginning of 2018. 

Price Manipulation

According to a recent research, it is likely that a “whale” manipulated Bitcoin’s price in 2017, resulting in the bull run. In this context, a whale is an individual or institution that holds a significant amount of Bitcoin, which is higher than that of the average investor. 

The research reports that the “whale’s” transactions on the blockchain revealed that Tether was used to back up the price and manipulate the Bitcoin market. This report doesn’t seem far-fetched since large transactions of Bitcoin can be loosely interpreted as massive adoption of the coin, resulting in a bull market. 

Less Government Regulation

Looking behind the 2017 bull market, there were three other bitcoin bull cycles, though they weren’t as significant. However, the idea here is that in each of these bull cycles, including that of 2017, the government institutions hadn’t enforced strict measures against cryptocurrencies as they currently have. This provided an ideal atmosphere for increased bitcoin activities between miners and traders, resulting in increased trading volume. 

Nonetheless, since the 2017 bull cycle, Bitcoin and the crypto-market as a whole has evolved and is on its way to a more mature phase.

What has improved since 2017

i) Lower Fees

The most significant change since 2017 is the reduction in Bitcoin transaction fees. The adoption of Segwit, as well as the increase in the number of exchanges, have made the transaction faster and affordable for Bitcoin users. 

Of course, if Bitcoin goes into a full-blown bull run, the transaction fees will increase in equal measure. However, the fees will still remain lower compared to other years, incentivizing more investors to join the market. 

ii) Big Money Interests

In 2017, and years before that, blue-chip companies dissociated themselves from bitcoin and blockchain technology altogether. 

Years after, there have been a lot of big brand companies showing interest in the cryptocurrencies, with an aim for leveraging the underlying protocol – blockchain. A good example is Facebook Inc, whose CEO announced the launch of the company’s digital coin, Libra. Microsoft is also actively building on the Bitcoin blockchain, as other institutions such as JP Morgan continue to show interest in cryptocurrencies. This gives the whole crypto-market the validation it deserves, prompting mass adoption. Increased mass adoption will likely trigger an increase in Bitcoin prices since it’s the most held coin by crypto investors. 

iii) Better Liquidity

It is estimated that there are about 206 exchanges currently in operation. To investors, this means it is a whole lot easier to liquidate your investment than it was a few years ago when only a few exchanges were operational. 

What’s even better is that most of the exchanges accept fiat currency directly, in exchange for cryptocurrencies. Investors can buy cryptos using their debit cards at a lower cost and more efficiently than it was the case in 2017. With better liquidity, especially for BTC, the trading volume is bound to increase, which is an essential feature to complement this year’s bull run. 

iv) More Options

It was not until the near-end of the 2017 bull run that Cboe and CME launched bitcoin futures. Despite being launched a bit late, the derivatives are meant to offer a more stable trading alternative to BTC, making the futures attractive to institutional investors. 

Also, if bitcoin price continues to increase and even reach an all-time high, the derivatives provide an efficient way for investors looking to make returns, by shorting Bitcoin. 

This time it’s Different 

It is evident that the Bitcoin landscape has matured since the phenomenal 2017 bull run. More corporations are entering the market, bringing new infrastructure and technologies to improve not just Bitcoin trading, but also the entire cryptocurrency market. If these changes in the market fundamentals are anything to go with, it is safe to say that the 2020 bull run might surpass that of 2017. But even if it fails to do so, 2020 still remains the best year for Bitcoin in terms of the average price. Compared to 2017, when Bitcoin’s average price was $6,125, this year’s average price is, so far, at $9,120, an indication of better days ahead. 

 

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Crypto Daily Topic

Is There a Looming Race for Digital Currency Supremacy?

Being the first of its kind, Bitcoin can be termed as the king of cryptocurrency – a position that can also be attributed to its large user base. 

Being the first of its kind, Bitcoin can be termed as the king of cryptocurrency – a position that can also be attributed to its large user base. 

Being the first of its kind, Bitcoin can be termed as the king of cryptocurrency – a position that can also be attributed to its large user base. 

Ever since its inception, this digital currency has inspired the launch of similar, or rather improved iterations, of new cryptos. As a result, the market is quite flooded with cryptocurrencies, each offering a unique utility point, in a bid to establish undisputed authority in the crypto-market. 

The race to dominating the crypto-space has grown exponentially to a point that it has attracted the attention of government institutions, who are seeking to regulate blockchain and all crypto assets. 

While most government institutions are playing catch-up, giant tech companies such as Facebook are laying plans on launching their own digital currency. So, the real question is, who is likely to win the digital currency race? Will it be a state or a private entity? 

The Case for Facebook’s Libra coin

Less than a year ago, Facebook announced that it would launch a digital coin called Libra. The coin is aimed at connecting thousands of people who don’t have immediate access to traditional banking systems. From the surface, Libra could indeed be a financial game-changer, as the giant tech company is banking on its massive international user base. This also translates to more profits for the company on top of its record high revenue generated from the advertisement.  

But the road to launching Libra, so far, has been nothing short of challenging. Lawmakers, especially in the U.S., were quick to grill Facebook’s plan on the basis of privacy concerns.

Unfortunately, the company hasn’t been in the good books as far as users’ privacy is concerned. As such, the U.S. Congress viewed its extension into the financial realm will likely result in more cases of consumers’ privacy violation. 

However, looking at what Libra can help users achieve, a good number of businesses will likely buy into it; despite Facebook’s disregard for privacy. For starters, the social media platform connects businesses to millions of potential customers. Put Libra into the picture, and Facebook transforms from just a social media platform to an e-commerce and financial marketplace, where customers can shop online using the built-in digital currency. This will be by far a great opportunity that many small businesses can’t resist. Also, Libra’s white paper outlines big brand partners such as MasterCard Inc, Visa Inc, and Uber Technologies, who’ve signed up to invest in the coin’s growth. 

But, for those who are unwilling to cede their personal details to a company that has always shown it can’t be trusted, the big-name partners can be seen as pathways for mitigating the regulatory measures and privacy criticism that Facebook faces. 

Central Banks Race

Sure, cryptocurrencies, in general, have been met with a lot of skepticism credit to their potential to disrupt global finance. Blockchain – the underlying cryptocurrency technology- is still in its infancy stage, which also attracts more speculation on digital currencies. 

Despite the backlash from finance regulators, a handful of countries are warming up to cryptocurrencies and its potential to revolutionize global finance. 

A good example is China, where the country’s central bank – People’s Bank of China (PBOC) – is closer than ever to digitizing the Yuan, China’s official currency. This move has been endorsed by President Xi Jinping, who believes blockchain is an integral part of China’s plan to become a high-tech superpower. 

Following closely behind is Japan, where the legislators are exploring the idea of issuing Central Bank Digital Currency (CBDC) in the form of a digital Yen. Apparently, the process of digitizing the national currency will be a joint venture between the Japanese Government and several private companies. Nonetheless, the goal is to give Japan an upper-hand in the cryptocurrency industry. 

Many believe that Japan’s plan to issue a CBDC is in response to the fear of competition from China, who are also digitizing the Yuan. Facebook’s Libra coin is also part of the reason why Japan is joining the race for digital currency supremacy. This is due to the fact that Libra is backed by different fiat currencies, making it hard to manage since it can’t be pegged to a single county’s politics. 

Western Countries Response

Western economic powers haven’t been as fast as expected, in adopting or promoting the use of digital currencies. In fact, since the birth of blockchain, some Western Countries have been actively inhibiting the growth of cryptocurrencies through strict regulatory laws. Case in point, the U.K. is determined to ban crypto derivatives in addition to planning on taxing crypto users. Things aren’t any better for crypto users in the U.S., where the IRS has managed to stub out several crypto start-ups. 

Recently, however, the western countries have realized the futility of blocking digital currencies. The European Central Bank (ECB), in particular, is working on a digital currency that could be an alternative to private providers. There have been notable moves by central banks in Canada, Switzerland, and Singapore, where they are looking at adopting a digital currency, as the use of fiat currencies decline. 

As countries and private entities try to establish their dominance in the crypto-market, the world’s largest central bank, Bank of International Settlements, aims at keeping the race co-ordinated and less chaotic. For this reason, the institution has appointed one of the ECB board members, to oversee the development of a digital currency model that other central banks can easily adopt. 

In the U.S., several Congress members expressed in writing to the Fed chairman – Jerome Powell – their interest in pushing for the digitization of the dollar. According to these Congress members, the current skepticism surrounding cryptos will jeopardize the widespread acceptance of digital currencies in the long haul. 

Conclusion

Clearly, the race to establishing a sovereign digital currency has taken root. China is expected to emerge victorious in this race, owing to the political back up blockchain has received in the country. 

Facebook and Japan could be the closest rivals to China as the two already have an established framework to support their digital currency. The former is only held back by legal setbacks, while the later is yet to materialize its plan in comparison to China’s concrete effort to digitize the Yuan. 

Western countries, however slow they might be, will soon catch-up at their own pace. But for now, only time will tell who will win the race. 

 

Categories
Crypto Daily Topic

Is Coinfirm Redefining Crypto Privacy with New Tool?

On top of the list of the features or advantages that made cryptocurrency really take off are the privacy and anonymity benefits that its users enjoy. Most people have come to view the anonymity that blockchain offers as synonymous with digital privacy.

On top of the list of the features or advantages that made cryptocurrency really take off are the privacy and anonymity benefits that its users enjoy. Most people have come to view the anonymity that blockchain offers as synonymous with digital privacy.

On top of the list of the features or advantages that made cryptocurrency really take off are the privacy and anonymity benefits that its users enjoy. Most people have come to view the anonymity that blockchain offers as synonymous with digital privacy.

Would you believe that there is a new piece of technology that could spell the end of anonymity in cryptocurrency without compromising the privacy it offers?

Coinfirm, a global leader in analytics and AML for blockchain and cryptocurrencies, is leading the new tech development after having just raised over $4 million to build it. The software is designed to help crypto exchanges meet the new legal regulations that are meant to curb money-laundering using cryptocurrencies and digital assets.

The FATF Regulations of 2019

According to Pawel Kuskowski, the CEO of Coinfirm, his company developed the software with the primary objective to help crypto exchanges comply with the ‘wire transfer rule,’ also known as ‘The Travel Rule’ issued by the Financial Action Task Force back in June 2019. The Financial Action Task Force (FATF) is a large international agency tasked with setting the standards for anti-money laundering regulations around the globe.

In the new regulations targeting virtual assets and related providers such as cryptocurrency exchanges, countries are expected to implement a comprehensive framework of measures meant to combat terrorist financing and money laundering. These include providing essential information about the originator and beneficiary in every digital asset or cryptocurrency transfer.

Other pieces of information that must be provided are the sender’s physical address and identification as well as the date and place of birth. In the new rules, exchanges are also expected to capture the name and account numbers of the recipient.

Anonymity vs. Privacy

While privacy and anonymity are two very different concepts, the FATF regulation has put many cryptocurrency exchanges in a difficult position. This is because they are now required to collect and disclose customer information, something that definitely does not bode well with cryptocurrency users and tends to undermine blockchain’s greatest feature: anonymity.

This requirement has also brought to the fore the need to differentiate between anonymity and privacy as far as digital payments go. Anonymity refers to a situation where a person does not wish to hide what they are doing or what they own, all they try to conceal is their identity. Privacy, on the other hand, is the power to keep various personal things to oneself, regardless of how it impacts society.

According to Kuskowski, if you use cryptocurrency, you need to get used to the idea that the age of anonymity is gone. With the new ‘Travel Rule’ regulation issued by FATF, your favorite exchange will be required to tie your crypto address to your real-world identity. The software that Coinfirm is developing is focused on helping exchanges keep private their users’ information despite the problems anti-anonymity rules seem to cause.

How Coinfirm’s crypto privacy tool works

The new technology that Coinfirm is working on to help crypto exchanges comply with FATF’s new regulations is focused on the customer’s privacy rather than the exchange’s ability to provide it. The software lets virtual asset service providers (VASPs) such as crypto exchanges share only the necessary customer information securely with other VASPs. It also generates detailed security reports that can be used to determine how risky it would be for one VASP to trade with another VASP with customer privacy in focus.

The service is all-rounded. It not only makes it possible for VASPs to trade securely, but it also makes it possible and safer for exchanges to transfer funds to non-VASP establishments and recipients such as anonymous digital wallets.

The FATF Travel Rule requirements may seem to prevent VASPs from transacting with non-VASPs that are not subject to the new rules, but Coinfirm’s secure platform has a solution to this problem. Once the new regulations are in effect, it may be riskier for exchanges to trade with non-VASPs, but the new system is built to make it easy for exchanges to send and receive digital assets to non-compliant users while remaining compliant.

Is this the future of privacy in the crypto world?

It is no secret that blockchain’s top feature – anonymity – was the technology’s most marketed feature that turned out to be a double-edged sword that could cause almost as much harm as its benefits. Criminals – mostly traders in illegal products and services and money launderers – have had a field day thanks to the anonymity and peer-to-peer transaction capability offered by blockchain digital assets. FATF’s regulations have come at the right time just as global governments are grappling with how to deal with the surge in financial crimes brought about by the new digital currency.

Coinfirm’s CEO Kuskowski, is himself experienced in this field, having headed the anti-money laundering department of the Royal Bank of Scotland. He says that the future of financial privacy should be defined solely by how an individual or a business can keep snooping eyes out of their details, and not try to hide it from the system altogether. His company’s technology, if adopted by crypto exchanges, is more of a regulatory compliance system that aims to keep the exchanges in business while helping them protect their customers’ data.

Coinfirm is an established blockchain services company that already works with top exchanges, including Binance and even corporate investigations firm Kroll. They are best placed to provide a solution to the privacy and anonymity issue that exchanges have to explain to their customers because of the expertise it has in the industry and the influence it has on the global financial market.

Regulation is inevitable

Many people mistakenly believed that it is completely impossible to regulate the digital assets market, especially considering how governments and banks have tried and failed to kill blockchain products. Ultimately, they have had to embrace it. This new regulation is not just necessary; it is good for both the privacy of the users and the crypto economy into which the world is headed, according to Kuskowski.

“Coinfirm is focused on providing a solution to a glaring problem with no current solution. Our Solution will be available for the wider market, and not just specially developed for exchanges. Coinfirm is going to kill the market,” he said.

The future of privacy in the digital world will depend on how well the market will receive solutions such as the one developed by Coinfirm. While there is a risk that the new regulations will challenge crypto companies in every industry, it is likely to drag traffic off low-quality exchanges. 

Closing remarks

Kukowski and Coinfirm are very optimistic about the prospects and capability of their new tool. If they get it right, there is a high chance that the company will pioneer the next phase of cryptocurrency adoption with the new regulations. Exchanges that are compliant with the new regulations will be operating on the level of banks, and Coinfirm will be at the center of helping them manage their user data.

“Exchanges will soon be going head to head against banks, the financial field will be leveled,” Kuskowski said, “we will have the best seats in the house to see which financial industry is more effective as far as technology, costs, and user privacy goes. I believe that crypto and crypto exchanges will win hands down!”

Categories
Cryptocurrencies

Blockchain Operating Systems: Everything you’ll ever need to know

The days when blockchain was only associated with Bitcoin seem to be behind us now. Blockchain technology is currently being explored for all manner of applications. We’re currently talking about blockchain operating systems as the next blockchain trend.

The days when blockchain was only associated with Bitcoin seem to be behind us now. Blockchain technology is currently being explored for all manner of applications. We’re currently talking about blockchain operating systems as the next blockchain trend.

The days when blockchain was only associated with Bitcoin seem to be behind us now. Blockchain technology is currently being explored for all manner of applications. We’re currently talking about blockchain operating systems as the next blockchain trend.

A blockchain operating system is one that employs blockchain tech as the support in the background. Think of your Android smartphone or Windows PC. These devices operate on the basis of a supporting system in the background, with all the commands being executed on the surface. A blockchain OS works by capturing all commands locally, but with the authenticating, execution, and recording of the commands happening on the blockchain.

Blockchain operating systems are still very much in the nascent stage, and a quick search through the internet reveals several projects are hoping to claim the title of “the world’s first blockchain operating system.” However, most of these projects are not clear on what solution they provide, while others offer a product that’s so far from the concept.

Having said that, we were able to pin down two blockchain operating systems that are up and running, while another is still in beta, but shows strong promise. Let’s look at those projects right after exploring how a blockchain operating system works.  

How a Blockchain Operating System Works

A blockchain works pretty much like a transaction processing engine. Whether processing a payment, tracking the shipment from the warehouse to your doorstep, blockchain applications are all about authenticating, recording, and processing transactions. It’s the same way that any operating system works – commands (transactions) are issued via mouse clicks or screen taps, and the user performs all tasks on the device.  This is the same concept that blockchain operating systems are based on – with them being viewed as more efficient than traditional operating systems.

Examples of Blockchain Operating Systems

ConsenSys Codefi

ConsenSys Codefi is a blockchain operating system that’s an offshoot of ConsenSys, a blockchain company that’s been in existence since2014.

In a September 2019 release statement, the project describes itself as “a product suite built for the next generation of commerce and finance…utilizing blockchain technology to optimize business processes and payments, digitize financial instruments, and build a customized decentralized applications.”

The Codefi platform is built atop Ethereum and aims to help everyone – from entrepreneurs to the banking system, decentralized networks and developers – benefit from the blockchain technology revolution. Through Codefi, organizations and individuals can digitize processes and assets ranging from equities to loans to real estate.

Its product suite comprises four products:

  • Codefi Assets: A platform to create, issue and manage digital assets on public or permissioned networks
  • Codefi Networks: A collection of tools to empower individuals to utilize crypto
  • Codefi Payments: A platform with a single dashboard in which individuals can interact and transact with cryptocurrency
  • Codefi Data: An engine for managing data, analytics, and risk for cryptocurrency and blockchain networks

LibertyOS

LibertyOS calls itself the “world’s first blockchain operating system.”

A look through its landing page shows the project is still in beta and is still asking for people to invest in the project.

It has a native token, the LIB token, through which advertisers can buy ad-space, and users can earn money through watching those ads – in a safe, clean and spam-free environment. Through this model, LibertyOS hopes to be self-sustaining.

The LibertyOS platform intends to be big on privacy and security, even incorporating a TOR browser. User behavior will not be tracked or recorded on the platform.

The team behind LibertyOS has combined skill and experience from industry leaders such as Microsoft, Google, Amazon, and IBM and education from top universities such as UC Berkeley, Stanford, and Harvard.

Nynja Virtual Operating System

Hong Kong-based NYNJA Group Ltd. has collaborated with Amgoo smartphone manufacturers to distribute its blockchain-based virtual operating system on the company’s phones. The vOS has a communications layer supporting voice, text, and video conferencing tools, alongside project management, e-commerce, and smart contract features, as well as developer tools and business solutions.

On the NYNJA platform is also a multi-currency wallet that supports Bitcoin, Ethereum, and all ERC-20 tokens. Individuals can also exchange digital goods like music, templates, photos, code, and services like translation, design, consulting, and so on. The NYNJA marketplace works very much like the Uber model – you can get a pre-qualified professional to work instantly on your project at the touch of a button.

Final Thoughts

With blockchain operating systems, users will have all the advantages of blockchain: security, privacy, decentralized apps, and so on – right on their computers and even mobile phones.

As of early 2020, Blockchain operating system is still a very young technology. It may take a few years before we see fully-fledged blockchain operating systems. After all, computer operating systems took decades before they became mature, functional operating systems. Bitcoin itself took five years before seeing any transaction, and yet it has spawned an entire unstoppable industry. What’s truly certain is that we’re going to be seeing many exciting blockchain operating systems in the future.

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Cryptocurrencies

A Beginner’s Guide to Tezos

Tezos is one of the most controversial cryptocurrencies to grace the scene. After a wildly successful July 2017 ICO that collected $232 million, its launch was postponed with controversy after another. However, the crypto finally launched in September 2018, rising above the cacophony to become the tenth most successful cryptocurrency as of February 26, 2020.

Tezos is one of the most controversial cryptocurrencies to grace the scene. After a wildly successful July 2017 ICO that collected $232 million, its launch was postponed with controversy after another. However, the crypto finally launched in September 2018, rising above the cacophony to become the tenth most successful cryptocurrency as of February 26, 2020.

Tezos is one of the most controversial cryptocurrencies to grace the scene. After a wildly successful July 2017 ICO that collected $232 million, its launch was postponed with controversy after another. However, the crypto finally launched in September 2018, rising above the cacophony to become the tenth most successful cryptocurrency as of February 26, 2020.

And this crypto-only seems to be growing stronger – it’s one of the cryptos to witness a bullish first quarter of the year.

So, what is Tezos? Let’s do a deep dive into Tezos, its unique selling point, and the controversy that once threatened to derail it.

Who is Behind Tezos?

The team behind Tezos is Arthur Breitman and his wife, Kathleen Breitman. Between them, they have a wealth of computer science, Mathematics, and finance experience. Arthur has previously worked for Goldman Sachs and Morgan Stanley, while Kathleen has work experience from Bridgewater Associates and R3.

Tezo’s On-Chain Governance and Self-Amending Protocol

Before we dive into Tezos, we need to understand the meaning of a ‘fork’ in the context of blockchain.

Blockchain, like software, needs to be updated from time to time to improve its functionality in one way or another. A software upgrade is known as a fork – which can either a soft fork or hard fork. A soft fork is backward compatible, but a hard fork is not.

Backward compatibility means the ability of the new version to interact with the older version. Once a hard fork is implemented, there’s no going back whatsoever. If you don’t upgrade to the new version, you can’t access the latest update or interact with participants in the latest version in any way.

Now you need to understand that forks are not a bad thing: if anything, updates are what makes a blockchain amenable to changing times and user demands.  The only problem is when hard forks cause rancor within a blockchain community.

We are all aware of the most contentious hard forks of all time – the ones that split both Bitcoin and Bitcoin Cash. Bitcoin was split into Bitcoin and Bitcoin Cash, and shortly after, Bitcoin Cash itself split into Bitcoin Cash and Bitcoin Satoshi Vision (SV). The Bitcoin Cash split was especially marked by extreme animosity between the two camps complete with name-calling and threats and the so-called hash wars.

The hash wars were pretty much the two camps using their mining resources to outdo the other chain. Ultimately, it was unnecessary theatrics that actually plunged the whole crypto market and promoted a bad rap against the blockchain and crypto industry.

This is the kind of contention Tezos is trying to avoid. Kathleen Breitman, the Tezos co-founder, said this in an interview with BreakerMag: “The great irony of Bitcoin is that it’s ultimately a tool for community consensus, but it’s [marred by] a tremendous amount of animosity. Tezos allows for innovation to happen in a systemized way as opposed to one born of politics. You’ll not find two people who loathe politicking more than Arthur and me. That’s the idea behind Tezos: let’s formalize this extraordinarily informal process.”

The Tezos’ Way

Tezos hopes to avoid divisive hard forks via what they call ‘self-amendments and on-chain governance.’ The self-amendment concept is meant to prevent the chain from undergoing a hard fork when it needs to upgrade. On-chain governance, at its simplest, means that users will vote over any proposed amendment. Combining the two means that voting can be modified, or the chain can be amended when necessary. The result is a frictionless process that allows the evolution of the blockchain without a hard fork. 

This is how it works:

  • Developers independently submit proposals for protocol upgrades together with an invoice for compensation of their idea
  • The compensation is meant to incentivize developers to contribute to the network  
  • The community puts the proposal into a trial and points out areas that can be improved or removed
  • After rigorous testing, Tezos stakeholders vote on whether the protocol should be implemented or not
  • If the vote favors an upgrade, a ‘hot-swap’ is carried out, and the new protocol is set in motion

This process ensures a decentralized and democratic approach to protocol upgrades by ensuring approval from the bigger section of the community. It’s a peaceful and yet effective approach for improving the Tezos platform.

The Baking process

Amusingly, Tezos calls its staking process “baking.” The baking process is as follows:

  • Bakers are granted block validation rights according to the amount of stake they own in Tezos
  • A block is baked (produced) by a random stakeholder and endorsed by 32 stakeholders (bakers) who are also randomly chosen 
  • Upon verification, the block is recorded on the blockchain
  • If a block is successfully validated and added on the blockchain, the baker is given a block reward and a percentage of the fees from that transaction

Token holders can delegate their baking rights to other token holders without relinquishing their ownership of the tokens. When the baking process is completed, the baker shares its rewards with the other delegates. A baker will be punished for acting dishonestly e.g., not sharing rewards, charging high fees, or attempting a double spend or propagating blocks on different branches. 

Token holders can easily switch delegates and, as such, can threaten to delegate elsewhere – this fosters coordination instead.

Liquid Proof of Stake

To understand Tezo’s liquid proof of stake, we need to understand the proof of stake mechanism (PoS) and then the delegated proof of stake mechanism. PoS was invented to improve on Bitcoin’s proof of work mechanism, which is too slow and consumes too much energy.

The proof of stake mechanism works as follows: 

  • Validators commit some coins as stake
  • They initiate the block validation process i.e., they identify blocks that can be added onto the blockchain, then initiate the verification process by placing a bet on it.
  • When a block is successfully validated and recorded on the chain, the validators receive a reward proportionate to their bets

However, the PoS mechanism includes the entire community and may prove to be problematic for scalability in the long run. For this reason, newer blockchains are designed with a delegated proof of stake (DPoS) protocol. DPoS means delegates are selected beforehand.

The Tezos consensus mechanism is a lot like this but slightly different. Instead of a hard and fast rule about the choosing of delegates, it’s completely up to a network participant to decide if they want to be involved in the validation process or not. In short, delegation is optional, or ‘liquid.’

Tezos’ Architecture

Any blockchain utilizes the following three layers:

  1. Network protocol – responsible for discovering blocks and broadcasting transactions between nodes
  2. Transaction protocol – a transaction layer that defines what a valid transaction is
  3. Consensus protocol – determines how an agreement on the validity of transactions is achieved

Tezos combines the last two protocols to form a ‘Blockchain Protocol.’

Tezos breaks from this using a generic ‘Network Shell’ that’s compatible with the different transaction and consensus protocol mechanisms. The Network Shell facilitates interaction between the network protocol and the blockchain protocol and is agnostic (amenable) to both the transaction and consensus protocols.

Controversy Surrounding Tezos

The Tezos we know today almost never was – thanks to a cloud of controversy, it was mired in from the very beginning. Let’s look at the issues one by one below:

Intellectual Property Row

First off, the company behind Tezos is called Dynamic Ledger Solutions (DLS), while the one that was put in charge of the ICO contributions is the Tezos Foundation.

DLS retained intellectual property rights over the Tezos source code. As per the ICO agreement, the Breitmans would set up a foundation (the Tezos Foundation), which would then buy out DLS (including the property rights) for the sake of the community.

However, the agreement had been that the Breitmans and Tim Draper, a venture capitalist, would receive 8.5% of the funds raised from the ICO as well as 10% of the circulating Tezzos. A document outlining the relationship between DLS and Tezos foundation and for the “interest of privacy” was pulled from the companies’ websites with no explanation. 

Internal Power Wrangles

The next controversy was the Breitmans getting into a public dispute with a member of the board and the President of the Tezos Foundation, Johann Gevers. The story is that Gevers, being in control of the funds from the ICO, would not release the funds.

The squabble caused unrest within the community and caused the coin to plummet in value. The Breitmans put out a censuring statement on Gevers peppered with terms such as “self-dealing, self-promotion, and conflicts of interest.” The prolonged and adverse media attention eventually pushed Gevers, and the Tezos Foundation board members to step down. They were replaced by two community members Michel Mauny and Ryan Jesperson.

KYC/AML

For the next few months, updates from the Tezos foundation were scarce as the community waited for any sign. Then the Tezos foundation unexpectedly announced that Know Your Customer/Anti-Money Laundering checks would be required from the contributors to the ICO from the year prior. This caught investors off-guard since the ICO was already a year old by then. This announcement was met with disapproving reactions from the community. 

Tokenomics of Tezo

Tezos was trading at $2.59 as of February 26, 2020. It was ranking at #10 in market cap with the value of $1, 816, 801, 431, and a 24-hour volume of $237, 062, 869. Its circulating supply was 701, 996, 666, with an all-time of $4.46 on July 01, 2018, and an all-time low of 0.314631 on December 07, 2018.

Where to Buy and Store Tezos

You can buy Tezos directly from or trade another crypto such as Bitcoin or Ethereum and then exchange it for Tezos (XTZ) on crypto exchanges such as Binance, Coinbase, Kraken, Cointree, Huobi, Bittrex and so on.

There’s currently no official wallet for Tezos. Like for any other cryptocurrency, it’s highly recommended you store your XTZ on a hardware wallet. Some great options include Trezor and Ledger Nano.

Concluding Thoughts

Tezos brings an interesting perspective into the blockchain space – the idea of the autonomous amendment and on-chain governance. And its success after another may be an indication that the crypto was cut for the future despite what many believed. Its success will depend on how it continues to innovate in an ultra-competitive crypto space.

 

 

Categories
Cryptocurrencies

Centralized Vs Decentralized Storage: How Blockchain is Redefining Data Storage

Today, data is more valuable than ever before. Whether it’s individual or company data, we treasure our data because it contains memories, sensitive information, transaction records, and financial records, and so on. In some ways, data is more valuable than money itself. And everyone wants fast and secure access to their data.

Today, data is more valuable than ever before. Whether it’s individual or company data, we treasure our data because it contains memories, sensitive information, transaction records, and financial records, and so on. In some ways, data is more valuable than money itself. And everyone wants fast and secure access to their data.

Today, data is more valuable than ever before. Whether it’s individual or company data, we treasure our data because it contains memories, sensitive information, transaction records, and financial records, and so on. In some ways, data is more valuable than money itself. And everyone wants fast and secure access to their data.

Data storage is the recording of information in a medium such as a computer or another sort of an electronic system. And decentralized storage is the storage of data in multiple servers or computers where files are protected with blockchain and cryptography. Since data is stored across a network of multiple computers, no one authority can regulate or control it.

Centralized storage represents the existing model of storing data where your data is stored on third-party servers. While the centralized storage solution has served us well since the age of the internet, it has inherent weaknesses that make it less than ideal for fast-changing customer preferences on how and when they want their data.

This article prods a little on the evolution of the internet and how it changed the storage function and explores the fallibility of centralized storage in juxtaposition with decentralized storage. We’ll also look at some of the exciting decentralized storage projects that are using blockchain technology to offer more secure, effective, and easy-to-access storage services.

The Evolution of the Internet

In the early days of data storage, we stored and shared data thorough rather rudimentary devices such as floppy disks. Over the years, we progressed to CDs, hard disk drives, and so on. These had a larger space for storage, but the core concept didn’t change. You still had to move around with the data storage device, rendering your data susceptible to loss and damage.

Upon the advent of the internet, the storage and sharing of data got a new form. We can now connect with computers from all over the world and access information, pictures, and data and more anywhere and anytime. We’ve come far from the days when you had to own and maintain your own server to the current pay-as-you-use model, and then to cloud services like Amazon’s S3 that provide better scalability, security, and performance. However, despite all this progress, the current iteration of the internet is still problematic in a number of ways.

The Problems with Traditional Internet

Censorship

The current centralized model of the internet renders it vulnerable to the whims of authoritarianism. An example is China, in which the online encyclopedia – Wikipedia, is blocked. Or when governments of tyrannical countries shut down the internet during an uprising. With decentralized platforms, people from such countries can still access information.

Relinquishing Control of Data

With centralized storage, companies and users usually hand over data to third party services. From then on, the data is beyond their control, as are the privacy settings protecting that data. Also, the party that you’re entrusting to store your data is more than likely only incentivized by profit. As such, they’ll make decisions that advance their bottom-line without much regard for your business model. A good example is Google’s change in the algorithm, which has put many marketing companies out of business.

Mismanaging of Data

Everyone knows about the Facebook and Cambridge Analytical scandal. Due to negligence by the social media giant, the Cambridge Analytica was able to put its hands on the data of millions of Facebook users and use that data to manipulate elections in several countries. The data was so eerily detailed that the psychographic profiles the company created could accurately suggest what kind of advertisement would be persuasive enough for an individual in a given location for a certain political end.

Another mismanagement debacle is the Deep Roots Analytics case in which the data firm stored details of 198 million Americans on a cloud server for almost two weeks without password protection. The data included names, email, and telephone contacts, home addresses, voter IDs, etc.

Expensive

To put it mildly, centralized data storage is expensive. To begin with, renting cloud storage is expensive on its own. And when you access it over and over again, the bills pile on. Also, costs are arbitrarily determined by the hosting company with little or no say from clients, or no incentive to use the service at all.

Advantages of Centralized Storage

Advanced Security

With decentralized storage, users’ files are split across multiple nodes in the network. Since the data is stored in all those nodes, it’s more secure as there’s no single point of failure. 

Higher Liveness

Liveness is a computing term to describe the ability of a system to stay up and running, even if certain parts of that system are not functioning optimally. In a centralized system, once the server fails for any reason, it brings down the entire system with it.

Decentralized Storage Projects

Rootstock (RSK)

Rootstock is a smart contract platform connected to the bitcoin blockchain through a sidechain. It features a technology stack called Rootstock Infrastructure Framework Open Standard (RIFOS). RIFOS is currently working on a storage application called ‘RIF Storage.’ RIF will improve storage in the following ways:

  • It will feature a unified interface that will allow for the encrypted and decentralized storage and streaming of information
  • It will offer a variety of options for users – from decentralized swarm storage to cloud and physical storage

On the RIF platform, you will also access several decentralized storage services such as IPFS and Swarm.

The partnership between RIF and Swarm, a distributed storage platform and content distribution infrastructure, will see to the following:

  • An incentivization system for users, combined with  a settlement and payment mechanism
  • The building of accounting functionalities between nodes
  • Enhance interoperability and antifragility to strengthen Swarm as a multi-blockchain decentralized storage platform.

Sia

Sia is a decentralized, blockchain-based cloud storage platform. Here, users can interact with each other in a peer-to-peer (P2P), secure and censorship-resistant environment. The Sia model works this way: individuals with extra hard drive space can rent it out and earn money from it, and individuals who need storage space can lease it at little cost.

And unlike centralized storage platforms where you pay more when you access your files for more than a preset frequency, the Sia platform allows you to upload and download files however much you want, as long as the contract funds remain in place. Also, renters are protected from fraud thanks to Sia’s proof-of-storage concept that ensures hosts only receive payment when they present proof of storage.

In this peer-to-peer model, the hosts have the right to advertise their services and also turn down storage requests for data that’s too sensitive, ethically ambiguous, or illegal. On their part, renters have the right to split up their files between various hosts, increasing their safety. They can also pay extra to receive special treatment, such as faster upload speeds and other preferential treatment.

Storj

Storj is an open-source, decentralized storage solution built on Ethereum. It features a suite of decentralized applications that allow you to store and share data in a secure environment thanks to encryption, sharding, and a distributed hash table.

Sharding is a process that fragments the files so that they are shared between users in the network. Anytime you want to access a file, Storj locates all the shards and pieces them together using the hash tables. The files are encrypted before they are shared, and only the owner can access or view them. And even if one of the nodes sharing the files goes down, you can still access the file.

Concluding Thoughts

Decentralized storage could turn upside down the storage function as we know it, thanks to a P2P, a highly secure model, and the freedom to access info and data anywhere and anytime. These projects are some of the trailblazers in this space, and we can be assured of other projects with more amazing and user-interactive features. It will be fascinating to see how this space evolves in the coming years.

 

Categories
Cryptocurrencies

Is Celer Network the Most Advanced Layer-2 Scaling Platform?

While the first generation of blockchains inspired us with dazzling qualities such as decentralization, immutability, and radical transparency, it has also proven to have scaling issues as interest in cryptocurrency surges. For this reason, many cryptos have sprung up to address the scaling issue and even do even more. 

While the first generation of blockchains inspired us with dazzling qualities such as decentralization, immutability, and radical transparency, it has also proven to have scaling issues as interest in cryptocurrency surges. For this reason, many cryptos have sprung up to address the scaling issue and even do even more. 

While the first generation of blockchains inspired us with dazzling qualities such as decentralization, immutability, and radical transparency, it has also proven to have scaling issues as interest in cryptocurrency surges. For this reason, many cryptos have sprung up to address the scaling issue and even do even more. 

The Celer Network is one such crypto project, and it promises to provide a new blockchain experience for users through interactivity, topnotch security, and low or zero fees to create and interact with decentralized applications and smart contracts.  

The Celer Network is the brainchild of a team with PhDs from some of the most prestigious universities in the world, including MIT, UC Berkeley, Princeton, and experience from tech giants like Google, Amazon, Cisco, HP, and more.

In this article, we go deeper into the Celer Network and discover what makes it stand out from other crypto projects.

Crypto’s Scalability Problem

As cryptocurrency has become more popular in recent years, it has become clear that the traditional architecture of blockchain cannot really support millions of users. Nothing has made this clearer than Cryptokitties, a game atop Ethereum’s blockchain that allows users to buy, breed, and sell virtual cats. 

This game became so popular, with a massive surge in users, that the Ethereum blockchain couldn’t support it optimally anymore. As such, transactions took days to be completed. The developing team had to increase transaction fees to reduce the traffic on the blockchain. 

The Celer Network

Breaking down Celer

At its very core, the Celer Network comprises two components: 

  • cStack – Celer’s off-chain architecture that can be integrated on different blockchains
  • cEconomy – the network’s cryptoeconomics (combination of cryptography and economics) model. 

cStack

cStack features these layers: 

  1. cChannel: A generalized state channel and a side chain suite that maximizes utilization of liquidity
  2. cRoute: An optimal transfer route with high throughput 
  3. cOS: A developed framework that supports off-chain enabled applications
What is cChannel? 

As an off-chain solution, cChannel utilizes the two underlying components of off-chain platforms: state channel and sidechains. 

A state channel is one that allows two-way communication between participants, allowing them to conduct transactions outside of the blockchain. A state channel has these characteristics: 

  • A segment of the blockchain is locked up via a smart contract arrangement
  • Participants in a transaction sign off transactions among each other without involving miners at all 
  • After the channel closes, the final state is added on the main chain  

Some state channels deal with payments only. Celer’s state channel tracks all the programs that may occur between the parties, including payments. 

Why Are State Channels Important? 

To understand why state channels are useful, think of the blockchain. As an example, on the Bitcoin and Ethereum blockchains, users have to wait until a supermajority of nodes in the network vote for transactions to go through. Also, as more users interact with the network, this voting process takes longer. As you can see, this process is slow and unideal.

This is where state channels come in. Since transactions are taking place between two parties instead of passing through the mining verification process, they are simple, direct, and quick.

State channels also provide strong privacy. Blockchain transactions are available on a public ledger, and thus, anyone can see them. But state channel transactions are only known between the two transacting parties.

Celer network hopes to create a ‘state channel network,’ which is a network of individual state channels designed such that they can route state changes through each other. Via such a network, users may not have open channels with each other, but they can open a virtual channel between themselves.  

What is cRoute?

To understand the Celer network’s cRoute, let’s do a quick run-through of the problems with existing state channels, mainly the Lightning Network and the Raiden network. 

State channels depend on state routing, which determines the speed and volume of transactions on a state channel, which is why it needs to be designed efficiently.

The Lightning Network uses “Flare,” a type of Landmark Protocol, while the Raiden Network utilizes the A* tree search, a mechanism designed to look for the shortest routing path. 

Both these mechanisms are scrambling to find the “shortest route between two points.” While this mechanism helps put out a good throughput, it changes network topology (arrangement of the elements in a communication network) and, as such, interferes with the overall balance of the network. 

Distributed Balanced Routing 

Celer hopes to remedy this using the Distributed Balanced Routing (DBR). DBR provides for transparency and network balancing in the routing process. DBR is akin to a river flowing downhill. It doesn’t know its final destination. It just follows gravity. Here are the benefits of the DBR algorithm:

  • Provably optimal: It tracks the most optimal route for transfer requests
  • Channel balancing: Each state channel is built to maintain balanced transfers for the network’s topology
  • Complete decentralization: Its decentralized algorithm provides for each node to only need to communicate with its neighbors.
  • Failure-resistant: the DBR algorithm can detect and adapt to unresponsive nodes ultra-fast. If some nodes fail, the remaining nodes will pick the slack and still deliver the maximum possible throughput.
  • Privacy: Thanks to DBR’s multi-channels, transactions are accorded a high level of privacy without the need for additional privacy settings or tools. It can also integrate Tor-like routing to ensure anonymity.

cOS

coS is a framework that aims to help developers build decentralized applications (DApps) of a high level of abstraction. (Abstraction means creating a system such that the average person can use without the need to know the complex technology behind the scenes.)

Via cOS, developers will be able to create two categories of DApps:

  • Simple pay-per-use applications: These applications will allow users to receive small payments from the real world and stream them through the payment network.
  • Complex multi-party applications: These applications will improve the current smart contract models with new techniques such as metaprogramming and annotation processing.

cEconomy

cEconomy is the second most important value proposition of Celer. This cryptoeconomic model aims to ensure that the network’s ecosystem remains stable and functional at all times. It plans to achieve these trade-offs via these mechanisms:

Proof of Liquidity Commitment (PoLC), which is a virtual mining process tasked with acquiring liquidity for the off-chain ecosystem. The Celer Network has members known as “Network Liquidity Backers” who commit their liquidity (like ETH) to the Collateral Commitment for a certain time, after which are rewarded with CELR tokens as a reward. This is what maintains liquidity in the network.

Liquidity Backing Auction (LiBA), which helps off-chain service providers obtain liquidity through a crowdlending model. A lender’s priority status is determined based on the amount of solicited liquidity and the size of the stake in CELR.

State Guardian Network, a special side-chain that protects off-chain states when users are offline to ensure the availability of the network. To become state guardians, CELR token holders need to stake their CELR with the SGN, upon which they become eligible guardians.

What is CelerX? 

CelerX is a Celer app and the only layer-2 application available on Android and iOS. Through the app, users can: 

  1. Use Celer Pay to instantly money with zero costs
  2. Play a variety of games with zero or ‘millisecond’ latency and stand a chance to win prizes

Since its launch, CelerX has reached $1.4m+ in total prizes awarded, 11,000 players, and 300,000 matches from 88 countries. 

Funds deposited on Celer Pay are in your complete control at all times. CelerX uses the ERC-20 Game Token (GT) through which users can practice games like Solitaire Win, Fishjump, Diamond Break, Frog Jump, Fruit Punch, etc. in the app. 

The app provides competitions for approximately 80% of the world and 38 US states. As of February 25, 2020, users from these US states are not eligible for the games due to gaming restrictions in the states: Arizona, Arkansas, Connecticut, Delaware, Florida, Lousiana, Maryland, Montana, South Carolina, South Dakota, and Tennessee. Users from Maine and Indiana are prohibited from card games.  

Crypto-based games have proved to be a hit with the masses (cue Cryptokitties), and CelerX hopes to capitalize on this by providing a platform for skill-based gaming mobile-based e-sports. Through the app, users can buy cryptocurrencies through credit cards, Paypal, and ApplePay – a first not only in blockchain-based gaming but the mobile gaming industry itself.  

Tokenomics of Celer

The Celer token helps keep the network’s liquidity stable while also acting as a medium for payments and transaction fees.

These are the Celer token values as of February 25, 2020. The token is trading at $0.003660 at a market rank of #289. Its market cap is $13, 262, 362, and its 24-hour volume is 4, 825, 975, with a circulating supply of 3, 624, 044, 542. It has a total supply of 10 billion and a maximum supply of the same value. Its all-time high is $0.0302469 on March 25, 2019, while its all-time low was $0.003150 on January 24, 2020.

Closing Thoughts

Celer Network is not another run-of-the-mill crypto scalability project. It utilizes clever layer-2 solutions that put security and privacy at the forefront, always. Its CelerX app model is peerless, as is its cStack and cEconomy components. The project shows a lot of promise, and it will be interesting to see how it pans out in the future. 

Categories
Cryptocurrencies

A Comprehensive Guide To Siacoin 

Blockchain’s first case was Bitcoin – which hoped to solve the problem of double-spending and the centralization of finance. Since then, thousands of cryptos have mushroomed, each with a promise to solve a problem that we may have not even known existed before, but whose solution we truly need.

Blockchain’s first case was Bitcoin – which hoped to solve the problem of double-spending and the centralization of finance. Since then, thousands of cryptos have mushroomed, each with a promise to solve a problem that we may have not even known existed before, but whose solution we truly need.

Blockchain’s first case was Bitcoin – which hoped to solve the problem of double-spending and the centralization of finance. Since then, thousands of cryptos have mushroomed, each with a promise to solve a problem that we may have not even known existed before, but whose solution we truly need.

Not many people know they can rent that extra space in their hard drive and get paid, and not many know they can buy storage space from someone on the other side of the world, and very affordably for that matter.

This is what Sia promises to do – provide a decentralized, peer-to-peer marketplace that people can sell and buy cloud storage services. Simply put, if you have idle hard drive space, you can rent it via Sia, and if you need cloud storage space, you can purchase it at a fraction of the cost that you would have spent via a centralized platform.

This article breaks down everything you need to know about Sia, including what the platform is all about, the creative forces behind it, how it works, and how to grab Siacoins.

The Team behind Sia

Sia is a brainchild of David Vorick and Luke Champine of Nebuolus Inc, a Boston-based startup. Both developers are graduates of Rensselaer Polytechnic. The two first presented the idea at HackMIT 2013, where it received positive feedback.

The idea was simple – what if all the idle space in hard drives all over the world could be brought together in an affordable, decentralized cloud storage platform?

The Problem with Centralized Cloud Storage

Before we see why Sia is special, let’s see why the existing cloud storage model is fundamentally flawed:

Giving Over Control of Data

When companies hand over their data to third party companies, they also give over control over that data. Not only are privacy protocols beyond their control, but they may also accidentally share data they never meant to in the first place.

Vulnerability to Hacking

Centralized systems usually have a single point of failure and hence susceptible to hacking. A good illustration of this is the 2017 Equifax hack in which the data of more than 145 million Americans was stolen from the credit report service. Another is the Apple iCloud attack in 2014 that saw private images of famous people posted on sites like 4chan, Imgur and Reddit.

Misuse of User Data

Facebook’s Cambridge Analytica scandal illustrates best how third parties can mismanage their users’ data. Facebook’s design allowed the company to get its hands on more than 87 million users’ data, including public profile, city of residence, page likes, and even news feed, timeline and private messages. They then used this information to create psychographic profiles that were used by politicians to sway elections in several countries.

Bring Your Own Device

Bring Your Own Device (BYOD) is another problem with third-party cloud storage. This is the case when companies tell employees to bring their own devices for work. Companies do this because either they don’t have the resources to buy IT equipment or employee devices’ specs are more powerful than the companies’.  The problem is, BYOD poses certain security risks. For instance, when these devices get lost, it puts clients’ privacy at risk. And in the case of security breaches, it’s difficult to identify the point of failure amongst all the employee devices.

How Sia’s Storage Procedure Works

The Siacoin storage procedure features its peer-to-peer storage model, ‘file contract’ system, and ‘proof of storage.’

File Contracts

File contracts are Sia’s version of smart contracts. Through these contracts, renters (clients) and hosts (providers) can conduct business within the context of a predetermined and well-defined set of rules.  If two parties wish to work together, they draft a file contract. The file contract contains the term of storage agreement and is meant to ensure each party meets its obligations. As the contract is stored in a public ledger, the terms set therein are immutable (unalterable) and hence verifiable by both parties at any time.

  • The client pays a certain amount (‘allowance’) of Siacoins that will finance the storage and bandwidth for the contract period. A contract’s default length is 13 weeks. 
  • The allowance is set up within the wallet, after which the renter’s software instantly identifies 50 optimal hosts for them, based on their scoring.
  • The host takes up a fraction of s Siacoins and sets it as collateral. The higher the collateral, the higher the score during a host’s selection process.
  • The client plus the identified 50 hosts sign the file contract, upon which it is submitted to the blockchain.
  • 3.9% of the total funds of the contract is paid as commission to Siafund holders.

P2P Storage System

The Sia ecosystem comprises of two main components – the renters (clients) and hosts (providers). Renters pay hosts with Siacoins for storage space. They can also negotiate the storage fee with hosts directly.

Hosts play a huge and important role in the Sia ecosystem, and as such, it’s within their purview to:

  • Advertise and promote their storage resources
  • Reject a client’s request if they deem the data in question to be especially sensitive, ethically wrong, or illegal

And on their part, renters have the freedom to:

  • Protect their files by splitting them up and sharing them between two different providers – for an added layer of protection
  • Pay more than the stated fees to providers to receive special treatment such as faster upload speeds

Proof of Storage

Sia has a ‘proof of storage’ concept that’s meant to protect clients from bad actors. Before a host receives payment, they must present to the network proof within the time set in the file contract. If they fail to provide the proof of storage within that specified time, the payment goes to a ‘missed proof address’ until they present proof. Depending on the circumstances, the host can even be fined for negligence. And when they miss too many proofs of storage mandates, the contract may be terminated for good.

However, when a host successfully presents proof of storage, they are awarded payment, which is sent to a valid proof of address. But they have to meet certain ‘spend’ conditions, e.g., time locks and network signatures before they can access the funds. 

Tokenomics of Sia

As of Feb 25, 2020, Siacoin registered the following values. A price of $0. 002452, while placing at #58 in market rank. It had a market cap of $192, 546, 342, and a 24-hour volume of $4, 606, 191. Its total supply was 41, 817, 047, 634 SC, with an all-time high of $0.111708 on Jan 06, 2018, and an all-time low of 0.000011 on Dec 01, 2015.

Siacoin and Siafund

Sia’s platform operates on a dual-token system: Siacoin (SC) and Siafunds (SF). Siacoin functions as the utility token, while Siafunds are to help the development of the project without relying on external donations. Siacoin’s supply is not capped, and all the tokens must eventually be mined. In the beginning, miners got 300,000 coins Siacoins as block rewards, but this reward will decrease up to 30,000 coins.

On the other hand, there are 10,000 SF in existence, all pre-mined. The company behind Sia holds 8835 of these coins, while the rest have been distributed in a crowdfund to help fund the project.

Sia Coin Mining

Siacoin uses the proof of work consensus mechanism. This means they have miners mining Siacoins using specialized mining computers called ASICS (application-specific integrated circuit). The history of Siacoin mining has a bit of controversy.

In 2017, David Vorick, lead developer for Sia, announced that Nebulous would launch a company called Obelisk to manufacture ASICS specifically for mining Sia. Members of the community supported the ASIC project by pre-ordering and contributing millions of dollars.

At the same time, ASIC manufacturing behemoths Bitmain and Innosilicon were already in the process of developing Sia ASICS. Some in the Sia community did not want a future where miners monopolized Sia mining. As such, they demanded a hard fork to prevent this. But the hard fork proposition was also opposed by a significant chunk of the Sia community. Ultimately, the hard fork faction won as Sia’s core developers implemented a hard fork.

The hard fork was conducted on Oct 31. 2018. The goal was to lock out Bitmain miners and only allow Obelisk miners to support the network. Vorick stated that the hard fork was a result of the community’s distrust towards Bitmain, as well as Innosilicon’s dominance over Siacoin, which controlled up to 37.5% of Sia’s mining hash rate. 

A large section of the community was content with the results, but others, especially those who had invested in Innosilicon, dissented. This is the group that stuck with the old Sia chain, which they called SiaClassic.

Why Sia?

Sia offers several advantages over existing cloud storage services.

Privacy: All data that passes through Sia is encrypted, meaning you’re always in control over your data. This is unlike current cloud services where the host has access to any data that you commit to them.

Security: The encryption of data means it’s insured from the pitfalls of the traditional model, such as vulnerability to hacking. Also, the ability to split your data between multiple providers boosts its security.

Affordability: Sia’s storage services are way more pocket-friendly than the traditional model. As an example, storing one terabyte of data via Sia can cost you just $200, while the same amount will cost $2300 on Amazon’s cloud storage service.

Where to Buy and Store Siacoin

You can acquire SC by trading Bitcoin for it in several exchanges, including Binance, Bittrex, Kraken, Cointree, Coinswitch, Poloniex, Huobi, and so on.

You can also get SC via mining from Luxor or SiaMining.

The Sia team has customized two wallets for SC: Sia Daemon and Sia UI. Sia Daemon is offered on Github and can be used per a user’s preferred Command Line Interface (CLI). This wallet supports Mac, Linux, and Windows. Sia UI is for the less than tech-savvy and comes with more user-friendly features.

Final Thoughts

In a space full of unfulfilled promises, Siacoin stands out as a service that you can actually access today. It’s a win for everyone involved: hosts can earn from the extra space in their hard drive, while renters can buy space in a decentralized, highly-secure environment for very little cost. What’s there not to like?