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.

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Crypto Daily Topic

An Investor Loses $45m worth of Crypto via a SIM Attack 

The crypto community is still reeling from the news of an alleged theft of $45 million worth of crypto from an investor through a SIM-swap attack. The attack is thought to have been a $30M Bitcoin Cash Attack and a $15m Bitcoin attack.

The crypto community is still reeling from the news of an alleged theft of $45 million worth of crypto from an investor through a SIM-swap attack. The attack is thought to have been a $30M Bitcoin Cash Attack and a $15m Bitcoin attack.

The crypto community is still reeling from the news of an alleged theft of $45 million worth of crypto from an investor through a SIM-swap attack. The attack is thought to have been a $30M Bitcoin Cash Attack and a $15m Bitcoin attack.

Using the username zhoujianfu, the alleged victim of the attack posted a link to the transaction history of Bitcoin Cash on Reddit’s Bitcoin community platform, adding: “is my address, goddamnit. It only had three confirmations, if any miners/the community can help somehow, I’ve got the private keys. Help help help…big reward, obviously.” He added, “Also for what it’s worth, they got $15m in BTC too…” The first post has since been deleted. The Reddit account appears to belong to Dreamhost founder, Josh Jones.

Due to the sheer magnitude of the attack, many community members had trouble believing its legitimacy. Some believed it was a troll attempt while others thought it was negligent to entrust crypto holdings in a SIM company.

What is a Crypto Sim Hack?

A crypto SIM attack happens when someone pretends to be you and convinces your mobile service provider that you have to transfer your phone number into a new phone. In reality, they’re taking your phone number and associating it with a different SIM card in their possession.  

You’ll know a SIM attack is successful when your phone stops registering the four network bars, and you can’t call or receive a call. Once a hacker gains control of your number, any information tied to it is now in their hands, including data, phone calls, text messages, passwords,  email, social media, bank accounts, and crypto holdings information. Not to mention that your 2-factor SMS authentication with your wallet is now in their hands. A hacker looking to steal cryptocurrency will usually scour for proof of crypto holdings and use your passwords to steal your crypto.

How to Protect Your Crypto from a SIM Attack?

Note that crypto transactions are irreversible, which makes a case for securing your assets even stronger. Storing your crypto information makes them susceptible to attacks – SIM swaps are an unsophisticated but effective method of transferring somebody’s information.

The first thing to know is that you should always store large amounts of crypto holdings in a secure location. Such a location and the safest thus far for crypto is a cold storage wallet. Cold storage wallets are those that when signing in or transacting, you don’t need to interact with an online server, i.e., your private key is stored offline. As such, a hacker can’t gain control of your crypto account through hacking, impersonation, phishing attacks, and so on.

With cold wallets, you can store keys in devices such as a CD, a paper, hard drive, and so on. A paper wallet is a paper document that has your public and private keys written on it. It has a QR code that will be scanned when you want to make transactions. Remember that you need to protect your paper document from damage from fire, water, and wear and tear.

Also, beware that hacking paper-wallet generator pages is likely to happen. A better procedure is to download a paper wallet app, copy it to a computer not connected to the internet or to a virtual machine, blocked from an internet connection, and create the keys there. For more on pitfalls of paper wallets, read this thread.

A hardware wallet uses an offline device to generate your private keys offline. These wallets look and function a lot like a USB device. When looking for a good hardware wallet, go for popular and time-tested wallets such as Ledger Nano, TREZOR, KeepKey, ColdWallet, ColdCard, OpenDime, and so on.

 

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Cryptocurrencies

Private, Public and Consortium Blockchains

Bitcoin brought with it blockchain technology – the technology that allows digital information to be distributed but not edited or copied. After it became a hit with Bitcoin, eager innovators from all over the world have made it their mission to replicate it in nearly every conceivable industry. From finance to healthcare to supply chains, industries are experimenting with blockchain to improve efficiency, transparency, and accountability in their systems.

Bitcoin brought with it blockchain technology – the technology that allows digital information to be distributed but not edited or copied. After it became a hit with Bitcoin, eager innovators from all over the world have made it their mission to replicate it in nearly every conceivable industry. From finance to healthcare to supply chains, industries are experimenting with blockchain to improve efficiency, transparency, and accountability in their systems.

Bitcoin brought with it blockchain technology – the technology that allows digital information to be distributed but not edited or copied. After it became a hit with Bitcoin, eager innovators from all over the world have made it their mission to replicate it in nearly every conceivable industry. From finance to healthcare to supply chains, industries are experimenting with blockchain to improve efficiency, transparency, and accountability in their systems.

What is Blockchain? 

A blockchain is a database whose entries cannot be deleted or edited but only distributed. It’s a time-stamped series of transactions that are immutable and whose data is managed by a network of computers.

Cryptocurrency, a form of digital money that prevents double-spending, is so far the dominant application of blockchain. Blockchain as a concept had been floated around the computer science space from as early as 1991, but only materialized 18 years later when Satoshi Nakamoto, the anonymous creator of Bitcoin, employed it as the underlying technology of Bitcoin. 

Now, as its appeal has increased in recent years, it has been borrowed for use in all kinds of digital information.

Today, there are three kinds of blockchains: private, public, and consortium chains. This article sets to exploring each of these. Before that, let’s point out three characteristics all three share. 

☑️ An append-only ledger – this means that on a blockchain, you can’t modify or alter what’s already recorded – you can only add to the last block. This procedure greatly reduces the chances of fraud.

☑️ A network of peers – all network participants (called nodes) hold a copy of the database. This setup promotes fairness and autonomy. 

☑️ A consensus mechanism – a blockchain network must have a mechanism through which nodes can agree upon the authenticity of a transaction. This feature promotes a democratic – everyone-has-a-say – process.

What is a Public Blockchain?

A public blockchain is an open-source blockchain. That means it’s open to the public. Anyone and everyone of every age, nationality, or social status is welcome to join the network, have a say, and take part in core activities. Public blockchains are also called ‘permissionless’ since you don’t need permission from anyone to interact with the protocol.

The idea behind public blockchains is self-governance and autonomy. No one dictates the rules, and anyone can join and leave as they wish. As well, all transactions that take place on a public blockchain are entirely open for anyone to see.

Public blockchains are ‘censorship-resistant’ in that they are run by users all over the world, making it hard for any authority or government to control or shut them down.

Also, public blockchains have a token that incentivizes various participants of the network to keep the network active.

The Good

Public blockchains are highly secure, courtesy of being run by computers from all over the world.

They ensure privacy for users in that you don’t leave your personally-identifying details on the chain, but rather transaction information like wallet number, time, and amount.

Transactions are peer-to-peer, meaning users are in complete control of their money with no one capable of freezing their funds

The Bad

Public blockchains like Bitcoin consume a lot of energy, which is expensive and bad for the environment

The majority of public blockchains are pseudonymous, meaning users do not have absolute and inviolable privacy or anonymity.

Some users of the network might have malicious intent, including hacking, stealing of tokens, or network clogging.

Public Blockchain Use Case

Bitcoin is the first-ever and the most well-known application of a public blockchain. 

Bitcoin transactions can be examined by anyone on the Blockchain Explorer. Other public blockchains are Ethereum, Litecoin, ZCash, Monero, Dash, and so on.

What is a Private Blockchain?

A private blockchain is one in which you need authentic and verified credentials to gain access. A private blockchain differs from a public one in that you need permission, depending on your position in the system’s hierarchy, to contribute and maintain the network. People at the top of the hierarchy or those with express access can also override processes as they deem necessary.

A private blockchain makes sense in a business context where managers want to improve efficiency but don’t want to put company data on the public blockchain. As well, a business has the right to amp up privacy restrictions any time they deem fit.

In a private blockchain, there’s the question of who enters entries, who can see updated transactions, who can begin a process, and so on.

The Good

Since only specific users can control the network, there’s no waiting times or periods of high demand which would slow down the network.

Entities that use private blockchains can keep sensitive data from the public while also realizing improved levels of efficiency.

Private blockchains do not have to provide any incentives to participants; neither do they consume massive amounts of energy. 

There is no possibility of downtimes arising from a spike in demand.

The Bad

Without support from computer users all over the world, a private blockchain is prone to stunted growth. It can also be slow to scale up and meet changing customer needs. 

Since they are centralized, public blockchains are susceptible to human error, manipulation, abuse, and other unfair dealings.

Use Case of a Private Blockchain

The best use case of a private blockchain is Hyperledger Fabric, a permissioned blockchain that businesses can deploy on their platform. The blockchain is also available in a plug and play mode, allowing businesses to set it up anytime and plug off when they don’t need to use it.

Walmart is a well-known user of Hyperledger Fabric. The retail giant can now trace the origin of more than 25 food products, from farm to store, to ensure quality levels and food safety.

What is a Consortium Blockchain?

The consortium blockchain is a type of blockchain that combines elements of both public and private blockchains. This is the distinction between a consortium blockchain and either of the two other types:  in a public blockchain, anyone can contribute to the network by inputting entries, validating blocks, etc. In a private blockchain, only a few entities have access to the chain and have the authority to initiate processes, enter entries, and so on. On a consortium blockchain, it’s a handful of equally powerful participants that can access the chain.

After that distinction, the rules of the system are not cast in stone. Some selected individuals may be the only ones who can view the chain, or it can be everyone in the consortium. As long as decisions are arrived at by consensus, they can be rolled out to the satisfaction of all parties.

Consortium blockchains rely significantly on the integrity of the validators. Provided a certain threshold of the validators can act with integrity, the network will work without issue.

Consortium blockchains make sense in the context where multiple organizations operate in the same industry and see it fit to collaborate on certain aspects of their business. This way, they can save on costs and function better individually and collectively. An organization would be motivated to join such a consortium courtesy of information and insights into the industry that they’d gain from other industry players. Sometimes the organizations involved can be termed “frenemies” since they are working together but also competing against each other.

Use Cases of Consortium Blockchains

There are currently many consortium blockchains that exist all over the world. Let’s briefly look at a few below:

☑️BankChain, a platform for banks whose goal is to explore, build, and implement blockchain software. Members of the BankChain community include Deutsche Bank, Bank of Baroda, Lulu Exchange, Kotak Bank, etc. 

☑️B3i, a community of insurers and reinsurers that attempts to improve industry efficiency through blockchain. Members include Liberty Mutual, Swiss Re, SBI Group, Tokio Marine, Allianz, and so on.

☑️Enterprise Ethereum Alliance (EEA), a consortium that aims to promote Enterprise Ethereum, an organization that delivers both public and private Ethereum blockchain for businesses.

Final Words

Blockchain has evolved a lot from the days when it was associated with Bitcoin only. It’s definitely exciting to see it as the new and hot technology that industries of all types are scrambling to get a piece of. And understandably so, because it embodies features that are a first, and which have the potential to revolutionize not just how we do business but also society itself. 

Companies need to choose what type of blockchain they want to get involved with, depending on their end goal and overall objective. Meanwhile, blockchain enthusiasts will be watching for new developments in this thrilling space.

Categories
Cryptocurrencies

Decred Review: Is It the Ideal Cryptocurrency?

Cryptocurrency represents freedom of finance. Decentralized, censorship-resistant, and peer-to-peer are some of the words that we ascribe to it. But whether the vast majority of cryptocurrencies meet these criteria is a grey area.

Cryptocurrency represents freedom of finance. Decentralized, censorship-resistant, and peer-to-peer are some of the words that we ascribe to it. But whether the vast majority of cryptocurrencies meet these criteria is a grey area.

Cryptocurrency represents freedom of finance. Decentralized, censorship-resistant, and peer-to-peer are some of the words that we ascribe to it. But whether the vast majority of cryptocurrencies meet these criteria is a grey area.

Decred is a cryptocurrency launched in February 2016 that attempts to live up to these ideals. Its team of founding developers comprises of former developers of the notable btcsuite, a version of Bitcoin programmed in the Go language.

In this article, we’ll cover the exciting highlights of the Decred project and leave you to decide whether it’s the optimal currency or not. 

The Principles of Decred

Decred endeavors to live by these principles:

☑️ Free and Open Software – All software developed as part of Decred shall be free and open software

☑️ Free Speech and Consideration – Every member has the right to communicate opinions and ideas without fear of censorship, as long as it’s based on fact and reason. 

☑️ Multi-Stakeholder Inclusivity – A diverse set of views and users shall be represented and encouraged.

☑️ Incremental Privacy and Security – Privacy and security are priorities, and they shall be treated as such, and shall be incrementally implemented and on a continuing basis, both proactively and in direct response to attacks.

☑️ Fixed Finite Supply – Issuance of coins is finite, and the total issuance shall not exceed 20, 999,999.99800912 DCR, with a block subsidy that adjusts every 21.33 days by a reducing factor of 100/101.

☑️ Universal Fungibility – Universal fungibility is central to Decred as a store of value, and any attacks against it shall be met with countermeasures.

Breaking down Decred

Decred has a maximum supply of 21 million. The project never held an ICO, but an airdrop of 282.64 DCR was awarded to 2972 selected participants during the launch. Its all-time high was $99.74 on April 25, 2018, and its all-time low at $0. 394796 on December 28, 2016.

As of February 21 21, 2020, the price of Decred is $20.53 at a market rank of #37. Its 24-hour volume is $28, 260, 170, with a circulating supply of 10, 786, 831.

Each time DCR is mined, 60% is awarded to the PoW miner, 30% to PoS voters, and 10% held by Decred for future development.

How to Get Involved With Decred

Decred designates three ways through which you can interact with the platform:

The Wallet – Through the wallet, you can send and receive funds as well as take part in PoS voting.

Proof-of-Work Mining – You can use your computing power to validate transactions on the network and generate new tokens.

Proof-of-Stake Mining – Through ownership OF Decred tokens, you can vote on network development issues and validate transactions. 

All you need to send or receive Decred tokens is an address that you can easily generate from any Decred wallet. Once you own Decred, you’re eligible to join a staking pool and participate in PoS voting and earn rewards while at it.

What Problems Does Decred Intend to Solve?

Decred developers are huge blockchain and Bitcoin fans. However, they identified problems with how Bitcoin operates. As Bitcoin’s popularity has surged, the decision-making process seems to get more centralized by the day. This is evidenced by, for instance, the concentrated power in the hands of powerful mining companies.

In addition, almost any major upgrades to the Bitcoin software have to take place via a hard fork. This is what happened in 2017 when one section of the community proposed the SegWit2x hard fork on the chain. The two opposing sides got involved in hostile debates, peppered with name-calling and threats. The hard fork was finally called off, but not before leaving sharp divides in the Bitcoin community.

According to Decred, such divisions and the power that a particular section of the community might have over the cryptocurrency is counterproductive to the ideals, spirit, and the world of blockchain and cryptocurrency.

We’ve all seen what happens when two opposing sides do not arrive at a consensus. Factions can decide at any time to create a hard fork off the open-source Bitcoin code. Cryptocurrencies like Bitcoin Cash, Bitcoin Gold, Bitcoin Satoshi’s Vision, and Bitcoin Diamond are all offshoots of the original Bitcoin blockchain.

The Problem with Hard Forks

Forking is never the ideal outcome for cryptocurrency. Let’s see below why:

Repeated hard forks are bad for investor sentiment. After the Bitcoin Cash hard fork, Bitcoin prices took a tumble.

Hard forks fracture the Bitcoin community. The flared up tensions, and hard-line stances do no good for the community and the cryptocurrency sphere as a whole.

New hard forks are susceptible to attacks. So far, the biggest public blockchain to succumb to a 51% attack is, you guessed it, a hard fork. This blockchain is Bitcoin gold, and the attack happened in May 2018. The attacker made away with roughly 388,000 BTG worth $17.8 million then.

Hard forking undercuts the economic aspect of cryptocurrencies. For instance, the Bitcoin hard forks are confusing to users and undermine Bitcoin’s principle of a capped supply.

Decred presents a vision and cryptocurrency that’s free of hard forks, especially ones that fracture the community. While a hard fork is possible on Decred, its voting protocol is designed so that users can democratically vote on changes before activation.

Let’s look at the various mechanisms that Decred employ that will help it realize fair, smooth, and efficient governance.

Decred’s Hybrid PoS and PoW System

Decred’s voting system utilizes a hybrid of the two best-known consensus mechanisms: proof of work and proof of stake. 

These are the basics of how these two interact:

  • Miners mine for a block using PoW
  • Five token holders are randomly chosen to verify the block
  • If three of these validators confirm the validity of the block, it is recorded on the blockchain
  • 60% of the block rewards go to the miners, 30% to the validators, and 10% to the Decred project for future development.

With PoS, anyone who holds Decred tokens can participate in the staking system in this way:

  • DCR holders can purchase tickets with their tokens. The tickets give them pass to be part of the system
  • Only 20 tickets can go to any one block at any time. You may have to wait to get mined, but if you wish to get mined faster, you’ll need to pay some fees.
  • Once mined, your ticket is “immature” and will be held outside the random draw pool until 256 blocks have been mined, which is in approximately 20 hours.
  • After your ticket enters the draw pool, you will have to hold out for your chance to be chosen as one of the five validators that are randomly picked to verify the block
  • Your ticket has a 50% chance of being selected within 28 days and a 99.5% chance of being selected before it expires (after around four months).
  • Once your ticket’s chosen, you’ll help validate a block and be rewarded with a price for the ticket and also a staking reward.

The Decred system is also fair in that validators can participate in staking pools. As such, if a validator can’t make it to be part of the validation process, they can simply have their pool validate a block on their behalf.  

So far, you can see that Decred gives the power of participation to both users and miners. Unlike the Bitcoin system, miners do not possess disproportionate power over the network. If, for instance, a miner decides to mine a malicious block i.e., a transaction unrelated to the chain, validators can simply decline to verify the block. As you know already, PoW takes a lot of computational power, and for that, miners have very little incentive to do something that won’t pass with the validators.

How Safe Is the PoW/PoS Hybrid?

Just HOW safe is the PoW/PoS hybrid mechanism? A crypto analyst named Zubair Zia made it his mission to test the security of Decred’s chain vs. Bitcoin’s or a PoW/PoS model vs. a pure PoW model. He wanted to see which chain would more easily succumb to a 51% attack.

He used BITMAIN’s Antminer s9i’s, which has a rate of 14 tera-hashes per second. His calculations demonstrated that it was 22 times as expensive to hit Decred as compared to Bitcoin as of June 2, 2018.

In short, the hybrid system is 22 times more secure than a purely PoW system.

Lightning Network for Transactions

Decred has also implemented the Lightning Network.  The Lightning Network (LN) is an off-chain technology that has been explored by multiple cryptocurrencies to improve scalability. LN helps to settle payments outside of the blockchain so as to reduce traffic and backlog on the main chain.

LN works by having two users set up a payment channel on the network and depositing an equal amount of funds. Any time one user wishes to transact, they simply send a promissory note to the other user indicating a change of the total sum in the shared channel.

Since transactions happen off the chain, users also pay fewer fees since there’s no queue. Transactions are also instant, and there’s even added privacy thanks to a Tor-like routing algorithm for transactions. 

Decred’s Politeia

Thanks to a decision-making system called Politeia, Decred has managed to achieve decentralization more than any other existing cryptocurrency project.

Politeia is an ancient Greek word employed in Greek political writings, especially that of Plato and Aristotle. The term has many senses, from meaning “rights of citizens” to “form of government.”

Decred’s Politeia is designed to be the ultimate form of self-governance and community autonomy over a cryptocurrency project. Users can vote to accept or reject proposals, including budgets, software upgrades, marketing plans, constitutional amendments, and so on. When launching the system, project lead Jake Yocom-Piatt noted: “The direction of Decred now lies with the collective intelligence and creativity of its stakeholders.

We look forward to the exciting projects our community will propose.”

Where to Buy and Store DCR

You can purchase DCR from several exchanges, including Binance, Bittrex, Coinswitch, Changelly, Kucoin, Huobi, and so on by trading Bitcoin for it.

As for storage, the best wallet so far is the Decrediton wallet that’s available for Mac, Linux, Windows, and so on.

Great third party options also include Exodus, Coinomi, Atomic, Ledger Nano, etc.

Final Words

Decred has undoubtedly broken the mold, especially with its first of the kind governance system. Even though not as well-known as of yet, it’s one that has modeled cryptocurrency ideals better than perhaps the whole cryptocurrency pool right now.

The team behind it is also very well-regarded in the blockchain and crypto space, which is just the icing on the cake. With such a sound philosophy and a fantastic team, Decred is poised for success. But this will depend on the community. One can only hope it will mobilize for better and more exciting features for the platform before newer projects arrive and overtake the platform. 

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Crypto Daily Topic

The Two ‘Flash Loan’ Attacks That Shook DeFi

Two attacks took the DeFi world by storm recently in what is the first DeFi major security incident. bZx, a decentralized finance protocol on Ethereum’s blockchain, endured two separate attacks after unknown persons manipulated “flash loans” and managed to drain nearly hundreds of thousands of Ether.

Two attacks took the DeFi world by storm recently in what is the first DeFi major security incident. bZx, a decentralized finance protocol on Ethereum’s blockchain, endured two separate attacks after unknown persons manipulated “flash loans” and managed to drain nearly hundreds of thousands of Ether.

Two attacks took the DeFi world by storm recently in what is the first DeFi major security incident. bZx, a decentralized finance protocol on Ethereum’s blockchain, endured two separate attacks after unknown persons manipulated “flash loans” and managed to drain nearly hundreds of thousands of Ether.

The First Attack

The first attack took place on Valentine’s night when the bZx team was attending ETHDenver – an Ethereum conference that brings together minds across the blockchain and DeFi space annually. The attacker took out $350,000 worth of ETH from Fulcrum, bZx’s lending platform by playing together several other DeFi protocols; Compound, Uniswap, and dYdX.

The attack happened this way:

The person borrowed 10,000 ETH from dYdX and then posted half the amount to DeFi protocol Compound and the other half to bZx. They then borrowed 112 wrapped Bitcoin (WBTC, which are ERC-20 tokens backed on a 1:1 ratio by Bitcoin.) With the amount on bZx, they entered into a short position for 112 WBTC, after which they sold the 112 WBTC from Compound on Uniswap. This move made the bZx sale very profitable. The attacker then repaid their dYdX loan and kept the proceeds from the short sale – 1,300 ETH. All this happened in a single transaction.

bZx admits the attack was “one of the most sophisticated” they’ve ever seen, which is big. Whoever pulled the attack must’ve had a very in-depth knowledge of all the protocols involved, together with their various tools. It also demonstrates the high levels of interoperability possible among various DeFi protocols – which is ideal, except when that interoperability can be maliciously manipulated. The attack had no precedent in DeFi, prompting the DeFi space to ask hard questions about the security future of DeFi.

In response to the attack, bZx in a slightly controversial move shut down Fulcrum.  Users and analysts noted bZx shut down the platform using a non-decentralized master key. But the firm defended the move, arguing, “the core of the debate here is whether we should be ruled by machines or economics. When you have an immutable contract that can’t be upgraded, you are ruled by machines. When the power to exist is distributed among representative stakeholders, you are ruled by economics. Both are valid methods for implementing decentralization.”

The Second Attack

And just when trading had resumed over the weekend and operations back to normal, attackers targeted bZx again, this time netting $633,000. This one took place just after 03:00 UTC Tuesday. The person(s) took out a flash loan of 7,500 ETH using 3, 518 ETH to purchase the stablecoin sUSD stablecoin from the issuer, which they then deposited as collateral for a bZx loan.

They then used 900 ETH to bid up the value of sUSD through Uniswap/Kyber then borrowed another 6,796 of ETH from bZx, using it to repay the 7,500 ETH loan and then pocketed the remaining value: 2, 378 ETH.

What’s shocking but also impressive is that the entire attack took place in just over a minute.

What are Flash Loans?

Flash loans are loans that users take and pay back in the same transaction so as to amplify their payouts. With a flash loan, a borrower loses nothing. The network can usually see whether or not a flash loan will be instantly repaid, and if not, it can reject all transactions associated with it. If it goes through, however, the lender gets a small fee, and the trader gains a profit, and everybody is happy.

But things aren’t always as simple as demonstrated by the bZx scenario. A flash loan carries great risk, especially with exploitable bugs in a platform’s code, or unreliable price feeds. In this case, the attacker(s) did not intend to simply buy low or sell high, but to deliberately manipulate vulnerable price markets.

Aftermath

Shortly after the first attack, investors started jumping from the bZx ship, but things seemed to get back to normal after the firm released a statement acknowledging the issue and addressing the way forward. 

As for the future of DeFi security, DeFi experts agree that this is a new territory; hence mistakes are bound to occur. Speaking to CoinDesk, Staked CEO asserted: “These are big risks. It’s a new category, it’s moving fast, and some things are going to break.”

The bZx team is now focused on securing the network and deterring future attacks. The firm already implemented a check that will disallow even overcollateralized loans in the future and has already put a cap on maximum trade sizes so as to limit the scope of potential attacks. It will also be implementing a Chainlink oracle to supplement Kyber’s price feed to be able to get time-weighted price info at any given time.

Categories
Crypto Daily Topic

ETH’s Bullish Behavior and the Case of Flash Loans

ETH has pulled a surprise on everyone Tuesday by posting bullish prices as high as $287 up from Monday’s low of $245.

ETH has pulled a surprise on everyone Tuesday by posting bullish prices as high as $287 up from Monday’s low of $245.

ETH has pulled a surprise on everyone Tuesday by posting bullish prices as high as $287 up from Monday’s low of $245.

This surge couldn’t have come at a weirder time; when Ethereum was on the spot for two attacks or ‘exploits’ on the Ethereum-based DeFI protocol bZx that saw it lose almost $1m worth of ETH.

 

The CEO of the crypto site The Block, Mike Dudas, tweeted Tuesday in acknowledgment of ETH’s Tuesday rally.

Respected economist Alex Kruger’s response to Dud’s tweet may explain this bullish behavior, though. While saying ETH did not actually ‘shrug off’ the exploit, he stated the attacks were naturally bullish for Ether since it’s “great advertising” and it “should generate interest in Ethereum from the finance industry and thus increase demand for ETH, even if the many DeFi platforms die in the near term because of this.” In essence, the attack raised Ethereum’s profile, its DeFi use case will be damned (at least in the short term.)

Flash Loans

The DeFi attack that helped reverse fortunes for ETH Tuesday was a result of the manipulation of flash loans. To understand flash loans, let’s look again at what Kruger had to say about them. In the same thread, he said, “flash loans provide access to instantaneous liquidity and collateral, and work on top of deterministic transactions that fully eliminate risk for both borrower and lender. This is extremely valuable, and the very best expression of programmable money…”

Flash loans are a new entry in the crypto world, a new decentralized finance innovation atop Ethereum’s blockchain. A flash loan allows a trader to take an uncollateralized loan to maximize the profits from a trade. They are ‘flash’ because they’re super-fast – in that the borrower repays the loan in the same transaction.

What happened with bZx is that the attackers exploited weak points in the protocol, making away with $300, 000 and around $650,000 worth of Ether.

Ensuing Fear, Uncertainty, and Doubt

After the Ethereum debacle, some individuals took the chance to pontificate about DeFi being an inherently flawed technology. But just like with the DAO attack in 2015, such incidents invariably point to weaknesses in a system, which in turn helps make it better and more resilient. Like with any technology, DeFi is undergoing ‘growing pains,’ and it helps to provide solutions to such imperfections rather than knocking everything down.  

What’s next for bZx

As for bZx, the firm will mitigate the damage of the attack in several ways, like liquidating collateral to cover a loan that the attack left uncovered, as well spread the loss across its user accounts. (Users will barely feel the impact of the loss, despite the magnitude of the attack.) The firm has also indicated plans of setting up an insurance fund as a long-term solution in case of a similar future incident. 

Perhaps DeFi proponents can look at the bright side: the attacks are a testament to DeFi taking up space in finance. The nascent technology is developing enough clout to warrant exploiting attacks.

Categories
Crypto Daily Topic Cryptocurrencies

What is Bumo Blockchain?

Before we say a single thing about Bumo blockchain, we need to talk about blockchain. Blockchain is a publicly distributed ledger that records transactions between parties permanently, transparently, and in a peer-to-peer manner.  

Before we say a single thing about Bumo blockchain, we need to talk about blockchain. Blockchain is a publicly distributed ledger that records transactions between parties permanently, transparently, and in a peer-to-peer manner.  

Before we say a single thing about Bumo blockchain, we need to talk about blockchain. Blockchain is a publicly distributed ledger that records transactions between parties permanently, transparently, and in a peer-to-peer manner.  

The concept of blockchain existed in the developer community for years. Still, it only came to life in 2008 when a person/people under the pseudonym Satoshi Nakamoto created a blockchain to serve as the underlying technology under the world’s first cryptocurrency – Bitcoin.

Since then, numerous cryptocurrencies have been created by developers all over the world – either running on their own blockchains or other cryptocurrencies’ blockchains.  The technology has also broken out of the cryptocurrency application and has been adopted in other industries – from finance to healthcare to supply chain and so on. These applications represent the private, enterprise side, of blockchain.

What is Bumo?

Bumo is a next-generation enterprise-grade public blockchain that hopes to host what it calls a ‘ubiquitous’ value transfer, smart contracts, and decentralized applications platform. The Bumo project is still in beta, i.e., still in development. 

Let’s look at some of Bumo’s unique selling points right off the park:

  • Two or more users can create an account together, thanks to what the platform calls “individual account weightage”
  • A Merkle-Patricia Tree to help store data efficiently
  • A “trailer” system that helps segregate on-chain and off-chain data
  • An ‘Orbit’ infrastructure helping support Bumo’s 2-layer multiform architecture
  • A 2-layer multi-chain consensus structure that’ll enable up to 10,000 transactions per second
  • A “Canal” system to facilitate interoperability
  • A robust and friendly toolkit for developers to create smart contracts
  • The ability for developers to build apps that aren’t necessarily backed by a smart contract

In this guide, we’ll look at these features in greater detail and see what Bumo hopes to do differently for the blockchain ecosystem. To do that, we first need to talk about the inherent problems with blockchain right now.  

Problems with the Blockchain

Scalability

The first and second-generation blockchain’s scalability issue refers to their inability to handle high-volume transactions within a short period of time – hence they can’t be used to serve millions of people all over the world.

One reason for this is the mining-based verification mechanism that requires miners to verify transactions and then record the verified transactions in the blockchain. This creates a backlog of transactions and a slow, overloaded network since a miner can only mine a certain number of transactions at any time.

The other reason is the 1MB sized blocks on the Bitcoin blockchain, which severely limits how much data any one block can hold. This means your transactions have to wait in a queue for roughly 10 minutes. On the Ethereum blockchain, there are no block size limits, but transactions may take an average of 15 seconds before verification. 

Lack of Interoperability

Interoperability, or lack of it, is another issue with existing blockchains. Existing blockchains e.g., Bitcoin and Ethereum, are not built to be able to interact with each other. This is why crypto exchanges have the power that they do since they provide a much-needed portal on which different cryptos can interact with each other.

But exchanges are centralized entities, which goes against the decentralization principle of cryptocurrencies. Besides, centralization makes cryptocurrencies vulnerable to hacking and blackouts, which can stall services.

The lack of interoperability also means mainstream adoption of the blockchain is impossible. This is because, for blockchain technology to be integrated into the mainstream, it needs to be able to interact with existing systems.

BUMO is a next-generation blockchain that’s going to be catering to businesses. It comprises of two-layer chains that will help streamline transactions on the blockchain. The Bumo system will also be interoperable with both heterogeneous and homogeneous blockchain.  

The Team behind Bumo

Bumo is a vision of four core people: Steven Li, Steven Guo, John Zhao, and Yuliang Zheng. This team has between them a wealth of experience in Physics, blockchain, cryptography, and hashing technology.

Core Features of Bumo

Let’s dive deeper into the core features the Bumo blockchain that makes it stand out: 

A Multisig account

A multisig (multi-signature) is an account owned and controlled by more than one party. The Bumo blockchain uses something known as ‘account weightage’ to give more power of access to some signature holders over others. For example, if three people own a business and they have an account on the Bumo blockchain, the CEO’s approval, for instance, will count more than the other two’s.  This is an approach that the Bumo team hopes will appeal to big companies.

The Merkle Patricia Trie (MPT)

The Merkle Patricia Trie is a tool that combines the technologies of Merkle Tree and Patricia (Practical Algorithm to Retrieve Information Coded in Alphanumeric) Tree. This combination makes it easier to find particular transactions by reducing the time that would be taken to ascertain if that transaction belongs to a particular block or not.

Trailer System for Off-Chain and On-Chain Data

Depending on the characteristics of the data, the Bumo blockchain will differentiate data into off-chain and on-chain data, providing a streamlined system for handling heavy and complex data. This differentiation will help reduce the burden on the blockchain and save on hardware costs because the node network will experience less strain.

Interoperability Feature of the Bumo Blockchain

The Bumo blockchain has the Canal system, which is two-layered – with main chains and cross chains. The main chains comprise collection and validation nodes. The validation nodes provide “high-level” consensus for transactions on the cross-chain.

Cross chains are akin to the routers in a traditional network system. They route data from various blockchains towards the target blockchain. 

BUMO and Smart Contracts

BUMO hopes to be the best destination for smart contracts. The platform will feature these properties which are specifically geared to help it achieve this purpose:

i) Turing complete, or ‘computationally universal,’ which means a contract can solve any problem with the right tools

ii) Fast deployment 

iii) Flexible calls

iv) Reliable execution of smart contracts

v) The Bumo platform features a virtual machine called the BuVM (Bumo Virtual Machine). BuVM has the following properties to enable what Bumo calls “Eco-Friendly Smart Contracts.”

  • More advanced smart contract performance
  • Increased security for smart contracts
  • Multi-language support for smart contracts
  • Developer-friendly tools and environment

Also, the Bumo platform will provide a unique space for app developers, thanks to the following features:

  • Native application programming interface tools
  • WebSocket-like features
  • Ability to create an app or tokenize assets without the need for a smart contract. This is what Bumo calls “Account-based Tokenization Protocol,” in which users will be able to issue tokens by the mere virtue of having an account on the Bumo blockchain.

Benefits of Bumo

☑️The ability to tokenize assets quickly, safely and reliably

☑️A friendly environment for developers to create decentralized applications

☑️The ability to handle up to 10,000 transactions per second

☑️Reduce the costs of operation, maintenance, and exchange of data in the blockchain

☑️It will allow the connection of Internet of Things devices that will create value for thousands of people

☑️It is user-friendly

☑️People can exchange smart contract values faster and safely

☑️It promotes the free flow of digital assets

Final Thoughts

The Bumo blockchain is poised to reinvent several aspects of blockchain and stir the crypto space for the better. If Bumo succeeds, it’s very likely the blockchain world will bid goodbye problems like scalability issues, lack of interoperability, and the need to be well-versed in programing language so as to create applications. Will the Bumo team deliver, or is it another overhyped blockchain project? As with many things in blockchain tech, only time will tell. 

Categories
Crypto Daily Topic Cryptocurrencies

What Is Rootstock (RSK): Understanding The Most Popular Bitcoin Blockchain

Bitcoin technology has played a phenomenal role in revolutionizing the global finance industry. Finance industry players, retail companies, and individuals understand this, hence its massive adoption across all industries. But Rootstock (RSK) sidechain developers believe that Bitcoin blockchain could be doing more. And that limitations in scalability, transaction processing, and lack of support for smart contracts the dominant cryptocoin is facing today are its biggest hindrances.

Bitcoin technology has played a phenomenal role in revolutionizing the global finance industry. Finance industry players, retail companies, and individuals understand this, hence its massive adoption across all industries. But Rootstock (RSK) sidechain developers believe that Bitcoin blockchain could be doing more. And that limitations in scalability, transaction processing, and lack of support for smart contracts the dominant cryptocoin is facing today are its biggest hindrances.

Bitcoin technology has played a phenomenal role in revolutionizing the global finance industry. Finance industry players, retail companies, and individuals understand this, hence its massive adoption across all industries. But Rootstock (RSK) sidechain developers believe that Bitcoin blockchain could be doing more. And that limitations in scalability, transaction processing, and lack of support for smart contracts the dominant cryptocoin is facing today are its biggest hindrances.

RSK developers also believe that the pioneer blockchain is money-dominated, implying that people concentrate more on Bitcoin Value than the technological revolution it promises the finance sector. And to address these issues, RSK labs sought to create a Bitcoin sidechain – Rootstock, also known as the ‘SMARTER BITCOIN.’ According to the company, the Sidechain will help Bitcoin overcome these limitations and boost its functionality and interoperability.

But what is RSK, and what progress has it made in making these feasible?

What Is RSK?

RSK is a Bitcoin sidechain connected to the BTC blockchain by a two-way peg. It can also be said to be an innovative virtual machine (RVM), tethered to the root of bitcoin blockchain with the aim of introducing the smart contract concept to the pioneer blockchain while effectively boosting its scalability. Plus, its through RSK sidechain that the crypto community will be able to create and run Bitcoin blockchain-backed smart contracts.

How does RSK hope to achieve these?

Ideally, the RSK sidechain seeks to marry the functionalities of the Ethereum blockchain with the security and efficiency of the bitcoin blockchain. To make this possible, the smart contract sidechain is tethered to the main blockchain by a two-way peg. This ensures that the side chain runs parallel to the main blockchain and that there is interchangeability of assets between both parent and side chain. It also has the backing of a semi-trusted third party that oversees the reliability of all transactions between RSK sidechain and Bitcoin blockchain in the execution of these smart contracts.

Hybrid federation to actualize smart contracts:

The semi-trusted-third-party (STTP) comprises of 25 highly accredited crypto community members of proven crypto knowledge and unquestionable integrity. And they serve as an interlink between RSK sidechain and Bitcoin blockchain, where they determine when to lock or release smart contract funds.

Why does the execution of smart contracts need a third party, you might ask? Well, because Bitcoin blockchain does not support the creation of smart contracts on its platform, RSK platform users needed an assurance that the Sidechain was operating in their best interests. And who to better provide such oversight and regularly audit the transactions carried out on the platform than the crème del crème of the crypto industry.

The 25 STTPs effectively form the hybrid federation that, in turn, operates the multi-signature wallet used to authorize the locking and release of funds. Each multi-sig wallet member has one vote, and it takes a simple majority to authorize the execution of a smart contract.

Two-way peg to actualize scalability and transaction speeds

The RSK Labs has been involved in the audit and analysis of both Bitcoin and Ethereum blockchains. In RSK sidechain, they have come up with a highly scalable platform that seeks to boost on-chain transaction processing speeds to 2000 in the long-run from the 3 TPS recorded by bitcoin blockchain today. They also intend to increase block confirmation speeds from 10 minutes per block to less than 10 seconds per block. To achieve this, RSK Labs developers utilized the GHOST protocol used on the Ethereum blockchain to speed up transaction processing speeds, and the DÉCOR+ block reward sharing protocol.

Note that RSK is a sidechain and will not be modifying the bitcoin blockchain code. How then does its scalability and transaction speeds impact Bitcoin? Well, the 2-way peg ensures the two blockchains run parallel to each other, and share assets like the blockchain database. This implies that if a transaction is recorded on the sidechain block, it automatically records on the main bitcoin blockchain, effectively eliminating chances of duplication. The tokens are also interchangeable, where 1 BTC = 1 SBTC (the token used on the RSK sidechain network).

RSK key features and components

Virtual machine:

RSK is to bitcoin, what EVM is Ethereum. A virtual machine through which bitcoin smart contracts can be executed. RSK, however, goes a notch higher to provide a platform on which the crypto community can create Bitcoin-based decentralized apps. And this effectively earns it the title –SmartBitcoin.

No commercializing tokens:

The fact that RSK is a sidechain that complements the Bitcoin blockchain means that its tokens won’t be commercially available. They will be restricted within the RSK to boost network operations like DApps creation. And to allow for easier interchangeability, 1 SBTC will always hold the same value as 1BTC. Let’s say you had 5 BTC and that you wanted to transact but want to leverage the speed and efficiency of the RSK sidechain. You simply exchange them for an equivalent amount of SBTC, and once done, convert your SBTC balance back to BTC.

Transactions not fully trustless:

The fact that Bitcoin’s blockchain does not support the creation of smart contracts on its native network necessitates the use of the Hybrid Federation interlink. When you exchange your BTC for SBTC or vice versa, your coins are locked in a multi-signature wallet within the 2-way peg. The federation, consisting of 25 highly accredited crypto community members, holds the keys to the multi-sig wallet. And locking and releasing funds held in the wallet only requires the authorization of a simple majority.  It provides a semi-trustless oversight over the funds as opposed to the fully independent, trustless, and automated oversight needed in a smart contract.

Merge-mining security:

 Bitcoin miners don’t need special applications or hardware to mine SBTC tokens. The RSK token mining applications are completely compatible with the bitcoin mining infrastructure. And as Bitcoin mining halves and block confirmation become harder, SBTC mining is a well-timed incentive.

The bridge between bitcoin and Ethereum:

RSK also supports the Turing Complete Programming language used by Ethereum Virtual Machine (EVM) and Ethereum DAPPs. This makes it possible for Ethereum blockchain users to easily migrate their systems to the RSK network. It is a viable option for Ethereum users, uncertain about the efficiency and reliability of the upcoming shift by Ethreum from proof of work to proof of stake.

What is the future of RSK?

Federation transitions to a drivechain/sidechain model?

Currently, RSK transactions over the 2-way peg are audited by the semi-trustless federation. Moving forward, however, and as the Sidechain gains traction and usage, RSK hopes to shift the custody of the locked coins on the 2-way peg to the merge-miners. A significant move aimed at reducing the need for trust.

RSK Educate:

RSK also looks forward to educating the crypto community on the effectiveness of its innovative Sidechain. To this end, RSK has published all the whitepapers related to this project and even created a blog where they share tips and educate the masses on how to interact with the Sidechain.

Why hasn’t RSK picked?

When RSK made public their intention to create and actualize the implementation of smart contracts, every crypto community member expected a flawless process. In its stead, RSK Labs, the developers of RSK sidechain, decided to include the semi-trustless federation of signees to maintain custody of the coins exchanged between Bitcoin main net and Sidechain.

The inherent risk associated with such an arrangement, especially considering their small and compromisable size of just 25 participants,  have seen the crypto community shy off the platform. Most of these lie in wait of the proposed upgrade to the 2-way link that elbows out the federation in favor of BTC and SBTC merge miners. 

Bottom line

It is about time Bitcoin blockchain took advantage of its massive industry support and incorporated smart contract features. And the Rootstock sidechain is here to give the blockchain its much-needed push towards execution of smart contracts. By adopting RSK, users of the already dominant legacy coin stand to benefit from such features only available with the newer blockchain models as faster transaction processing speeds, a DApps building platform, and the ability to execute bitcoin blockchain-backed smart contracts. Looking at the Bitcoin community, however, one can’t help but notice the pockets of resistance and doubts forming around the effectiveness and reliability of the Sidechain. And these are majorly attributable to its reliance on the federation of signees as custodians of the locked coins. Only time will tell if this will change once RSK migrates to verification by merge-miners.

Categories
Crypto Daily Topic Cryptocurrencies

Your Complete Guide to Using Cryptocurrency Trading Bots

While trading cryptocurrency is fairly straightforward, it can be quite a draining task trying to keep tabs on market trends, considering that the crypto market never closes. On top of it all, the unpredictable market’s volatility doesn’t make things easier for both new and experienced crypto traders. This is where trading bots come into play. 

While trading cryptocurrency is fairly straightforward, it can be quite a draining task trying to keep tabs on market trends, considering that the crypto market never closes. On top of it all, the unpredictable market’s volatility doesn’t make things easier for both new and experienced crypto traders. This is where trading bots come into play. 

While trading cryptocurrency is fairly straightforward, it can be quite a draining task trying to keep tabs on market trends, considering that the crypto market never closes. On top of it all, the unpredictable market’s volatility doesn’t make things easier for both new and experienced crypto traders. This is where trading bots come into play. 

Generally, a trading bot is a special algorithm designed to read different market indicators and to mark trade entry and exit points, as well as complete trading transactions on behalf of the user. 

The biggest advantage of trading bots, besides deeply analyzing intricate trading data, is the accuracy and high speed at which they execute trading processes. Such a high degree of efficiency is appreciated by traders whose strategies involve time-sensitive processes such as limit order and stop-loss order. 

It’s easy to create your own trading bot, especially if you have a good grasp of coding and programming languages. But this doesn’t mean the less tech-savvy traders are locked out from trading using bots. 

There are a good number of pre-programmed trading bots that cryptocurrency traders can utilize and even customize to fit their trading strategies. 

But before you pick the first trading bot that shows up from your search, there are a few things you should consider to ensure you make the right decision. 

Factors to Consider When Choosing a Trading Bot

☑️Ease of Use

The idea of leveraging the efficiency of bots is to automate your trading process. However, it doesn’t mean that you will entirely leave the bot to handle everything. You need a trading bot that you can easily manipulate its functionalities and tweak it in line with your trading objectives. 

So, ensure your trading bot of choice has an intuitive interface, allowing you to control it without the need for any technical knowledge. 

☑️Security

Cryptocurrency, much like anything else on the cyber-space, is prone to hacking among other cybersecurity threats. Besides, using a trading bot means that you are giving the bot access to your funds. This can be risky, especially if the bot’s security is questionable. 

The true test of a bot’s security is examining the company behind the bot. Ideally, the bot should be built by reputable developers who stand behind their work. You can also check users’ reviews on the bot’s security. 

☑️Reliability 

Even with its efficiency, a trading bot isn’t helpful if it frequently experiences downtime or goes offline for whatever reason. An unreliable bot means that you’ll miss out on a trading opportunity. 

Again, users’ reviews can help you know whether a particular bot is reliable or not. 

☑️Profitability

The main reason for using a trading bot in the first place is to maximize profits by utilizing the bot’s efficiency. 

One way to know if a bot is profitable is by checking whether it allows for the customization of trading strategies. Also, look out for handy trading features that give you an edge when trading. 

☑️Compatibility with Exchanges

Although most crypto trading bots are compatible with major exchanges, it’s always good to ensure that your bot of choice is compatible with the exchange you want to trade on. 

Best cryptocurrency trading bots in the market:

1. Cryptohopper 

The definition of a reliable bot, as we know it, is changing thanks to this cloud-based cryptocurrency trading bot. The bot continues to trade even when your computer is switched off, ensuring you don’t miss any trading opportunity. Additionally, since the bot doesn’t run on local storage, your computer is able to maintain its peak performance, which isn’t the case when using typical bots.

Being cloud-based, you might be tempted to think that the bot is reserved for the tech-savvy traders. Well, that isn’t the case! In fact, Cryptohopper is among the first trading bots to integrate external trading signaller that allows novice traders to run the bot on autopilot. Experienced traders also have the freedom to configure their own trading signals based on multiple technical indicators. 

One of the most unique features of this trading bot is its backtesting capabilities that allow you to reconstruct trades that could have occurred in the past, using historical data and rules of a given trading strategy. The results allows you to determine the effectiveness of the strategy, saving you potential losses. Other handy features include trailing stops, intuitive templates, and technical analysis. The bot can also be configured to only sell with profit.

In addition to its features, Cryptohopper is compatible with major exchanges such as Coinbase, Bitfinex, Kraken, Bittrex, and even less popular ones like KuCoin, Poloniex, and Cryptopia. 

Cryptohopper charges a relatively affordable fee for using the bot. But first, you’re offered a 7-day free trial, so you can familiarize yourself with the features as you test out its profitability.  Once you are ready to use it, you can subscribe to the basic monthly plan dubbed “Explorer’ for just $16.58/month or upgrade to the “Adventurer” package for $41.58/month. The premium plan goes for $83.25 and comes with more functionalities compared to the other subscription plans. 

2. 3Commas

3Commas is a web-based trading bot that’s compatible with numerous exchanges. Recently, the company behind this bot collaborated with Binance exchange, a partnership aimed at ensuring convenient trading conditions. 

The bot has a user-friendly interface that allows you to replicate the trading strategies of other successful traders, as well as customize your own. Its best capabilities are the stop loss and take profit targets, which can be set simultaneously. You can also trade various cryptocurrencies at the same time to maximize your profits. 

To guarantee reliability, 3Commas can run both on Android and iOS devices, allowing you to monitor your trading progress on the go. The best part is that the bot runs 24/7 regardless of the device you are using. You can access all your trades across various exchanges conveniently from the trader’s diary that comes with the bot. This comes in handy in tracking your profits and other transactions. 

The bot’s monthly plan will set you back $29/month, the ‘Advanced Package’ gives you access to long and short algorithms as well as view and copy functionalities, for $49/month. The ‘Pro Package’ gives you access to all premium features such as margin trading bot, composite bots, and ability to use Bitmex, Binance Futures, and Bybit bots.

3. Gunbot 

Gunbot has been around for quite some time and not even once in its long history had the bot fallen victim to hacks or security breaches of users’ wallets. Professional and beginner traders will certainly have it easy using the bot due to its simple layout. If you encounter any problem when using the bot, you can seek help from the vast community of Gunbot users on their social media platforms. 

Nonetheless, even with its basic interface, the bot houses configuration abilities based on technical indicators used that are used by manual traders.

The unique selling point of this bot is that it charges a one-time, flat rate for using it. The fee is paid in terms of Bitcoins, usually 0.1BTC or 0.3 BTC, depending on the features you would like in your bot. Upon purchase, you’ll be offered the company’s digital coin known as Gunthy coin. With this coin, you can easily sell your bot, should there come a time you want to quit trading. 

Its only downside is that the bot cannot efficiently stop losses on a highly volatile market.

4. Gekko

Although it is user-friendly to traders regardless of their skill level, traders with advanced tech knowledge will get the most out of this free trading bot.

To start with, Gekko can be downloaded for free on GitHub – a platform designed for tech gurus. You don’t need any technical knowledge to navigate the platform and download the bot. However, being open-source software, a great deal of configurations and improvements require a good grasp of coding. 

Nonetheless, even without any tech skills, you can still use the bot to perform basic trading functions such as backtesting and set it on autopilot.  

The bot is designed to run on virtually all operating systems, including Linux, MacOS, and Windows, in addition to being compatible with major exchanges such as Bitfinex, Kraken, and Bitstamp. 

Conclusion

Trading bots offer the much-needed efficiency to stay on top of the dynamic cryptocurrency market trends. Compared to brick and mortar type of trading, trading bots make more rational trading decisions since they aren’t subject to emotional waves that come with the market fluctuations. 

To an extent, the lack of emotions can be a flaw since they aren’t attached to the money, and so, the bots can continue trading even when making losses. It’s for this reason that bots require periodic monitoring just to ensure they are trading in accordance with your overall trading goals. Most importantly, ensure you are familiar with all the trading basics before using any trading bot. 

Categories
Cryptocurrencies

What are Bitcoin Futures? 

Futures markets have, for long, been in existence in more established asset classes such as securities and bonds. However, it was not until late December of 2017 that Bitcoin futures were introduced on regulated trading avenues. Although it is the only one of their kind in the digital currency space, Bitcoin Futures is regarded as a significant milestone in bringing cryptocurrencies closer to mainstream investing. 

Futures markets have, for long, been in existence in more established asset classes such as securities and bonds. However, it was not until late December of 2017 that Bitcoin futures were introduced on regulated trading avenues. Although it is the only one of their kind in the digital currency space, Bitcoin Futures is regarded as a significant milestone in bringing cryptocurrencies closer to mainstream investing. 

Futures markets have, for long, been in existence in more established asset classes such as securities and bonds. However, it was not until late December of 2017 that Bitcoin futures were introduced on regulated trading avenues. Although it is the only one of their kind in the digital currency space, Bitcoin Futures is regarded as a significant milestone in bringing cryptocurrencies closer to mainstream investing. 

Similar to any commodity/asset futures, Bitcoin futures are not necessarily for maximizing profits but rather serve as a risk management tool to hedge against the risk of the volatile crypto market.  

To understand what exactly are Bitcoin futures, it demands we explore how typical futures contracts work in the first place. 

What are Futures Contracts?

Futures contracts are basically an agreement between two parties to buy or sell an underlying asset at a predetermined price on a precise future date. Once the contract expires, both parties are obligated to fulfill the terms of the contract at the agreed price, regardless of the actual price at the time of contract execution.

The parties involved usually take one of the two positions of a futures contract; long or short. If you take the long position, it means that you agree to buy the underlying asset/commodity at a specific price in the future, while the short position means the other party agrees to sell the asset at a specific price once the contract expires. 

The idea here is to hedge risks associated with adverse price movements of the commodity. If, for instance, you expect the price of a commodity to rise, you can take the long position in a futures contract at the current market price. Upon the expiration of the contract, if the price rose, you’ll have saved some money since the contract will be executed at the lower market price as agreed.   

In the same vein, futures can also be used to speculate price movements to realize profits. For instance, if the buying party anticipates that the price of the asset will rise leading up to the expiration date of the contract. They can profit off the price difference, if indeed the price rises, by selling the contract at a higher price to another party, before the expiration date. 

How do bitcoin futures contracts work?

Bitcoin futures are similar to traditional financial futures, in that they allow you to speculate the Bitcoin’s price without having to own any Bitcoin. 

Investors can either take the long position on Bitcoin futures contract, if expecting prices to increase or short position if they own Bitcoins and want to mitigate potential losses from the anticipated drop in BTC prices. 

For instance, say, you own 10 Bitcoins at a market value of $5,000 for each coin, and you anticipate the price will drop to $4,000 in two months. You can take a short position, and agree to sell your Bitcoins at the prevailing market price. Close to the expiration date of the contract, you can decide to buy back (long position) the futures at the now low BTC price, thus earning you $10,000 while saving you the losses caused by the drop in price. 

Bitcoin futures unique advantages

I. Regulation

The crypto universe is torn between two major groups; those that want the coin to remain unregulated and those that believe regulation of BTC is an essential step towards mass adoption. 

Bitcoin futures are regulated by the Commodity Futures Trading Commission (CFTC). This places BTC on a path to mass adoption. It should be noted that CFTC is not as strict as its alternative, Security Exchange Commission (SEC). So, Bitcoin maintains a good deal of its liberal nature. 

II. Enhanced Liquidity

Thanks to the regulatory rules imposed by CFTC, Bitcoin futures are becoming more appealing to professional traders and big money Wall Street investors. With their more dollar volume input, BTC futures may become even more liquid than Bitcoin itself. 

III. Price Transparency

Bitcoin futures contracts are settled each trading day using a transparent reference price, which is written into all Bitcoin contracts in other markets. This will make it easy to use Bitcoin as a payment method since transparency creates a unified price that is essential in mitigating the volatility of spot prices. 

Getting started with Bitcoin futures trading

Now that you understand how to place and execute a Bitcoin futures contract, there are a few crucial things you need to know for profitable trading. 

Get Familiar with the Trading Rules

Trading Bitcoin futures is a bit different from trading typical equities and bond futures. This is due to the fact that they have a significantly higher margin requirement compared to a regular futures contract. 

Chicago Mercantile Exchange (CME) and Chicago Board of Exchange (Cboe), the main Bitcoin futures trading avenues, requires one to put up a 35% and 44% margin, respectively, of the futures contract value. Although this margin can be achieved by trading other financial products on the exchange, the products aren’t offered to new traders. 

Margin is basically the amount of money a trader must pay first as collateral when taking a futures position. Usually, for most traded assets, the margin is under 10%. 

So, this is to say that if a contract was trading at $10,000 on CME, a trader wishing to take a long or short position, will have to pay $3,500. The trader can also be subjected to additional margin calls if the account falls below a certain level. 

Understanding Price Limits

Price limits are the maximum price ranges allowed for a futures contract in a trading session. Bitcoin futures are subject to limits on how far the price can move before triggering a temporary or permanent halt. 

In the case of Cboe, a contract will be halted for two minutes if the best bid, leading to the contract expiration date, moves 10% up or down the previous day’s prices. 

Build a Trading Strategy

Developing a trading strategy is fundamental when trading any type of financing product, including Bitcoin futures. 

Your trading strategy should revolve around what you want to achieve – prevent loss or make a profit- while paying attention to your risk appetite. For this reason, consulting an experienced futures broker is recommended, so as to design a personalized strategy that is aligned to your objectives. 

Besides, trading directly on CME is almost out of reach due to the high cost a trader is required to pay before they can trade on the platform. As an individual investor, you, therefore, need to find a broker who trades on CME. 

Takeaways

One of the best things about Bitcoin futures is that you don’t need a wallet nor BTC coins to participate in the trade. Bitcoin futures, like most futures contracts, are settled in cash equivalents, so no tangible coins are exchanged between parties, saving you the hassle of owning or storing digital coins. Traders collect their gains once the other party honors their contract obligation. Also, you can conveniently place a short without necessarily borrowing the underlying asset ( Bitcoins), meaning you don’t have to own any coins. 

As lucrative as it may sound, it is important to keep in mind that Bitcoin futures are a highly risky investment instrument. As such, it is advised to only invest that amount you can afford to lose, should the contract go opposite of what you initially speculated. However, there is always the option to close out a position before the expiration date, in an effort to minimize or entirely avoid losses. 

Categories
Cryptocurrencies

How to Choose and Accept Cryptocurrency for Your Business

As with any other technology, the digital currencies have revolutionized not just the tech world but also the health, finance, and manufacturing industries. 

As with any other technology, the digital currencies have revolutionized not just the tech world but also the health, finance, and manufacturing industries. 

As with any other technology, the digital currencies have revolutionized not just the tech world but also the health, finance, and manufacturing industries. 

Their disruptive aspect can be linked to the underlying protocol, blockchain, which most cryptos run on. 

This technology delivers faster and more secure transactions compared to using fiat currencies. Moreover, there are no central authorities such as banks or government, involved in the transaction. As a result, this lowers the transaction fees saving you money in the long haul.

But, ever since the Bitcoin craze back in 2017, there has been an influx of cryptos in the market. For any business owner, the overwhelming number of cryptocurrency choices can be daunting, especially with reports that some coins are a Ponzi scheme. 

Criteria used to choose the right crypto for your business

So, which criteria should business owners use to choose the right cryptocurrency for their enterprise?

☑️Value of the Coin

Choosing a coin that has high value shields your business from losses caused by the volatile nature of cryptocurrencies. This is especially true since highly valued coins tend to be more stable, meaning their prices don’t change radically. 

The value of a crypto is directly related to its demand. The higher the demand, the higher the value of the coin. 

☑️Usability

The usability of a coin can be viewed in different spectrums, but it all boils down to how users interact with a coin. 

The most basic usability aspect of a coin is in terms of the number of people using the coin. A popular digital coin certainly has a more significant number of users compared to a less popular coin. The idea here is to choose a digital coin that has a good number of users. This way, you can be assured that most of your customers have access to the coin of your choice. 

Also, usability entails the user-friendliness of a cryptocurrency. A coin with a complex interface can be intimidating to a particular demographic of your customer base, thus limiting your products or services to the tech-savvy clientele. 

A coin with an intuitive interface should be easy to perform simple functions such as opening and funding the wallet as well as sending and receiving funds. 

☑️Transfers

One of the primary reasons behind businesses accepting payments in cryptocurrencies is due to the fast transaction associated with the payment process. 

It’s common for business owners to wait for days or even weeks for payments made using a debit card, to reflect in their bank accounts. This can be frustrating, especially if you have urgent bills to pay or need to make a payroll.

While cryptocurrencies offer faster transactions than conventional currency, some aren’t as fast as you would wish. Take bitcoin, for instance. The network on which it operates has a scalability problem, which translates to slower transactions due to its limited blockchain size and frequency. 

Of course, there are altcoins such as Monero, and Litecoin that offer faster transactions and even charge less than bitcoin for sending and receiving funds. These coins take less time to confirm a block, amping up the transaction process. 

How to Accept Cryptocurrency for your Business

There are three main ways of accepting cryptocurrency as a form of tender for products and services. 

Direct Deposit

If you only have a small number of customers using cryptocurrency, direct deposit works best. All you need is to create a wallet and share its address with your customers. 

Ideally, you should partner with an exchange platform to help you create a wallet. This way, it will be easy for you to link your wallet to your bank account, so as to withdraw funds in fiat currency. 

Besides crypto exchanges, you may consider creating a versatile digital wallet with popular providers such as Exodus and Jaxx. With one of these wallets, you can accept any type of cryptocurrency for efficient conversion to conventional currency. 

To make the transactions easier for your customers, you should present your wallet in the form of a QR-code. Customers will just scan the code with their phones, and transfer the agreed amount directly to your wallet. You can request a wallet QR-code from the exchange site you’ve partnered with or use an independent app dedicated to creating one for streamlined cryptocurrency payments. 

Point of Sale (PoS) Equipment

A cryptocurrency PoS equipment is accompanied by a piece of software that automatically links your wallet to your bank account, for a seamless payment experience. The equipment also supports cryptocurrency-based debit cards and even offers withdrawal services in the form of fiat currency. 

Alternatively, instead of buying a cryptocurrency  PoS terminal, you can create a merchant digital wallet and link it to your existing PoS system. Unlike the traditional digital wallet, a merchant wallet comes with unique functionalities that make it compatible with your accounting systems for easy bookkeeping. 

Once you’ve created a merchant digital wallet with your preferred provider, you’ll then receive a public address, private key, and a QR-code. Now, using the instructional manual, integrate these details to your existing PoS system, invoices, and shopping cart. 

Plug-ins and Cash Out

Exchanges such as Binance and Coinbase offer plug-ins that are installed into your online store. It becomes easier to integrate these plug-ins if your store is on popular platforms such as Shopify, WordPress, or eBay. 

Customers can, therefore, shop from your store and check out using crypto, which is then deposited to your wallet address or bank account. 

Boost Your Business by Accepting Cryptocurrency Payments

Accepting cryptocurrency payments gives your business a competitive edge, as technology becomes more integrated into all business operations. Being an international currency, cryptos are also a gateway to broadening your market outreach. 

Of course, there are a few drawbacks with this payment method. Volatility remains the biggest downside to cryptocurrency payment for business services. With such unprecedented price swings, the most viable solution is to convert any cryptos to fiat currency, immediately upon receipt to protect yourself from loss of value. 

In addition to volatility, you should also maintain compliance with regulatory tax schemes that are subject to your jurisdiction. 

Nonetheless, business owners are advised to keep an eye out for cryptocurrency trends and consult experts in the field, to understand every aspect of digital currencies before integrating them into payment systems. 

Categories
Crypto Daily Topic

Bitcoin’s Path to $1 Million: A Mere Speculation or Inevitable Reality? 

nEver since Bitcoin hit an all-time high bull run in 2017, there has been speculation about its potential to hit the $1 million mark. 

nEver since Bitcoin hit an all-time high bull run in 2017, there has been speculation about its potential to hit the $1 million mark. 

nEver since Bitcoin hit an all-time high bull run in 2017, there has been speculation about its potential to hit the $1 million mark. 

John McAfee, with all his controversial personality and expertise in the tech world, has been at the front-seat, fuelling the $ 1 million BTC price speculation. In fact, he’s part of the reason why bitcoin reached $20,000 in December 2017, thanks to his bold prediction on Twitter in November of the same year.

Well, he didn’t exactly predict that it would be worth the $20,000 but instead claimed that the coin would be worth as much as $500,000 by the end of 2020. Although he didn’t get into the specifics of how he had arrived at that number, the prediction spiked a mass adoption of BTC in 2017, resulting in the bull run. 

A few months later, McAfee doubled up the prediction to a $1 million price target. Recently, other notable industry players such as PayPal director & CEO, Wences Caseres, threw in their weight on the prediction, saying it’s possible for BTC to hit $1 million in the next to seven to ten years. 

The Critics

Of course, there are a good number of respectable individuals opposed to the idea that bitcoin is a sound investment, leave alone the price prediction. Warren Buffet, the Oracle of Omaha, describes Bitcoin as a store of fear, not a store of value. Others who doubt bitcoins potential include JP Morgan and Chase Bank CEO Jamie Dimon and Paul Krugman, an esteemed economist and columnist for The New York Times. 

Despite the harsh skepticism facing Bitcoin’s future, it doesn’t mean it is entirely impossible for the cryptocurrency to grow in value, and even surpass the $1 million mark. 

But before that, there are several hurdles the digital currency must overcome to place itself on a path to the highly anticipated price target. 

Scaling Problem

For Bitcoin to experience any massive growth, its market capitalization has to grow first. Case in point, since the first real Bitcoin transaction back in 2010, the infamous Pizza purchase, the crypto’s market cap rose by a whopping 2,300%. This happened after a few weeks of increased adoption/transactions by the general public, who were eager to get a piece of this new digital currency. The increased market cap resulted in an increased BTC price from just $0.0025 to $0.06. 

Unfortunately, Bitcoin’s block size is insufficient to support the high number of transactions required to boost its market cap and eventually achieve the $1 million target. The actual block size is 1 MB, which often causes sluggish transactions even with the current of $178 billion. Keep in mind that the $1 million BTC argument dictates that the market cap must amount to approximately $16 trillion, an equivalent of 13% of global GDP! 

There have been attempts to solve this problem, but its success hasn’t materialized. Two Bitcoin developers created a two-layer solution dubbed the Lightning Network (LN). This off-chain payment tool makes the transfer of BTC funds faster, except that the payment information doesn’t touch the main blockchain unless the transaction link is closed. 

Besides, LN doesn’t completely solve the high bitcoin transaction fee problem, which could jeopardize the network’s adoption among the BTC community. 

Regulation from External Authorities

In line with the idea that there has to be a massive adoption of BTC to propel it to high price points, the current regulatory environment hasn’t been doing any good to the Bitcoin community. As such, more people are finding it hard to fully invest in Bitcoin, considering the negative reviews from government institutions. 

To put into perspective, consider the BitLicense law imposed by the New York State Department of Financial Services (NYSDFS). According to the law, any start-up centered around bitcoin will have to pay an exorbitant fee of about $5,000 to acquire a business permit/license. The worst bit is that it’s not guaranteed that the NYDFS will approve their license request. 

On top of that, there are states with varying bitcoin taxation laws, some of which are unfair. In such states, BTC is treated as an asset, thus subject to capital gain tax. The idea behind this is due to the unpredictable volatility of BTC, which. in an ideal case, would result in a bitcoin holder’s net worth increasing if the coins price were to increase in the first place. Consequently, this discourages business owners who would like to accept Bitcoin payments for their products or services. 

While the government’s interference is aimed at creating a sound atmosphere in the cryptocurrency space, it doesn’t come out well for people who loved Bitcoin’s decentralized nature. That said, there needs to be a bilateral trust between the Bitcoin community and the government, for the digital currency to reach $1 million in value. 

Banking Support

Probably, the major hurdle standing on the way to 1$ million BTC value is the lack of dependable liquidity. If the currency is to be accepted by the masses, they need a reliable option to change their fiat currency to BTC and vice versa. 

Unfortunately, in many countries, the central bank bars the subsidiary banks from offering liquidity options to BTC users. Some credit card companies even probit their users from purchasing cryptocurrencies. There have also been numerous cases of frozen accounts for those trading cryptocurrencies. 

Such strict laws not only discourage new investors but also causes panic selling among the existing Bitcoin holders, resulting in a bearish run in the crypto market. 

The Rationale Behind $ 1 Million BTC Price Prediction

Regardless of the seemingly impossible hurdles to overcome, Bitcoin still stands a chance to come close if not reach the ambitious price target. 

Let’s objectively look at some underlying factors that make the price target more of a reality than a speculation

Technological Growth

In the theoretical stages of technological growth and adoption, every new tech solution or tool starts out with an innovator as the pioneer and first user. Gradually, the tool/solution grows and becomes adopted by the first group of people known as early adopters. The early adopters aren’t big in numbers, but the subsequent mid and late adopters are often in large numbers, thus giving the tech solution in the mainstream attention and usage. 

Bitcoin by itself is a technological solution which in this case, the majority of the coins are held by the early adopters. These are a small group of people who invested in Bitcoin when it was worth pennies. As such, it’s quite safe to say that Bitcoin hasn’t yet achieved mainstream usage and adoption as spelled out in the developmental stages of technology solutions. 

More so, big corporations and the government have realized the importance of blockchain, the underlying cryptocurrency technology, as evident from the launch of Libra ( a digital currency expected to be launched by Facebook, soon). 

The cryptocurrency industry as a whole will, therefore, gain public acceptance placing BTC on its path to $1 million. 

Cushion Against Financial Crisis

Financial recession often results in loss of wealth among the citizens of the affected country. Bitcoin and another cryptocurrency, therefore, stands as a cushion against unpredicted financial crisis since it lacks a central authority controlling it. 

This idea is even more practical in countries such as Zimbabwe and the Philippines, where the local currency has lost much of its value. Bitcoin and other cryptos are an alternative store of value medium, to citizens in such countries. 

The higher the number of people safeguarding their wealth in cryptos, the more likely bitcoin will grow market cap and finally achieve a $1 million valuation. 

Conclusion

Judging from the past bull run, it’s easy to see why Bitcoin’s future cannot be accurately predicted. There are factors beyond the rational market principles that have and could influence Bitcoin prices, making the coin’s price growth subject to speculations. 

Nonetheless, for a stable growth towards high price points, Bitcoins must overcome the setbacks stated above. Only this way, and in combination with factors favoring its growth, will Bitcoin hit and surpass the $1 million price target with little volatility. 

Categories
Cryptocurrencies

What is Token Burning and How Does it Work?

Token burning, a concept unique to the cryptocurrency market, is gradually becoming an intrinsic feature of newer and future cryptocurrency projects. Even more recently, well-established altcoins such as Binance have adopted this concept making it worth the attention of any cryptocurrency investor. 

Token burning, a concept unique to the cryptocurrency market, is gradually becoming an intrinsic feature of newer and future cryptocurrency projects. Even more recently, well-established altcoins such as Binance have adopted this concept making it worth the attention of any cryptocurrency investor. 

Token burning, a concept unique to the cryptocurrency market, is gradually becoming an intrinsic feature of newer and future cryptocurrency projects. Even more recently, well-established altcoins such as Binance have adopted this concept making it worth the attention of any cryptocurrency investor. 

As the name suggests, coin/token burning is the process of ‘burning’ coins, or rather, the irreversible destruction of coins/tokens in an effort to eliminate them from circulation. 

To understand this concept better, let’s delve into how the whole ‘burning’ process works. 

How Does Token Burning Work?

Despite the extreme image the phrase paints, token burning doesn’t involve any kind of token disintegration. In fact, it’s impossible to disintegrate coins since blockchain – the underlying cryptocurrency protocol – is immutable, meaning the protocol’s history and data cannot be altered in any way. 

What actually happens is that the coins/tokens are algorithmically taken out of circulation by sending their signatures to a public address known as an ‘eater address.’ The keys to this public address are private and cannot be obtained by anyone. In essence, it means that once the tokens are sent to this address, they are unrecoverable and can never be used. Ever!

All burnt coins/tokens are then recorded on the blockchain transparent ledger system for all nodes to see and confirm that the coins have been indeed destroyed. 

While token burning serves the same purpose, which is the elimination of coins from distribution, it differs in the scope of execution. For instance, some projects will execute a one-time burn after their Initial Coin Offering (ICO), to help eliminate any unsold tokens. Other projects favor periodic burning of tokens based on the token’s utility and size, among other variables. Binance coin (BNB), for example, burns its tokens quarterly, with an aim to reach a threshold of 100 million BNB burned tokens. Alternatively, project developers can buy back their tokens from exchanges and take them out of circulation by sending them to the ‘eater address.’ 

A few other coins, such as Ripple, burn token progressively with each transaction. When parties transact using the coin, they must incur a transaction fee, pretty much like sending Bitcoin to another BTC wallet. However, in the case of Ripple, the transaction fees aren’t awarded to miners. Instead, these fees are automatically burned. 

Why do we need to burn tokens?

It’s quite startling to understand why crypto projects burn their precious tokens. But the process comes with its own benefits, favoring not only the developers but also the coin users. Here are the main motives behind token burning;

☑️Increase the Value of Coins 

The most common reason behind token burning is to boost and encourage the growth of a coin’s value. Going by the economic laws of demand and supply, reducing the supply of a commodity in the market fuels the demand for that particular project. As such, by burning a token, the supply of a coin reduces in equal measure, prompting a demand of the coin since there is a lesser amount of coins to satisfy the people’s demand. Consequently, the price of the coin appreciates, stabilizing its value. 

To the investors, the growth in value encourages them to hold the coins for longer in anticipation of even better prices as the demand increases. Also, holding the coins for longer helps maintain a sound network bandwidth, which is beneficial to the developers.

☑️Provision of Dividends

The provision of dividends is closely tied to the resultant increase in coin value after burning. However, this benefit works best in security tokens rather than in their utility counterparts. 

A security token is classed as an asset, and thus those holding it are regarded as investors. This is not the case with utility tokens. 

Nonetheless, with the increase in a coin’s price after burning some of them, the developers indirectly reward the coin holders, since the value of the asset has appreciated. This move plays out perfectly in countries such as the USA, where cryptos are discouraged from handing out dividends directly to their token holders. 

☑️Protection Against Spam

All cryptocurrencies are under the computing realm, which makes them vulnerable to cybersecurity threats. Having this in mind, it’s easy to understand why tokens can fall victim to Distributed Denial-of-service attack (DDOS), especially with the growing number of cryptocurrency users. 

Basically, DDOS is a cyber-attack in which the perpetrator seeks to flood a system with an influx of requests, so as to prevent the execution of some or all legitimate requests.

In the same vein, a DDOS attack on token targets at clogging the network, preventing the execution of transactions. By burning tokens, the developers end up reducing the overall transactions to a manageable number, thus safeguarding the network from DDOS attacks and spam transactions. 

Ripple is a perfect demonstration of how coin burning prevents spamming. By automatically burning a portion of the transacted amount, Ripple discourages the need to overload the network to gain a quick profit.

☑️Correct Errors

Although in rare cases, sometimes project developers make serious mistakes that can only be corrected by token burning. 

For instance, a project may issue an excess amount of coins or experience an increase in the number of tokens as a result of technical errors. In other cases, tokens unfit for trading. For example, those meant to support a transaction may end up into public circulation. Theoretically, an increased supply translates to lower demands, plummeting the coin prices. 

As a corrective measure, the excess tokens are burnt to avoid some of the consequences brought by the errors incurred. 

☑️Build Trust and Loyalty

Gaining trust from coin holders is the ultimate goal of any cryptocurrency, particularly one that is new in the market. 

After the Initial Coin Offering (ICO) of new crypto, its price is bound to increase. The project developers may decide to make more profits by selling excess coins to exchanges, at the prevailing spiked prices, which is unfair.  More so, by selling the excess coins, it would lead to allegations that the developers are only committed to gaining profits and that their coin has no real value. 

However, burning the excess coins shows that the developers are committed to the long-term growth of the coin. As such, the funds raised from the ICO will be used for business operations. But most importantly, burning excess coins help decentralize the project. 

Conclusion

As hardcore as it may sound, token/coin burning is proving to be an effective method of maintaining a balanced crypto-ecosystem. With time, future cryptocurrencies will certainly adopt this mechanism giving its numerous benefits, especially in a coin’s infancy stage. 

Also, with the hope that cryptocurrency space will stand the test of time, coin burning is arguably the best bet to maintaining the long-term value of a crypto. 

 

Categories
Crypto Daily Topic Cryptocurrencies

Privacy Coins: Here Is Your Complete Guide

Public blockchain cryptocurrencies such as Bitcoin and Ethereum utilizes cryptography technology to disguise users’ identity. To an extent, this protects users’ privacy, making the cryptos ideal for pseudonymous transactions. However, the transparent nature of these cryptocurrencies’ ledger system compromises users’ complete anonymity. As such, it’s easy for malicious third parties to trace all your transactions […]

Public blockchain cryptocurrencies such as Bitcoin and Ethereum utilizes cryptography technology to disguise users’ identity. To an extent, this protects users’ privacy, making the cryptos ideal for pseudonymous transactions. However, the transparent nature of these cryptocurrencies’ ledger system compromises users’ complete anonymity. As such, it’s easy for malicious third parties to trace all your transactions […]

Public blockchain cryptocurrencies such as Bitcoin and Ethereum utilizes cryptography technology to disguise users’ identity. To an extent, this protects users’ privacy, making the cryptos ideal for pseudonymous transactions.

However, the transparent nature of these cryptocurrencies’ ledger system compromises users’ complete anonymity. As such, it’s easy for malicious third parties to trace all your transactions and exploit this information to jeopardize your privacy. Now, this is where privacy coins come into play. 

What Exactly are Privacy Coins?

Unlike public digital currencies, privacy coins offer robust anonymity that works by obfuscating your transaction history and amount, making it impossible for third parties to piece together your identity. To achieve it, privacy coins leverage various innovative technologies, giving them a competitive advantage, as far as users’ privacy is concerned. 

While there are a good number of privacy coins in the market, we’ll be taking a comprehensive look into the best five coins, based on their technology, adoption, and market capitalization. 

Monero – XMR

Started in 2014, Monero has grown to become one of the most popular privacy coins backed by a stable market cap. The coin gives its users complete control of their data and anonymity, allowing them to keep their transaction information away from privy eyes.

In addition to its default private key cryptography, the Monero employs CryptoNote proof-of-work protocol, to obscure all details related to a transaction, including the source of funds. To further enhance users’  privacy, the protocol is complemented by unique technologies such as Ring Signatures, Ring Confidential Transactions (RingCT), and Stealth Address. 

As the name suggests, Ring Signature technology works by bringing a group of signers to sign a single transaction. This forms a ring where only the sender can generate and send a one-time-key, while the actual recipient will be the only one who can detect and spend the funds linked to the key. With the technology in place, it becomes difficult for any transaction to be traced back to any user, which in turn secures users’ privacy. 

To guarantee that the coins have not been fraudulently fabricated in the transaction, RingCT creates a cryptographic proof which verifies that the sum of the input and output amounts is equal. The technology does this without disclosing the actual transaction numbers, thereby masking the amount the two parties transacted. 

Stealth Address, on the other hand, is designed to make all transactions untraceable. Basically, a one-time-key is created for each transaction, giving the sender and recipient the freedom to disconnect themselves from a transaction. What’s even better is that the key isn’t linked to the recipient’s wallet address, making it harder for an outside observer to trace the amount sent. 

Dash – DASH

Dash coin is an open-source peer-peer cryptocurrency that was launched after Bitcoin forked in 2014. In fact, the coin borrows heavily from its parent, BTC, in terms of privacy protection. It utilizes a concept known as PrivateSend, which is an improved version of Bitcoin’s CoinJoin, designed to anonymize transactions.

Essentially, the concept works by allowing multiple parties, usually three users, to pre-mix their coins into a single transaction, and then send these coins to new addresses, randomly. The transactions are further taken through a series of such operations, which makes the amount, the sender and destination unknown to third-parties. 

The instant-send feature of the coin facilitates faster transactions, by channeling inputs and outputs along the second tier of the Dash blockchain. 

Although not related to privacy protection, Dash coin also features a management mechanism that oversees future funding and network development through a self-governing community know as Decentralised Governance by Blockchain (DGBB). 

ZCash – ZEC

Being an iteration of Zerocash, ZCash implements it’s predecessor’s protocol that is based on zero-knowledge cryptography known as ZK-SNARKs. As intricate as it may sound, the technology’s functionality is pretty straightforward.

Basically, ZK-SNARKs encrypts all transactional details that are stored on the network, which include information about the sender, the recipient, and the amount transacted. In the process, the technology also verifies that the data being exchanged is authentic, without necessarily broadcasting the said information, besides the fact that it is true.

Keep in mind that using this privacy feature is optional, and thus users can opt to have their transaction recorded publicly. But it’s believed that users who choose the transparent option end up compromising the security of the entire network. 

PIVX – PIVX

Private Instant Verified Transaction (PIVX), which also goes by the same tickle symbol as its acronym, is an open privacy coin with a growing popularity. It was launched as a Dash coin fork but runs on the Proof-of-Stake algorithm rather than Proof-of-Work used by Dash coin. This means that PIVX doesn’t rely on miners to verify transactions and, as such, rewards the coin holders, who are also responsible for validating transactions.

However, to be among the users who are rewarded with coins as well as approve transactions, you must have a stake of at least 10,000 tokens. After achieving the threshold token, you are allowed to own a master node, which gives you the power to on how the development budget will be used and even submit developmental suggestions. 

PIVX also has a near-instant transaction verification feature and can be trusted in safeguarding users’ privacy. 

Verge – XVG

Much of Verge’s popularity can be attributed to the endorsement it received from John McAfee, a reputable businessman in the cyber-space. Although it is quite unstable, the coin has succeeded in providing a fast and decentralized way of making transactions, while maintaining users’ privacy.

By default, Verge integrates the Tor network into its wallet, encrypting your IP address, such that your online transactions can be linked to you. 

Its most privacy protection arsenal is the Wraith protocol that allows users to switch between public and private ledger systems. 

As with Bitcoin, the public ledger system displays your account balance, wallet address, and that of the recipient, in addition to the actual amount you are sending. Choosing the private ledger option keeps these details under wraps, protecting you from third parties who may be trying to trace your transactions. 

Other noteworthy features include 5 Proof-of-work algorithms, which have a limited target block time, improving protection against attacks. 

Takeaway

With the increasing cybersecurity threats, protecting your online privacy becomes a priority, especially when transacting cryptocurrencies. Sure, there is no problem in displaying your transactions history for all to see, since you don’t have anything to hide in the first place. But the idea that third-parties can use your transactions to trace activities should prompt you to keep your cyber-footprints untraceable. 

As such, you may consider investing in some of the digital currencies mentioned above in an effort to protect your personal privacy. 

Categories
Cryptocurrencies

Exciting Use Cases of Decentralized Finance

Today’s finance landscape is inherently unequal – with millions locked out of opportunities due to their location, being undocumented, or having low economic means.  Few would have foreseen that the technology that brought us Bitcoin could potentially solve this enduring problem.  Decentralized finance (DeFi) is all of these things: an idea, a belief system, a […]

Today’s finance landscape is inherently unequal – with millions locked out of opportunities due to their location, being undocumented, or having low economic means.  Few would have foreseen that the technology that brought us Bitcoin could potentially solve this enduring problem.  Decentralized finance (DeFi) is all of these things: an idea, a belief system, a […]

Today’s finance landscape is inherently unequal – with millions locked out of opportunities due to their location, being undocumented, or having low economic means. 

Few would have foreseen that the technology that brought us Bitcoin could potentially solve this enduring problem. 

Decentralized finance (DeFi) is all of these things: an idea, a belief system, a movement, and a blockchain-based technology that promises to eradicate the aforementioned barriers to financial access, or to put it another way, to democratize finance. Already, decentralized finance is making waves as DeFi platforms and products increase by the day. 

In this guide, we explore some uses cases of this new and exciting technology, as well as some of the real-life applications that are making brave inroads into the space. 

But before we do that, let’s kick off with a primer on what exactly DeFi is, plus why we need it. 

What is Decentralized Finance? 

Decentralized finance is an emerging, blockchain-based ecosystem of finance that seeks to expand finance.  

It aims to make financial services more accessible and inclusive for everyone by making financial markets and products open-source, transparent, and under no particular authority. 

In DeFi world, everyone would have absolute control over their assets and interact with other participants through peer-to-peer (P2P), decentralized applications (DApps). 

What Problems Does DeFi Solve? 

DeFi’s chief goal is to decentralize financial services and make them available to all – an aspect that today’s centralized financial system is sorely lacking. As such, DeFi solves two main problems which we’ll look at in greater detail below: 

Inequality in Finance. Today, millions of people are locked out of access to loans, mortgages, a bank account, savings, insurance, and so on. DeFi aims to eradicate or alleviate this problem by creating a finance system that has no systemic or institutional barriers. All one would need is a smartphone and internet connectivity to access services.  

Financial Censorship. Today’s centralized finance system means that governments, banks, or intermediaries can restrict or prevent an individual’s or a company’s access to their assets. For example, the government could freeze the assets of a company that openly defies it, or an individual that it perceives to be rogue. By contrast, with DeFi, financial products are under no one’s control. Hence no one can arbitrarily restrict an individual’s or company’s assets. 

What Are the Advantages of DeFi?

Why should you care about DeFi? What difference does it propose to the current financial system? These are some of the advantages of DeFi: 

Autonomy: DeFi applications do not need a go-between party in transactions or an arbitrator in case of disputes. All terms are set in the code, and users have complete autonomy over their funds at any time. This eliminates the costs that would go into providing such intermediary services.   

Security: Since DeFi services are set up on decentralized blockchains, single points of failure are eliminated. Data is recorded on the blockchain and distributed across computers all over the world, reducing the chances of services being compromised.

Tradability: Thanks to DeFi, the tokenization of assets is now possible. Tokenization means one can quickly sell an asset that was previously illiquid (not fast-moving), as well as divide an asset into parts that enable many market participants to buy just the portion they can afford, instead of losing out on a whole investment.

Accessibility. The world’s unbanked can access financial services that they previously couldn’t, thanks to DeFi. 

What Are The Use Cases For DeFi? 

The following are some of the potential use cases for DeFi: 

i. Payments

DeFi platforms or applications can be used to create blockchain-based protocols that allow individuals to have wallets via which they can make instant and cheaper payments. 

ii. Borrowing and Lending

DeFi enables open lending structures that have numerous advantages over the traditional borrowing and lending system, including: 

  • Ultrafast transaction settlements 
  • Ability to back up digital assets with real-life assets 
  • Credit checks are not necessary; hence more people can get access to loans
  • Potential standardization and interoperability of financial services, making them frictionless across various providers 
  • Democratizes the borrowing and lending process by providing borrowers with a wider pool of potential lenders.    

iii. Stablecoins

A stablecoin is an asset that attempts to circumvent the price swings in cryptocurrencies, making them suitable as mediums of exchange and stores of value. Stable coins thus provide the stability associated with fiat currencies while maintaining the benefits of cryptocurrency such as security, fast processing speeds, and overall efficiency. 

iv. Tokenization

This is the process of digitizing a real-world asset to increase its liquidity in the marketplace. Tokenization creates asset-backed tokens – which are digital tokens backed by real-world assets. Through tokenization, assets that traditionally have low liquidity, e.g., jewelry, real estate, and art, can quickly move their position in the marketplace. Also, thanks to the ability to divide assets into portions through tokenization, non-high income earners can get a piece of a product or investment that they previously couldn’t afford.  

v. Decentralized Exchanges (DExes)

Decentralized exchanges are platforms where users can exchange digital assets without relying on a third party, as in a centralized exchange. Instead, trades occur between parties in a P2P, automated process. Examples of DExes include Binance DEX, Radar Relay, and EtherDelta. 

vi. Issuance Platforms

An issuance platform is a service that allows people to tokenize their assets by providing them with the tools to create digital tokens. An issuance platform provides the necessary technical and legal infrastructure to ensure a seamless tokenizing process for users.   

Thanks to these platforms, individuals and companies can raise funds without the costs associated with intermediaries such as banks, credit unions, lawyers, etc. They also open up investment opportunities for investors of all net worth levels, origin, or geographical location. 

vii. Open Marketplaces

With open marketplaces, DeFi reimagines the age-old idea of a marketplace by turning it into a decentralized platform where people can exchange things of value. 

People can buy and sell non-fungible tokens (ones that are unique and thus not interchangeable, as opposed to fungible tokens such as Bitcoins that are interchangeable) such as trading cards, collectibles, domain names, game items, and so on. All transactions take place via blockchain-based smart contracts, removing the need for a central authority who would normally dictate the rules of the marketplace.  

viii. Prediction Markets

A prediction market is a group of participants who speculate on the outcome of future events – from elections to games to weather to natural disasters to commodity prices to major political events. 

DeFi provides a decentralized take on traditional betting markets such as casinos. Decentralized prediction markets are censorship-resistant, thus democratizing the betting space. For instance, individuals can participate in betting on their favorite sports events even if they live in jurisdictions where betting is restricted. It also means that anyone can create a bet without the approval of a central authority like, for instance, the administrator of a betting platform.

ix. Decentralized Autonomous Organizations (DAOs)

These are organizations that allow individuals to create organizations whose rules and bylaws are encoded on the blockchain. DAOs represent the highest degree of organizational transparency, with every process automated and with minimal to no human input needed. They solve the problems of centralized, hierarchical setups such as corruption, arbitrary decision making, delayed decision making, and so on. 

Real-Life Applications of DeFi

The DeFi world is up and running with applications that are already making their impact felt. The following are some of the most popular DeFi use cases out there today:

☑️MakerDAO. This is a decentralized autonomous organization running atop Ethereum’s blockchain. It has a dual coin system that aims to mitigate the volatility of cryptocurrency. The MakerDao platform has two tokens: Maker – which is volatile and fluctuates like any other crypto and is used to govern the Maker platform, and DAI, a decentralized stablecoin whose value is fixed in a 1DAI = 1USD formula. Makercoin utilizes external market economics to allow DAI to be a stablecoin.  

☑️Dharma Protocol. This is a finance application based on the Ethereum blockchain that democratizes borrowing and lending. As a lending platform, Dharma has all the works of a traditional lending platform – except that it expands finance in that anyone, anywhere, can access the Dharma platform as long as they have an internet connection. 

☑️Uniswap. Uniswap is an Ethereum blockchain-based decentralized exchange that allows individuals to trade ether and ERC-20 tokens. Thanks to its decentralized protocol, there is no need for middlemen – which saves costs, and users have complete autonomy over their crypto holdings.

☑️Bloom. Also, Ethereum-based, Bloom is a credit scoring and identity verification platform that aims to reduce credit fees, increase credit access, make credit histories shareable across countries, and make credit risk assessment fairer. Through Bloom, individuals with little to no credit stand a better chance to get access to loans. 

☑️dYdX This is a DEx that allows traders to exchange cryptocurrency derivatives. Derivatives are financial instruments that derive value from an underlying asset, e.g., Bitcoin futures. Via dYdX, traders can exchange their crypto derivatives of choice in a censorship-free, peer-to-peer, and fairly priced environment. 

Final Thoughts

By creating a financial system that’s open to all, accessible, affordable, and transparent, DeFi promises to wrestle economic power from those at the top and give it back to the people. And it proposes a powerful use of blockchain technology – decentralized financial services ranging from lending to asset issuance, to open marketplaces, to prediction markets, to censorship-free crypto exchanges, and more.

Categories
Cryptocurrencies

Your Complete Guide to Tether

The idea behind cryptocurrency was that it would be used side by side, or better, outmatch fiat currency in everything.

The idea behind cryptocurrency was that it would be used side by side, or better, outmatch fiat currency in everything.

The idea behind cryptocurrencies was that they would be used side by side, or better, outmatch fiat currency in everything. cryptocurrencies would be quicker, more secure, more efficient, and so on. But as it grew popular, it soon became apparent that cryptocurrencies were extremely volatile. This volatility renders them untenable for use in daily transactions – necessitating the advent of stablecoins. Today, Tether is the poster child of stablecoins, or so to speak.

This guide walks you through everything you need to know about Tether, this thing called stablecoin and the seemingly endless controversy that Tether finds itself embroiled in.

What is Tether?

Tether is a cryptocurrency whose tokens are pegged to an equivalent amount of fiat currencies like the US dollar, the Chinese Yuan, the Euro, and so on. The Tether network’s native tokens are called Tether, and they trade by the name USDT.

Launched in July 2014 and opened for trading in February 2015, Tether was first called RealCoin, later rebranded as Tether by Tether LTD,  the company behind the project.

Tether belongs to an emerging type of cryptocurrency called ‘stablecoins.’ Stablecoins operate under the premise that cryptocurrency valuations do not have to be as unpredictable as the traditional cryptocurrency.  As such, stablecoins are backed by a reserve of fiat currencies or other cryptocurrencies that rely on external market economics (e.g., MakerDao) to create stable coins.

More on Stablecoins

In today’s crypto scene, the vast majority of cryptocurrencies are used purely as speculative trade instruments without much ‘’real-world” use. But this is not what cryptocurrency was invented for. The idea behind stablecoins is to provide stability for cryptocurrencies, which would make them suitable for use as mediums of exchange and stores of value.

Since cryptocurrencies are characterized by wild price swings, stablecoins attempt to provide price stability and offer fast processing power (for massive use ) and, at the same time, the privacy and security of cryptocurrencies. Also, investors can bet on stablecoins because they won’t experience the same volatility associated with cryptocurrencies.

In short, the original cryptocurrency vision was for it to compete with fiat currencies in purchasing power, be deflationary, and suitable for payments — Stablecoins attempt to model this ideal behavior.

How Does Tether Work?

Tether is based on different blockchain platforms. One version uses the Bitcoin blockchain-based Omni platform, with the other utilizing Ethereum’s blockchain.

The Bitcoin blockchain’s version inherits the stability and security of the world’s first blockchain.

Tether coins are collateralized by one US dollar, meaning a Tether coin is backed by and can be redeemed at any time for a US dollar.

Previously, Tether supported only the US dollar as a redeemable currency but has since added the Euro and the Chinese Yuan to its repertoire. 

What’s the Point of Tether? 

As we previously stated, cryptocurrencies are known for their incredibly wild volatilities. Yet that is partly why they are so popular – because traders and investors can purchase a cryptocurrency and sell it when prices shoot up – making significant profits.

Tether, being predicated on a stable, fixed price offers no thrill sufficient enough for crypto investors.  The cacophony associated with the crypto market – the pumps, dumps, bubbles is absent when it comes to Tether. Owning the crypto is similar to having a bank account that gives you zero returns.

So what’s the point of Tether?

Let’s explore the reason why Tether is useful, after all:

Transaction times. Money deposits and withdrawals on foreign exchanges are notoriously time-consuming processes that can even take up to a week to complete. Also, banks are closed after 5 pm, during the weekends and holidays. Thus, the traditional way is no guarantee for fast, quick, and reliable transactions. On the other hand, Tether transactions take just minutes. Traders can take advantage of this to quickly shift funds and grab arbitrage opportunities in the crypto market.

Transaction fees. The traditional money transfer system is characterized by expensive costs. On top of that, if you’re using another currency not supported by a particular exchange, you’ll be charged an extra conversion fee. By contrast, Tether charges very minimal to zero fees for transactions within its wallets.

Price Stability.  While cryptocurrencies’ volatility is a good thing for trading, the reality is not as rosy when you’re at risk of losing money. Countless people have invested in crypto waiting for it to spike – with no avail. Trading cryptos, while exhilarating and potentially lucrative, comes with a great deal of risk. That’s where a stablecoin like Tether comes in useful.

For example, imagine you’re trading Bitcoin for Litecoin. You convert BTC to buy LTC. Litecoin rises by 20%. You wish to make a profit and sell your LTC for BTC. While your trade is undergoing, Bitcoin suddenly falls by 30%. While you were right about LTC’s direction, you suffer a loss as a result of BTC taking a dip. 

Tokenomics of Tether

As of 3rd January 2020, Tether ranks at an impressive #6 position in terms of market capitalization, with the number standing at $4, 639, 755, 545. Its 24-hour volume is $39, 402, 491, 795, with a circulating supply of 4, 642, 367, 414. Tether’s total supply is 4, 776, 930, 644 USDT. Its all-time high was $1.21 in May 217, 2017.

Where to Buy and Store Tether

The most common way to acquire Tether is to exchange another cryptocurrency for it. There are hundreds of cryptocurrencies that are paired with the crypto.

You’ll find Tether at some of the most popular exchanges, including Binance, Bitfinex, Kraken, Bittrex, Coinut, Poloniex, Exmo, and so on.

The ERC20 version of Tether can be stored in any Ethereum-compatible wallet, including MyEtherWallet, Trust Wallet, MetaMask, Atomic Wallet, Mist, and so on.

It is also highly recommended you store your coins in hardware wallets – which are immune from online vulnerabilities such as hacking, phishing, etc. Some reputable options include Ledger Nano, Trezor, Coinomi, Exodus, etc.

There’s also the option of storing your crypto on the dedicated Tether wallet web interface. However, you might rethink this option not only because it supports just Tether, but because its security history is less than satisfactory.

The Myriad Controversies of Tether

This guide would be remiss if we didn’t mention the litany of controversies that have beset Tether since its launch. 

Let’s look at some of the controversies below:

In May 2016, the International Consortium of Investigative Journalists leaked documents that pointed to Tether Ltd and Bitfinex as having the same CFO, CEO, and CSO. In what is called the Paradise Papers, it was revealed that both companies are operated by the same group of people and were not separate entities as the cryptoverse had been led to believe.

  • In April of 2017, Wells Fargo withdrew as the correspondent bank between US customers and Tether/Bitfinex. The two companies filed a lawsuit against the bank, only to withdraw it later.
  • Tether inexplicably terminated its relationship with a third-party audit firm that was to conduct an independent audit on its reserves. The audit was meant to establish if indeed Tether tokens in circulation were collateralized by real reserves.  Since then, no audit has ever been conducted to this day. 
  • In November 2017, a hacker made away with $31 million worth of USDT. The company quietly created a temporary hard fork to blacklist the address that had the funds – drawing criticism for that move.
  • In December 2017, the Commodity Futures Trading Commission issued a subpoena to Tether and Bitfinex on the grounds of lack of audit and what seemed to be its manipulation of Bitcoin’s price.
  • In June 2018, Bloomberg published a report titled “Crypto Coin Tether Defies Logic on Kraken’s Market, Raising Red Flags.” The report was published in response to what seemed as an unchanging price of Tether regardless of changes in the volume of buy and sell orders.
  • In April 2019, the New York Attorney General’s office accused Tether and Bitfinex of engaging in a collaborative cover-up of the loss of $850 million of co-mingled client and investor funds. The sum was previously held by a Panamian entity called Crypto Capital Corp. Per the court filings, authorities seized the money in various countries. Bitfinex had allegedly received $700 million from Tether’s reserves to hide the loss.

What’s the Future for Tether?

To date, Tether is yet to release any evidence that all Tether coins in circulation are backed by real reserves, but it insists so. In June 2019, the law firm Freeh, Sporkin, and Sullivan composed “The Tether Transparency” report – which indicated that Tether had real reserves backing the token. However, crypto experts were not satisfied with the report, which they insisted was no audit, but mere data obtained from Tether’s bank accounts.

As well, many of the controversies surrounding Tether have been debunked as FUD (Fear, Uncertainty, and Doubt) that’s so rife in cryptoverse.

Tether appears to be going steady despite all the storms. This can be attributed to the crypto community’s support for it as the most popular stablecoin, and the crypto project’s fighting back, sometimes with proof, against all allegations.

Summing it all, any external threats that would bring Tether down result mostly to naught, as it remains a favorite within the community.

Categories
Cryptocurrencies

What is QTUM? Demystifying the First-Ever Proof-of-Stake Blockchain

Even the most casual blockchain fan has most likely heard of Bitcoin and Ethereum. The two blockchains are the most popular in the blockchain and crypto space – thanks to their pioneering technologies. Bitcoin’s security and Ethereum’s smart contracts’ capability are peerless, a decade and six years after they were launched, respectively.

Even the most casual blockchain fan has most likely heard of Bitcoin and Ethereum. The two blockchains are the most popular in the blockchain and crypto space – thanks to their pioneering technologies. Bitcoin’s security and Ethereum’s smart contracts’ capability are peerless, a decade and six years after they were launched, respectively.

Even the most casual blockchain fan has most likely heard of Bitcoin and Ethereum. The two blockchains are the most popular in the blockchain and crypto space – thanks to their pioneering technologies. Bitcoin’s security and Ethereum’s smart contracts’ capability are peerless, a decade and six years after they were launched, respectively.

Now imagine if the two chains’ capabilities could be harnessed and offered on a single platform. That would be huge. And it’s precisely what Singapore-based crypto and blockchain project, Qtum has done.

In this guide, we’ll delve into the Qtum ecosystem and explore all the exciting details you need to know. 

But first, let’s get the basics out of the way.

What is Qtum?

Qtum,  – pronounced as ‘Quantum,’ is a cryptocurrency and blockchain project that combines Ethereum’s smart contract technology with Bitcoin’s security and stability to support decentralized applications (DApps) and smart contracts platform. The project’s white paper states that Qtum is the first “UTXO-based smart contract systems with a proof-of-stake (PoS) consensus model.”(UTXO stands for ‘unspent transaction output.’ It’s a blockchain model first developed by Satoshi to solve the double-spending problem of digital currencies.)

Bitcoin and Ethereum are the two most valuable cryptocurrencies both in market cap and by being trailblazers in the space. By bridging the functionalities of both chains, Qtum hopes to have the best of both worlds.

The Best of Both Worlds

As we’ve noted above, Bitcoin and Ethereum are the two blockchains that broke the ground for other crypto projects, each in its own way. Bitcoin, while being the oldest, remains the securest of blockchains.

Ethereum, for its part, is the first reliable platform for developers to create smart contracts and decentralized applications.

Qtum has created an “Account Abstraction Layer (AAL)” to facilitate Ethereum’s Virtual Machine integration on Qtum’s UTXO blockchain. Abstraction is a concept in computing that means hiding the complexity of the software to allow for its smooth implementation and use. With abstraction, anyone can use a technology without having to master the technicalities underlying it.

For example, to use a smartphone, you don’t need to be a programmer or developer. If you need to call someone, you don’t need to know how pressing the call icon activates the circuit inside the phone, and so on. In short, abstraction makes complex technologies accessible to the average person.

This simple innovation has enabled it to offer a secure smart contract platform that combines Bitcoin’s and Ethereum’s best, and one that’s interoperable with both chains. For the Qtum community, this is big because scalability technologies on both blockchains e.g., Raiden, Lightning Network, Segwit, and so on, will be operable on QTUM.

Who Is The Team Behind Qtum?

The Qtum project draws its talent from multiple sources. The team comprises members from both the Bitcoin and Ethereum communities as well as outfits like Baidu, Alibaba, Tencent, NASDAQ, and more. The forefront members of the team include Patrick Dai, Jordan Earls, Yungi Ouyang, Baiqiang Dong, Neil Mahi, and Xiaolong Xu. This group combines experience from blockchain, theoretical mechanics, software development, web development, and so on.

Qtum, the First Proof-of-Stake Blockchain

Another remarkable feature of Qtum is its use of a Proof-of-Stake (PoS) consensus protocol. The platform’s implementation of PoS was the first in the blockchain space. PoS is seen as superior to the Proof-of-Work consensus protocol first introduced by Bitcoin. In PoW, miners compete to solve computational puzzles, upon which the first miner to solve a puzzle receives block rewards.

PoW, however, has various challenges, including:

  • It gobbles up excessive amounts of energy – which is too expensive and bad for the environment
  • People or entities that have access to resources have an unfair advantage over those who don’t because they can afford the massive amount of power required as well as powerful specialized mining computers. This goes against the decentralization that cryptocurrency is supposed to embody.
  • It uses real-world resources

Qtum and Mobile

The vast majority of blockchains focus on computer-based applications. Qtum changed this by allowing for mobile users – both individuals and businesses, to be able to run smart contracts and decentralized apps from their mobile phones.

Co-founder Patrick Dai explained QTUM’s ‘Go-Mobile’ strategy to Bitcoin Magazine, saying: “We want Qtum to be the easiest blockchain network to use…Today, everyone and everything is moving, that’s why we can’t have a network that is run by stationary objects.”

How does Qtum achieve this?

Existing DApps and smart contract platforms require you to have a full copy of the blockchain. People that have smaller devices or have no access to high-speed internet cannot hack this. Qtum circumvents this via the Simple Payment Verification (SPV) protocol, which has default access from Qtum thanks to EVM and UTXO integration. This SPV protocol allows for access to EVM with mobile-customized lite wallets and removes the need to download the whole blockchain.

Decentralized Governance Protocol

Another exciting feature of Qtum is its Decentralized Governance Protocol (DGP) that allows for modification of blockchain features like block size, block processing time, gas amounts, and so on without the need for a hard fork and ecosystem disruption. DGP, for instance, can increase block capacity up to 32 MB. Any change to blockchain parameters is done on-chain – without third party software or any contribution from network participants. 

Tokenomics of Qtum

QTUM’s ICO lasted from March 2016 to April 2017. A hundred million coins were distributed, with 51% going to the public. The remainder was split up as follows: 20% for the development team, early supporters, and founders, another 20% reserved for business development, with the remaining 9% going to research, growth strategy, and education.

As of Jan 31, 2020, QTUM ranks at #35 in terms of market cap, Its market cap is $202, 194, 252, with a 24-hour volume of $202, 194, 252 and a circulating supply of 96, 349, 532 QTUM. It has a total supply of 102, 099, 552, while its maximum supply is 107, 822, 406 QTUM. The token has an All-Time High of $99.87 (Jan 07, 2018) and an All-Time Low of $1.47 (Sept 24, 2019).

Last Thoughts

Qtum’s abstraction layer that enables users to use Ethereum’s smart contracts via the Bitcoin blockchain and its DGP platform that facilitates seamless blockchain modification are blockchain firsts. Thanks to these technologies, enterprises and even individuals can take advantage of blockchain technology more straightforwardly than was ever possible. The project has the right tools in its arsenal to make it successful, as long as it continues with the same innovative spirit in an ever-evolving blockchain world.

Categories
Cryptocurrencies

The Three Generations of Blockchain

Subtly introduced to the world a decade ago by the mysterious Satoshi Nakamoto, blockchain is the technology at the core of cryptocurrencies. In its early days, it was the subject of admiration and fervor – thanks to its groundbreaking immutability (irreversibility), utter transparency, and enhanced security attributes.

Subtly introduced to the world a decade ago by the mysterious Satoshi Nakamoto, blockchain is the technology at the core of cryptocurrencies. In its early days, it was the subject of admiration and fervor – thanks to its groundbreaking immutability (irreversibility), utter transparency, and enhanced security attributes.

Subtly introduced to the world a decade ago by the mysterious Satoshi Nakamoto, blockchain is the technology at the core of cryptocurrencies. In its early days, it was the subject of admiration and fervor – thanks to its groundbreaking immutability (irreversibility), utter transparency, and enhanced security attributes.

Today, blockchain is still a young technology. But that doesn’t mean it doesn’t keep changing or improving, just like any other technology.

Consider the internet. The internet we know wasn’t like that in the beginning. When we look back, we can point to milestones that were achieved to culminate into the one we’ve got today.

In the sixties, we witnessed the first wide-area computer networks, followed by the electronic mail cash system and the ethernet in the seventies. The nineties brought with them more advanced developments like the World Wide Web, the first browsers, and so on. Each of these developments made the internet more reliable than it had been prior and contributed to the internet that we know today.

Just like with the internet, we can look back and say blockchain has evolved in certain ways since its inception. Each stage brought with it novel inventions that were limited or nonexistent in its forerunner. Based on this, we can classify blockchain’s existence into three generations.

Before we dive into each, it’s worth pointing out that blockchain’s development is interesting in that each succeeding generation is not necessarily more successful than its predecessor. This was always blockchain’s nature – breaking the mold in every trait. Every generation has carved out its space in the industry, and each is known for its unique contribution to the world of blockchain. With that, let’s dive in and see how the blockchain baby has grown to date.

The First Generation: Bitcoin and Cryptocurrencies

Blockchain, as we know it today, was first proposed by Bitcoin’s developer Satoshi Nakamoto in the cryptocurrency’s white paper. At the heart of the blockchain is a publicly distributed ledger that utilizes cryptography for the security of the network.

A blockchain comprises blocks that are linked together by cryptography. A ‘block’ here is a spreadsheet or a ledger containing information about a certain number of transactions.  The chain is a cryptographic passcode of sorts that must be ‘solved’ before accessing the next block of transactions.

Blockchain enables peer-to-peer transactions between network participants. This means there’s no central party authorizing or overseeing transactions – as a bank does for its customers, for example. For this reason, blockchain has been branded as “the greatest invention of the internet” and the “internet of money.”

In the same way that the internet decentralized information, blockchain might be the herald of decentralized finance.

While Bitcoin, the first application of blockchain, has broken the ground for all manner of blockchain-based applications, it’s hard to gloss over its inefficiencies like its inability to support smart contracts or its rather slow throughput (handling a mere seven transactions per second). As well, Bitcoin utilizes a ‘Proof-of-Work’ (PoW) consensus mechanism that requires computing complex mathematical problems. Due to the complexity involved, PoW is time-consuming and uses colossal amounts of energy comparable to the annual output of an entire country. There’s also the issue of compromised security in the event of a 51% attack.

These inefficiencies raise questions about its long-term sustainability, and its ability to support Bitcoin as a global currency leave alone compete with traditional money systems.

The Second Generation: Ethereum and Smart Contracts

In a way, we could say that we’re currently living in the second generation of blockchain. The second generation was instigated by developers who believed the blockchain was capable of so much more than being a platform for digital money.

The Ethereum blockchain is the embodiment of the technology’s second generation. Its developers, with Vitalik Buterin at the forefront, actualized the idea of smart contracts. Smart contracts are ‘smart’ in the sense that they are self-executing, do not need third parties, and are highly accurate (by virtue of being immutable).

As well, participants in a smart contract can log in at any time to view the terms of the agreement. Smart contracts eliminate any possibility for fraud, thanks to the immutability of the records. In the future, we could very well see agreements like marriages, bonds, trustees, and the like being enforced via smart contracts. And since these types of contracts are self-enforcing, the need for parties like lawyers, middlemen, regulators, etc. is removed.

It’s also on Ethereum’s blockchain that developers can build exciting decentralized applications (DApps). To understand DApps, think of Facebook and Google. These are two centralized applications that wield the power that they do because they are centralized. By contrast, decentralized applications have no central authority that regulates what users do on the platform. At the same time, user data is solely in the hands of who it belongs to – users.

Ethereum’s world of possibilities does not end there. Today, aspiring cryptocurrency and blockchain projects can raise capital via the blockchain using smart contracts. Ethereum also empowers new crypto projects to build their platform atop it. Today, over 200 000 crypto tokens that provide value to users everywhere benefit from Ethereum’s technology.

While Ethereum showed everyone that blockchain was capable of more, it is not without limitations. The network also faces the same scaling challenges as Bitcoin, making it difficult to provide reliable services to millions of users from around the globe. It also uses the same PoW mechanism as Bitcoin, consuming colossal amounts of power in the process.

The Third Generation, and the Future

Currently, the inability to scale is the bane of blockchain’s existence. Many blockchain and cryptocurrency solutions after Bitcoin and Ethereum have attempted to solve this, but with varying results. Going forward, it’s abundantly clear that scalability is the most important development that will emerge out of the third generation of blockchain. Whether that will require shaking the current blockchain setup or the use of ‘second-layer’ technologies, scalability is the main priority for future blockchain.

Newer kids on the block are also trying to improve interoperability across chains. The PoW mechanism is being replaced by the Proof-of-Stake mechanism and other novel consensus protocols that are faster, do not gobble up excessive power, and are generally more effective. Beyond this, new ideas to improve blockchain are always being proposed and implemented.

The Bottom Line

‘Change is the only constant thing’ definitely applies to blockchain too. We can expect developers to keep rolling out innovative ideas for the technology, although it’s difficult to say exactly where any new developments will take us. As usual, blockchain enthusiasts are uber keen to see what the next exciting thing is.

Categories
Crypto Daily Topic

Bitcoin Cash ABC vs. Bitcoin Cash SV – Examining the Bitcoin Cash Hash War

The debate about Bitcoin’s scalability began almost with its very inception. A few years later, that debate tore the Bitcoin community right down the middle. The core of the matter was Bitcoin’s 1MB block size. Satoshi wrote a 1MB limit on the code to prevent the block size from being up to miners’ discretion, which […]

The debate about Bitcoin’s scalability began almost with its very inception. A few years later, that debate tore the Bitcoin community right down the middle. The core of the matter was Bitcoin’s 1MB block size. Satoshi wrote a 1MB limit on the code to prevent the block size from being up to miners’ discretion, which […]

The debate about Bitcoin’s scalability began almost with its very inception. A few years later, that debate tore the Bitcoin community right down the middle. The core of the matter was Bitcoin’s 1MB block size. Satoshi wrote a 1MB limit on the code to prevent the block size from being up to miners’ discretion, which would lead to some miners producing bigger blocks than others and potentially causing the chain to split.

However, Satoshi certainly didn’t envision the firestorms that would later erupt out of this issue. As transaction volumes increased on the chain, it became clear that some things needed to change. But what would change, and how, was the main bone of contention in the community.

This contention gave birth to the Bitcoin Cash hard fork, which, paradoxically, later split into Bitcoin Cash ABC and Bitcoin Satoshi’s Vision – for the same reasons Bitcoin Cash had split from Bitcoin.

What was the lead up to this perplexing chain of events? Let’s dive into the famous ‘hash war,’ how it began, its implications, and its conclusion.

What is Bitcoin Cash, and Its Origin? 

Before we delve into Bitcoin cash and its origin, we need to look at the events that precipitated its creation. These events are the scalability issues facing Bitcoin and the disagreements among ‘factions’ in its camp as to how to address them. 

Bitcoin’s block size limit of 1MB meant that as the network grew in popularity and more people used the network, the network became clogged, leading to slow transactions and high transaction fees. It also meant the network couldn’t compete with payment models like Visa, which processes thousands of transactions per second, as compared to Bitcoin’s seven transactions per second. 

This issue meant a scaling solution had to be created. The problem is the Bitcoin community couldn’t come to a consensus as to how it would be done. One group wanted to maintain the 1MB block sizes and look for a scaling solution that would operate off of the main blockchain. The other group wanted to increase the block size and allow for more transactions in each block while keeping transaction fees low. However, this idea was met with censorship and indignation from the other group.

In 2017, Bitcoin had achieved mainstream status, and its popularity had grown more than ever. The foreseen transactions backlog that would slow down the network were now a reality. Network users were already complaining of several days waiting time before their transactions could be confirmed. For your transaction to be confirmed fast, you had to pay higher transaction fees. This also meant that Bitcoin could not be relied upon to conduct everyday transactions like micropayments. 

At this point, one camp suggested ‘Bitcoin Unlimited,’ an upgrade to increase block sizes. The other camp suggested a Segregated Witness (SegWit), an off-chain technology that would retain the block size, but also allow for faster transactions. 

However, Bitcoin Unlimited meant the network had to hard-fork, which meant the new version would not be compatible with the older version, and users all over the world would have to migrate to the new version. The SegWit camp preferred to maintain the status quo and maintain Satoshi’s version, whilst working on a solution that wouldn’t necessitate hard-forking. Bitcoin Unlimited also meant that miners with large processing power would have an unfair advantage over those with limited resources – which was against the democratization that Satoshi envisioned. 

The SegWit’s camp idea was to ‘segregate’ some part of the transaction (mainly transaction signatures) and store it outside the main chain, hence creating more space in each block. SegWit proponents viewed it as a less risky approach. However, the opposite camp saw it as a temporary solution to a permanent problem. 

The 2017 Hard Fork and SegWit2x

On August, 1, 207, the vast majority of Bitcoin miners indicated their support for SegWit2x. SegWit2x meant a potential implementation of SegWit with an agreement to later increase the block size limit to 2MB. 

However, a pseudonymous contributor going by ‘Shaolin Fry’ suggested a user-activated soft fork (UASF) that would implement SegWit without the contribution of miners. A UASF would comprise users, Bitcoin exchanges, and Bitcoin businesses. Since the users outnumber miners, it was clear a SegWit implementation was going to be effected without the participation of miners. (Miners were against SegWit because it would supposedly expose a ‘covert’ algorithm that ASIC mining machines were using to boost their processing speeds). 

Even then, a part of the community was not satisfied with SegWit – electing to initiate a hard fork of the Bitcoin chain. The new blockchain was called Bitcoin Cash, and it has an 8MB block size compared with Bitcoin’s 1MB. Bitcoin Cash went on to become one of the most successful cryptocurrencies, entering the top ten in terms of market capitalization. 

Bitcoin Cash developers envisioned a blockchain that allowed faster transactions and hence be used as a payment system for everyday transactions. The argument was Bitcoin can be an investment asset, but Bitcoin Cash can be a cheaper and faster payment model as compared to the traditional system. This, they argued, was what Satoshi had intended. 

One Year Later, More Block Size Limit Wars 

When the world thought the Bitcoin block size push-and-pull was over, Bitcoin Cash itself split into Bitcoin Cash ABC (ABC for Adjustable Blocksize Cap) and Bitcoin Cash SV (SV for Satoshi’s vision). Bitcoin Cash ABC proponents wanted to further increase the block size as well as enable the running of smart contracts on the platform. 

Bitcoin Cash ABC (BCH ABC) has implemented some changes such as Canonical Transaction Ordering Route (CTOR). CTOR means that transactions are arranged by following a dictionary sequence, as opposed to the Topological Transaction Ordering Route (TTOR) used by Bitcoin. CTOR is supposedly a more effective and elegant way of arranging transactions. Bitcoin Cash ABC also maintained the simpler name ‘Bitcoin Cash.’ 

But not everyone was enthusiastic about the idea of making the BCH blockchain a smart contracts platform. The leader of the anti-BCH ABC crowd was Craig Wright, a controversial figure who insists he’s the original creator of Bitcoin (earning himself the pejorative moniker ‘Faketoshi’). Another vocal critic of BCH ABC was Calvin Ayre, owner of the powerful mining entity, Coingeek. On his part, Ayre argued that miners would not pick up CTOR. 

The anti-BCH ABC camp led to the creation of Bitcoin SV. The BSV camp argued that it represented the true vision of Satoshi Nakamoto. The new version also had some upgrades to facilitate faster transactions. 

The two most prominent figures in the BCH camp were Roger Ver and Jihan Wu. Ver is the owner of Bitcoin.com, the Bitcoin exchange, while Jihan Wu is the co-founder of Bitmain, a Bitcoin hardware manufacturer owner of mining company Antpool. 

Hash Wars

After the hard forks, what followed next was a battle on who would get to keep the BCH ticker. With both sides having heavyweight owners of mining companies, a ferocious war was impending. Each side used their mining power on their chains to push liquidity of each crypto in the market – hence the name ‘hash rate war.’

Soon, however, the hash war came to naught – with both sides burning millions of dollars into a mining contest that incurred losses amounting to millions, for both forks. According to bitcoinist.com, BCHSV incurred a loss of $2.2 million, while accruing a negative profit margin of 441%.On its part, BCHABC incurred $1.3 million in losses and a negative profit margin of 51%.

Both sides also implemented replay protection on their respective chains to prevent accidental use of coins on both chains by users.

The hash wars also hurt the whole cryptocurrency market. Bitcoin, in particular, tanked to its lowest level that year. And major crypto exchanges like Coinbase, Kraken, and Bittrex assigned the BCH ticker to the BCHABC hard fork.

The BSV side soon agreed to let go of the ‘Bitcoin Cash’ name as well as the BCH ticker and reluctantly agreed to adopt the name ‘Bitcoin SV’ and the BSV ticker.

The two coins went on to compete against each other in the market, just like any other cryptocurrencies.

Bitcoin Cash VS Bitcoin SV Today

After the war between the two coins, Bitcoin Cash stayed ahead in terms of price and market capitalization. Some crypto exchanges like Kraken and Binance have gone on to delist BSV.

BSV surprised everyone in early 2020 by surging past 300% to a price of $372 and briefly overtaking Bitcoin Cash to become the fourth largest crypto by market cap. Many people speculated the rise in BSV is attributable to Craig Wright’s current legal woes – which have helped increased publicity for the coin.

But BCH has since reclaimed its position over BSV. As of January 27, 2020, BCH is trading at $368.55, with a market cap of $6, 724, 517, 583, while BSV is trading for $284.05 with a market cap of $5, 176, 171, 633.

Final Thoughts

We don’t know who Satoshi is, but we’re certain he didn’t anticipate, neither would he have liked the acrimonious factions that arose out of his 1MB block size idea, and one that threatened to bring Bitcoin on its knees. Thankfully, Bitcoin has since rebounded from the hash war implications, as have the two hard forks that arose out of it. We can only wait and see future dynamics playing between both hard forks. 

 

Categories
Cryptocurrencies

Your Complete Guide to Cardano

Launched in 2015, Cardano has defied expectations to rise to the top ten in market capitalization. For those not privy to the inner workings of the Cardano project, it can be hard to pin down what has catapulted its rise to the highest sanctums of cryptocurrency, despite being less than popular on the price side.

Launched in 2015, Cardano has defied expectations to rise to the top ten in market capitalization. For those not privy to the inner workings of the Cardano project, it can be hard to pin down what has catapulted its rise to the highest sanctums of cryptocurrency, despite being less than popular on the price side.

Launched in 2015, Cardano has defied expectations to rise to the top ten in market capitalization. For those not privy to the inner workings of the Cardano project, it can be hard to pin down what has catapulted its rise to the highest sanctums of cryptocurrency, despite being less than popular on the price side.

Nicknamed the “Ethereum Killer,” Cardano has an intriguing approach and pretty remarkable technology.

So, what is it about Cardano that makes it worthy of the “Ethereum Killer” tag? In this guide, we’ll find the answer to that query, as well as explore some of the exciting innovations of this project.

What is Cardano?

Cardano is a cryptocurrency project and blockchain-based smart contracts platform. Cardano believes digital cash is the future of money and aims to create a platform in which people from all over the world can send and receive money in a fast, direct, and secure manner.

Cardano was conceptualized by Charles Hoskinson, an Ethereum cofounder. He calls it a third-generation cryptocurrency – meaning it exists to improve on the scaling problems and other weaknesses of the first generation (Bitcoin) and second-generation (Ethereum) blockchains.

Cardano uses the new Haskell programming language, a ‘functional language’ that enables mathematical proofing of the code’s future behavior.

The Cardano platform has a native cryptocurrency known as ADA, with which users can send digital funds. It also houses two layers: the Cardano Settlement Layer (CSL) and the Control Layer. CSL is used to settle transactions that are conducted with ADA, while the Control Layer will be used to host smart contracts.

Who is Behind Cardano?

Three distinct organizations have pooled resources together to create Cardano. There’s the Cardano Foundation, a Switzerland-based standards body whose job is to support the Cardano community and fulfill regulatory and compliance requirements. The other is Input Output Hong Kong (IOHK), a well-known organization in the cryptosphere. And then there is Emurgo, a startups investor tasked with assisting businesses to build on the Cardano blockchain.

What’s Special with Cardano?

Unlike its contemporaries, Cardano is a peer-reviewed blockchain. Before protocols are greenlit for release, they’re first reviewed by a network of academics and researchers from various universities. While other blockchain projects present just a white paper, the Cardano team goes the extra mile and crafts several academic papers for researchers, investors, and so on.

The rationale behind this? The team wants to ensure that the platform is secure, scalable, and fit for mass usage once it goes mainstream. As such, there’s much scientific rigor involved as there would for a mission-critical system.

How Does Cardano Work?

As previously mentioned, the Cardano comprises a Cardano Settlement Layer and a Control Layer. In the long term, Cardano hopes to be used as a medium of exchange and a smart contract platform that can be interoperable with the traditional banking system.

At the very heart of Cardano is Ouroboros. Ouroboros is an algorithm-based Proof of Stake Protocol through which miners can mine ADA. The protocol is also custom-built in a manner that saves as much energy and time as possible.

What does Ouroboros entail, you wonder? Let’s find out below.

What is Ouroboros?

Ouroboros works based on ‘slot leaders’ who are akin to miners in the Proof of Work protocol. Slot leaders are the ones who determine which blocks will be added on the blockchain, with a maximum of only one block per slot leader at any time. Time is divided into ‘epochs,’ and every epoch has a slot leader. Also, immediately after one epoch ends, another one begins.

In case a slot leader misses their chance to choose a block leader for one reason or another, they have to wait until the next time they’re eligible to become block leaders. In every epoch, at least more than 50% of blocks has to be generated. 

To be eligible for a slot leader position, a participant has to own at least a two percent stake in Cardano.  Slot leaders are also electors. When an epoch is in progress, electors choose the slot leaders for the next epoch. Also, the more stake you own in Cardano, the bigger your chance of being selected as a slot leader.

Now, slot leaders wield a considerable amount of power. For this reason, extra caution must be exercised to ensure as much fairness as possible. Cardano achieves this by implementing a ‘multiparty computation’ (MPC). In an MPC, each elector conducts a random action known as “coin tossing,” after which they share their results with the rest of the electors. In short, the end result is randomly generated, but the final value is collectively arrived at.

Statistics of Cardano (ADA)

As of 28th January 2020, Cardano is trading at $0.051903, with a 10th place market capitalization of $1, 345, 697, 885. Also, its 24-hour trading volume is $179, 384, 436. Its all-time high was $1.33 on Jan 04, 2018, while its all-time low was $0.017354.

ADA’s circulating supply is 27, 927, 070, 538, while its total supply is 31, 112, 483, 745. The coin has a limited supply of 45 billion.

Is Cardano an Ethereum Killer?

Cardano has been dubbed the “Ethereum Killer” since it offers the same functionalities as Ethereum, but better.

Also, it is the first blockchain platform that utilizes peer-reviewed research, giving it an edge over other cryptos, at least in terms of rigorousness.

As well, Cardano has an impressive speed of 257 transactions per second (TPS), which stacks strongly against Ethereum’s current meager 15. Its Ouroboros proof of stake is superior over the typical proof of stake by being the first consensus mechanism to be mathematically proven as secure.

These features, and more, make Cardano an impressive blockchain. But that doesn’t mean it’s about to dethrone Ethereum, not yet.

First of all, Ethereum is a project under continuous improvement. Its developers are always working to improve its scalability and other functions. For instance, Ethereum plans to migrate from the current Proof Of Work to a Proof of Stake mechanism, which provides better room for scalability, is quicker, and is not as power-hungry as the former.

Moreover, being the first reliable smart contracts platform, Ethereum has somewhat of a loyal following – from the developer community to the crypto market to users.

For these reasons and more, it is unlikely that Ethereum will be unseated anytime soon, whether by Cardano or any other cryptocurrency.

The Coinbase Effect

As of January 2020, Cardano is yet to be listed on Coinbase, despite the exchange signaling it was considering the addition way back in July 2018. Cardano fans are still waiting with bated breath for this to happen.

Coinbase is big, not just in market volume but also in name. So, many wonder what this would mean for the Cardano price if it were to be listed.

First, it’s important to know a coin getting listed on the exchange does not herald its bullish rally for all the time to come. Many coins have been listed, surged in price thereafter, and went on to fizzle out.

It’s likely that ADA will shoot up in price as the exchange’s user rush in to get a piece of the Cardano action at an affordable price. From then on, the coin experienced up and down swings like any other crypto, depending on the improvements its developers will continually integrate on its blockchain. 

Also, Coinbase’s massive user base means massive interaction with the coin, and hence more liquidity. More liquidity means more investors, and more investors mean more support. Support often leads to an increase in value.

Conclusion

Cardano has distinguished itself from other crypto projects by being the first to be built on peer-reviewed protocols and pure mathematics. That fact alone gives it an edge over other similar projects. Also, the people leading it – heavyweights in the crypto scene, add massive credibility to the project. Cardano fans expect only great things from the project.

Categories
Crypto Daily Topic

Craig Wright Compared To Jesus amid His Book Being Dropped By Publisher

One of the tenets of Bitcoin, the world’s first cryptocurrency, is complete transparency. It’s therefore ironic (wonderfully so) that ten years after its launch, the world doesn’t know who its creator is, Or was. Predictably, that has led to a flurry of speculation about who designed Bitcoin, with many names being advanced as the possible candidates for the mystery creator. However, the candidates named as the potential creators have all but declined the suggestion.

One of the tenets of Bitcoin, the world’s first cryptocurrency, is complete transparency. It’s therefore ironic (wonderfully so) that ten years after its launch, the world doesn’t know who its creator is, Or was. Predictably, that has led to a flurry of speculation about who designed Bitcoin, with many names being advanced as the possible candidates for the mystery creator. However, the candidates named as the potential creators have all but declined the suggestion.

One of the tenets of Bitcoin, the world’s first cryptocurrency, is complete transparency. It’s therefore ironic (wonderfully so) that ten years after its launch, the world doesn’t know who its creator is, Or was. Predictably, that has led to a flurry of speculation about who designed Bitcoin, with many names being advanced as the possible candidates for the mystery creator. However, the candidates named as the potential creators have all but declined the suggestion.

Craig Wright, the Self-declared Satoshi

This is in stark contrast with Craig Wright, an Australian computer scientist who has fervently and consistently declared himself the creator of Bitcoin. The Bitcoin community has watched with bewilderment as he makes one claim after another. These claims are confounding, to say the least, especially considering Satoshi Nakamoto’s last publicly known message was in 2011 to Gavin Andresen, one of the developers associated with Bitcoin in the beginning. Also, much of Satoshi’s correspondence with the early Bitcoin community paint a picture of a person who was shy of the spotlight.

By contrast, Craig Wright is a man who laps all the attention and threatens to sue anyone who accuses him of fraud, including Vitalik Buterin, Ethereum’s creator. This is despite him refusing or being unable to provide any tangible proof that he is the creator of Bitcoin. Specifically, he hasn’t provided any proof that he wrote the original Bitcoin white paper or collaborated with any of the early developers.

Is Wright Like Jesus?

But that hasn’t prevented him from garnering sympathizers. One of these is Kevin Pham, a crypto writer who calls himself a Bitcoin SV minimalist and a reformed Bitcoin attack dog. With 26k Twitter followers at the time of writing, the man has a bit of following in the crypto community. It’s for this reason that his recent tweet comparing Craig Wright to Jesus raised eyebrows and generated a succession of disapproving comments. 

In his tweet, Pham boldly declares that Bitcoiners rejecting Wright is akin to Jews rejecting Jesus. He goes on to add history will judge Bitcoiners harshly. Of course, Bitcoiners are not buying it.

Wright’s Book Suspended

Meanwhile, a book purporting to dive into Wright’s place in Bitcoin has been suspended by an Australian publisher a week before it was to be published.  The book titled “Behind the Mask: Craig Wright and the Battle for Bitcoin” had been hotly anticipated by the cryptosphere, but it looks like it will not be forthcoming at least in the foreseeable future.

According to CoinGeek, a crypto publication owned by Wright’s friend, Calvin Ayre, the publisher has dropped the book indefinitely. The book had plenty of orders already placed, with Wright claiming he was one of the people who had ordered a copy.

Ayre published an angry tweet castigating the pulling, writing “how is it possible that a book about Craig and the creation of Bitcoin, was pulled a week before publishing and Craig was cooperating with the production and had ordered some for him and family and he finds out in an article by a nobody site that is blaming him for pulling it?”. He has since vowed to publish the book himself.

Rumors were rife in the crypto community that Wright had threatened the authors with litigation, but he has reportedly denied doing so. Mickey, an Australian news site, first broke the story that Affirm Press, the publisher, had dropped the book. In an email to the site, the publisher had expressed legal fears, stating, “Unfortunately, that book has been canceled from our publication list. The threat of publication was too high.” As for the source of legal fears, that remains a mystery.

Do you think Wright should be compared with Jesus? And do you think he is the creator of Bitcoin? Whatever the case may be, it’s clear the drama has no end in sight.

Categories
Crypto Daily Topic

Is Quantum Technology a Threat to Blockchain and cryptocurrencies?

Bitcoin’s underlying technology – blockchain – is hailed as an unrivaled, ultra-secure technology. And it’s true – Bitcoin’s cryptographic encryptions are some of the strongest in contemporary times. However, as is the norm with technology, the reality of ‘bigger and better’ is always looming.

Bitcoin’s underlying technology – blockchain – is hailed as an unrivaled, ultra-secure technology. And it’s true – Bitcoin’s cryptographic encryptions are some of the strongest in contemporary times. However, as is the norm with technology, the reality of ‘bigger and better’ is always looming.

Bitcoin’s underlying technology – blockchain – is hailed as an unrivaled, ultra-secure technology. And it’s true – Bitcoin’s cryptographic encryptions are some of the strongest in contemporary times. However, as is the norm with technology, the reality of ‘bigger and better’ is always looming.

Quantum computers, the super-powerful computers relying on naturally occurring phenomena to perform calculations, are becoming a reality. When Google announced that it had achieved “quantum supremacy” in 2019, the blockchain and crypto universe had legit cause for concern. This is because quantum computing is sufficiently powerful to compute equations spellbindingly quickly. And for this same reason, the very encryption securing Bitcoin and other cryptocurrencies might not be so strong, at least when it comes to quantum computing.

Is the quantum threat real, though, and if so, how immediate is it? And what does the future hold for blockchain in light of the quantum threat? We’ll answer these questions in this article – right after we dig into this quantum phenomenon.

What is Quantum Computing?

A quantum computer is any device that harnesses quantum mechanics to perform tasks. Quantum computers can achieve massive computational speeds because they rely on ‘quantum bits’ (qubits).

The regular computer uses binary units called bits to perform tasks. Bits can only represent one of two possible states at a single time: 0 or 1. However, qubits can represent both 0 and 1 states at the same time. The phenomenon is known as superposition, and it’s what allows quantum computers to perform calculations at ultra-fast rates.

Another state in quantum theory is entanglement – a state in which two members of a pair exist in the same quantum state. When two particles are entangled, a change of state in one prompts a change of state in the other, even if they are far apart from each other in physical space. Nobody knows the cause of this phenomenon, but pairing qubits this way in a quantum machine leads to exponential growth in the machine’s processing power.

Coming back to superposition – it’s an extremely hard state to achieve and just as hard to maintain. It’s an incredibly fragile state – with the slightest vibration or temperature change causing them to fall out of the superposition state. This is known as the ‘decoherence’ phenomenon. When quantum bits are ‘disturbed’ this way, they decay and eventually disappear. When this happens, the task at hand cannot be successfully completed.

To correct this, physicists use a variety of techniques to protect qubits from the outside world – like placing them in extremely cold fridges and vacuum chambers.

A quantum machine’s computational power is determined by the number of quantum bits it can leverage at the same time. The first experiments in the late 1990s yielded two qubits. These days, the most powerful computer can leverage 72 qubits. This computer is currently owned by Google.

Thanks to its superfast calculating speed, quantum computing can redefine entire industries for the better – from healthcare to finance to supply chain to transportation to weather prediction. 

Quantum Computing Vs. Blockchain

Blockchain and cryptocurrencies are not 100% foolproof (cue the many hacking incidents), but they remain one of the most secure technologies in modern times. People trust blockchain because of its revolutionary qualities like immutability, utter transparency, and high security.

But quantum computers are a real threat to the blockchain.

To begin with, blockchain transactions are encrypted with cryptography based on elliptic curve cryptography (ECC). But ECC is not “quantum-proof,” meaning a powerful quantum machine could potentially decrypt a crypto holder’s private keys and forge signatures. With crypto-based on trust – once that trust is broken, it could very well be the end of Bitcoin and other cryptocurrencies.

Right now, scientists are already aware of a possible algorithm that could break down many existing encryption techniques – including elliptic curve signatures. Researchers and mathematicians are already versed with how quantum machines could look like – and they worry about what that could mean for blockchain.

In fact, the general contention is that no one knows the sheer power that quantum computing could herald. It could very well exceed everyone’s expectations and render blockchain technology obsolete.

How Much Quantum Power Would Be Needed to Break Bitcoin?

Speaking to Forbes in October 2019, Dragos Illie, a quantum and encryption researcher at Imperial College London, said it would take at least 1500 qubits to have any effect on Bitcoin and other cryptocurrencies.

Going by achievements in quantum physics, it would take even decades before we can reach that milestone. As previously mentioned, the largest quantum machine has 72 qubits.

What do Researchers Say?

Researchers from the Russian Quantum Centre have noted that one of blockchain’s weaknesses is that it relies on one-way mathematical functions that are easy to run but difficult to run in reverse. These formulas are used to generate digital signatures as well as verify transactions.

A bad actor armed with a quantum device could perform these reverse calculations in a matter of seconds. They could also forge transaction signatures, impersonate crypto holders, and gain access to their wallets. Such an actor could also very easily meddle with the mining process. They could commandeer the public ledger and manipulate records.

The researchers suggested developing countermeasures to this threat immediately. One solution would be replacing the current digital signatures with “quantum-safe” cryptography. This cryptography would conceivably be able to withstand attacks from a powerful quantum machine. Another solution would be based on quantum internet – although that’s decades away. It would entail quantum-based wireless communication architecture that would unlock new possibilities for blockchain technology.

Other quantum researchers – Del Rajan and Matt Viser from Victoria University propose leaping straight to making blockchain a quantum-based system. Their idea envisions a blockchain-based on qubits that are entangled not just in physical space – but also in time itself. They rationalize that it would be difficult for malicious actors to retroactively alter records on the blockchain – as to do this would require destroying the particle altogether. However, this would only be possible after the actualization of a quantum internet.

What Do Practitioners Say?

While researchers propose solutions that are only possible in the far future, there’s a lot of hands-on research in this field that’s already going on. Quantum experts are already developing quantum cryptography to curb the threat of quantum computing on blockchain. However, experts differ on just how immediate the quantum threat is.

For instance, Yaniv Altshuler, founder of predictive analysis Endor Protocol said to Cointelegraph, the crypto website: “Quantum computers are becoming incredibly powerful…but there is no evidence that quantum computing can compromise the blockchain.”

Stewart Allen, CEO at quantum computing firm IonQ, believes that by the time quantum computing becomes powerful enough to pose a danger to the blockchain, security algorithms will have advanced to be able to counter them:

“There is no real threat of quantum computers breaking blockchain cryptography in the short-term…We’re at least a decade from quantum computers being able to break blockchain cryptography.”

Bitcoin advocate Andreas M. Antonopoulos believes the quantum threat is grossly overstated. In a 2018 YouTube Q&A, Antonopoulos said: “We can migrate quite easily to another algorithm. It’s not really as big a threat as people think it is.”

But other experts believe the quantum threat is real and immediate.

Norbert Goffa, executive manager of on-chain data storage system – ILCoin, has concerns over quantum-based mining pools. “Today, we do not have any quantum-based mining machines. On the other hand, a lot of companies are working on quantum-based computing technology. We believe that in the next five years, it could be real…”

Rakesh Ramachandran, CEO of QBRICS, an enterprise blockchain platform, believes that quantum computing will cause a systemic shift in blockchain tech.

“Quantum computers will be redefining cryptography…wherever there is an application of cryptography…The challenge lies in how blockchain will migrate to the new version of cryptography.”

Final Thoughts

Quantum computing is an exciting technology with the ability to compute equations super-fast – and plenty of industries are poised to benefit greatly from the technology when and if it develops. However, that same technology could be maliciously used to unravel the whole world of blockchain. Thankfully, brilliant researchers are hard at work, figuring out how to protect blockchain and cryptocurrencies from the quantum wave. In essence, there is no big cause of worry. 

 

Categories
Cryptocurrencies

A Complete Guide to Asset-Backed Tokens 

Blockchain technology heralded a new era of transparency, fairness, and democratization of finance. Currently, there are numerous applications of blockchain that are helping make the world a better place while reducing financial barriers. One of these is tokenization, a process that enables asset owners to sell a portion or the whole asset and get compensated fairly. Also, assets that could only be afforded by the high net worth individuals can now be afforded by the average investor, thanks to asset-based tokenization. 

Blockchain technology heralded a new era of transparency, fairness, and democratization of finance. Currently, there are numerous applications of blockchain that are helping make the world a better place while reducing financial barriers. One of these is tokenization, a process that enables asset owners to sell a portion or the whole asset and get compensated fairly. Also, assets that could only be afforded by the high net worth individuals can now be afforded by the average investor, thanks to asset-based tokenization. 

Blockchain technology heralded a new era of transparency, fairness, and democratization of finance. Currently, there are numerous applications of blockchain that are helping make the world a better place while reducing financial barriers. One of these is tokenization, a process that enables asset owners to sell a portion or the whole asset and get compensated fairly. Also, assets that could only be afforded by the high net worth individuals can now be afforded by the average investor, thanks to asset-based tokenization. 

In this article, we break down asset-based tokens, the rationale behind tokenizing assets, and take a look at assets with great potential for successful tokenization. 

What Are Asset-Based Tokens? 

Asset-based tokens are tokens whose value is backed by a real-world, tangible asset. Essentially, they are crypto coins whose value is pegged against an existing asset value. People tokenize real-world holdings so as to increase their liquidity (the real-world assets) in a market place. 

Asset-backed tokens are offered during a Security Token Offering (STO). 

An STO is a process where an investor exchanges money for tokens representing an investment. As such, we can describe security token offerings as events that distribute securities. And since tokens represent real-world property, STOs represent a secure investment option. 

Why Tokenize an Asset? 

Asset owners or managers tokenize assets to increase liquidity for the underlying asset. Liquidity is the degree to which an asset can be quickly and easily purchased or sold at a price reflecting its true value. Securities like stocks and bonds have high liquidity as opposed to assets like cars, real estate, jewelry, and so on. Liquidity commonly affects an asset’s trading volume. Good liquidity can also enhance an asset’s value since it’s easier to convert such an asset to cash.

Examples of Tokenization Use Cases

Tokenization is mainly used to back assets that generally have limited liquidity. Some of these assets include derivatives, real estate, art, company shares, commodities, and other assets that usually take long to find a buyer. 

Below are examples of asset tokenization use cases: 

☑️Tokenization of company equity.

☑️Tokenization of real estate investment trusts (REITs) for investors who want to venture into real estate. REITs can be customized to suit client needs or characteristics, such as risk tolerance 

☑️Tokenization of real estate or rental returns. Today’s real estate is prohibitively expensive to scores of people who would otherwise be interested in a smaller percentage of the property. Tokenization allows such property to be “fractionalized,” allowing more people to invest in a property. 

☑️Tokenization of intellectual property such as film licensing, royalty payments, etc. This allows fair distribution to every party that has a claim to such a movie, song, album, or book. 

☑️Tokenization of accounts payable and receivable, potentially replacing factoring and other models of supply chain finance. This substitution would allow data to flow seamlessly between accounts payable and accounts receivable in Enterprise Resource Planning (ERP) systems. 

Tokenizing an asset increases its value by opening up previously unattainable markets. Since asset tokenization is based on smart contracts, it also eliminates third parties and intermediaries – saving up money in the process. Moreover, investors who can’t afford these third parties are afforded the opportunity to take part in asset ownership. Not to mention, the automated tokenization process is faster, saving everybody’s time. 

Categories of Asset-Backed Tokens

There are four main categories of potential tokenization of assets; these are:

  • Tokenization of equity and debt
  • Tokenization of commodities
  • Tokenization of non-fungible hard assets
  • Tokenization of non-fungible soft assets

I. Tokenization of Equity and Debt 

Tokenizing equity and debt is a method of fundraising for startup companies. This process removes the need for intermediaries, such as banks and stock exchanges. 

Fractionalization of equity ownership is by no means a new concept – stock certificates, timeshares, mutual funds, etc. have existed for a long time. But asset-backed equity and debt tokens now offer something much more – an immutable, transparent, and liquid digital representation of a company’s debt or equity. Any shareholder can access the blockchain platform and verify ownership and its authority to trade. 

As such, although debt and equity are assets that anyone can purchase and sell today, blockchain technology radically improves the process. Private equity funds are traditionally low liquidity assets that require investors to hold their stake for at least one year. Hedge funds are another type of asset that is moderately liquid – requiring investors to hold for several months. 

Increasing liquidity via tokenization would dramatically increase the value of these asset classes, enabling investors to better adapt to market fluctuations.  

II. Tokenization of Commodities

Commodities that are normally traded on exchanges can also be converted into security tokens. Whether it’s oil, gas, grain, sugar, tea – any commodity that’s already traded through intermediaries can be tokenized. 

Cross-border trading of more fringe commodities such as hydro, wind, or solar power can also be done via a blockchain-based exchange. Governments, utility companies, and consumers can all participate and interact on a single trustless and open platform. 

As for tokens that are backed by real-world assets, physical verification is needed to establish the accuracy of the token value. Already, there are third-party auditors that exist for this end. These auditors can now combine real-life verification with blockchain-based tracking to increase confidence in the marketplace. 

For gold, which commonly trades through exchange-traded funds, tokenizing it completely changes the game. Each token represents part or the whole gold bar that’s stored and audited by a third party “oracle.” The oracle verifies the gold’s weight, purity, authenticity, etc. 

Bitcoin, the ‘digital gold,’ could be even replaced by tokenized gold in the future. The advantage Bitcoin holds over real gold is its ability to be easily divided and transferred. It’s easy, for instance, for a token exchange to take Bitcoin worth $3,000 and send 1% of that to another crypto holder. It’s, however, challenging to do the same with a bar of gold. But once you tokenize it, it becomes much easier to sell and transmit a fraction of that gold, and the same is true for other commodities.

III. Tokenization of Non-fungible Hard Assets

Hard assets are tangible and physical assets. Hard assets also present many opportunities for tokenization. In this category, we will look at two hard assets: real estate and collectibles. 

  • Real Estate Tokenization

Tokenizing real estate could make it a borderless investment, more profitable, and more affordable for all types of investors. Real estate here means things such as rentals, hotel chains, motel chains, care homes, etc. 

  • Collectibles Tokenization 

Traditionally, collectibles such as rare art pieces have been a preserve of the rich. With tokenization, anyone anywhere can hold a percentage of a collectible. 

Also, tokenizing an asset helps it achieve more value in the long term. An art piece, for instance, can be tokenized and distributed on the blockchain with each ‘shareholder’ holding a tradable share of the piece. 

IV. Tokenization of Non-fungible Assets

Soft assets are assets that are intangible and which are usually hard to quantify and establish their value. We’ll look into two types of soft assets: intellectual property and digital asset collectibles. 

  • Intellectual Property (IP) Tokenization

IP assets such as copyrights, royalties, patents, and trademarks have traditionally had low liquidity and have never had a secondary market place on which investors can buy. Tokenizing IP ownership would not only enhance its liquidity but also increase its value.  

  • Digital Asset Collectibles Tokenization

Usually, it’s difficult to prove ownership of digital collectibles – with the only proof being a contract between the provider and the user. However, tokenization could create a market place for these virtual goods, even increasing their liquidity and hence value. 

Challenges and Opportunities for Asset-Backed Assets

Asset-backed tokens go toe to toe with Bitcoin in terms of being fungible, transferable, scarce, and durable. As such, asset owners can find a market place for their assets easier than ever. 

Tokenization could face a hostile environment depending on territory. For instance, China, Qatar, and South Korea have banned STOs outright, while countries like the US, Singapore, Germany, and the EU allow it, albeit with strict regulations. Other countries like India are yet to take a definitive stand on STOs. Some jurisdictions like Malta have granted STOs free rein – placing no limitations or regulations on them whatsoever. 

Tokenization might also be prone to user error, and it’s easy to lose your tokens if you’re not careful with your wallet private key address. 

Asset-backed tokens are immune from the volatility swings experienced by utility tokens and cryptocurrencies. Asset-tokens can trade 24/7 if listed in crypto exchanges. This exposes them to market liquidity from investors all over the world. Also, asset-rich companies may soon adopt tokenization, increasing its visibility. This would popularize the idea of asset-backed tokens, pushing it into the mainstream. 

Conclusion 

Asset tokenization enables a physical asset to be divided into smaller parts, making it easier to convert into cash. Thanks to asset-based tokens, times may be gone when people had to wait for months or years to finally get a move in market position for their assets. And anyone, regardless of geographical location or the capital they possess, can get a share of attractive assets that they previously couldn’t. Tokenization will help create more inclusive, fair, and effective marketplaces.

Categories
Cryptocurrencies

Bitcoin will never be the same: Taproot Upgrade Proposal ‘Nearing Completion’ 

It has been a while since the Bitcoin platform received a major upgrade. There is, however, a major upgrade proposal in the works that is nearing public launch. The proposed bitcoin soft-fork designed to improve the platform security and boost user privacy is already moving through the developer feedback phase and maybe getting ready for public launch soon.

It has been a while since the Bitcoin platform received a major upgrade. There is, however, a major upgrade proposal in the works that is nearing public launch. The proposed bitcoin soft-fork designed to improve the platform security and boost user privacy is already moving through the developer feedback phase and maybe getting ready for public launch soon.

It has been a while since the Bitcoin platform received a major upgrade. There is, however, a major upgrade proposal in the works that is nearing public launch. The proposed bitcoin soft-fork designed to improve the platform security and boost user privacy is already moving through the developer feedback phase and maybe getting ready for public launch soon.

The Bitcoin Taproot/Schnoor upgrade proposal, originally revealed in 2018 by Greg Maxwell, one of the core developers of Bitcoin, is a long-anticipated technical upgrade. It is touted to improve not only the security of the network and the privacy of the users but also the scalability, fungibility, and script innovation in the blockchain platform.

What is the Bitcoin Taproot proposal?

Taproot and Schnorr updates, or simply Taproot, is Bitcoin’s next greatest technological breakthrough that promises ‘a new world of possibilities’ for the digital asset. The proposal remains highly sensational and has been subject to extensive deliberation in the Bitcoin community because it is a major platform upgrade with great implications on transaction architecture and performance.

It is designed to improve Bitcoin’s privacy and boosts platform scalability by making all the transactions on the platform appear the same to an outside observer, regardless of the complexity of the transaction details. The Schnoor update, on the other hand, is a code modification that aggregates transaction signatures to make it possible to implement Taproot.

Here is how Taproot works; in the Bitcoin network, transactions are validated using public-key cryptography. Currently, transactions are validated using an Elliptic Curve Digital Signature Algorithm. This algorithm has a number of glaring shortcomings, especially when it comes to transaction privacy and platform fungibility. Taproot is designed to fix these shortcomings by concealing specific types of transaction details from outside observers, in a way, standardizing and simplifying the details that are visible to outsiders.

For instance, when a transaction has a hot wallet, a cold wallet, and details of a trusted third party wallet key, all these are aggregated into a single Schnoor signature rather than being bundled as separate codes into a transaction. The single Schnoor signature can then singly be used to validate a Taproot output key.

The Taproot output key will be a single code that represents all the complex codes that would otherwise present a transaction as a collection of different keys. An outside observer will only see the single output and would not need to bother with finding out which two keys were used to generate it.

Aside from improving the privacy of the platform, this upgrade would also significantly reduce the size of the transaction file. This goes a long way to reduce the Bitcoin transaction fees as well as making the Bitcoin network more scalable. If you are familiar with the limitations of the Bitcoin platform, you will appreciate that any upgrades implemented to make it more scalable are crucial, especially if it does not involve hard-forking the platform.

Will the Taproot upgrade bring forth a BTC revolution?

When it was first proposed two years ago, the Taproot proposal triggered heated discussions among Bitcoin developers and in the general Bitcoin community. Throughout the time the upgrade was in development, the proposal moved through the Bitcoin ecosystem feedback phase as developers made their recommendations and reviewed possible changes to the proposal draft.

On December 17th, during the final scheduled meeting of the Taproot review group, an update on the project was made public. Bitcoin Core developer Pieter Wuille revealed that the upgrade proposal was ‘nearing completion’ and that developers were already putting the final touches that addressed all the comments and suggestions collected by the review group.

This upgrade could be a major turning point for Bitcoin – despite it not requiring a hard fork – because of the improvements, it makes to the system. When implemented, the Taproot/Schnoor upgrade could accelerate the process of block validation by as much as 250% and cut transaction fees by as much as 30% to 75%, according to Square Crypto product manager Steve Lee. Lee made this prediction in a presentation in the summer of 2019, and it is consistent with what other experts have had to say about the subject.

There is a good chance that the Taproot update could be the upgrade that revolutionizes the Bitcoin platform considering the limitations that are currently holding it back. On top of the list of problems plaguing BTC is scalability, which can be attributed to the Proof-of-Work (PoW) consensus it uses. PoW is so power-hungry and so slow that it limits BTC to between 3.3 and 7 transactions per second (TPS).

Visa, for comparison, processes around 1,700 transactions per second and may be capable of processing as many as 24,000 transactions per second. If Bitcoin is to ever scale globally and match this transaction processing speed, then a major change has to be made. However, there is little that can be done to improve from the current TPS without hard-forking the platform. The Taproot upgrade goes a long way to boost the platform TPS without the need to switch to a different consensus such as Proof-of-Stake (PoS).

How Taproot improves Bitcoin fungibility

Fungibility is an economics term that refers to the property of an asset whose individual units are standardized or essentially interchangeable. It means that each part that makes the whole is indistinguishable from another. In this case, Taproot improves Bitcoin’s fungibility by making all the outputs for spending look identical.

According to Kento U of Coinmonks, Taproot is Bitcoin’s next big update largely for the fungibility benefits it brings to the platform. Being a scheme for signing transaction scripts, Taproot’s most functional role is to homogenize the transaction output from a content perspective. When Bitcoin transactions are made to look exactly similar from the blockchain explorer, it guarantees that the Bitcoin network will be more secure since it will not be easy to tell one transaction from another at a glance.

There is also another great benefit to rolling out the Taproot update on the Bitcoin network; it opens up the possibilities for inscription innovation by allowing for complicated arrangements of keys and signatures in a transaction. This will effectively eliminate the limitation of the number of scripts that can be used to spend Bitcoins.

Why is Taproot update a big deal to the community?

A very small percentage of Bitcoin users pay close attention to system updates on the Bitcoin network, yet they often turn out to be the most bullish indicators for the Bitcoin currency. Most people still mistakenly look at institutional investors, Bakkt futures, and bankster instruments for indicators, yet all these and many other common events rarely ever affect the platform on which Bitcoin runs. The Taproot upgrade has a direct impact on the scalability, decentralization features, and fungibility of Bitcoin, which influence its long-term value.

It is commendable, however, that the interest the community has on this latest update proposal is gaining momentum and attracting wide interest. Developers working on the update and members of the Taproot review group have expressed optimism that the new development has generated impressive interest in the network as it moves to the next step of development.

When the draft is formally proposed as a Bitcoin Improvement Proposal, and a pull request to the Bitcoin Core pulled, the Taproot implementation is expected to undergo another round of reviews and suggestions before it is finally merged with the main branch if all goes well.

Members of the Bitcoin community still have the opportunity to analyze and suggest improvements to the upgrade while the proposal is still in the review phase.

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Crypto Daily Topic

The Top 5 Crypto Trends and Updates to Look out for in 2020

The year 2019 may have been pretty uneventful for those in the crypto space. Still, if you thought the blockchain and cryptocurrency technologies had peaked, the year 2020 promises to bring with it ground shaking surprises in the crypto sphere.

The year 2019 may have been pretty uneventful for those in the crypto space. Still, if you thought the blockchain and cryptocurrency technologies had peaked, the year 2020 promises to bring with it ground shaking surprises in the crypto sphere.

The year 2019 may have been pretty uneventful for those in the crypto space. Still, if you thought the blockchain and cryptocurrency technologies had peaked, the year 2020 promises to bring with it ground shaking surprises in the crypto sphere.

The last year was characterized by a handful of bullish breakouts, some highly publicized exits here and there, and the entrance of a large number of players into the crypto space. However, we can all agree that it was a significant slow down from the crypto fire that raged from 2017 through 2018.

If you are abreast of all the major developments in the world of cryptocurrency and blockchain technologies, you will appreciate that there were a number of notable developments in 2019 that set the stage for this year to be hot! 2020 is the year that a number of notable institutions looked forward to making their presence felt either by investing in it or introducing revolutionary technological advancements. For instance, Radix distributed ledger technology, which is hyped to be a better alternative to blockchain technology, is expected to be publicly released this year.

Enthusiasts of cryptocurrency also look forward to the materialization of several distinct trends that revolutionize the digital money industry and even the global way of life in general. We have put together the top five promising trends and updates to which every crypto investor must pay attention to stay on top of industry developments.

1. Ethereum 2.0 promises to revolutionize decentralized finance 

Being the second-largest cryptocurrency by market cap and popularity, Ethereum is already undergoing a major upgrade that many industry experts believe will revolutionize not just the cryptocurrency arena but the financial world in general. Ethereum 2.0, dubbed ETH2 or Serenity, is a major platform upgrade that brings a ton of new features to the network, the most notable being the shift from the Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus protocol.

Simply put, the shift from PoW to PoS passes the block validation function from blockchain miners to special network validators. This not only makes the blockchain network faster and verifying transactions more efficient but also improves overall platform security as chances of a 51% attack are effectively eliminated.

There are many reasons why Ethereum’s shift from PoW to PoS consensus will shake up the crypto world. First off, the older PoW consensus that is still used by Bitcoin greatly limits the scalability of the platform, and as such, the shift opens Ethereum to a world of transformation that even Bitcoin cannot match.

Considering that more people are embracing blockchain and cryptocurrency every day, it is important to note that the upgrade will improve the performance of the network, thereby making it acceptably fast for real-world use cases. It would be an understatement to say that the improvements on the Ethereum platform, implemented in three phases, are groundbreaking.

The developments, once successfully implemented, will pave the way for mainstream adoption of the blockchain for use in almost any industry and by anyone. This may be the change that finally opens up blockchain for small businesses and even individuals to implement their projects affordably and efficiently. Could this be the sign that 2020 is the year that tokens and assets running on the Ethereum platform will explode?

2. Increased regulation of crypto and impact on anonymity

One of the frequent themes that came up whenever cryptocurrency was discussed on the public media in 2019 was the ever-increasing attempts to regulate blockchain and digital assets. In 2020, as more countries shift from viewing these technologies with suspicion to embracing them, expect more regulations to be passed.

There are still many unregulated exchanges operating today. However, it is just a matter of time before they are forced to either shut down or conform to government regulations designed to protect the growing cryptocurrency user base. Governments, through regulatory bodies, are also keen to collect more revenues from investors and crypto users, and the only way to achieve this is through new regulations.

Presently, many countries around the world have put in place some form of regulations or controls to manage cryptocurrency use. Most of these regulations were meant to be interim laws while the regulatory bodies caught up with the tech world to understand what future there is in cryptocurrencies. Many forward-looking governments are actively debating and researching what regulations they need to put in place and how best they need to implement them to earn from the crypto boom while protecting their citizenry.

Whether you look forward to investing in the crypto market or just need to stay on top of market developments, you have to appreciate the impact that the oversight and regulatory bodies will have on cryptocurrency, and in particular, the aspect of anonymity.

3. Bitcoin halving may propel BTC to over $50,000

Throughout the second half of 2019, the price of Bitcoin was in constant decline. At the time of writing this post, Bitcoin was priced at just over US$8,000. However, with the next halving of Bitcoin expected in May, some experts predict that by the end of 2020, the price of Bitcoin could soar as high as US$50,000. This argument is backed by the fact that the last time Bitcoin cut its mining rewards by half, its price shot up by over 4,000 percent.

Bitcoin’s blockchain platform uses the Proof-of-Work consensus protocol where every block of transactions is verified (mined) and added to the chain rewards the miner with a fixed amount of Bitcoins. To prevent inflation of the currency, every four years, the value of the reward given to the miners for each block mined is reduced by 50 percent. If history is anything to go by, the price of Bitcoin will go up both before and right after the halving process. It may be hard to predict by what percentages the price will shoot up, but it will.

Presently, miners are rewarded with 12.5 Bitcoins for every block verified and added to the chain. This means that in May of 2020, after the halving, each block mined will attract a 6.25 Bitcoins reward. This is expected to lead to a spike in the price of Bitcoin because its supply in the market drops by half while demand keeps rising.

4. Institutional investors expected to flood the cryptosphere

The year 2020 may be the magic year in which institutional investors and leaders in the traditional financial industry dive into the crypto world. Banks, hedge fund managers, endowments, pension fund investors, and pretty much everyone else who makes money from money must stop holding back on cryptocurrency or lose out.

It is no secret that institutional investors have been gradually warming up to cryptocurrency after years of denial and even outright condemnation. The rapid rate in which investors have been investing in digital assets since the crypto boom of 2017 is proof enough that 2020 will be the year in which even the most adamant deniers will be converted into investors.

The ever-rising popularity of blockchain and the adoption of cryptocurrency, and in particular Bitcoin, has encouraged institutions to diversify their portfolios to digital assets. The 2020 prediction is based on the fact that these institutions finally have the professional machinery to invest in large scale and governments are putting in place regulations that will enable them to invest depositor money in digital assets.

5. Retail adoption of crypto to soar as China prepares to dominate

In January 2020, a new set of regulations that represents the about-turn of the Chinese government’s attitude towards blockchain and cryptocurrency, have taken effect. For many years since the introduction of Bitcoin and the gradual but steady rise of cryptocurrency, China was known to be unreceptive towards these two technologies to the point of openly banning them. However, their new legislation targeting blockchain technologies and mining cryptocurrency is a clear indication that the future is bright for digital assets in one of the world’s largest economy.

The opening of the Asian market for cryptocurrency is perhaps the greatest boost for the adoption of digital assets since the late 2017 cryptocurrency boom that drove the price of Bitcoin to almost US$20,000. At the start of the 2010s decade, cryptocurrency adoption stood at about 50 million. However, there is a good chance that it will hit 1 billion by the end of 2020, according to analysts at coinbase. This is largely due to its adoption in the emerging markets where financial systems are mostly broken.

The 2020s decade will be the year of cryptocurrency to shine brighter than ever. Considering that blockchain is one of the greatest and most impactful technological advancements since the invention of the internet, it is just a matter of time before it becomes a way of life for a majority of the global population. The financial and cultural revolution that blockchain and cryptocurrency promised over a decade ago when the bitcoin whitepaper was made public is already here with us.

The rapid evolution of other complementary blockchain tools and products such as privacy-focused browsers, blockchain disruption of pretty much every industry, and all the benefits of decentralization have conspired to create an ideal global environment for digital assets to thrive in 2020. Whether you are an enthusiast still testing the waters or are a forward-looking investor looking to stay on top of new developments in the industry, this is the year to expect the most radical trends in the cryptosphere.

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Cryptocurrencies

Where does Bitcoin gets it’s value?

Ten years after it was introduced, Bitcoin is stronger than ever. Reporting its fastest hash rate ever at the beginning of this year, and leading a rally of other cryptocurrencies to outclass other assets, the idea that Bitcoin is not going anywhere has never held less water.

Ten years after it was introduced, Bitcoin is stronger than ever. Reporting its fastest hash rate ever at the beginning of this year, and leading a rally of other cryptocurrencies to outclass other assets, the idea that Bitcoin is not going anywhere has never held less water.

Ten years after it was introduced, Bitcoin is stronger than ever. Reporting its fastest hash rate ever at the beginning of this year, and leading a rally of other cryptocurrencies to outclass other assets, the idea that Bitcoin is not going anywhere has never held less water.

But Bitcoin’s success alone has not silenced the critics. Every conversation about it inevitably always leads to wrangles over what makes it valuable.

Skeptics say it has no value and that it’s a fraud and a bubble, and something that shouldn’t be called a currency. But believers see it as digital gold and the future of money. Who’s right and who’s wrong?

To answer this question, we need to dig a little into the history of money and the attitudes that have surrounded it over time. We’ll also see if Bitcoin possesses the “holy grail” of what’s considered a currency, and how it stacks against traditional money in this regard.

A Brief History of Money

Before we look at how Bitcoin gets its value, it helps to take a brief look into the history of money. When Bitcoin skeptics question its intrinsic value, arguing only fiat currency has intrinsic value. After all, fiat money wasn’t there at the inception of civilization.

As you may already know, bartering is one of the most significant ways that people transacted with each other. Bartering goes as far back as 6000 BCE when the Phoenicians traded goods across cities across the Mediterranean.

It was also the method of transaction in the Far East, Middle East, and Europe, with people exchanging spices, silks, perfumes, furs, food, silks, salt, and various more desired things among each other.

The Swiss are credited with being the first country in Europe to print banknotes – in 1661, and somewhat responsible for the note revolution. China had experimented with paper money for 500 years – centuries before Europe could catch onto the idea. Before then, the Chinese transacted with copper coins, which were not ideal due to their weight and insecurity, especially when traveling.

Countries then entered the “Gold Standard” era, during which coins representing various values were minted out of gold and silver. But this proved ineffectual as well because the coins were susceptible to tampering. Thus, the coins paved the way for gold certificates – which were paper documents representing a certain worth of gold.

Soon, the Bretton Woods system took over, which dictated that forty-four countries would peg their currencies against the US dollar, which was backed by gold reserves. This meant the US dollar was “strong” and safe because it could be converted to an equivalent of gold at any time.

But the US dollar soon crumbled under the pressure of public debt, inflation, and a negative balance of payments. In 1971, the US administration closed the gold window owing to too many US dollars in the hands of other countries and gold reserves being too low. A new economic plan was hatched – one who could better mitigate inflation and reduce unemployment. This plan gave birth to fiat currency as we know it today.

What Gives Bitcoin Its Value?

The legitimacy of Bitcoin has been questioned along the lines of what makes it valuable? Fiat currency has been “earned” through trial and error, culminating in the stable system of today. Bitcoin entered into existence as purely digital money, commanding attention. Not only has it gone on to eclipse all fiat currencies in value, but it also leads other cryptocurrencies to outperform other asset classes like precious metals, commodities, and so on. The coin has even hit an all-time high of $20,089.

Aside from the question of whether it is a store of value, a successful currency must also meet qualifications related to scarcity, divisibility, utility and transferability, fungibility, and durability. Let’s look at these qualities one at a time.

Scarcity. To maintain its value, a currency must be scarce just enough. It shouldn’t be too scarce, as this would make it ineffective. It shouldn’t be too readily available either, as this would cause massive inflation resulting in economic collapse.

Divisibility. A valuable currency should be able to be divided into smaller incremental units. This divisibility makes it flexible in a way that reflects the true value of every good and service in an economy.

Utility. Utility means a currency is reliable. People should be able to use it to obtain goods and services reliably.

Transferability. A currency should be easy to be transferred between participants in an economy. This applies not only within a country’s borders but also between nations.

Fungibility. A successful currency must have each unit being interchangeable and indistinguishable from the next. For example, an ounce of silver is the same as another ounce of silver.

Durability. As a currency is passed between participants in an economy, it must be able to survive the test of time and not deteriorate too easily.

How it holds its own when compared against fiat currency.

To assess the value of Bitcoin as a currency, we need to see if it meets the above stipulations, and how it holds its own when compared against fiat currency.

Scarcity. Bitcoin’s supply is capped at 21 million coins. On top of that, the rate at which new coins are released is reduced after every four years. The last Bitcoin will be mined around the year 2140. On the other hand, fiat currency can be manipulated by the government or central bank so that its supply increases.

Divisibility. While Bitcoin’s supply of 21 million pales in comparison to most fiat currencies, it is divisible up to the 100 millionths. As such, the smallest unit, a Satoshi, is equal to 0.00000001 BTC. This divisibility is programmed into the currency’s original code. This means quadrillions of Satoshis can be distributed for use in a global economy.

Utility. Bitcoin’s blockchain technology is a public ledger system that’s not regulated by anyone, and it doesn’t need trust to participate in. This is enabled by a reliable system of checks and balances that ensure the efficient running of transactions.

Transferability. Bitcoin is transferable from one party to another thanks to tools such as cryptocurrency exchanges and wallets.

Fungibility. Every Bitcoin has the same exact value as the next Bitcoin, no matter who holds it and how they have acquired it.

Durability. Thanks to a highly secure, immutable, decentralized public ledger, Bitcoin is durable than most – if not all fiat currencies. Also, being a digital currency, a BTC can be used innumerably without wear and tear, theft, or loss – if its owner takes the requisite precautions.

So Where Does Bitcoin Derive Its Value?

To determine what gives Bitcoin its value, we need to look at what drives its price. Bitcoin’s price is driven by good old supply and demand, its monetary policy, and public sentiment.

Since it’s capped at 21 million coins, Bitcoin has a finite supply, and the coins released diminish after every four years, investors may be keen to acquire a share of it, fueling demand.

As well, just like people would back mediums of exchange in past centuries and thus making them universally accepted, such is the case with Bitcoin. The Bitcoin community “backs” up the currency, granting it acceptance and hence value. And as more people accept it, the more it’s distributed, raising its value.

Challenges Plaguing Bitcoin

As you can see, Bitcoin holds up fairly well against fiat currency. But still, what ascribes value to it is a hot point of debate.

One of the biggest challenges is its status as a store of value. Its ability to be a store of value is dependent on it being a medium of exchange. Thanks to its volatility swings, Bitcoin is more used as an investment than a medium through which individuals can transact with on a normal day.

As well, its utility and transferability are not exactly clear cut, as at this stage. Cryptocurrency exchange and storage spaces are vulnerable to hacks, loss of keys, thefts, frauds, and so on. And while fiat money is also susceptible to theft, there are regulations in place that are better suited to pursue redress.

Much also comes down to perception. A large chunk of the population still views Bitcoin as a bubble whose bursting is a matter of when. And governments and regulators across the world approach it in strikingly different ways – from outright hostility to absolute acceptance.

What Is the Deal with Intrinsic Value?

Bitcoin skeptics have always argued Bitcoin has no “intrinsic value,” hence not really a viable currency. The idea of intrinsic value means that a currency should derive value from being inherently useful. In other words, intrinsic value is the perception of a currency’s true value. But Bitcoin proponents argue that its lack of “intrinsic value” is a weak argument.

In truth, “intrinsic value” is not a thing, they say. In the world of money, intrinsic value is only that which we ascribe to an item. For instance, glass beads were used as money in Africa and parts of North America. Limestone coins were used for the same purposes by the Yap people of the Pacific. And paper money itself was treated with misgivings earlier on because it was considered ephemeral and shaky as compared to tangible things of value such as land, gold, sizes of armies, and so on.

As such, intrinsic value is merely a construct. Just because Bitcoin exists purely digitally, is under no one’s control and generally breaks the rules doesn’t mean it’s less a valuable currency.

Final Thoughts

Bitcoin’s path is far from certain. It started as shaky currency, yet today it has attained spell-bounding success and spawned off other successful cryptocurrencies. The question of its value will be around for a long time to come. Its utility, transferability, and other currency attributes are still not surefire. But from the look of things, it’s the world that will adjust to accommodate Bitcoin, not the reverse. And whether or not Bitcoin becomes the world’s currency, as envisioned by its creator, the world of money will not emerge unscathed by the Bitcoin wave.

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Crypto Daily Topic

Cryptojacking Infections Drop by 78% After Interpol Crackdown in Asia

Sting operations coordinated and carried out by international crime-fighting agency Interpol in Southeast Asia to stem the proliferation of cryptojacking malware has resulted in a massive 78 percent drop in infections.

Sting operations coordinated and carried out by international crime-fighting agency Interpol in Southeast Asia to stem the proliferation of cryptojacking malware has resulted in a massive 78 percent drop in infections.

Sting operations coordinated and carried out by international crime-fighting agency Interpol in Southeast Asia to stem the proliferation of cryptojacking malware has resulted in a massive 78 percent drop in infections.

Interpol was forced to take action after more than 20,000 routers were infected with the Coinhive cryptojacking malware that cybercriminals installed in MicroTik routers. In the six months between June 2019 and January 2020, the agency, assisted by TrendMicro, a global leader in cybersecurity and enterprise data security, carried out the sting dubbed Operation Goldfish Alpha that ultimately reduced the number of affected routers by almost four in every five infected routers.

What is cryptojacking?

Cryptojacking, also known as malicious crypto mining, became very rampant around the world from around mid-2017 through 2018 and peaked in 2019. This is an emerging online crime threat that lives discreetly on computers, computer accessories, or mobile devices to use the system resources to mine various kinds of cryptocurrencies.

Cryptojacking is a new form of cybersecurity threat that was brought about by the possibility for hackers to use victims’ computer resources to mine cryptocurrency. According to a report by Kaspersky solutions released in the third quarter of 2019, cryptojacking has already overtaken other forms of cybercrime, including ransomware, in terms of prevalence and frequency.

This previously little-known menace can take over computer browsers, compromise routers to proliferate among devices on a network, and even ‘hijack’ servers to mine digital assets without the owners’ awareness. Like many other malicious attacks on computers, the primary motive for cryptojacking is profit. 

Interpol revealed the outcome of Operation Goldfish Alpha in a press conference in Singapore on January 8th. The agency made the startling revelation that hackers took advantage of a vulnerability in MikroTik routers to infect over 100,000 routers around the world. They pointed out that their operation focused on the ASEAN (Association of Southeast Asian Nations) region after its intelligence showed that the highest number of infections (about 18 percent) were in the region.

International collaboration vital to fighting cryptojacking

Cryptojacking is a new kind of cybercrime that came about with the introduction of cryptocurrency or digital money. It is a kind of threat that the security agencies were not prepared to tackle before. To make operation Goldfish Alpha a success, Interpol’s Global Complex for Innovation (IGCI) and Cyber Foundation projects partnered with various organizations in the private cybersecurity sector, including Cyber Defense Institute and Computer Emergency Response Teams (CERTs).

The operation identified and targeted victims in 10 countries in the Southeast Asia region. They are: Singapore, Indonesia, Brunei, Laos, Cambodia, Malaysia, Philippines, Myanmar, Vietnam, and Thailand. Interpol’s special computer crimes team also sought assistance from the national police of the targeted countries to come up with guidance documents that they used to guide victims in removing the miner script from their routers, patching the vulnerability, and help them prevent re-infections.

Interpol officials announced that by late November and early December 2019, the number of devices infected with the Coinhive malware had reduced by 78 percent. At this time, the operation to remove infections from remaining devices was ongoing, and the agency was optimistic that the number of infected devices would drop even further.

The main takeaway from the conference was that fighting such a crime is easier and more successful when various private security institutions, national police organizations, and international cybercrime prevention agencies collaborate and share intelligence. Detecting and removing the Coinhive malware from infected devices is easier and more straightforward now because of this. Interpol has declared this malware a less serious threat than it was before Operation Goldfish Alpha as more end-users understand what the malware is and how it works.

Cryptojacking remains a serious threat

Despite the Coinhive virus being practically defeated, cryptojacking remains a serious threat to all kinds of devices, and end-users should be vigilant to stay safe from it. During the conference in Singapore, Interpol’s director of cybercrime Craig Jones emphasized on the need for the police everywhere in the world to form strong partnerships with players in the cybersecurity industry to quickly identify and neutralize any emerging cryptojacking scripts before they proliferate as far as Coinhive did.

“By combining expert data on emerging cyber threats collected and analyzed by the private sector with reports of the investigative capabilities of law enforcement, it will be easier to protect communities and individuals from all kinds of cybercrimes – new and existing,” said Craig Jones, the Interpol director.

Interpol listed a number of other notable bodies that played major roles in the success of the Goldfish Alpha operation, including The National Cyber Security Center of Myanmar.

As the world embraces cryptocurrencies and blockchain technologies, it is expected that there will be more cases of new cryptojacking malware that exploit different vulnerabilities and affect different devices. As a matter of fact, there are cases of cryptojacking malware that use up the computer’s resources without actually infecting the computer itself. For instance, there have been cases of websites that drain a user’s computing power when they visit the website without requiring them to install any scripts.

The damage caused by cryptojacking malware

If you are a victim of cryptojacking, you may not notice it right away, if at all. Most cryptojacking malware is designed to operate stealthily in the background, stealing as much computer resources as possible for as long as possible without being detected. The effect is that a computer runs slower than it should while using more power than normal. A user may notice higher electricity bills and a shorter device life without being able to pinpoint where the problem is.

Depending on how subtle the cryptojacking malware is, there are a number of red flags to look for when you suspect that your device is infected. On top of the list is a significant slow down of the device and the cooling fan running faster and longer than normal. Interpol recommends that you diagnose your system to rule out all other potential causes of poor device performance and disconnect from the internet to determine if your device is infected with a cryptojacking malware.

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Crypto Daily Topic

Can Photonic Chips Save Bitcoin?

Bitcoin mining was Satoshi Nakamoto’s idea to release new Bitcoins into circulation only after solving some complex puzzles. The mining system, which verifies transactions after ten minutes, was so designed in order to secure the network. And as Bitcoin has become more popular, so has mining increased. 

Bitcoin mining was Satoshi Nakamoto’s idea to release new Bitcoins into circulation only after solving some complex puzzles. The mining system, which verifies transactions after ten minutes, was so designed in order to secure the network. And as Bitcoin has become more popular, so has mining increased. 

Bitcoin mining was Satoshi Nakamoto’s idea to release new Bitcoins into circulation only after solving some complex puzzles. The mining system, which verifies transactions after ten minutes, was so designed in order to secure the network. And as Bitcoin has become more popular, so has mining increased. 

But if Bitcoin’s future depends on mining, that future becomes harder to picture every day. This is because mining presents various challenges that make the Bitcoin network less safe and not decentralized as Satoshi envisaged. Also, mining is incredibly expensive and not good for the environment.

Is there an alternative? This is the question nagging many Bitcoin fans.

As it turns out, photonic chips could be the answer.

Let’s take a more in-depth look into Bitcoin mining, what photonic chips are, and if the technology is enough to replace Bitcoin mining as we know it.

A Bit about Bitcoin Mining

Bitcoin mining has a bit of fascinating history. After Bitcoin took a dramatic dip from $17,000 to less than $7,000 at the end of 2017, the overall sentiment was Bitcoin was done. But the cryptocurrency’s mining appeared to be unshaken by what was happening with the price. This meant the value of Bitcoin trumped the costs associated with mining it. In other words, Bitcoin was still profitable.

In the next year, miners continued scoring big. But in November 2018, Bitcoin plummeted from around $6500 to less than $3500. This plunge was what did it for many miners. Bitcoin simply wasn’t profitable enough now. Because many miners checked out, the crypto’s hash rate took a plunge too – going from 60 exa-hashes/sec to 35 exa-hashes/sec.

The drop in Bitcoin’s price and the consequent decline in hash rate had certain ramifications for Bitcoin. For one, this meant mining would almost be confined to regions where electricity was cheap – mainly Western China. Consider too that around this time, China was cracking the whip against cryptocurrencies, a fact that drove cryptocurrency-based businesses to set up in other countries.

What did this mean for Bitcoin? First off, the “centralized” mining, as opposed to mining being geographically diverse, was a threat to the very core tenet of Bitcoin – decentralization. And the cold legal reception in the very region where Bitcoin could be mined posed a threat to its very existence.

Since then, looking for alternatives to Bitcoin mining has become the vocation for some Bitcoin enthusiasts.

The Problem with Bitcoin Mining

Apart from the existential threat to Bitcoin, there was always another persistent problem with Bitcoin mining. While Satoshi Nakamoto devised the computations to increase security for the network, what he may not have envisioned was the massive power bills. And when more people learn about Bitcoin, the more they seek it out, and the more the energy used goes up.

Bitcoin mining is so power-hungry that it gobbles up over 75 terawatt-hours a year. The enormity of this might not register until you learn that this is above the annual power consumption of entire countries such as Austria. For the mere expense and the impact this has on the environment, mining is simply not sustainable.

Photonic Chips – A New Proof-of-Work?

To solve the mining problem, a team of researchers comprising Michael Dubrovsky (co-founder of PoWx), Marshall Ball of Columbia University, and Bogdan Penkovsky of the University of Paris-Saclay have proposed better mining technology. Dubbed “optical proof of work,” oPoW is a laser technology that involves using a more energy-efficient approach to mining.

The idea is to “fix” Bitcoin mining as it is and return mining to “the people” as opposed to a small concentrate of individuals in one corner of the world. Another end goal is to make Bitcoin mining a more profitable venture. Current specialized computers go by the thousands in dollars – and they are not designed to be used for much else.

So what are these photonic chips?

Photonic chips are small optical computers made of integrated circuits and that rely on photons (using light beams to generate energy) rather than electrons.

Also known as lightwave technology, photonics is not nearly a new concept. The term “photonics” goes back to 1967 when the French physicist, Pierre Aigrain, coined it to describe the result of harnessing light to emit energy. There are countless applications of the technology today – in IT, healthcare (biophotonics), manufacturing, sensing, lighting, solar power, space technology, and so on.

Dubrovsky and the team want to introduce photonics to Bitcoin mining. Instead of the power-guzzling ASIC miners, they hope that optical computers will use way less energy.

Mining using photonics will mean changing Bitcoin’s mining algorithm. The team hopes to replace Bitcoin’s encryption protocol with one they call HeavyHash. HeavyHash is optimized for photonic computers and will replace the SHA256-based PoW (HashCash.)According to the team, this new algorithm will lower the barrier to entry to Bitcoin mining, democratize Bitcoin, and massively help the world save power.

Beyond these ambitions, oPoW would stabilize the cryptocurrency’s hash rate, so it’s not so vulnerable to price falls. In short, whether Bitcoin’s price declines or not, miners would still make profits.

The Challenges with oPoW

While the oPoW plan sounds ambitious, it has its share of challenges.

The energy-efficiency of photonic chips is not clear cut. Some photonic applications, for instance, optical switches and photonic circuits, use round-about applications to function. These applications increase the energy use of photonic chips. The researchers have not predicted how much energy the chips will save.  It’s hard to know what this means for oPoW at this stage, and if it will be a power-saving option after all.

The team is also yet to prove how oPoW will address the problem of different regions having different power costs. Hardware costs will rise in the future, not decrease. So finding cheaper sources of energy may be a better solution.

What Would Opow Mean For The Bitcoin Market?

Consider for a moment that oPoW proposes to change the fundamental mining algorithm of Bitcoin. That comes with drastic ramifications, both positive and negative.

If implemented, an oPoW system would, first of all, break China’s control of Bitcoin mining farms. In turn, mining would now be concentrated in technologically advanced countries. Countries that are ahead in photonic technology would benefit the most. As you can see, this would not be the democratization of Bitcoin mining that the researchers imagine.

Drops in Bitcoin’s price would not mean a reduction in hash rate. Whichever way the price goes, miners will continue to enjoy a payday.

There is a lot of chatter about current miners creating some sort of “price floor.” An oPoW implementation would sink this floor further in the event of a bearish market since mining costs would be lower. This would likely influence Bitcoin’s price to gravitate towards the bearish end.

Final Words

As it stands now, it’s hard to be enthusiastic about oPoW, especially with the many gaps in how it will improve the current system. Sentiments are rife within the Bitcoin community that the technology is likely to only be a temporary fix. The team itself has not specified how much power the chips would save. So while the concept looks good on paper, it’s probably not sufficiently innovative to solve one of Bitcoin’s long-running challenges. It’s up to the team to prove the Bitcoin community wrong on this one. 

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Crypto Daily Topic

2local – Environmentally Conscious, Blockchain-Powered Marketplace

Environmental sustainability is an issue that keeps a lot of environment-conscious people awake at night these days. With scientists ringing the alarm louder than ever before, many people are becoming more aware of the need to participate in actions that contribute to a safer, cleaner environment. And with blockchain slowly taking over industries, it was […]

Environmental sustainability is an issue that keeps a lot of environment-conscious people awake at night these days. With scientists ringing the alarm louder than ever before, many people are becoming more aware of the need to participate in actions that contribute to a safer, cleaner environment. And with blockchain slowly taking over industries, it was […]

Environmental sustainability is an issue that keeps a lot of environment-conscious people awake at night these days. With scientists ringing the alarm louder than ever before, many people are becoming more aware of the need to participate in actions that contribute to a safer, cleaner environment.

And with blockchain slowly taking over industries, it was only a matter of time before we heard of the technology being tapped to mitigate the climate crisis. Its immutable record-keeping, transparency, and accuracy are just some of the qualities that make it an excellent tool for this end.

2local is a Netherlands-based entity that’s leading the way in the environmental-sustainability endeavor – while relying on a powerful blockchain-powered system. But 2local also seems to have other high ambitions in addition to saving the environment.

Let’s dig into the organization’s background, the intriguing way it hopes to integrate blockchain to promote environmental sustainability and its cryptocurrency, the L2L token.

What is 2local?

2local is a blockchain-enabled platform running on the Stellar platform that seeks to promote environmental sustainability and growth and prosperity for all. On the platform, consumers can connect with companies that sell sustainable, locally produced, high-quality goods, and services. The platform operates on a cashback and loyalty system in which consumers, via the use of the native L2L stablecoin, can receive a cashback for purchasing goods from these companies. 

Backed by professionals from the maritime, finance, tech, business, market research, entrepreneurship, and so on, the project seems poised to benefit from a wealth of experience.

2local operates on a three-pillar model to address what it terms as a “man-made crisis” of hunger, inequality, and climate change. These are “a local lens, a cashback system, both deeply rooted in blockchain.” Its local lens encourages companies to go local while encouraging people to buy these locally made products. The cashback system compensates people for purchasing locally made products, while the platform’s blockchain provides a fast, secure, and transparent system.

2local is the first company in the blockchain space to design a smart market model that connects businesses with the end-user, with both parties being given an incentive to preserve the environment.

The L2L Token

All transactions on the platform are conducted via the platform’s native L2L token. L2L tokens can be stored in digital wallets specially designed for the platform. Set to be launched in 2021, L2L is an algorithm-based stablecoin, ensuring users can trade with it without the risk of volatility-triggered losses.

Using the L2L token gets users rewarded with a monthly cashback. Also, when you use the token, you save on high transfer fees. 

The Environment, Blockchain, and 2local

Countless studies continue to show that global temperatures have reached new highs thanks to man-made carbon emissions. Blockchain has been touted and is being explored as one of the potential solutions to this problem. Thanks to its verification potential, the technology could bring a different way of doing things when it comes to mitigating the effects of climate change.

2local is one of the organizations tapping into this potential. Thanks to a blockchain-powered system, it’s easy to track the origin of a product and verify if it’s indeed made with local materials. Locally made goods help promote sustainability by reducing transport miles.

This is because the more the transportation miles, the more harmful gases are released into the environment. The need to transport materials across territories also drives the need for more fuel consumption, which ravages the environment even more.

Conclusion

2local couldn’t be more an organization of the times (or is it the future?) than with its ambitious plans of making the world a better place – while being aided by blockchain, a revolutionary idea in itself. The truth is, blockchain and the need for environmental sustainability are both ideas that simply refuse to be ignored. For this reason, we think 2local is one to watch.

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Crypto Daily Topic

Merged Mining and Its Potential for Mitigating Halving Effects for Bitcoin and Litecoin

Bitcoin and Litecoin are two of the most popular cryptocurrencies. Bitcoin has long maintained peak position in market capitalization, with Litecoin not far behind as the sixth-largest. Both cryptocurrencies also experience a major event every four years. This event is block rewards halving – in which miners’ rewards are slashed by half. As a result, […]

Bitcoin and Litecoin are two of the most popular cryptocurrencies. Bitcoin has long maintained peak position in market capitalization, with Litecoin not far behind as the sixth-largest. Both cryptocurrencies also experience a major event every four years. This event is block rewards halving – in which miners’ rewards are slashed by half. As a result, […]

Bitcoin and Litecoin are two of the most popular cryptocurrencies. Bitcoin has long maintained peak position in market capitalization, with Litecoin not far behind as the sixth-largest. Both cryptocurrencies also experience a major event every four years. This event is block rewards halving – in which miners’ rewards are slashed by half.

As a result, there’s a decreased incentive for miners to keep supporting and securing the blockchain networks as block rewards diminish.

Merged mining presents a potential solution to this problem. 

What is merged mining, though? What springs the idea, and how can it mitigate halving effects for Bitcoin and Litecoin? This explainer seeks to address those questions, along with a scoop of more on this merged mining phenomenon. 

Merged Mining Explained

Merged mining, a.k.a Auxiliary Proof of Work (AuxPoW) is the process of mining two or more separate cryptocurrencies at the same time. The idea is to do so in a way that does not affect the mining performance on the blockchain of either coin. The concept of merged mining is lately a hot topic in the blockchain sphere – but it’s by no means a novel concept.

Satoshi Nakamoto – the brains behind Bitcoin, had earlier on envisaged the idea of merged mining. In a 2009 post in the BitcoinTalk forum, he shared that “I think it would be possible for BitDNS to be a completely separate network and separate blockchain, yet share CPU with Bitcoin. The only overlap is to make it so miners can search for proof-of-work for both networks simultaneously.”

Merged mining is based on the premise that work on a particular blockchain can be accepted as legitimate on a different chain. Each chain trusts and accepts the other’s work in the verification of data and transactions as well as the addition of new blocks. One blockchain provides proof of work – and this is the parent chain, and the other chain leverages this work and treats it as legitimate. This chain is called the auxiliary chain.

What Does Merged Mining Entail?

To begin with, merged mining relies on the involved cryptocurrencies utilizing the same algorithm. This means, for instance, that coins that use the same algorithm as Bitcoin – the SHA-256, can be co-mined with it, provided the right technical procedures are in place. Usually, the parent blockchain doesn’t need to undergo any sort of modification. The auxiliary, or child blockchain, is the one that needs programming so the two chains can “trust” each other.

At the time of writing, only three examples of AuxPow exist. These are Bitcoin-parented Namecoin, Litecoin-parented Dogecoin, and Myriadcoin – which is parented by both Bitcoin and Litecoin.

Can Merged Mining Mitigate Halving “Shock” for Bitcoin and Litecoin?

When it comes down to it, halving means reduced rewards for crypto miners. For instance, Charlie Lee, Litecoin’s creator, reflected on this scenario in July 2019 before Litecoin’s halving the following month. Interviewing for crypto site Mickey, he acknowledged that halving is always a “shock to the system,” explaining: “When rewards get cut in half, some miners will not be profitable and they will shut off their machine…” And though Litecoin has since bounced back, it’s hard to predict the future of Litecoin in subsequent halvings.

Also, as Bitcoin’s next halving edges closer – when block rewards drop to 6.25, it is expected the event will have a ripple effect on the entire Bitcoin ecosystem. Although the market sentiment will likely be bullish, the question about future halving effects for the cryptocurrency remains open-ended.

But what if there was a solution? Could merge mining be the answer for the halving conundrum?

A study by Binance Research, the research arm of leading crypto exchange – Binance, explored the possibility of merged mining to mitigate the effects of Bitcoin and Litecoin halving.

In the July 2019 report, Binance research determined that merged mining could increase mining rewards for both cryptocurrencies in light of future halving. Per the report, smaller blockchains could also benefit from AuxPoW by gaining access to better security enabled by bigger blockchains. They can also reduce the expenses needed to run a separate mining ecosystem.

In the same report, Binance explored how Dogecoin has held its own since adopting AuxPoW – in a bid to illustrate how merge-mining can be beneficial.

Dogecoin (DOGE) and Merged Mining

Dogecoin, the meme-inspired cryptocurrency, provides us with an excellent case study of merged mining, owing to its status as the most successful coin in this category. Launched in December 2013, the crypto adopted AuxPoW in July 2014. As Litecoin miners forked over their operations to integrate DOGE, the latter’s hash rate started ballooning, reaching well over 1500% that September.

Since then, both cryptocurrencies’ hash rates have moved in close correlation – with the exceptionally high correlation coefficient of 0.95. The two cryptos have also mirrored each other pretty closely in mining difficulty, difficulty ratios, and daily transactions. Also noteworthy is the fact that after some new mining pools started mining only Litecoin in 2017, a sharp deviation between the two hash rates occurred.

Still, merged mining is nothing near a cure-all for miners, or challenges currently facing blockchain, as the research warned. Below, we’ll take a look at the good and the bad of AuxPoW in greater detail.

Merged Mining Implications

The Good

Miners have the motivation to keep mining, thanks to the ability to earn extra income without doubling up on expenses

The cryptocurrencies involved get a liquidity boost, thanks to miners clearing transactions for both blockchains at a faster rate

Auxiliary blockchains benefit from enhanced security provided by the parent chain, but still, get to keep their distinct chain

Auxiliary chains are catapulted to mainstream recognition thanks to their association with larger, more established chains

The Bad

Some miners might not warm up to the idea of supporting child chains, as this would require them to adjust a lot of their mining operations. This takes time and money.

Some miners might not perceive child chain cryptos to hold a lot of promise. For this reason, there might be little incentive to adopt and support auxiliary networks

Some miners, especially new ones, might be entirely unaware of merged mining and the potential to make more from the technology

Child chains might become overly dependent on the parent chain, hamstringing their development and adoption of scalability technologies

Merged mining opens new attack vectors on the child chain

If not enough miners from the parent chain fork over to the child chain, the merged-mining model is vulnerable to a 51% attack

Final Thoughts

Merged mining sounds like a promising proposition for blockchain. Bitcoin and Litecoin networks could utilize the technology to secure their future, while up and coming blockchain networks could hop on the train and get exposure, enhanced security, and more. Admittedly, technology has its flaws, but the promise trumps the peril.

Categories
Crypto Daily Topic

Why is Bitcoin’s hashrate on the rise? 

Bitcoin’s hash rate has reached an all-time high of almost 120 exahash per second. The crypto reached this milestone two days shy of its birthday – on January 1st. (January 3rd is Bitcoin’s birthday, being the day the first block of Bitcoins was mined.) On new year’s eve, Jameson Lopp, CTO of CASA, the multisig wallet company, tweeted that “Bitcoin’s network hash rate increased by 162% during 2019, from 38 to 100 exahash per second.”

Bitcoin’s hash rate has reached an all-time high of almost 120 exahash per second. The crypto reached this milestone two days shy of its birthday – on January 1st. (January 3rd is Bitcoin’s birthday, being the day the first block of Bitcoins was mined.) On new year’s eve, Jameson Lopp, CTO of CASA, the multisig wallet company, tweeted that “Bitcoin’s network hash rate increased by 162% during 2019, from 38 to 100 exahash per second.”

Bitcoin’s hash rate has reached an all-time high of almost 120 exahash per second. The crypto reached this milestone two days shy of its birthday – on January 1st. (January 3rd is Bitcoin’s birthday, being the day the first block of Bitcoins was mined.) On new year’s eve, Jameson Lopp, CTO of CASA, the multisig wallet company, tweeted that “Bitcoin’s network hash rate increased by 162% during 2019, from 38 to 100 exahash per second.”

To put this in perspective, bear in mind that Bitcoiners were celebrating when the hash rate went over six exahashes in 2017. 

Also, consider the fact that this year’s surge in hash rate is despite 2018’s rather bearish market, followed by the subdued market sentiment in 2019. 

What’s A Hash Rate?

For the nontechnical crowd, the hash rate is simply the speed at which a mining computer operates. In the case of Bitcoin and other cryptocurrencies that rely on mining to release new coins into existence, the hash rate is the efficiency and performance of a mining machine. It refers to the speed of mining hardware (specialized computers designed to handle the intensive computational power of crypto mining) when trying to solve or “compute” a block.

A higher hash rate is advantageous because it means a miner has an increased chance of finding the next block and receiving a reward.

What Does This Mean For Price? 

Many crypto enthusiasts take a high hash rate to mean a higher price for Bitcoin. But this is still a contested fact. Other people believe that a high hash rate has the opposite effect. 

Sometimes the correlation is the other way round. An increase in Bitcoin price causes the hash rate to surge, as was the case around the period of May to June 2019, when, according to BitInfoChart, hashing power leapfrogged in response to the price uptrend. This trend continued until Bitcoin’s hash rate reached an all-time high of 108.8 m terahashes per second. (100 m TH/s = 1 exahash.)

While the relationship between hash rate and price is still a point of debate, it’s worth noting that the increase in hash rate is happening just as we are entering the year of the next halvening. As we count down to 20 May 2020, the date when Bitcoin halving will take place, prices will almost unquestionably have a bullish run. What effect will this have on the hash rate? We can only wait and see. 

Hash Rate Doesn’t Mean Everything

An increased hash rate translates into stronger network security. That’s pretty much agreed upon. What it does not mean, though, is more miners are joining the network, or decentralization has been strengthened even more. For instance, the vast majority of miners are located in China, as opposed to a proportionate global distribution the way Satoshi Nakamoto envisioned. As such, the hash rate is not close to a holistic dimension of network health. To its credit, however, the network has so far proven resilient against attacks and censorship, which is quite impressive. 

Conclusion

Eleven years since its inception, Bitcoin is presenting with an unprecedented hash rate. This fact only spells good tidings for the network – and its cryptocurrency. The world’s first cryptocurrency is getting stronger, and this is good news for investors, crypto enthusiasts, and even blockchain fans. Let’s see which way the hash rate goes as we advance towards the next halvening, and especially after it.

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Crypto Daily Topic

A Cryptocurrency Indices Guide

Indices are a construct that’s been in the financial world for ages. Many people are already acquainted with stock indices that track the performance of the stock market as accurately as possible.

Indices are a construct that’s been in the financial world for ages. Many people are already acquainted with stock indices that track the performance of the stock market as accurately as possible.

Indices are a construct that’s been in the financial world for ages. Many people are already acquainted with stock indices that track the performance of the stock market as accurately as possible.

Essentially, an index is a function that indicates the price value of a security in that security’s market.

Cryptocurrency indices are not much different from stock indices – they keep track of movements in blockchain and crypto as well as gauge the general crypto market performance. With cryptocurrencies becoming such a rage, many investors are now gravitating towards them.

And thanks to crypto indices, professional investors can know where to put their money, and newbie traders can get a reliable exposure to the crypto asset class.

Let’s take a look at the most dominant cryptocurrency indices today.

CCi30

Launched in January 2017, the CCi30 is one of the oldest indexes. Unlike most crypto indexes, CCi30 only tracks the 30 largest cryptos by market capitalization. The team behind it is a combination of tech, mathematics, and economics gurus – including Igor Ravin (Professor of Mathematics at Temple University), Carlo Scevola (Economist and president of CS&P, a Swiss fiduciary company) and IT expert Robert Davis.

By focusing on the 30 largest cryptos, CCi30 assesses the overall growth and movement in the blockchain and crypto space. The index is being used by passive investors (investors who buy a security for holding in the long-term) to take part in crypto trading.

Bloomberg Galaxy Crypto Index

The Bloomberg Galaxy Crypto Index (BCGI) is another crypto index – but only geared at the largest cryptocurrencies traded in the US dollar. BCGI was launched in 2018 with a starting value of 1000. The BCGI index is owned by Bloomberg in a branding partnership with Galaxy Digital Capital Management.

According to the BCGI website, the index operates under four guiding principles:

  • Data integrity. Crypto pricing sources are selected based on their liquidity and reliability and after a rigorous risk and suitability assessment. As well, cryptos must meet the minimum threshold for daily traded USD value.
  • Diversification. No single crypto value can contribute more than 30% or below 1% of the market cap of the index.
  • Representative. The index’s goal is to provide a reference tool for the broader cryptocurrency market.
  • Continuity. The index seeks to be responsive to the ever-changing, dynamic nature of the market, while still preserving the character of the index over time.

The BCGI index selects cryptocurrencies on quite stringent criteria, including the following:

  • Trades in USD
  • A minimum of two pricing sources that meet Bloomberg’s pricing criteria
  • A minimum of 30-day median value traded at $2 million on those two pricing sources, or another eligible source
  • A free-floating value – one that is not pegged on any asset, even a digital asset
  • Be able to meet the above criteria for three consecutive months
  • Hard forks are evaluated on the same gamut of eligibility requirements as established cryptocurrencies
  • Twelve is the maximum number of cryptocurrencies that can be included, with the limitation being based on the highest performing – by market cap.
  • Any cryptocurrency to be included in the index needs to follow the above eligibility requirements for three consecutive months.

The Coinbase Index

Coinbase Index is an offshoot of the Coinbase crypto exchange giant. The index only tracks the performance of digital assets listed on the exchange. The index determines its overall value by weighing the value of crypto assets based on its market cap.

Coinbase index also keeps track of new cryptos introduced – or the supply of such cryptos.

The index was introduced in March 2018, with several improvements added since then.

The index has the advantage of easy access to price points – thanks to its Coinbase platform. Coinbase Index has given rise to the Coinbase Index fund, which gives passive investors exposure to all assets listed on the exchange. The fund is continuously rebalanced to include new assets that get listed on the exchange platform.

Huobi Index

The birth of Huobi Index was as a result of the need to simplify the trading process for investors on the Huobi exchange platform. The index, also known as the HB10 index, was launched in May 2018, with a starting value of 1000.

The index’s value is weighed with the Pasche weighted composite price index. The average daily volume of previous quarters is the main measurement that determines the samples that will be selected. Some of the current constituents at the index include Bitcoin, Ripple, Ether, EOS, Litecoin, Ethereum Classic, Ontology, IOST, and the native token for the Huobi platform.

The percentage of individual constituents moves in real-time, allowing investors to track it as such. HB10 uses Tether – as opposed to the US dollar, since the former, being a digital currency, better reflects the actual volume of transactions taking place.

Bitmain Big 10 Index 

Bitmain index (BLC 10) was launched by Bitmain – one of the largest companies in the world that produce crypto mining hardware. The index tracks the top ten largest and most liquid digital assets – denominated in USD, in the crypto market. These top ten cryptos are selected out of a total of 17 constituents whose data is aggregated from reputable crypto exchanges. These crypto exchanges must have high asset liquidity, be regulation-compliant, transparent, and stable.

Some of the exchanges the index uses are as follows: Bitfinex, Gemini, Huobi, Itbit, Bitstamp, Binance, Poloniex, Kraken, and Bittrex.

BLC 10 covers over 90% of the total market capitalization of the cryptocurrencies, with a diversified mix of decentralized as well as private coins. Investors can check real-time updates of price values – but they can also rely on the reference price that’s published daily at 10:00 am, Hong Kong time.

Conclusion

Indices are nothing new in finance. They help investors make more informed investment choices and to better study market sentiment. Also, investors can diversify and rebalance their portfolios as and when appropriate, to avoid incurring losses by putting all their eggs in the same basket.

With cryptocurrencies making such a splash, it only makes sense to have crypto indices that will make the investing experience much more worthwhile.

Categories
Blockchain and DLT

Why One Bitcoin Analyst’s Prediction Went Viral 

2020 promises to be an exciting year for the crypto community, a year when most cryptocurrencies and their backers make major moves and further their undying quest to establish dominance and woo in more users. And we aren’t just talking about Facebook’s Libra – though we expect its eventual entry into the blockchain and cryptocurrency world to rattle the markets. We are talking about the near-silent moves that the popular cryptocurrencies have been involved in and some of which will materialize early in the year.

2020 promises to be an exciting year for the crypto community, a year when most cryptocurrencies and their backers make major moves and further their undying quest to establish dominance and woo in more users. And we aren’t just talking about Facebook’s Libra – though we expect its eventual entry into the blockchain and cryptocurrency world to rattle the markets. We are talking about the near-silent moves that the popular cryptocurrencies have been involved in and some of which will materialize early in the year.

2020 promises to be an exciting year for the crypto community, a year when most cryptocurrencies and their backers make major moves and further their undying quest to establish dominance and woo in more users. And we aren’t just talking about Facebook’s Libra – though we expect its eventual entry into the blockchain and cryptocurrency world to rattle the markets. We are talking about the near-silent moves that the popular cryptocurrencies have been involved in and some of which will materialize early in the year.

From Bitcoin to Ethereum to Ripple, we expect each of these major coins to embrace significant structural or operational changes in the coming months. And in this article, we will be detailing these changes and their significance to the coin itself and the crypto community.

We start by looking at Bitcoin halving and why one man’s prediction of its price after the halving has gone viral.

Bitcoin halving

In May 2020 – that’s less than four and a half months away – Bitcoin will undergo its third halving process. This basically means that the amount of the Bitcoin cryptocurrencies being rewarded to miners for contributing to the blockchain will be slashed in half. Why is this significant, you might ask? Because it not only has a direct impact on the price of the most popular and most valuable cryptocurrency but also impacts bitcoin transaction costs. To understand the impact that this year’s halving will have on the price of the lead crypto, however, we look back at its last two halving processes.

Bitcoin halving takes place every four years, and the first took place in 2012, with the most recent coming in 2016. In its premier stage, Bitcoin miners received 50 BTC for every block contributed to the blockchain. Granted, the November 2012 halving didn’t have much impact on the price of Bitcoin that was going for $11 at the time. After the July 2016 halving, however, the coin price would sway between $580 and $700. 

Interestingly, the most significant Bitcoin price movements for the two halving stages would manifest within the 18 months following the process. After the 2012 halving, for instance, Bitcoin price rallied to hit $1100 by the end of 2013. And following the 2016 halving, the pioneer digital currency soared to its highest ever price yet of over $20,000 by Jan 2018.

In an ideal market structure, you would expect the halving to inspire significant value rise rallies that would possibly take it through to the next four years.

Nothing ideal about Bitcoin market

But there is nothing ideal about the bitcoin pricing and the larger crypto market. These markets and the digital currencies traded therein have time and again defied the conventional economy laws. And this is evidenced by their huge and persistent volatilities. These plus the relatively slow response to the halving process has become a major cause of division on different bitcoin and crypto analyst’s predictions of the coin’s price after halving. While most believe that it will ultimately go up – albeit sluggishly – a significant portion of these is adamant that the Bitcoins price increase has nothing to do with halving.

The Canfield hypothesis

Jacob Canfield is a long-time crypto analyst and his end of the year commentary about the Bitcoin’s price trajectory going into 2020 has gone viral. And with regards to the expected halving, Canfield believes that it will have significant impacts on the price of Bitcoin. But it’s his opinion on why most people don’t associate the bitcoin value rise with the halving that caught the attention of the crypto community. In a tweet sent out three days to the New Year, Jacob Canfield argued that:

“The halving is priced in so much that it’s actually not priced in and no one is buying bitcoin except the smart money who knows it’s not priced in who has convinced everyone else it is priced in so when the halving occurs and price is skyrocketing no one will be holding bitcoin.”

These sentiments – that have been regarded by some quarters as an extremely meta prediction of Bitcoin – were nonetheless echoed and interpreted by Willy Woo – an Adaptive Capital analyst. Who mentioned that:

“Translation: While the public believe in efficient market theory and that markets perfectly price in all available information. Market traders know the price chart is a war of strategy and fuckery designed to make the most money for the best players.”

Woo reckons how naive it would be for any crypto enthusiast to imagine that market prices are always a reflection of the available market data.

Any crypto analyst worth their salt will also tell you that in the periods leading to both bitcoin halving processes, the coin witnessed declining prices. Canfield was quick to observe this and put it down in a tweet expressing his confidence in Bitcoin’s price dip before the end of January. He argues that he is:

“Longing $6700-6800 in January will be a good deal. I was hoping for $5500, but not sure we get there. Not sure we see much lower for a while after that. Will revise if the context of the market changes, but that’s what I’m seeing so far.”

Ethereum and its new hard fork

On 2nd January, Ethereum completed the Muir Glacier hard fork upgrade.

What you probably do not know is that this is the second major upgrade to the blockchain in a month after a similar upgrade – the Istanbul Upgrade – in late November. The upgrade effectively holds back the kicking in of the “difficulty bomb,” also referred to as “ice age,” that will mark a transition to Ethereum 2.0. It was effected after the mining of block 9,000,000 and is expected to hold back Ethereum’s transition to a Proof-of-Stake model by about 4,000,000 blocks – or more than 600 days.

The difficulty bomb mode algorithm was embedded onto the Ethereum blockchain network in 2015 with the aim of increasing hashing difficulty and push the network towards a PoS concept. The proof of stake model adopted by Ethereum 2.0 will, however, be dissimilar to that of Bitcoin blockchain in one primary way. While bitcoin blockchain reduces the reward to miners, Ethreum’s difficulty bomb increases the time it takes to mine a block by between 10 and 20 seconds.

However, both approaches have similar side effects as they contribute to high transaction costs and demotivate miners. By delaying the difficulty bomb and the transition to the proof of stake, Ethereum will be looking for different ways of continually incentivizing their miners to ensure that they remain within the platform during and after the switch.

Ripple and XRP at the ATM

Following in the footsteps of Bitcoin and Ethereum, Ripple would also start the year with an ATM partnership that will see General Bytes dispense XRP tokens.

General Bytes is a Crypto ATM Company with a network of over 3000 machines across the United States. The XRP partnership means that virtually anyone using their machines now has the option of loading and withdrawing ripple coins from their ATMs. The company, however, mentions that this is not a default feature with their ATMs, but it is up to the ATM operator’s discretion to chose whether to enable the XRP feature or not.

While making this Ripple news public, General Bytes stated that:

“Owners can now enable XRP as it is backported to all machines sold to date. Of course, an ATM operator needs to enable it as they are the ones who own the machines, wallets, etc.”

The move confirms Ripple’s continued chase for dominance within the retail crypto space. It should particularly be noted that this isn’t the first time the blockchain developers are partnering with crypto ATM companies. In the months leading to the end of the year 2019, for instance, Xpring – Ripple’s fundraising and crypto development arm – invested over $1.5 million in CoinMe, a Seattle-based Crypto ATM company.

 

Categories
Crypto Exchanges

Bittrex Crypto Exchange Review 2020: Is The Exchange Legit Or Another Scam?

Bittrex has time and again been ranked among leading crypto exchange platforms across the world. And some of the factors that keep it ahead of competition include the fact that it embraces advanced technologies in guaranteeing system security as well as the wide range of cryptocurrencies one can trade on this platform. We attribute these to the fact that Bittrex is one of the few exchanges that haven’t lost its client assets to crypto hackers.

Bittrex has time and again been ranked among leading crypto exchange platforms across the world. And some of the factors that keep it ahead of competition include the fact that it embraces advanced technologies in guaranteeing system security as well as the wide range of cryptocurrencies one can trade on this platform. We attribute these to the fact that Bittrex is one of the few exchanges that haven’t lost its client assets to crypto hackers.

Bittrex has time and again been ranked among leading crypto exchange platforms across the world. And some of the factors that keep it ahead of competition include the fact that it embraces advanced technologies in guaranteeing system security as well as the wide range of cryptocurrencies one can trade on this platform. We attribute these to the fact that Bittrex is one of the few exchanges that haven’t lost its client assets to crypto hackers.

They offer three different types of accounts with the highest level (Enhanced account), giving total freedom to the trader. Several other perks come with trading in Bittrex exchange. But how safe are your crypto transactions on this platform? Is the platform even reliable?

With so many options available and stringent regulations that vary from state to state, it is essential to understand the exchange before investing your money. Below is a brief overview of the Bittrex crypto exchange platform, including its features, signup, accounts, pros, fees, and customer support, among others.

What is Bittrex?

Bittrex is one of the oldest exchange platforms founded back in 2014 by former Microsoft employees Richie Lai, Bill Shihara, and Rami Kawach. The exchange is headquartered in Seattle, Washington, but its reach extends well beyond the United States. Ideally, virtually anyone across the world can create a free trader or investor account with Bitmex exchange.

Both traders and investors on the platform are, however, advised to check their local regulations before they begin trading with any crypto exchange platform. Bittrex offers a familiar proposition for experienced traders. They provide various cryptocurrencies you can trade and also supports fiat currencies.

Their custom trading engine seamlessly combines various automated trading features such as GTC (good till canceled), stop loss, and instant sell or buy, among others. The interface also loads very first and is more beginner-friendly than most platforms. You will never experience any lags with this platform.

It, however, does not support margin trading. As such, Bittrex suits the traditional crypto trader looking for a wide variety of cryptos and standard spot trading orders. And you will like it here because the exchange supports over 234 different cryptocoins and doesn’t charge deposit fees.

How does Bittrex work?

Bittrex works like a classic cryptocurrency exchange, so those who have experience trading cryptos will find it quite familiar. The platform presents the trader with both standard technical and charting tools traders needed to manage their accounts. Once you have an account, you can deposit funds and begin trading.  Keeping in mind that the platform supports three types of accounts: unverified, basic, and enhanced.

Unverified accounts

These have various limitations, including a lower cap on the maximum withdrawal you can make (1 Bitcoin per day). When you sign up for Bittrex, you automatically create an unverified account. You will require the 2-factor verification to upgrade to the basic account. However, there are various tools you can use to help you learn more about the platform. Unverified accounts are most appealing to beginners looking to expand their crypto trading skills

Basic accounts

This option offers more tools and access with the possibility to withdraw up to 3 Bitcoin per day. You can upgrade to the basic account once you complete the 2FA verification process. The platform uses a strict verification process and collects more information about their clients. However, this ensures they provide trustworthy coins and keep the exchange secure.

Enhanced account

This is the premium option for prolific crypto exchange traders looking for total freedom. With enhanced accounts, you can withdraw up to 100 Bitcoin per day. In addition to the two-factor verification, enhanced accounts require you to provide a photo of your government-issued ID and a selfie portrait.

Once you have an account, trading is effortless with Bittrex. The platform is known for its sleek user-friendly features and fast-loading interfaces. You can easily access your dashboard, make trades, track your orders, and contact customer support.

Bittrex account registration

Registering for an account with Bittrex is an effortless and straightforward process. All you need is a valid email address and proof that you are 18 years or older. As aforementioned, you can sign up for any of the three account options available depending on your unique requirements. If you seek a robust platform with all the necessary trading tools and features, the enhanced account is more suitable. Conditions are also different for each account.

Unverified accounts are entry-level with minimum requirements. They also have limitations, since the platform has not verified user identity. You will need to complete the two-factor verification and provide your ID and portrait, among other necessary info to get full access to the exchange. As a global service headquartered in Washington, Bittrex allows registrations from anywhere in the world, provided you meet the minimum requirements.

Number of cryptocurrencies supported on Bittrex

As one of the older exchange platforms, Bittrex was initially designed to support Bitcoin. However, the exchange has since expanded to accommodate over 400 altcoins you can trade against Bitcoin, Ethereum, US dollar, and Tether (USDT). The platform also supports FIAT, although deposits are made using the cryptocurrency wire transfers.

Bittrex is known for its transparency when it comes to listing up and coming altcoins thanks to its strict source code vetting process. Plus, they also remove inactive coins from their listing to improve the overall quality of their offers. Currently, the only FIAT supported is the USD.

How to trade on Bittrex?

Bittrex offers an effortless way to trade cryptocurrency and manage your digital assets. Once you have signed up for an account and made a wire transfer deposit, you can start analyzing cryptos and making trades. There are various tools and features available from your dashboard to help you pick an option. Bittrex allows investors to buy, sell, or trade cryptos against other coins. You can also use automation features to stop you from generating losses past a preset limit. The platform also has charting tools you can use to track and analyze your trade.

Bittrex trading fees and charges

When it comes to trading fees, Bittrex commissions are slightly higher than the industry average. The platform charges a flat commission of 0.25% on all trades, which can translate into a lot, especially if you are making larger transactions. They do not have any high-volume trades, rebates, or incentives for markers and traders.

There are no fees charged for deposits and withdrawals. However, each coin has its unique transfer fee built into the trade. There are no hidden fees in the system, and the high margins are justified by the platform’s sleekness and premium status. Bittrex offers a decent opportunity to trade numerous cryptos and make a profit.

Deposit and withdrawal

Bittrex does not charge anything for deposits and withdrawals. There, however, is a cap on how much you can withdraw, depending on your type of account. The platform also has no support for direct purchases of crypto using credit, debit, or ACH bank accounts. Nonetheless, identity-verified customers operating outside the US are eligible for USD currency deposits and withdrawals.

About 40 US states, including Alaska, Alabama, California, Indiana, Georgia, Florida, Ohio, Texas, Washington, Michigan, and New Jersey, among others, also have access to this feature. However, you must first add Bitcoin to your e-wallet before you can start purchasing other coins.

Security and digital asset protection

Bittrex is known for its emphasis on all matters of safety. Their platform is one of the safest you will come across in the crypto world, and they use a strict verification process to ensure users are real and safe. The platform also scrutinizes all coin listings and has various security measures to fix all vulnerabilities. The founders of the platform are former security experts with over 40 years of combined experience.

This platform has never been hacked, and there are no cases of any insecurity, which is very impressive considering Bittrex has been around since 2013. Their elastic multi-stage wallet strategy also keeps 80%-90% of user funds in offline cold wallets. Withdrawals require 2-factor verification and API calls, making the platform impossible to breach.

Registration and regulation

Bittrex is a legitimate cryptocurrency exchange company headquartered in Seattle, Washington. While the service is not regulated under the US Securities laws, it abides by all compliance requirements in the places it is available. The company is also not FDIC insured, which presents a significant level of concern should the company go down. Nonetheless, it has been around for a while and boasts a large community of users.

Bittrex customer support

Bittrex offers 24/7 customer support with multiple communication channels. However, as a large platform with numerous users, their customer support is relatively weak compared to most alternatives. Several reviewers have also reported cases of unwarranted suspension pf trader accounts as well as Bittrex taking too long to reply to customer issues. This can be frustrating, but you eventually get a response from the team. 

Bittrex maintains that only 0.1% of its user accounts suffer suspensions and outright bans. Their low-tier requirements also make it appealing for the un-banked global population. But you are advised to first check your local laws on Crypto transactions before investing your money here.

Everything else you need to know about Bittrex

Bittrex is among the leading crypto exchange platforms with low minimum requirements and a sleek feature-rich platform. You can easily create an account, load your wallet, and make trade orders. Managing and monitoring the account is also not as daunting as with other platforms.

However, trading crypto involves a considerable amount of risk. The main benefit of Bittrex compared to alternatives like Binance is verified account owners can access USD deposits and withdrawals. Other than that, Bittrex offers the conventional exchange experience for anyone seeking robust platforms with all popular options.

Verdict: Is it safe to trade on Bittrex?

Other than the reported issues with customer service, Bittrex offers everything necessary to begin trading cryptocurrency. Registration is effortless, and there are several technologically advanced tools and features to help you complete trades. They have also invested in security and as evidenced by their exhaustive verification process. While the site is designed to be beginner-friendly, it has various elements that make it attractive for all kinds of crypto traders. It is also a legal business that boasts of close to five years of experience in the crypto exchange industry.

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Crypto Daily Topic

Will dot Crypto Domains Phase Out The Cryptocurrency Wallets?

Sending and receiving cryptocurrencies has always been complicated. You always have to deal with the rather complex crypto addresses. But all this is about to change with the introduction of .crypto domains by Unstoppable Domains to the crypto world. According to the software company, the .crypto domains will gradually phase out the need for complicated wallet addresses.

Sending and receiving cryptocurrencies has always been complicated. You always have to deal with the rather complex crypto addresses. But all this is about to change with the introduction of .crypto domains by Unstoppable Domains to the crypto world. According to the software company, the .crypto domains will gradually phase out the need for complicated wallet addresses.

Sending and receiving cryptocurrencies has always been complicated. You always have to deal with the rather complex crypto addresses. But all this is about to change with the introduction of .crypto domains by Unstoppable Domains to the crypto world. According to the software company, the .crypto domains will gradually phase out the need for complicated wallet addresses.

Instead of sending Ethereum to such wallet address as 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy, you will now be able to send it to the easy to remember ‘ABC.crypto.’ But there is more to the domain registry than just simplifying the art of sending and receiving cryptocurrencies. And we highlight them all here while looking at the revolutionary impact these .crypto domains have on the way we transfer crypto.

What is a .crypto domain?

.crypto is ideally a blockchain-powered domain registry. It was created on the Ethereum Blockchain and was initially supposed to help simplify the art of sending and receiving cryptocurrencies. It was developed and introduced to the crypto community by Unstoppable Domains software company to complement and eventually replace the complicated wallet addresses.

With a .crypto domain, you no longer need to deal with complex wallet addresses when sending or receiving crypto coins, all you need to know is the receiver’s domain name. You then proceed to pay the domain, just as you would pay the crypto wallet address.

While explaining the simplicity of.crypto domains, Mathew Gould – co-founder and CEO of Unstoppable Domains had this to say,

“We believe that tribalism in the crypto community is slowing down adoption of the technology. .Crypto is a domain name system meant to be used for any cryptocurrency payment and with any cryptocurrency wallet. Sending money to a .crypto domain is a way simpler user experience for the millions of cryptocurrency users that currently have to copy/paste and type in long addresses in order to transact.”

What challenges does the .crypto domain seek to solve?

Crypto tribalism:

Crypto tribalism refers to the existing identity differences between different cryptocurrencies. This is, to a large extent, based on the perceived technological superiority of particular cryptocurrencies and their underlying blockchains. It is evidenced in the fact that different wallets will only host-specific cryptocurrencies making it virtually impossible for a single crypto wallet to support all cryptos in existence today. .crypto domain, however, seeks to eliminate this tribalism by creating a one-fits-all wallet that is supportive of virtually every coin.

Complex wallet addresses:

Crypto wallet addresses are complicated and hard –if not impossible – to memorize. This means that you are always copy-pasting or referencing from different sources every time you wish to send or receive cryptos. With a .crypto domain name, you only need your easy-to-remember domain name.

Need for escrow:

One of the primary advantages of the .crypto domain in cryptocurrency exchange is its speedy cash transfer and the integrity of the system. This implies that crypto transfer can be initiated by virtually anyone from any part of the world and have them in your name within a minute. The fact that these domains are created on a blockchain platform means that they are highly secure and thus no need for an escrow agent to guarantee the secure exchange of funds over the domain.

Other things you need to know about .crypto domain

As mentioned earlier, there is more to .crypto domain than just the facilitation of secure cryptocurrency payments:

No renewal fee:

The .crypto domain differs from the traditional domain in several ways. Unlike traditional domain registries, .crypto is built on the highly secure and immutable blockchain infrastructure. More importantly, it isn’t a subscription but a purchase where you get to pay once and own the domain for life.

No website censorship:

Traditional websites are subject to censorships from governmental agencies and other higher authorities. On the .crypto domain where you get to own the domain, neither the governmental agencies or any other institutions have control over the content you write or is affiliated with your domain.

Independent registry:

For the longest time, domain registries and the entire domain registration process has been regulated and controlled by ICANN. The blockchain-powered domain registry, however, presents crypto enthusiasts with an independent registry outside ICANN’s grip. The domain regulatory body does not get to approve names on this registry or regulate the issuance of domain names.

No third-party custodians:

Simply put, there are no custodians of the .crypto domains. By buying the domain name, you assume full control over the blockchain domain. You get to store your domain, and no one can get access to either move or seize them without your authorization. And this comes off as one of the many problems that the .crypto domain seeks to address.

Who owns .crypto domains?

The .crypto domain registry was started by San Francisco based software company – Unstoppable Domains. It was launched by the brand in partnership with Draper Associates and Boost VC, who have been backing the company. The registry is built on the Ethereum blockchain. It started as part of the Ziliqa foundation that established the Ziliqa domains (.zil domains) whose evolution would see the birth of .crypto domains.

The Ziliqa Foundation is constituted by the website hosting blockchain that exploited several decentralized storage networks as well as the Interplanetary File System in storing the web content. It also included a payment system. In .crypto domains, Mathew Gould and his company are merging both the website web content and crypto payment processing capabilities into one.

Where to buy them:

The sale of .zil domains that kicked off in early 2019 would go on until late October in the year. By this time, Unstoppable Domains reported huge interest in these blockchain-powered domains, adding that they managed to sell over 100,000 .zil extensions during this period.

.crypto domain registration went live in November 2019, and you can now register this 8-character web extension on the Unstoppable Domains website. The good thing is every one that purchased the .zil domain extension can upgrade to a .crypto extension of the same name for free.

Possible challenges facing .crypto domains

Squatting and trolls:

Interestingly squatting and trolling challenges aren’t an exception of the conventional domain industry. Right after the launch of the .crypto domain, a hacker was able to exploit a bug within this blockchain technology that they used to gain permanent ownership of key domain names. Some of the trolled names include apple.eth, defi.eth, wallet.eth, and pay.eth. The company, however, claims that it was able to detect and fix the bug in time and negotiate for the surrender of these domain names.

User-education:

Blockchain and cryptocurrency are already complicated subjects. And while crypto exchanges may be accused of perpetuating the highest cases of crypto tribalism, they have done a commendable job in providing the crypto community with free and relatively secure online wallets.

It will take a lot of time and resources to convince this crypto community on the need to migrate from these free wallets to the paid domains. The case of domain trolls makes this even harder given the sensitive nature of the crypto traders and investors on matters security.

Bottom line

Unstoppable Domains, the San Francisco based software development company, has come up with a solution to the complexity posed by different crypto wallets. The .crypto blockchain-powered domain will not only serve as an independent website free of censorship but will also serve as a universal crypto wallet. It will not only support all the cryptocurrencies currently available, but the fact that it is built on the blockchain technology gives it an extra layer of security and integrity not common with the conventional crypto wallets.

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Crypto Exchanges

Poloniex Review 2020: A Safe Crypto Exchange Or Scam?

Poloniex crypto exchange started in 2014, and by 2016, it was one of the most popular and preferred bitcoin exchange. What happened after 2016 that saw the crypto exchange fall off the leader’s post into near-oblivion? More importantly, can we really trust Poloniex crypto exchange with our crypto assets and personal information?

Poloniex crypto exchange started in 2014, and by 2016, it was one of the most popular and preferred bitcoin exchange. What happened after 2016 that saw the crypto exchange fall off the leader’s post into near-oblivion? More importantly, can we really trust Poloniex crypto exchange with our crypto assets and personal information?

Poloniex crypto exchange started in 2014, and by 2016, it was one of the most popular and preferred bitcoin exchange. What happened after 2016 that saw the crypto exchange fall off the leader’s post into near-oblivion? More importantly, can we really trust Poloniex crypto exchange with our crypto assets and personal information?

To answer this and more questions regarding the effectiveness of Poloniex, we have come up with the Poloniex crypto exchange review. Here, we will be looking at all things Poloniex, from its mode of operation, trading fees, level of customer support, and everything in between.

We will also look at the amount of customer data the company collects and how it protects it to see if it has learned anything from its March 2014 hack that saw them lose 12.3% of Bitcoin held in their reserves. We will also be looking at its new Parent company – Circle – and the effectiveness of the strategies it is using to help Poloniex regain its market leader position.

We start by gaining a deeper understating of the crypto exchange.

What is Poloniex?

Poloniex is an unregulated crypto-to-crypto exchange that started in 2014. It remains one of the few unregulated exchanges operating in the United States and maintains its headquarters in Boston. Unlike most other-fiat to-crypto and crypto-to-crypto exchanges operating in the U.S, Poloniex doesn’t bar membership from international clients. Today, Poloniex is ranked among the top 100 exchanges in the world – a major fall from the top 10 list back in 2016 – with an estimated market capitalization of $14 million.

At the height of its crypto exchange market dominance, Poloniex was considered the most liquid platform. History even has it that it was the first crypto exchange to post more than $1 billion in daily trading volumes. And while it may have fallen short of the crypto market’s favor, Poloniex is still widely respected for its innovativeness. And all these explain why it attracted the interest of Circle – a Goldman Sachs owned social payment services provider – that acquired it early 2018.

Since its acquisition, Circle has initiated a raft of measures within the crypto exchange – all of which are aimed at helping restore the exchange to its former glory. These include adding a card and bank transfers to its deposit and withdrawal processing methods. Circle is also bending Poloniex towards compliance with different regulations as it hopes to make it the first fully regulated crypto exchange in the United States. This, according to Circle, would help give it more credibility, especially after the launch of a Poloniex based over the counter (OTC) platform that facilitates crypto trading and payments for hedge funds and big banks.

How does Poloniex crypto exchange work?

Poloniex is a pure crypto-to-crypto exchange where you can buy and sell different cryptocurrencies. Unlike most crypto-to-crypto exchanges, however, that will only accept crypto deposits, Poloniex makes it possible for their clients to make credit card and bank wire deposits. Once the fiat currency hits the Poloniex account, it converted into either the USDC or USDT stable coins. This helps the exchange maintain its integrity as a pure crypto-to-crypto exchange without locking out first-time crypto traders.

In addition to trading existing cryptocurrencies, Ploniex allows for the listing of new coins and tokens on its platform via Circle Invest and Circle Trade exchanges. Ideally, any verified Circle-Poloniex platform user can apply to list their tokens on the exchange.

Setting up a Poloniex trader account

We find it interesting that despite being a U.S based crypto exchange, Poloniex is still open to memberships from 100+ countries across the world. This implies that virtually anyone except China, Germany, and Pakistan residents can register on the platform. New York, New Hampshire, and Washington State residents are also barred from accessing Poloniex because the crypto exchange is yet to comply with the BitLicense regulations passed in these three states.

You will also want to note that despite being a crypto-to-crypto exchange, Poloniex doesn’t allow for anonymous trading. You will thus be required to verify your account by uploading identification documents, proof of address, and a selfie before you can deposit or transact on this platform.

Cryptocurrencies supported on Poloniex

Once you register and verify your identity on Poloniex, you will have access to 60+ cryptocurrencies and over 100 crypto trading pairs. These supported cryptocurrencies include all the popular cryptocurrencies like Bitcoin, Ethereum, and Monero against which most other altcoins and tokens are priced. There also are stable coins USDT and USDC.

We believe that the inclusion of the stable coins on this platform is advantageous to both the first time and expert traders in two primary ways. First, it helps attract newbies and by making it possible for them to make fiat currency deposits that are automatically converted into stable coins for use within the platform.

Secondly, they come in handy during periods of high market volatility. If you don’t wish to trade the highly volatile markets or simply aren’t sure of the trade decision you want to take, you only have to convert your assets to stable coins and wait for the best market entry point.

How to trade on Poloniex

We were especially drawn to Poloniex exchange’s well laid out and easy to use dashboard. Predominantly featured on this page are the price chart and graphical representation of the price history while on the right hand of the screen is the real-time market price of different coins. The buy and sell boxes are featured at the bottom of the page.

You will also have access to the exchange’s market order book that lists the selling and buying prices of different crypto coins. You will, therefore, have the option of trading at the prevailing market price or investing in the long term or short term through the limit order trading tool.

Poloniex exchange trading costs

Poloniex crypto exchange maintains some of the most affordable trading fees and commissions. The exchange maintains a graduated fee structure for different transactions based on traded volumes. Maker (buyer) fees start from 0.15% for orders below $25,000 and decrease gradually to zero fees for orders above $20 million. Taker (Seller) fees, on the other hand, start from 0.25% for orders below $25,000 and decline gradually to 0.10% for orders exceeding $20 million. Lenders will also be charged 15% on any interest accrued.

Deposits and withdrawals

For the longest time, traders and investors on Poloniex could only deposit and withdraw cryptocurrencies from the fund. The exchange has, however, added both credit card and bank wire transfers on to the list of deposit and withdrawal processing methods. Your deposits will, however, be automatically converted into either USDC OR USDT stable coins during the cash transfer while your stable coin withdrawals are automatically converted to your preferred fiat currency before hitting your bank account.

There are no deposit fees for both crypto and fiat deposit. Withdrawals will, however, vary from one cryptocurrency to another and the volume of the transactions.

Security and digital assets protection on Poloniex exchange

2FA and Email verification:

At Poloniex, crypto exchange, security starts on the signup page. Here, you are required to activate the two-factor authentication (2FA) by downloading the Authy or Google Authenticator apps. And in addition to these, you will also have email confirmations for new and suspicious trader account logins.

Cold storage:

You might want to note that Poloniex, unlike most other crypto exchange companies, doesn’t provide its clients with free crypto wallets. However, the exchange claims that all the client funds held in the trader accounts are securely held in cold storage with just a fraction of these funds available to facilitate the exchange’s day-to-day operations.

Insurance:

Poloniex also claims to have all their customer deposits invested with the FDIC for up to $250,000 per user. The need for insurance and all these other security measures seems to stem from the fact that Poloniex has already suffered one major hack that saw it lose more than 12% of its client Bitcoin deposits.

Registration and regulation

Poloniex is an unregulated pure crypto-to-crypto trader. Its parent company, Circle, is, however, heavily regulated both in the United States and in the United Kingdom. And while Circle has made public its intention of making Poloniex the first regulated crypto exchange in the United States, it is yet to embrace the different federal and state-based virtual currently regulations in place today, especially the BitLicense that originated in New York.

Poloniex customer support:

Poloniex crypto exchange’s dedication to quality customer support starts with a multilingual website that is currently available in five languages. You can also access the customer support team by raising a ticket on their website or directly via their twitter and Telegram handles.

We take fault in the Poloniex crypto exchange’s lack of an elaborate FAQ section that means that even the most basic customer queries have to be resolved via a customer care ticket. We also are disappointed by the fact that, despite their adoption of advanced technologies and innovativeness claims, the exchange doesn’t have a live chat option.

Everything else you need to know about Poloniex crypto exchange

Mobile apps:

Poloniex crypto exchange recently launched an app-based crypto trading platform that is available on both the Android and iOS versions. This is a mirror of the desktop trading app as it has all the trading features needed to execute a crypto trade.

Poloni DEX:

Poloniex is gradually edging towards decentralization and recently launched Poloni DEX for ICO. On this platform, Poloniex clients can request to have their tokens for different blockchain projects listed. One of the most significant tokens listed on Poloni DEX is ATOMS token for the COSMOS project that seeks to bridge the gap between different blockchains by encouraging interoperability.

Crypto lending:

Poloniex crypto exchange’s innovativeness manifest in its industry’s first lending platform. This makes it possible for Poloniex traders to lend their crypto assets to other traders who promise to refund the advanced coins and a predetermined interest.

Verdict: Is Poloniex crypto exchange a scam?

In this Poloniex crypto exchange review, you have seen that the platform can be a lot of things. It is a pioneer when it comes to innovativeness in the crypto space, as evidenced by the Poloni DEX, mobile trading app, and lending option. We, however, consider its customer support as inefficient, as evidenced by the long wait time when it comes to responding to client queries and lack of a live support feature. It may have fallen victim to the acts of cybercriminals and lost customer funds in the past, but it seems to have learned a lesson and strengthened their systems by embracing cold storage, 2FA, and such other browser-based security features as IP address whitelisting.

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Crypto Exchanges

Coinbase: Is It Safe To Buy and Store Cryptocurrencies On This Exchange?

Coinbase, the American based crypto exchange, describes itself as the “easiest place to buy, sell, and manage your cryptocurrency portfolio.” While relying on some of its string features like insurance backed deposits, strong regulation by the SEC, and secure storage that has shielded it from hackers since establishment, Coinbase refers to itself as “the most trusted cryptocurrency platform.”

Coinbase, the American based crypto exchange, describes itself as the “easiest place to buy, sell, and manage your cryptocurrency portfolio.” While relying on some of its string features like insurance backed deposits, strong regulation by the SEC, and secure storage that has shielded it from hackers since establishment, Coinbase refers to itself as “the most trusted cryptocurrency platform.”

Coinbase, the American based crypto exchange, describes itself as the “easiest place to buy, sell, and manage your cryptocurrency portfolio.” While relying on some of its string features like insurance backed deposits, strong regulation by the SEC, and secure storage that has shielded it from hackers since establishment, Coinbase refers to itself as “the most trusted cryptocurrency platform.”

But how accurate are these claims, and is it really safe to buy and store your cryptocurrencies on the Coinbase exchange and wallet? We answer this and more questions about this exchange in this comprehensive Coinbase review. Here, we will try to bring to light everything you need to know about this major crypto exchange, its Coinbase wallet, and the security of its platform and mobile apps.

We start by gaining a little background information about the company

What is Coinbase?

Coinbase is a San Francisco based crypto exchange and one of the oldest – having started in 2012. Today, Coinbase is available in 100+ countries across the world and boasts of one of the broadest customer base. It is a hybrid exchange that supports both crypto-to-crypto as well as fiat to crypto transactions.

It also comes off as one of the most regulated crypto exchanges and one of the handful that’s licensed to operate in the United States. For the longest time, Coinbase concentrated on the U.S and the European markets. But, it has since opened itself up to the international market with the separation of Coinbase and Coinbase Pro. Ideally, Coinbase is a brokerage exchange where crypto traders interact with the Coinbase brokerage firm. Whereas, Coinbase Pro is specially conceived for the advanced traders who want to interact with the international crypto market directly.

Because of the highly regulated nature of the U.S crypto industry, Coinbase doesn’t allow for anonymous crypto trading. You, therefore, will be required to verify your user identity before you can make a deposit and initiate a transaction on Coinbase. Verification here involves supplying the crypto exchange with a copy of your government-issued identification document, proof of address, and a selfie.

How does Coinbase work?

To understand how Coinbase works, we first need to gain a deeper understanding of the two Coinbase exchanges

Coinbase:

As I mentioned earlier, Coinbase is more of a brokerage. This means that when buying and selling on Coinbase, unlike in any other exchange, you will not be dealing with the international crypto market and the prevailing market rates. You will instead be selling to and buying from the Coinbase Company, whose trading prices try to mirror the real crypto market rates.

One of the upsides to this is that even the smallest or biggest gets filled near instantly. This is especially important for institutions and high volume investors who don’t wish to engage in multiple transactions to have their orders filled. The biggest downside, on the other hand, is that the company, and not the open crypto market, has near-absolute control over both the buying and selling prices.

Coinbase Pro:

According to Coinbase, Coinbase pro was established to help cater to the needs of advanced crypto traders. Coinbase Pro is, therefore, a true crypto exchange that grants its traders total access to the crypto markets. You, therefore, are free to set your buying and selling prices on the Coinbase pro order book or complete your transaction using the prevailing market rates.

The main benefit of trading on Coinbase Pro is the fact that you get to interact with the markets directly and buy or sell using the real market prices and not those set by a brokerage. Coinbase Pro, on the other hand, isn’t favorable to high volume traders who would have to rely on multiple transactions to fill their single order. This exposes them to the risk of price volatility where prices spike in between the order.

Coinbase account registration

With the creation of Coinbase pro, the crypto exchange expanded its global reach from 30 to 100+ countries. Note, however, that the main Coinbase platform is still biased towards North America, Europe, and a few Latin countries. While international clients can open an account there, the much they can do with the main exchange is to exchange currencies. This is based on the fact that the exchange doesn’t support card and bank transfers from the rest of the world.

The registration process on this exchange is nonetheless relatively straightforward. The only difference from the registration process on other exchanges is the fact that it requires you to first verify your Coinbase and most other crypto accounts before making a deposit.

Number of cryptocurrencies supported on Coinbase

Another notable Coinbase feature that sets it apart from most other crypto exchanges is its conservative approach to cryptocurrencies. We note that while the rest of the industry players are welcoming to virtually every credible cryptocoin out there, the main Coinbase platform will only support 17 cryptocurrencies. Coinbase Pro adds eight more cryptos to this list to feature 25 cryptocurrencies that are tradable on its platform.

How to trade on Coinbase

To buy or sell cryptocurrencies on Coinbase and Coinbase Pro, you will first need to create a user account. Then start the verification process by confirming your phone number. You will then be directed to the identity verification page that requests you to upload such details as your identification documents, proof of address, and selfie.

Proceed to set up your preferred payment processing method from the choice of bank transfers, credit cards, Swift accounts, and even PayPal. Note, however, that PayPal is only available for withdrawals and not account deposits. Confirm the payment method, after which you are well on your way to making your first sale or purchase.

Coinbase trading fees and charges

Coinbase has one of the most complex trading fees and commissions structures we have come across. Here, trading fees are a mix of variable and fixed rates that will also depend on your preferred payment processing method and the transaction amounts. For instance, the buy and sell orders of amounts below $200 attract a fixed fee. Orders below $10 have a fixed fee of $0.99, while those between $50 and $200 are charged a maximum of $2.99.

Transactions above $200 are charged a fixed percentage that varies from one payment method to another. If you already have enough deposits in your Coinbase account to fund your crypto purchases, you will be charged 1.49%. Debit and credit card funded transactions are, however, higher at 4.99% the transaction amounts. We consider this way expensive in an industry where its competitors like Binance charge a mere 0.1% of the transaction amounts.

Deposit and withdrawal

Deposit and withdrawal methods supported by the crypto exchange include bank wire transfer, PayPal, credit, and debit cards. You will, however, do well to remember that PayPal will only support withdrawals from Coinbase and not deposits.

Additionally, credit and Debit cards can only be used to make direct purchases and not to load cash that sits idly on your Coinbase trader account. Bank Wire deposits in the UK are free while withdrawals cost £1. In the U.S, bank wire deposits and withdrawals cost $10 and $20, respectively.

Security and digital asset protection:

Granted, Coinbase has put in place some of the most formidable security and crypto assets protection measures we have come across. These include:

Two-Factor Authentication and IP whitelisting:

The foremost security safeguard employed by Coinbase is a must-have 2FA feature for all accounts. Additionally, the company embraces IP and Device whitelisting requiring new additional verification every time you log into your account from a new device or IP address.

Coinbase wallet and cold storage:

Each Coinbase and Coinbase Pro trader account comes with a free Coinbase wallet. The company goes on to claim that as much as 98% of the cryptos in these wallets are kept in cold storage while the easily accessible 2% is used to fund the exchange’s day-to-day operations.

Coinbase Vault:

The Coinbase wallet has an additional security feature dubbed the Vault. This requires you to set up a 48-hour lock-up for large balance transactions. This ensures that should anyone gain illegitimate access to your account and initiate a large balance transfer, you will have 48 hours to review and cancel the transaction before the balances leave your account.

FDIC insurance:

In an industry first, all your deposits with Coinbase are insured with the Federal Deposit Insurance Corporation (FDIC). This implies that should the company go down, you will be indemnified for deposits of up to $250,000.

Registration and regulation

Coinbase and Coinbase Pro are highly regulated and licensed by key American finance industry regulatory agencies like the SEC and Fin CEN. We, therefore, consider it one of the highly regulated crypto exchange companies in the world.

Coinbase customer support

Coinbase maintains a highly responsive and readily accessible customer support team. You can get in touch with one of their representatives via email, live chat, on social media, and even on the phone – that’s toll-free for U.S and UK Coinbase clients.

Everything else you need to know about Coinbase

Launched USDC stable coin:

Coinbase recently participated in the development and launch of the USDC stable coin. The token developed on the Ethereum blockchain will, according to Coinbase, always be valued $1 and backed by hard cash deposits into a US bank.

Launched crypto custody for institutions:

While relying on its rich history of securing client deposits and being one of the handful exchanges that have never been hacked, Coinbase launched the crypto custody for institutions. This is a standalone business operating outside the exchange that provides institutions with a safe keep for their crypto assets. It is highly secured and has the backing of a world-leading insurance policy.

Verdict: Is it safe to buy and sell on Coinbase?

We all have to agree that Coinbase has put in place more hardy security measures around their company and their client’s deposits than any other crypto exchange. From two-factor authentication to cold storages and crypto vaults. And with the integrity of these features is also regularly tested by different independent third parties, Coinbase isn’t leaving anything to chance. 

We also are alive to the fact that the company is adequately regulated by some of the most stringent financial regulatory agencies in the world and has the backing of the FDIC. And this informs our verdict that it is safe to buy and store cryptocurrencies on this exchange.

 

Categories
Crypto Exchanges

Binance Exchange Review: Is it legit?

Is Binance crypto exchange an industry leader or just another hoax? Well, launched in China but expelled during the Chinese Crypto ban and forced to find a new home overseas, Binance has gone on to become one of the most popular crypto exchanges today. This popularity can largely be attributed to the impressive number of cryptos supported here, professionalism in customer support, low trading fees, and a friendly CEO – CZ.

Is Binance crypto exchange an industry leader or just another hoax? Well, launched in China but expelled during the Chinese Crypto ban and forced to find a new home overseas, Binance has gone on to become one of the most popular crypto exchanges today. This popularity can largely be attributed to the impressive number of cryptos supported here, professionalism in customer support, low trading fees, and a friendly CEO – CZ.

Is Binance crypto exchange an industry leader or just another hoax? Well, launched in China but expelled during the Chinese Crypto ban and forced to find a new home overseas, Binance has gone on to become one of the most popular crypto exchanges today. This popularity can largely be attributed to the impressive number of cryptos supported here, professionalism in customer support, low trading fees, and a friendly CEO – CZ.

But does Binance has a valid claim to the global crypto leaders post? Read on as we look at its contributions to the industry and everything else you need to know about this crypto exchange.

What is Binance?

Binance is a cryptocurrency exchange founded by Changpeng Zhao (CZ) in China in late 2017 before moving it to Europe’s Malta in 2018. Initially, Binance was a crypto-to-crypto exchange but has since started accepting fiat credit card and bank deposits. And during its less than two years of operation, Binance has become synonymous with highly competitive trading fees, most innovative exchange platform features, championing futuristic crypto policies, and spearheading charitable projects. Its strategic position in Malta outside the strict E.U and U.S. markets makes it a favorite for the rest of the world.

How does Binance work?

First off, Binance is a crypto exchange that allows you to buy, sell, and trade both the leading and other micro digital currencies. Their exchange is available in both the basic and advanced views ideal for both beginner and expert traders, respectively. On either trading chart view, you are exposed to 450+ crypto trading pairs with most of these priced against Bitcoin, Ethereum, and the crypto exchange’s native coin – Binance coin.

In addition to this, Binance trading exchange charts promise some of the most comprehensive as both basic and advanced views capture all the important details needed to push a trade on one page. From trading charts and price graphs to a coin’s trade history and latest prices in the order book to the buy/sell boxes.

How to set up a Binance account

Another of Binance’s endearing features is that it is easy to join and draws its membership from virtually every corner of the world. We found the account creation process on Binance quite straightforward whereupon admission you become tier 1 trader. Here, you can transact and withdraw up to 2BTC per day anonymously.

You will, however, need to pass the company’s KYC and AML policies if you wish to expand your transactional and withdrawal limit to 100 BTC per day as a tier 2 trader. This requires that you send the company a copy of your government-issued identification document and proof of address. Interestingly, there also exist higher levels that allow for even higher trade limits, but you will need to contact the company directly for that.

What cryptocurrencies does Binance support?

The Binance website claims that its exchange supports 150+ cryptocurrencies. But taking into account both the popular currencies and micro tokens launched daily on their Initial Exchange Offering (IEO) platform, we estimate that the exchange supports 300+ tradeable crypto coins, tokens, and stable coins.

How to trade on Binance

Based on our experience on both the basic and advanced versions of Binance crypto exchange, we can comfortably say that you don’t need special skills to trade on the platform. Not when it has one of the most straightforward buy/sell processes. On their website, you will find the exchange tab that provides you with the option to trade on the Basic or Advanced platforms.

Choose basic (it is simpler), and on its left-hand side of the screen, you will have the order book with your preferred coin’s list price and the buy/sell order prices. You can then select or search for the coin you wish to trade on the right-hand side of the screen and use the buy/sell boxes on the bottom center to complete the transaction.

Binance trading fees

Binance will not impose any additional charges or fees on your deposits. You, however, will be charged an average of 0.1% of the transaction volume to trade on their platform. But this trading fee is slashed by 25% if you chose to pay via the native Binance coins. And this essentially makes it the most affordable crypto exchange we have come across so far and probably the secret behind their $2 billion transaction volumes. 

Binance further maintains highly competitive withdrawal charges for different cryptos. Bitcoin and Ethereum withdrawals are, for instance, charged 0.0005 and 0.005, respectively.

Deposit and withdrawal

You will also be interested to note that there are no transfer limits into your Binance account for both anonymous and verified traders. There, however, is a limit as to how much you can withdrawal without verifying your trader account – currently set at 2BTC per day. The company is nonetheless open to both individual and corporate traders and therefore maintains a discretionally daily withdrawal limit that you can always agree on with the Binance management.

Supported payment processing methods

For the longest time, Binance was pure crypto to crypto exchange, implying that you could only deposit and withdraw into your crypto wallet. It, however, is gradually welcoming fiat to crypto transactions and also started processing fiat deposits. At the time of writing this Binance review, however, the exchange will only accept cards (both Visa and MasterCard’s) and bank transfers only. Binance card transactions support swift transfers where cash takes 10-30 minutes to reflect in your binance trader account plus has the lowest processing fees of $10 or 3.5% per transaction – whichever is higher.

Note, however, that the fiat deposits transactions are also limited to traders from specific regions, especially the UK and the larger European Union. Additionally, the platform will only accept USD and EUR currencies meaning that you will incur currency conversion fees for individuals holding other global currencies.

Security and digital asset protection

Binance maintains an online crypto wallet (Trust Wallet) that’s given freely alongside your trader account. You are free to choose between storing your digital assets here or transfer them to any other crypto wallet address. According to Binance, the larger percentage of the digital coins with Binance are held in cold storage, with only a few maintained in online lenders to facilitate the exchanges day-to-day operations.

Despite these cold room claims, however, Binance suffered their first and only successful hacking where someone withdrew over $40 million worth of cryptocurrencies from the exchange in May 2019. The hacker, according to Binance, succeeded with the heist by manipulating key user information like API keys used by bots and managers. The exchange, however, promised to cover the loss and reimburse users using their reserve funds.

Registration and regulation

Binance cryptocurrency exchange is regulated in Malta and operates under the country’s Virtual Financial Assets (VFA) policies. Unlike most other exchanges registered and regulated in two or more countries and under the scrutiny of several financial conduct authorities, Binance is not licensed by any other regulatory body.

Binance customer support

Binance has one of the most active and highly responsive customer support team we have come across in the crypto space. And it all starts with their multi-lingual website that supports up to 16 languages. Their customer support team is accessible 24/7 via email, live chat on the website, and all popular social media pages like Telegram, Twitter, Facebook, and Instagram.

Everything else you need to know about Binance:

Launched Blockchain academy:

In an industry first, the Malta-based crypto exchange company recently launched the Binance academy that it says brings “The World Of Blockchain” to your fingertips. It is ideally supposed to help introduce most individuals to the crypto world by teaching them about cryptocurrency and blockchain for free. This academy covers everything from basic blockchain and crypto terms to emerging trends and tutorials on different blockchain-related topics.

Binance Launchpad:

Binance refers to their Launchpad as “a token launch platform for transformative projects.” It ideally is a modern form of initial coin offering where different blockchain projects launch their tokens. Unlike traditional ICOs that were largely unregulated, projects on Launchpad have to apply for listing, after which they are vetted for such traits as transparency, security, reliability, sustainability, and the professionalism of its developers. This has gone a long way in curbing the runaway scams plaguing the crypto industry.

Margin trading:

Binance crypto exchange is also a margin trading champion and an industry leader in advocating for leveraged crypto trades. Crypto traders on Binance can, therefore, margin trade different crypto assets with leverages of up to 20X.

Binance DEX:

Binance has also been a front-runner in championing decentralized exchanges (DEX). This involves setting up several satellite exchanges around the world that complement the primary Binance exchange in a bid to improve efficiency. In actualizing the DEX, Binance has already come up with Binace Jersey and Binance Uganda – two independent crypto exchange outposts of Binance. It should also be noted that it is through these DEX that Binance has introduced fiat to crypto transactions.

Verdict: Is Binance legit?

Despite joining the crypto exchange industry relatively late, Binance has gone to become one of the most popular exchanges. This is evidenced by its massive following and significantly high daily transaction volumes posted on the exchange – averaging $2 billion daily. And a few factors endear it to the crypto world. Key among this is its straightforward signup trading processes, its support for anonymous trading for low-volume crypto traders, and pursuance of the lowest trading fees in the industry.

These plus the innovativeness that has seen it welcome more crypto trading pairs on board and come up with transformational tools like decentralized exchanges (DEX) and Binance Launchpad, and these plus the fact that it is licensed and regulated in Malta don’t just prove its legitimacy but also go a long way in establishing affirming its market leaders position.

 

Categories
Crypto Daily Topic

Crowdfunding: A new dawn for SMEs

It is already a cliché today to say blockchain and cryptocurrency have revolutionized pretty much every industry. Blockchain started a revolution. The old system of the banking industry and governments were quick to realize the revolutionary power of the tech. That is why there were attempts to regulate or outright ban blockchain and crypto in some countries.

It is already a cliché today to say blockchain and cryptocurrency have revolutionized pretty much every industry. Blockchain started a revolution. The old system of the banking industry and governments were quick to realize the revolutionary power of the tech. That is why there were attempts to regulate or outright ban blockchain and crypto in some countries.

It is already a cliché today to say blockchain and cryptocurrency have revolutionized pretty much every industry. Blockchain started a revolution. The old system of the banking industry and governments were quick to realize the revolutionary power of the tech. That is why there were attempts to regulate or outright ban blockchain and crypto in some countries.

However, blockchain has won against all naysayers.

For the financial industry, it has been the Holy Grail that enabled small businesses in the United States – over five million of them – to access capital and to thrive. Entrepreneurs who had little to no chances to fund their ideas without begging the banks and venture capitalists have been among the biggest beneficiaries of the cryptocurrency boom.

It is true to say the odds have been good for the people who, for years, have been shut out of opportunities because of their gender, age, race, or where they are from. Considering that small businesses have always been the backbone of the US economy, the problem of open bias in the access to capital was a problem that badly needed to be fixed once and for all. 

The JOBS Act merging with cryptocurrency has brought a storm of disruption that opened the floodgate of opportunities for everyone with a small business.

The brief history of the blockchain religion

Bitcoin was released by an anonymous individual or group of individuals called Satoshi Nakamoto in 2009. Very few people will go into history as witnesses of the birth of this new technology that would rapidly grow to take over every aspect of humanity from the money we use to how we govern ourselves. It was the blooming of the idea that decentralized ledgers were the solution to the lack of trust between two people when a transaction is made. This new tech quickly proved to be the antidote to the kind of system manipulation that resulted in a great recession and almost crashed the global economy in 2008.

Today, everyone has a good idea of what blockchain really is. A fair number of people today agree that cryptocurrency may be the future of money. It started with cryptographers and software enthusiasts playing with bitcoin and explaining it to anyone who cared to listen. True believers know that blockchain is a revolutionary trust system because it is simple.

The Bitcoin whitepaper describes Bitcoin simply as a peer-to-peer network that makes it possible for two people to transact and exchange value without the need for a middleman or a third-party. Bitcoin keeps rewarding its believers, and it is enticement enough for more people to want to derive value from it.

As with everything healthy for an economy, the success of Bitcoin created dozens of similar offshoots cryptocurrencies. Bitcoin Cash, Ethereum, Litecoin, Zcash, Monero, and every other cryptocurrency with unique features have contributed something new to the blockchain world. In the case of Ethereum, their ERC-20 platform has been just as revolutionary as the blockchain itself. Small businesses had the power to create their own tokens for capital.

The JOBS Act and the age of crypto crowdfunding 

JOBS is an acronym for Jumpstart Our Business Startups Act. It was signed into law with little publicity in 2012. This was the legal whistle that the game was on, and every small business could legally raise funds by selling equity in crypto tokens. By pitching directly to the crowd, entrepreneurs no longer needed to beg VCs and bankers for capital.

The JOBS Act law was an update to the Securities Act of 1993 that modernized the finance law in one simple way: by easing various regulations that governed the US Securities and Exchange Commission, in the process streamlining ways in which businesses in the United States could raise funds. It encourages small businesses to pitch directly to the masses and back it up with equity.

The JOBS Act was written to directly impact how far startups can go to raise funds. It gave them irresistible exemptions when they issue shares on the blockchain in the form of tokens or cryptocurrency. This means small businesses could develop their own assets and sell it directly to investors without having to go through the pain of IPOs.

The law essentially leveled the small business equity crowdfunding market by guaranteeing every investor that as long as they agree to the terms and conditions of a coin offering (ICO), they could buy equity directly from a small business.

Crowdfunding and the opportunities it brings

To understand why crowdfunding was such a disruptive force in the startup and small business world, you just need to appreciate the three severe problems in the current systems that it fixed:

☑️ For over 80 years, it has been virtually impossible for most people to invest directly in small businesses by buying shares. The stock market was inaccessible because of all the brokers and regulations companies had to deal with. Now, they can legally and easily create special-purpose funds to sell directly to the crowd.

Equity-based crowdfunding has proven more effective and accessible compared to traditional reward and debt-based capital funding alternatives.

☑️ Small businesses have always had a hard time winning over investors because of the bureaucracy that bogs traditional equity-based funding. Before the JOBS Act was passed, very few businesses had the legal backing to sell shares because the only option was an initial public offering (IPO). It’s just sad that IPOs are slow and expensive.

This act essentially saved entrepreneurs the commissions they had to pay to brokers and lawyers, and the government removed all the unnecessary legal hurdles.

☑️ Tokenization of shares became the most popular way for businesses to get liquidity fast and affordably. With ready-made blockchain implementation platforms such as Ethereum evolving each day, it became straightforward for small businesses with limited resources to create and roll out smart contracts with commercial value.

The ERC-20 contract offered simple yet powerful tools for businesses to develop and issue their own cryptocurrencies and tokens.

Building a community of believers key to tokenization success

It may be easy for a business to raise funds on the blockchain by creating and selling digital assets, but there is a price to pay to actually make the sales. Considering how stiff the competition is for the small but growing pool of investors, only entrepreneurs who can convince potential investors that their assets are worth their money succeed in selling them.

Startups and small businesses that go this route have to be creative and impressive to win subscribers. The cryptocurrency crash of 2018 taught them to be even more selective where they put their money in the crypto market.

It takes a great effort to build a community of believers and investors that will buy into a business’s idea. For entrepreneurs that put the effort, the reward is worth it in the end. As a rule of thumb, the number of subscribers the small business gets in three months during beta is indicative of how the market will value shares when the offer opens to the public. This information can even be used to get favorable terms from traditional investors, including venture capitalists and bankers. 

The best thing about crowdfunding using a smart contract is that it offers the opportunity for a business to win the minds and wallets of backers anywhere. Since blockchain is not limited by geographic barriers, it allows entrepreneurs to create a mega community of people from any country in the world. Casting such a wide net has made it possible for them to get support from sources they least expected.

According to the World Bank, 2016 was the first year when small businesses and startups raised more money from crowdfunding than from venture capital. The crowdfunding environment has evolved fast since then to become a global phenomenon as businesses in all industries rush to raise capital by issuing their own digital assets. These assets serve their purposes in different ways from medium of exchange to store of value. Every blockchain expert predicts a bright picture for businesses that embrace and rigorously take advantage of the financial innovations brought by blockchain.

Categories
Crypto Daily Topic

CDC Turns to Blockchain to Keep Track of Outbreaks

The United States government has been one of the first governments in the world to embrace the blockchain technology. While it was very apprehensive of it largely because of the threat of blockchain, but it has not been long before it realized its many other benefits.

The United States government has been one of the first governments in the world to embrace the blockchain technology. While it was very apprehensive of it largely because of the threat of blockchain, but it has not been long before it realized its many other benefits.

The United States government has been one of the first governments in the world to embrace the blockchain technology. While it was very apprehensive of it largely because of the threat of blockchain, but it has not been long before it realized its many other benefits.

Blockchain’s capability to build trust in public service provision through transparent and collaborative networks makes it an ideal system to use in governance and critical information distribution. The Center for Diseases Control and Prevention (CDC) has figured out how blockchain can be leveraged to track patient health data, monitor infectious diseases, and track prescription medication.

The CDC launched a pilot project late in 2018 to explore ways in which the distributed ledger technology – that is blockchain – can be used to manage patient data over a period of time efficiently, and across different settings. This is particularly important in this age when artificial intelligence presents a huge potential to detect, track, and stay on top of outbreaks and threats to public health.

The department has partnered with various leading technology companies, including IBM, to provide the artificial intelligence technology for the blockchain project and Intel to develop the backbone on which the new blockchain platform will run.

How blockchain works in health

You probably already know blockchain as the underlying technology for cryptocurrency. Blockchain is a distributed ledger technology (DLT) with great potential across almost every industry, including healthcare. Simply put, ‘blockchain’ is a ‘block’ of transactions or data linked together using cryptographic signatures called hashes to form a ‘chain.’ The blockchain is a ledger in which the blocks are verified and stored by a network of connected computers or processes known as ‘nodes.’ Every node in the blockchain network maintains an entire copy of the blockchain that is constantly synced and updated.

Various governments, organizations, and private companies are exploring how the new technology can be used to boost access and quality of healthcare as well as cut costs. Blockchains and their applications differ depending on the underlying specifics such as networking type, encryption, hashes, and intended applications.

However, in general, all blockchain platforms offer the same benefits, including transparency, secure collaboration, faster transactions, automatic and real-time reconciliation of accounts, and transactions without the need for intermediaries or third-parties.

Blockchain strategy to manage and analyze patient data

To demonstrate how committed it is to integrate the newest technologies to improve the welfare of its people, the United States government last year pledged to spend as much as 20 percent of its GDP on healthcare.  The CDC is already tapping the blockchain technology to track and stem the rising cases of opioid addiction in a project that looks to streamline the traditional long-running surveys used to track patient symptoms and treatments.

The new system has proven to be easier for the CDC to collect data through surveys from such institutions as the National Hospital Ambulatory Medical Care Survey, which collects patient health data and visit information from hospitals and doctors all over the country. Presently, the government relies on data collected and analyzed by the CDC to make many determinations from how doctors prescribe opioid painkillers and antibiotics to how frequently Americans are seeking medication for stress management.

The new blockchain-based health surveillance system set to be rolled out by the CDC will make it easier for public health agencies to survey the hospitals and physicians to acquire important information about their patients as well as their prescription practices. In addition to collecting the data, the system will also track, secure, and a log of who accesses which parts of the data and when.

The transparency that the blockchain platform brings to the operations of the CDC is unparalleled and comes at a time when data security is just as sensitive as it is open to how it is used. While the technology itself does not store the patient data, it simplifies the process of keeping track of which data was collected from whom and where it is stored. This helps safeguard sensitive patient information while allowing medical providers access and update the information on the blockchain.

The blockchain platform the CDC is testing stores its data in encrypted electronic records in IBM’s cloud servers. Only authorized individuals in specific agencies would be able to obtain the encryption keys required to access the data.

Managing breakouts and epidemics

One of the most anticipated uses of the blockchain platform in the health industry is to help health workers respond to crises faster and more effectively. The agency is testing how it can use blockchain to study and monitor trails of any reported outbreaks of diseases to help its scientists find their origins and patterns. 

The new platform is very convenient, largely because of the timestamping feature. Coupled with the benefits offered by distributed data processing tools on the cloud, the CDC is certain that proper implementation of blockchain will better help in suppressing the spread of diseases.

When a person contracts an infectious disease such as hepatitis A, the CDC needs to be among the first to know about it in order to take action and contain it. Institutions under the Health Department within the neighborhood in which the diagnosed patient comes from must also be notified. This is important since the patient may have contracted the virus that causes the disease from contaminated food or water in that area, and drastic measures must be taken to prevent further contamination.

The CDC will make use of the blockchain platform to routinely share public data with local and national health organizations besides institutions under the health department. This communication revolution in the health industry has enabled easier and more efficient ways to coordinate the mitigation of the spread of infectious diseases. The institution has already developed special applications that are specially designed for improved public health surveillance and public health data management. The CDC believes that moving such crucial data from one peer to another – faster, securely, and in a compliant manner – is the key to its success in dealing with outbreaks and epidemics.

IBM is not the only company that strongly believes that the blockchain technology has proven invaluable in suppressing epidemics and generally making work easier for the CDC. Intel, too, is partnering with private giants in the pharma industry, including Johnson & Johnson and McKesson, to develop blockchain platforms that would help the CDC. One particular way is helping them better trace how prescription pills are distributed from the manufacturer to the patients.

With such a formidable tool, the CDC will better understand, from a supply chain management perspective, which physicians prescribe which medications and whether they are culpable of malpractices.

Other future blockchain applications in health

There is presently a serious problem in the way health institutions keep public health records. The storage and data distribution system is incoherent and not fully utilized. The confusion arises because the CDC expects the institutions that collect them to file the same data with different institutions, often using different documents.

With the blockchain technology, the CDC will be able to eliminate delays and inaccuracies in data collected from different sources while ensuring that sensitive data is protected from unauthorized individuals.

Another way in which the CDC is exploring the use of blockchain is in consent management. In the current healthcare environment, every state has its own patient and privacy consent regulations. A blockchain-based system would be used to record data sharing consent to ensure that no patient’s privacy is breached on purpose or unintentionally.

Categories
Cryptocurrencies

What is the Basic Attention Token?

Advertising is the lifeline for most businesses. However, the current digital advertising space is, to put it mildly, broken. The three players in the advertising model: the user, publisher, and advertiser all get shortchanged. Users’ data is harvested without their consent, publishers (owners of the ad) don’t effectively monetize content, and advertisers (creators of the ad) are perennially subjected to fraud.

Advertising is the lifeline for most businesses. However, the current digital advertising space is, to put it mildly, broken. The three players in the advertising model: the user, publisher, and advertiser all get shortchanged. Users’ data is harvested without their consent, publishers (owners of the ad) don’t effectively monetize content, and advertisers (creators of the ad) are perennially subjected to fraud.

Advertising is the lifeline for most businesses. However, the current digital advertising space is, to put it mildly, broken. The three players in the advertising model: the user, publisher, and advertiser all get shortchanged. Users’ data is harvested without their consent, publishers (owners of the ad) don’t effectively monetize content, and advertisers (creators of the ad) are perennially subjected to fraud.

Those are not the only problems with the current advertising model. For instance, who’s to say a user, for example, on YouTube, will click on that pop-up ad? Chances are they will skip it as soon as the five seconds are up.

And let’s not even get into dishonest platforms. Everyone still remembers Facebook’s infamous debacle when they sold users’ private data to the shady Cambridge Analytica, which the latter used to sway elections in several countries.

As you can see, modern digital advertising needs an overhaul. The Basic Attention Token (BAT) is an ingenious attempt at this – by seeking to have every participant in the advertising chain get what’s due to them.

This article delves deeper into this proposition, explores the BAT token and how to acquire it, and demystifies the game-changing browser technology behind the BAT system.

What is BAT?

BAT stands for Basic Attention Token – a digital advertising token built atop the Ethereum blockchain. The token is used to facilitate a decentralized ad exchange marketplace between users, advertisers, and publishers. It is based on a novel concept – that user attention is critically important for advertising end goals. So the key is to monetize what really matters: user attention and to eliminate the needless expenditure that’s associated with the current model.

BAT is still young – only launched in 2017. It was created by Brenda Eich, the brains behind JavaScript, and who is also Mozilla Firefox co-founder. Eich envisaged that the BAT token would accomplish the following:

☑️ Eradicate the middlemen in the current advertising model

☑️ Reward users, advertisers, and publishers with what is rightfully theirs

☑️ Provide an incentive for users to view ads (give ads attention)

☑️ Reward advertises with better ROI for their content

☑️ Give publishers a share of ads revenue

How Does the Basic Attention Work?

The BAT token can currently only be utilized on the Brave Browser. Using smart contracts, advertisers pay BATs to publishers to run their ads. When a user views the ad, his attention is measured in real-time on the browser – taking into account the visibility of the ad, time spent viewing the ad, and their actual engagement with the ad. The user is then rewarded with a portion of the token payment, and the remainder is paid to the publisher hosting the statement. 

Users can then spend the BAT on several offerings on the browser – from premium products to high-resolution photos to data services.

This system works for everyone involved in the following ways:

☑️ Users can anonymously serve the web, with advertisers still being able to monetize their attention.

☑️ Publishers can get their fair share of revenue that was previously lost to middlemen

☑️ Advertisers can glean more accurate data on their campaigns, enabling them to target audiences more effectively, and relevantly, next time 

The blockchain-based model eliminates fraud on behalf of advertisers 

What is the Brave Browser?

Brave uses a background ledger system to monitor your attention and what kind of content you mostly engage with. Based on this info, publishers are then paid accordingly. Also, users receive content that they most probably would like to see.

And although Brave measures your attention, that information remains anonymous, and your private data always remains in your control.

Your attention value, or the degree of attention you’ve devoted to an ad, is calculated using the incremental time the ad is viewed, plus the number of ad pixels visible in proportion to relevant content.

The Brave Bowser epitomizes the following features:

Privacy. Users can surf the web completely anonymously. Any information that would unethically be harvested is unavailable. All tracking is also blocked automatically.

Enhanced ad matching. Brave keeps an impressive collection of user data – from active tabs, URLs, keywords, and so on.

Improved user experience. Users never have to look for external servers for every new page. Ad matching is done locally, leading to better quality browsing, utilization of power, saving of internet data, faster browsing, and uninterrupted content flow.

Basic Attention Token Statistics 

BAT has a total supply of 1.5 billion tokens. As of December 18, 2019, it has a market cap of $229, 862, 410, and a 24-hour trading volume of $69, 897, 505. It ranks at number 34 in terms of market cap, while trading at $0.162913. Its all-time high was $0.980702 on Jan 09, 2018, while its all-time low was $0. 66209 on July 16, 2017.

Where to Buy and Store BAT

You can acquire some BAT tokens through any of the following methods: 

  • Funding a Brave wallet with Bitcoin, Ether or Litecoin – upon which an automatic conversion to BAT takes place
  • Using a credit or debit card through the Brave wallet
  • Buying BAT on cryptocurrency exchanges like Coinswitch, CoinbasePro, Binance, Kraken, Huobi, Bittrex, Coinex, and so on.

Being an ERC 20 token, you can store BAT in any ERC 20 supported wallet. You could also consider hardware wallets like Trezor, Ledger Nano, KeepKey, CoolWallet, and so on.

The in-house Brave wallet is also another great option.

Conclusion

BAT is one of the few crypto projects with big-name support, a straightforward case, and a feasible product. The founder of the project is the true and tried creator of the popular Firefox browser, and on top of that, he has the relationships to push BAT onto other browser platforms.

The technology has serious potential to reshape the way that users, advertisers, and publishers interact with each other – with everyone getting rewarded accordingly. It’s safe to say that BAT’s interruption of the current advertising ‘order’ is a matter of if, not when. It should be exciting to see how BAT turns tables.

Categories
Crypto Exchanges

BitMex Crypto Exchange Review 2020: Is BitMex Legit or Scam?

When looking for cryptocurrency exchange platforms, BitMex is one of the first names you will come across. Also known as Bitcoin mercantile Exchange, this platform boasts of “industry-leading security,” offers 100X leverage, and has no expiry dates for trading. They are also one of the handful of exchanges yet to lose any Bitcoin through hacking and fraud.

When looking for cryptocurrency exchange platforms, BitMex is one of the first names you will come across. Also known as Bitcoin mercantile Exchange, this platform boasts of “industry-leading security,” offers 100X leverage, and has no expiry dates for trading. They are also one of the handful of exchanges yet to lose any Bitcoin through hacking and fraud.

When looking for cryptocurrency exchange platforms, BitMex is one of the first names you will come across. Also known as Bitcoin mercantile Exchange, this platform boasts of “industry-leading security,” offers 100X leverage, and has no expiry dates for trading. They are also one of the handful of exchanges yet to lose any Bitcoin through hacking and fraud.

Thanks to its robust security and advanced APIs, BitMex has established itself as one of the most reliable exchanges for seasoned crypto traders. But how true are these claims? More importantly, is it safe to trade crypto through BitMex?

In this guide, we take a broad perspective into BitMex, including their exchange platform features, mobile platform, registration, trading, leverage, margin levels, and everything else you need to know before you start trading with the exchange. First, let’s take a brief look at the platform’s background.

What is BitMex?

BitMex was established back in 2014 by HDR Global Trading Limited, which was found by former banking experts Arthur Hayes, Samuel Reed, and Ben Delo. Since its inception, BitMex has morphed into one of the most significant platforms for trading Bitcoin. The Seychelles-based exchange offers a non-conventional crypto trading p platform in that you do not deal with actual cryptocurrencies.

In their stead, investors get to margin trade cryptocurrencies CFDs. Here, you can leverage your trades up to 100 times. However, because of the stringent crypto trading rules in the US, BitMex is not open to US-based traders. The upside of using the Bitmex Platform and its and its margin trading features is that it allows you to make large profits from relatively small investments.

The downside to these leveraged trades nevertheless is the fact that you can quickly lose everything in a relatively short time. BitMex suits traders that know what they are doing. Registration is also straightforward with signup only requiring a valid email address, proof that you are at least 18 years of age.

How does BitMex work?

BitMex offers a derivative crypto trading platform, meaning you will not directly trade the cryptocurrency. To understand how the platform works, we need to review the available contracts:

Futures contract

This is an agreement to buy or sell cryptocurrency at a specified date in the future. The contract also has a predetermined price.

Perpetual contracts

Perpetual contracts are relatively similar to the traditional future agreements. However, there is no expiry date with such agreements.

Upside profit contracts

This contract allows you to participate in the potential upside of a cryptocurrency. You pay a premium on a trade date, which you will receive the profit if the crypto price goes up. Otherwise, no payment occurs.

Downside profit contracts

This is the opposite of upside profit contracts as you get paid if the crypto’s price falls.

The BitMex exchange platform offers various functionalities and widgets you can use to manage your orders and change your viewing preferences. It also allows charting, with the TradingView feature that provides better visibility than virtually all exchanges. Once you make an order, you can view, track, and manage it through Active Orders. BitMex platform is solely available for desktop use, which is understandable considering its complicated interface.

You can trade contracts for different types of cryptocurrencies against other FIAT currencies, including the Japanese Yen, US Dollar, and Chinese Yuan. However, all deposits are to be made using Bitcoin, which also the currency used to represent your profits and losses even when trading altcoins. Once you have loaded your e-wallet, you can then use Bitcoin to purchase other cryptos.

BitMex account registration

BitMex, like many other crypto exchange platforms, has a straightforward registration process. Provided you are 18 years and above and have a valid email address, you can create a free account. BitMex offers two separate accounts: the live trading option – which is available to experienced traders – and a demo account (BitMex Testnet) – a sandbox version of the live trading account – that allows you to try the platform without going live.

Testnet demo account is ideal if you want to learn more about how the exchange works before you begin trading real currency. BitMex is registered in the Republic of Seychelles and offers a global service accessible to everyone who meets their minimum requirements. However, the service is not available in some places, including the USA, Quebec Province (Canada), Crimea, Cuba, Iran, Syria, Sudan, and North Korea. The site does not limit location, but your local laws may affect how you use BitMex services. 

Number of cryptocurrencies supported on BitMex

BitMex was founded to give priority to Bitcoin, which was the only trusted cryptocurrency back in 2014. To date, all deposits and withdrawals are only available in Bitcoin. However, the platform supports several other cryptos and FIAT currencies.

This includes Bitcoin and Bitcoin Cash, Ethereum and Ethereum Classic, Dash, Tron, Cardano, Litecoin, Monero, Ripple, Zcash, and Tezos. Bitcoin trades allow both spot and futures trading options. Other cryptocurrencies only provide futures. BitMex focuses on these few options to suit traders looking for highly specific niche platforms that offer leverage on trade. 

How to trade on BitMex?

Trading with BitMex is quite effortless once you get the hand of their unique interface. You first need to sign up for an account and make deposits. The minimum deposit you can make is 0.0001BT. There are no other limits on the maximum you can deposit or withdraw. Once you have loaded your account, you can use the dashboard to find the contracts that match your investment needs. There are various features to help you make an order and manage your trades. 

BitMex trading fees and charges

BitMex offers some of the most competitive trading fees in the market, considering the chunky profits you can make as a seasoned crypto investor. With a -0.025% marker fee, you can quickly grab little rebates. The taker fee is 0.075%, while the settlement fee is 0.05%.

There are no other fees charged in the platform, apart from the regular Bitcoin network fees calculated from the blockchain load. It is one of the benefits of using this platform compared to others where fees can go as high as 0.25%. Fees for Bitcoin are slightly different from other cryptocurrencies. They charge 1% for the initial margin and 0.5% for maintenance. 

Deposit and withdrawal

Deposits and withdrawals are free of charge. You deposit from as low as 0.001 BTC, and there are no other limits. Withdrawals are also pretty fast and available 24 hours a day. What’s more, withdrawals are processed in person at a specific time, which adds an extra layer of security.

You can only make deposits or withdrawals in Bitcoin. Your account balances are also reported in Bitcoin, but you can leverage trades in several cryptocurrencies mentioned above. Unfortunately, BitMex does not allow bank transfers and credit cards.

Security and digital asset protection

BitMex characterizes an exceptional level of security and asset protection with its in-house hand-checked withdrawal system. They also use the underlying index price (not final price) to calculate their margins, making it impossible for frauds to manipulate order books or cause liquidation. They are yet to suffer any hacks or losses since inception.

bitMex partners with Amazon Web Services provide two-factor authentication and trading engine security that can shut down the system whenever the deposit address and private keys don’t match. The platform’s credibility is further guaranteed by the fact that BitMex is an insured exchange that protects your investment even if the site goes down. What’s more, the platform was developed using kdb+, the coding language used by the world’s biggest banks.

Registration and regulation

BitMex is a legal exchange owned by HDR Global Trading Limited, a company that was incorporated under the International Business Company Act of 1994. It is a legit crypto exchange platform that operates under the stringent regulations of existing laws. The service is global but adapts to the unique rules in different places, so you should always review your local laws to know what you can achieve. Since the system has no comprehensive verification process to prove location, it is easy to sign up from anywhere.

BitMex customer support

BitMex uses a standard industry customer support offered through an email ticket. Their site is also packed with resourceful information and an announcement box. There also are a lot of live updates going on in the platform, including a live stream of trader chats. A dedicated support desk answers to your urgent inquiries 24/7 so you are always in good hands. Various exchanges offer better customer support, but you should be able to find any help you seek. 

Everything else you need to know about BitMex

BitMex is the most reputable platform offering margin trading options. You can set your desired leverages manually or automatically using the Leverage Slider. Plus, you can also cancel orders at will or choose an iceberg and fill or kill orders.

If you are looking for an easy to use exchange for margin trading, BitMex is definitely one of the best options. Here, you gain access to the leverages as soon as you are done with account creation. Plus, BitMex allows traders to interact with each other via live chat. Not to mention that there are several widgets and tools to help you manage and visualize your trades. 

Verdict: Is it safe to trade on BitMex?

BitMex is probably one of the best crypto exchange platforms for those seeking margin trading options. The company has invested a lot towards security and focuses on satisfying a unique niche. They offer a transparent operation with extremely low fees and up to 100 times leverage.

While there are no FIAT deposits or withdrawals, the platform is unique and very secure. It is ideal for seasoned traders who are experienced and know how to navigate margin trading options. With that said, BitMex is a legal, licensed exchange company with real human customer support and viable opportunities for making huge profits.

 

Categories
Cryptocurrencies

Demystifying Maker – The Groundbreaking Stablecoin

Unpredictability and wild volatility swings have always been the bane of cryptocurrency’s existence. As a solution, crypto experts invented the idea of stablecoins – which is a cryptocurrency pegged against “real-world” money to tame the fluctuations of crypto. But stable coins also turn out to have their own share of problems.

Unpredictability and wild volatility swings have always been the bane of cryptocurrency’s existence. As a solution, crypto experts invented the idea of stablecoins – which is a cryptocurrency pegged against “real-world” money to tame the fluctuations of crypto. But stable coins also turn out to have their own share of problems.

Unpredictability and wild volatility swings have always been the bane of cryptocurrency’s existence. As a solution, crypto experts invented the idea of stablecoins – which is a cryptocurrency pegged against “real-world” money to tame the fluctuations of crypto. But stable coins also turn out to have their own share of problems.

Maker is a token and a platform that seeks to improve the stablecoin model while mitigating the volatility risk inherent with cryptocurrency.

In this guide, we’ll discover the Maker system, how it works, the place of Maker in the entire crypto ecosystem, and how you purchase the Maker token.

What is Maker?

To begin to understand Maker, we need to get a good understanding of what is a stablecoin. Stablecoins are a new class of cryptocurrencies that attempt to mitigate the risk of normal cryptocurrencies. Cryptocurrency prices are prone to volatile fluctuations, which ultimately makes them unsuitable for day to day use or as collateral. For instance, who’d want to spend 100 crypto coins on a pair of jeans only to find out the next month they’re worth a fortune? 

This is where stablecoins step in: to offer the best of cryptocurrencies – the privacy of money and instant processing, as well as the stability and predictability of fiat currencies.

The Maker System

The first thing to understand is that the Maker platform has a dual coin system: Makercoin (MKR) and Dai (DAI). Makercoin is a volatile token that governs the Maker platform. Dai is a stable coin designed for daily use, savings, and collaterals.

Dai is denominated in US dollars in a 1 DAI = 1 USD formula. Unlike the other stablecoins out there, DAI is not pegged to any fiat currency. Stablecoins that are pegged to fiat currency do not live up to the cryptocurrency vision of decentralization and censorship-resistance. By using external market economics, Makercoin is the volatile crypto coin that allows Dai to be a stablecoin.

As a decentralized stablecoin, Dai offers itself to four markets that could benefit from its use:

Gambling Markets – it doesn’t make sense to gamble with the wildly unpredictable cryptocurrencies. This would only expose the gambler to two risks: the risk that comes with the bet itself and the risk of the asset price. Using a stable cryptocurrency like Dai allows you to limit your risk solely to the usual probability of loss.

Financial Markets – Such financial markets like derivative smart contracts and options need collaterals of stable price values. The collateralized debt positions offered by the Maker platform also offers a permissionless, interest-free decentralized trading leverage, and decentralized tools.

International Trade – International transactions usually rack up high costs. Dai mitigates foreign exchange volatility while also removing the need for intermediaries in the transaction process.

Transparent accounting systems – Dai provides a completely transparent platform where all transactions can be verified – allowing organizations to improve efficiency and reduce the probability of fraud.

What Is the Use of the Maker Coin?

On the Maker system, the Maker token plays these roles:

Utility token. MKR is used to pay for the collateralized debt positions that generate Dai on the Maker ecosystem.

Governance token. Coin holders use the token to vote for operational changes in the Maker protocol through a continuous approval voting process. This means that the proposal that has the most votes from coin holders becomes the “top proposal” that can be activated to improve the protocol. 

Recapitalization Resource. The Maker system automatically creates new MKR tokens in case of a shortfall on the collateralization system.  

How Does The Maker Platform Work?

The Maker platform has a unique smart contract system called Collateralized Debt Position (CDPs). To generate Dai tokens, users must deposit collateral assets, which are then held by CDPs. Generating Dai also incurs the user some debt. The debt is what locks a user’s deposited collateral assets within the GDP until they can repay the debt in the same quantity of Dai, and withdraw its collateral.

Currently, “pooled ether” (PETH) is the only collateral accepted by the Maker system. To generate DAI, you must first convert Ether into the pooled ether.

A user’s interaction with CDP has the following stages:

Making the CDP. A user sends a transaction to Maker to initiate a CDP. They then send their PETH to collateralize the CDP.

Generating Dai. The user sends a transaction stating the amount of Dai they want from CDP. After generating Dai through this process, an equivalent amount of PETH is locked away in a CDP smart contract. They can only access this PETH when the Dai debt is paid off.

Debt Reconciliation. To get back their collateral, a user must pay off their outstanding debt in the CDP together with a “stability fee” that is essentially interest on the outstanding debt.

Withdrawing collateral. After the user’s debt and stability fee are paid off, the user can retrieve their collateral by sending a transaction to the platform

MKR Statistics

Makercoin impressively ranks at number 22 in terms of market capitalization. As of December 19, 2019, the crypto has a market cap of $476, 146, 583, a 24-hour trading volume of $4, 797, 594, and a circulating supply of 1 billion. Its all-time high was $1,773.92 on Jan 18, 2018, with its all-time low being $21.06 on Jan 30, 2017. Its current going price is $476.15.

How to Buy and Store MKR

Buying Maker comes with a two-step process. First of all, you need to buy some BTC or Ether from an exchange that accepts debit card deposits or bank wire. You then need to transfer the crypto to an exchange that will accept the BTC or Ether in exchange for MKR.

For example, you can buy BTC or Ether at Coinbase and exchange it for MKR in CoinbasePro, Gate.io, HitBTC, OKex, Kucoin.

Both coins of the Maker system are Ethereum tokens based on the ERC-20 protocol. As such, any ERC-20 compliant wallet is suitable for storing MKR. Hardware wallets such as the Ledger wallets, Trezor, Keep Key, Cool Wallet S, etc. are also recommended.

Conclusion

Maker addresses one of the biggest issues with cryptocurrency – its volatility. By stabilizing Dai’s value through external market systems, users get the best of crypto and fiat currency – privacy, instant payments, and the stability of value. Thus, you can invest in the crypto without worrying that its value will plummet overnight.

MakerDai also solves the issue of questionable centralization status and lack of transparency associated with other stable coins.  As it is now, Maker has the opportunity to seize the stage and become the ideal stablecoin. It has the recognition, a working model, and an irresistible proposition for the cryptocurrency economy.

Categories
Cryptocurrencies

Breaking Down the Populous Cryptocurrency

Many small and medium-sized businesses grapple with the issue of late invoice payments. Late invoices cause businesses to miss many money-making opportunities, not considering the error and fraud-prone paper-based trails of the existing invoicing system.

Many small and medium-sized businesses grapple with the issue of late invoice payments. Late invoices cause businesses to miss many money-making opportunities, not considering the error and fraud-prone paper-based trails of the existing invoicing system.

Many small and medium-sized businesses grapple with the issue of late invoice payments. Late invoices cause businesses to miss many money-making opportunities, not considering the error and fraud-prone paper-based trails of the existing invoicing system.

Blockchain technology can solve this by enabling decentralized, transparent, and error-free invoice financing that would save businesses money and time.

Populous is a platform that promises to simplify invoicing for businesses. In this explainer, we explore in more in-depth detail on how Populous achieves this, the role of its three tokens, how the future looks for the platform, and more.

What is Populous?

Populous is a peer-to-peer platform built on Ethereum’s blockchain that uses its distributed ledger technology to provide small and medium-sized businesses a global and efficient invoice financing platform. Populous describes invoice finance as “a form of funding that instantly unlocks the cash tied up in outstanding sales invoices. Business owners allow invoice buyers to buy invoices at a discounted rate in order to unlock the cash quicker. Once invoices are paid by the invoice debtor, the invoice buyer receives the amount previously agreed upon.”

In short, Populous wants to reduce or eradicate the need for third parties, intermediaries, or moderators in invoice processing and transactions.

How Does Populous Work?

On the Populous platform, there are two types of transacting parties: buyers and sellers. These parties exchange invoices via smart-contract-based auctions. We can think of invoice sellers as borrowers, with invoice buyers as investors.

To sell an invoice, you must first register your company. You will then wait until you receive approval from a Populous administrator. Once you’re approved, you can offer an invoice with specific sales goals. This will also need to be approved.

If your invoice offer is approved, an invoice buyer will view available invoices and identify which one they would like to invest in. The buyer will then make a bid for the invoice. They will also set an interest rate for the invoice.

Next, the invoice seller will view the bid, and if satisfied, confirm it. The seller then releases the invoice and then, via a smart contract, receives funds equivalent to the bid.

Populous’s Altman Z-Score Formula

The approval of bidders is done using an in-house credit rating system called the Altman Z-Score Formula. The formula is a financial modeling tool that assesses businesses’ credit risk based on these three factors:

  • The probability that a business will become bankrupt within two years
  • The probability that a business will default on terms of the agreement
  • The control measures of a business in times of financial distress

The Z-Score formula solely assesses a company’s suitability for the platform.

Sellers’ bids usually only last for 24 hours. A bid ends under either of the following circumstances:

  • An auction is successful – meaning your sales goal is matched with a bid
  • 24 hours elapse before your sales goals match a bid. In this case, you can either take the best available bid, cancel your offer, or submit another offer
  • You withdraw your offer, in which case you can completely cancel the auction or accept the best bid available 

Explaining Populous Tokens

The Populous platform has three tokens, which can be confusing at first glance. Let’s break them down below. 

Pokens

Pokens are the in-house currency of the Populous platform. The currency is pegged to an equivalent of fiat currency. For example, in the U.K, 1GBP Poken is equal to 1GBP, and in the US, 1USD token is equal to 1USD. Pokens are ERC 20 tokens, and users pay with them to acquire invoices. The Pokens themselves can be directly purchased from Populous with GBP, USD, EUR, and Yen. Other currencies will be converted to GBP on the London Stock Exchange rate before you can purchase the tokens. You can also buy Pokens using supported cryptocurrencies such as Bitcoin and Ethereum.

Pokens are ERC 20 tokens, meaning you can store them in any ERC 20 compatible wallet. 

Populous Platform Token (PPT)

These tokens were distributed to the public during the ICO and are used for investment purposes. PPT tokens have a capped supply of 53, 252, 246.

Apart from holding PPT, you can use it to invest in invoices. When you invest in an invoice through Populous, your tokens are put up as security for the investment, after which you receive Pokens in exchange. Once the invoice is paid, you receive Pokens as profit together with your Original PPT investment.

PXT

PXT (Populous eXtensible Business Reporting Language (XBRL) Token) is a token that allows you to access Business Intelligence (BI) data on the Populous XBRL Platform. With PXT, you can access the one quadrillion bytes of business on the Populous Data Platform. This data enables you to create customized reports regarding credit scores, SWOT analyses, your business’s financial health, and so on.

PPT Statistics

As of December 19, 2019, PPT has a market cap of $21, 423, 195, and a 24-hour trading volume of $1, 108, 105. Its all-time high was $76.49, while its all-time low was $0.298937. The token has a circulating and fixed supply of 53, 252, 246 tokens.

Where to Buy and Store PPT

Most exchanges do not allow you to buy crypto with fiat currency. You’ll thus need to buy BTC or ETH so as to exchange it with PPT. You can get the token on exchanges like Binance, Kucoin, P2PB2B, IDEX, Coinplace, LATOKEN, Bitrue, Livecoin, etc.

PPT is an ERC 20 token, meaning you can store it in any ERC 20 supported wallet, e.g., MetaMask and MyEtherWallet.

If you prefer tighter security (and who doesn’t?), you’re better off using a hardware wallet. Trezor, Ledger Nano, and Parity are some of the popular PPT compatible wallets.

What’s the Future of Populous?

So far, there doesn’t seem to be any serious competitor of Populous. The biggest challenge it faces is getting clients to ditch existing invoicing models and transition to their platform. For now, the Populous system is limited to the UK and China/HongKong markets. That means only invoices originating from those territories can be sold on the platform. Populous is likely working to implement support for more countries – something that will help it achieve its goal of being a global trading platform.

Conclusion

Populous is a platform with an excellent model and vision but is yet to truly capture the imagination of cryptoverse. This can partly be blamed on its current country limitation, or it could be because it’s still a ‘teething’ project. Either way, PPT needs to expand its platform and market itself better if it hopes to make a bigger impact on the crypto and blockchain sphere.

 

Categories
Crypto Daily Topic

Are Anti-Money Laundering Rules Hurting Crypto?

Netherlands-based cryptocurrency mining pool Simplecoin and Bitcoin gaming platform Chopcoin are shutting down over the fifth European Union Anti Money-Laundering Directive that is set to come into force on January 10, 2020. The proposed directive will require crypto operations in the EU territory to conduct Know Your Customer procedures on customers for anti-money laundering purposes. 

Netherlands-based cryptocurrency mining pool Simplecoin and Bitcoin gaming platform Chopcoin are shutting down over the fifth European Union Anti Money-Laundering Directive that is set to come into force on January 10, 2020. The proposed directive will require crypto operations in the EU territory to conduct Know Your Customer procedures on customers for anti-money laundering purposes. 

Netherlands-based cryptocurrency mining pool Simplecoin and Bitcoin gaming platform Chopcoin are shutting down over the fifth European Union Anti Money-Laundering Directive that is set to come into force on January 10, 2020. The proposed directive will require crypto operations in the EU territory to conduct Know Your Customer procedures on customers for anti-money laundering purposes. 

One of the basic tenets of cryptocurrency is privacy, and some crypto operations would rather close shop altogether than go against that principle. Indeed, Simplecoin argues this as the reason informing its decision to shut down: “We believe in the power of cryptocurrency and its potential. Mining should be available to anyone and we refuse to jeopardize our users’ privacy.”

Chopcoin’s website is currently inactive, while its Twitter page sent out a tweet on November 18th informing users that it will be suspending its services due to “regulatory concerns.”

This comes barely a week after UK-based crypto payments provider BottlePay announced its decision to cease operations on 31st of this month, citing an unwillingness to subject users to “the amount and type of extra personal information” that it would be required to extract from customers.

Some member states have even taken it a notch higher. In the Netherlands, it is alleged that the Central Bank and the Ministry of Finance are planning to introduce more rules than the ones outlined in the AMLD5.

While some crypto firms may be closing down over ideological reasons, others may be closing down due to the financial implications spelled by AMLD5. Wouter Vonk, the co-founder of Dutch-based crypto exchange Coingarden, which is also closing, has revealed that the new regulations “will come with serious costs”, forcing them to end operations.

What is the AMLD5?

The fifth Anti Money-Laundering Directive (AMLD5) entered into force in 2018 and will take practical effect in January 2020. EU member states are obliged to entrench the new policies into law by January 10th. Many crypto services regard the directive as privacy-intrusive.

AMLD5 is set to bring changes such as limiting the anonymity of cryptocurrencies, wallets and prepaid cards; increased exchange of information between anti-money laundering authorities, public registers for crypto entities; monitoring of transactions and reporting any suspicious activity to authorities.

Crypto Regulation in America

It isn’t just the EU that is cracking the whip on crypto operations. In the US, the Securities Regulation Commission continues to crack down on crypto-based projects, including those that seem to not have registered “properly.”

And the current administration’s reception to crypto has been hostile – to put it mildly. Treasury Secretary Steve Mnuchin has branded them a “national security threat”, while President Donald Trump has tweeted before that he’s not “a fan of bitcoin and other cryptocurrencies.” Some in the crypto community worry that the president could exercise his supreme powers and enforce more stifling regulations on cryptocurrency. 

Hurting More than Helping

These regulatory proposals could have a negative effect on cryptocurrency and the emerging blockchain ecosystem.

To begin with, the majority of such regulations are more likely to push out or hurt small crypto operators who can’t keep up with the costs of compliance.

And, of course, these regulations defeat the very purpose of cryptocurrency – to wrestle control of money from central authorities and provide censorship-resistant finance for all.

These proposals could also backfire. Crypto dealings may be pushed to the ‘underground’ world in exchanges that fall outside of ALMD5’s and other regulations’ scope.

Such blanket regulation also risks curtailing the flow of crypto assets, including that of honest actors. This is evident with the US where KYC requirements for banks, so as to curtail the spread of drugs, have been extremely financially taxing for banks. Also, entire regions such as the Caribbean have suffered debt thanks to the enforcement of indiscriminate compliance requirements. 

And overall, uncontrolled regulation could push up the costs of operating crypto enterprises, which would have the undesirable effect of stifling the growth of the crypto and blockchain infrastructure. 

Conclusion

With such increasingly stringent controls, what’s the future for the crypto space? Will it achieve the desired effect and curb illegal crypto use, or will it backfire and encourage such activity in less detectable platforms? It’s hard to tell at this stage.

What’s already clear is more crypto entities will be pushed out as they find it impossible to operate in the full glare of regulation or the costs that come with it. It will also be interesting to watch the effect of such regulations on the growth of the crypto sector and the burgeoning application of its underlying technology, the blockchain. 

Categories
Cryptocurrencies

What Is Augur (REP)?

Ethereum’s blockchain has made it possible to build all sorts of exciting decentralized applications on its platform. Augur was one of the very first projects to take advantage of Ethereum’s smart contract and Solidity tools and create its unique protocol.

Ethereum’s blockchain has made it possible to build all sorts of exciting decentralized applications on its platform. Augur was one of the very first projects to take advantage of Ethereum’s smart contract and Solidity tools and create its unique protocol.

Ethereum’s blockchain has made it possible to build all sorts of exciting decentralized applications on its platform. Augur was one of the very first projects to take advantage of Ethereum’s smart contract and Solidity tools and create its unique protocol.

Unlike many of its contemporaries, Augur does not seek to improve upon any aspect associated with the crypto or blockchain technology like block sizes, scalability, transaction fees, or centralization. Rather, the project seeks to capitalize on blockchain technology to improve the traditional prediction markets model.

In this guide, we’ll look into this exciting project, how it works, whether it’s worth sinking your money into, and more.

What is Augur (REP)

Augur is a decentralized, peer-to-peer, and open-source prediction platform built on the Ethereum blockchain. When trading on Augur, you’re rewarded if you correctly predict the outcome of any future event – whether it’s an election, a football match, political events, policy decisions, a natural disaster, market crashes, weather events, and so on. The project’s website says “anything is fair game” – if you can’t find your preferred choice of a bet, you can create your own.

Augur leverages the “wisdom of the crowd” – the idea that a collective group of people is smarter than individual experts when it comes to problem-solving, general knowledge, predicting, etc. Those who predict the right outcomes win and those who don’t, lose. The more unlikely an event to occur, the bigger the reward for the accuracy of its prediction.

The platform has its own currency known as REP – “Reputation,” which people use to report on and dispute the outcome of events. Coin holders are rewarded for accurate predictions of events if they occur, while others can object if they don’t agree.

What Does Augur Aim to Achieve?

As a decentralized application on the Ethereum blockchain, Augur is censorship-resistant, is not owned by anyone, and thus cannot be shut down by anyone. Blockchain experts Jack Peterson and Joey Krug created the project in 2014 to ‘democratize’ the prediction markets.

With the creation of Augur, Peterson, Krug and the team had the following goals in mind:

  • To design a prediction market model operated and accessible by anyone
  • To enable people to make predictions with as little fees as possible
  • To achieve better accuracy of predictions compared to the traditional prediction model

How Does Augur Work?

Augur is more or less a decentralized take on traditional betting. The Augur protocol utilizes four processes in the prediction model, which we will expound below.

Creating Markets. Anyone can create a market of their choice on the platform. All you need is a small amount of ether and a hot betting topic. But first, you need to check the list of topics on the platform to avoid double coverage. You can come up with anything, from “Will Mark Zuckerberg Be Voted Out as CEO of Facebook in 2019?” to “Will France Take Home the World Cup in 2020?” to “Will Game of Thrones Return for a Sequel?” Users creating prediction markets usually set a ‘creator fee,’ which must be between 0 and 50%.

Trading. After a market is created, trading begins. Users can buy shares in the outcomes of the event, as well as receive rewards for participating and sharing their insights and opinions about the market. The price of the shares is calculated based on the likelihood of that event occurring. The more people buying into a particular event, the higher the price will be. Users also have the option to trade their shares with others or invest in unlikelier outcomes for better returns.

Reporting. This stage comes after a market closes – that is, a market’s underlying event takes place in the ‘real world.’ The potential result, known as ‘Outcome,’ is determined by profit-motivated ‘Reporters,’ who simply report the real-world outcome of the event. Any REP holder can be a reporter. Reporters who consistently provide accurate reports are financially rewarded, while those whose reports are not consistent with the actual outcomes are financially penalized. Note that users of the platform do not need to own or use REP, it’s only reporters who need it to participate in the reporting process.

Settlement. In this final stage, a trader can close their position by selling the position to another user in exchange for ether, or automatically settling their shares on Augur’s smart contracts. Predictions by users that turn out to be accurate are rewarded. Reporters whose reports were determined to be accurate are rewarded in reputation tokens, while reporters who did not respond or gave inaccurate information are penalized, with their share of tokens being given to reporters whose report was accurate.

REP Market Policy and Availability

As of December 12, 2019, REP’s market cap was $97, 856, 775, with a 24-hour trading volume of $7, 271, 550. At the token’s crowd sale in 2019, 8.8 million tokens were distributed to the public, with 2. 3 million tokens reserved for operational costs.

The REP token can be acquired on crypto exchanges such as Bittrex, Coinswitch, Poloniex, Coinbase, Kraken, etc.

Augur is an ERC 20 token, meaning you can store it in any wallet with ERC-20 support. Other options include hardware wallets such as Ledger Nano X, Ledger Nano S, Trezor, KeepKey, etc.

The Future of Augur, And Whether You Should Invest In It

Augur was one of the very first projects to launch on the Ethereum blockchain. It is also one of the Ethereum projects that made headlines upon its launch and continues to be consistent. Besides, the project has gotten the node of notable figures in the crypto and blockchain sphere.

Brian Armstrong, CEO of Coinbase, has described it as “an awesome project,” while Vitalik Buterin, Ethereum’s co-founder, noted its ingenuity when he called it “Uber for knowledge.”

We think that its uniqueness among other Ethereum tokens coupled with its solid reputation makes it a worthy investment. 

Conclusion

Augur has been on the scene for a while now – being one of the first to be built upon the Ethereum blockchain. It is a decentralized prediction market platform that’s available to anyone. With a small amount of ether, anyone can participate in event likelihood stock trading.

Categories
Cryptocurrencies

What is the ZRX Token?

Cryptocurrencies have stirred the financial space in a way that more and more people want to jump on this economic bandwagon. As the newest asset class, cryptos are overtaking other securities in an unprecedented fashion. But this is where we have a problem. For people to join the crypto revolution, they have to go through centralized exchanges. These exchanges, however, come with their own set of issues.

Cryptocurrencies have stirred the financial space in a way that more and more people want to jump on this economic bandwagon. As the newest asset class, cryptos are overtaking other securities in an unprecedented fashion. But this is where we have a problem. For people to join the crypto revolution, they have to go through centralized exchanges. These exchanges, however, come with their own set of issues.

Cryptocurrencies have stirred the financial space in a way that more and more people want to jump on this economic bandwagon. As the newest asset class, cryptos are overtaking other securities in an unprecedented fashion. But this is where we have a problem. For people to join the crypto revolution, they have to go through centralized exchanges. These exchanges, however, come with their own set of issues.

Enter decentralized exchanges (DEXs). DEXs, in which traders transact directly with each other, are fast becoming popular. 0x is one of the most high-profile of these types of exchanges, and it allows users to trade ERC 20 tokens via its native token, ZRX. In this guide, we’ll dive deeper into the 0x project, how it works, and the ZRX token and how to get your hands on it.

What is 0x?

0x is an open protocol designed to facilitate the peer-to-peer exchange of Ethereum tokens on the Ethereum blockchain. 0x was formed by industry experts Will Warren and Amir Bandeali in 2016.

The two envisioned a future where all kinds of securities, including stocks, precious metals, etc. could be traded as tokens publicly on the blockchain. 0x is created to be different from both centralized and decentralized exchanges and thereby provide the best combination of both their features.

It also seeks to solve problems that arise from both types of exchanges. Let’s begin with the issues facing centralized exchanges.

☑️ Susceptibility to Hacks

Centralized exchanges will always be prone to hacking attacks. Mt. Gox, Bitfinex and Binance are only some of the examples of centralized exchanges that have been hacked for Bitcoins worth millions of dollars. 

☑️ Subject to Mismanagement

Centralized exchanges are regulated by people who are fallible and prone to human error. The example of Mt.Gox is an exchange whose fate was caused by mismanagement.

☑️ Volume problems

Centralized exchanges often have trouble dealing with a sudden increase in demand. For instance, a sudden surge in demand for Bitcoin in November 2017 caused some exchanges to temporarily halt processing transactions while others experienced downtimes.

☑️ Subject to Regulatory Whims

Centralized crypto exchanges are registered in countries. This means they must play by the rules that the government of that country wishes to enact.

0x’s Technology and How It solves these, plus DEXes’ Problems

Decentralized exchanges rely on smart contracts for trading of ERC tokens. However, the sheer proliferation of tokens on Ethereum’s blockchain presents the problem of confusion and scalability. At the time of writing, there are more than 200,000 token contracts on the blockchain.

0x’s whitepaper notes: “End users are exposed to smart contracts of varying quality and security with unique configuration processes and learning curves, all of which implement the same functionality.”

This has caused several problems for the network, including increasing transaction costs for the network. This means for crypto exchanges, transactions would be charged a specified amount of ether. Also, as the volume of orders increases, the costs of operating it increases as well.

Second, the numerous exchanges have led to a fragmented user base and with it, fragmented liquidity for the DEXs crypto market. 

0x’s technology attempts to solve this by combining two technologies – State channels and Automated Market Maker. State channels take transactions off the blockchain, therefore reducing transaction fees. Automated Market Maker (AMMs) are algorithms that conduct trades between two parties, while also acting as the opposite party in transactions.

0x relies on “relayers” to host the off-chain order book and connect buyers and sellers.

Having seen how the platform aims to improve the DEX model, let’s look at how it addresses the main issues faced by centralized exchanges:

  • It provides a more secure platform as there is no single point of failure, thanks to the Ethereum blockchain which is open-source, pubic and distributed 
  • It eliminates the possibility of a rogue or malicious exchange running away with people’s crypto funds
  • It eliminates the whims of governments or regulators  
  • It makes crypto trading an affordable endeavor for all types of traders
  • It makes it effortless to swap tokens on the blockchain by removing the high transaction fees associated with centralized as well as smart contract decentralized exchanges. It intends to do this by taking transactions outside of the blockchain

What is ZRX?

0x has its own Ethereum token, known as ZRX. The token is used to pay relayers for their services. However, 0x’s main intention for the token is to facilitate decentralized governance over the 0x protocol upgrade system. This means anyone who owns ZRX gets to have input – proportional to their holdings, into any upgrades the protocol may get over time.

How to Buy ZRX

The ZRX token is available on the majority of crypto exchanges, including Coinbase, Binance, Bittrex, Shapeshift, Poloniex, Changelly, KuCoin, Huobi, Coinswitch, Bitit, and Idex.

Being an Ethereum token, ZRX can be stored in an Ethereum wallet. Other options include MyEtherWallet, Exodus, Eidoo, and Ledger wallet.

There is a fixed supply of one billion ZRX. During its launch, 50% of the tokens were released to the public, with the 0x project retaining 15%, 15% going to the developer fund, 10% to the founding team, and 10% to the project’s advisors and early supporters.

The Problems With 0x’s Approach

0X is an ambitious project and one that could be the solution to both centralized exchanges and DEXes problems. However, some crypto experts assert that the ZRX token has no clearly defined purpose.

Also, the staking approach – in which the more ZRX you hold the more you can contribute to the project’s development, means that it can be hijacked by investors with large holdings – which does not keep up with the spirit of decentralization. 

Also, some experts contend that the business model is not sustainable. By having its platform open and free, the project might be foregoing revenue from trades and setting itself up for failure in the future.

Conclusion

The 0x project has its flaws, but the protocol is a promising proposition. It solves the challenges presented by centralized exchanges while improving the decentralized exchange model. Its flexibility, versatility and its free availability may very well catapult it to be the future of cryptocurrency exchanges. It’s going to be interesting to see how this project pans out in the future.

 

Categories
Crypto Exchanges

What Is OmiseGO (OMG)?

From being centralized to being expensive, today’s crypto exchanges come with their own share of issues. Besides, they often have a limit on how many transactions they can handle, a factor that has led to downtimes in times of high traffic.

From being centralized to being expensive, today’s crypto exchanges come with their own share of issues. Besides, they often have a limit on how many transactions they can handle, a factor that has led to downtimes in times of high traffic.

From being centralized to being expensive, today’s crypto exchanges come with their own share of issues. Besides, they often have a limit on how many transactions they can handle, a factor that has led to downtimes in times of high traffic.

A solution is thus needed for instant, peer-to-peer transactions on a scalable platform. With its game-changing Plasma technology, OmiseGO promises to be the frontier for such a solution. What is this Plasma technology, and what exactly is OmiseGO? We answer this question together with detailing how you can acquire some OMG coins and more.

What is OmiseGO?

Founded in 2017, OmiseGO (OMG) is a decentralized crypto exchange and a bank that runs on the Ethereum blockchain.  The project describes itself as “the answer to a fundamental coordination problem among payment processors, gateways, and financial institutions.” 

OmiseGO is the brainchild of Omise, a payments company based in Thailand. The team comprises CEO Jun Hasegawa, Vitalik Buterin, Joseph Poon, Dr. Gavin Wood, Vlad Zamfir, and Roger Ver.

The project’s mission is to enable people to have secure access to financial services, including the ability to invest, exchange, and spend digital assets anywhere.

OmiseGO has two products: the white label eWallet and the decentralized OmiseGO network. The OmiseGO network uses Plasma architecture to achieve scalability. (A white label product is one that can be used by many different brands. That means developers can create their own wallets based on OmiseGO’s eWallet.)

OmiseGO’s Core Components

The OmiseGO platform has five core components: a decentralized exchange, a developer kit, eWallet Suite, OmiseGO coin (OMG), and Plasma technology. Let’s look at these technologies in more detail below:

Decentralized Exchange

OmiseGO’s decentralized exchange allows cross-chains transactions to take place, meaning users can trade cryptos directly across blockchain networks. These transactions are verified through a proof-of-stake consensus mechanism in a process where OmiseGO users stake their tokens to vote on the validity of transactions.

A Software Developer Kit

OmiseGO’s platform provides a set of tools to developers with the hope that they will use these tools to create high-quality, user-friendly wallets for users on the platform. The kit is designed in such a way that developers do not have to have an in-depth understanding of blockchain to create wallets. With the kit, developers can also integrate debit and credit card account transfers through which users can deposit, withdraw, and convert fiat money into digital currency.

OMG Token

The OmiseGO Network relies on a Proof-of-Stake mechanism to validate transactions. Coin holders leverage their stake to have a say in the running and protocols of the network in a decentralized manner. 

Users also pay for transactions on the network via OMG coin.

eWallet Suite

OMG’s eWallet suite is a bridge that allows users to connect seamlessly to the OmiseGO network.

It allows users to interact seamlessly with the OmiseGO network. The wallet is customizable, meaning you can tweak and develop it to suit your own needs. You can also use it to store loyalty points, game tokens, both crypto and fiat money, and more.

Plasma

Plasma is a blockchain scaling solution created by Joseph Poon and Vitalik Buterin.  Plasma’s white paper states that “Plasma is a proposed framework for incentivized and enforced execution of smart contracts which is scalable to a significant amount of state updates per second (potentially billions) enabling the blockchain to be able to represent a significant amount of decentralized financial applications worldwide.”

In essence, Plasma is blockchains on top of a root chain. Think of plasma being the branches to the root, i.e., the main blockchain, e.g., the Ethereum blockchain.

Here are the design goals of the project

One main blockchain and child chains – The main blockchain is the root blockchain, and every other child chain is derived from it. Both types of blockchains run independently of each other.

Minimization of the need for trust – The system is as trustless as possible. None of the child chains is dependent on the actions of particular actors.

Ledger scalability – The blockchains need to hold a lot of data. The ‘branch’ chains should be able to accommodate the data that would be normally held by the main blockchain. 

Scalability – The child chain ought to be able to implement various scaling solutions, e.g., sharding and the lightning network.

Localized computations – Each child chain should be able to perform their own calculations and provide updates to the main blockchain at regular intervals.

Fraud proofs – In the event of a dispute, the concerned party should be able to send proof to the root chain. The root chain can then roll back the state of the child chain and penalize the signers of the block of the child chain.

Uniqueness for every chain – The child chains should have their own governance procedures, provided they are reporting back to the main chain at the required intervals

What’s So Special with OmiseGO?

OmiseGO differentiates itself from standard exchanges by two qualities: decentralization and being currency agnostic.

Decentralized. Today’s exchanges are centralized, meaning they are owned by an exchange that makes all the decisions and owns users’ data. On the contrary, OmiseGO is completely decentralized, so users retain ownership of their data. Data is also secure on the blockchain such that it’s impossible to tamper with.

Currency Agnostic. The majority of exchanges only allow users to obtain a particular crypto after converting fiat money to another crypto, mostly Bitcoin or Ether. This process is inconvenient and also expensive as users are charged fees at every stage.

OmiseGO circumvents this process by charging a small flat fee for all conversions, whether from fiat to crypto or from crypto to crypto.  

OMG Statistics

OmiseGO is currently trading at 0.652534 (December 23, 2019) while ranking at number 47 in terms of market capitalization. Its all-time high was $28.35 on January 08, 20, while its all-time low was $0.319695 on July 16, 2017. OMG’s total supply is 140, 245, 398.

How to Buy and Store OmiseGO

You can buy OMG coins from exchanges such as Binance, Kucoin, HitBTC, and more. Most exchanges will require you to purchase BTC, Ether, or Litecoin so as to exchange it for OMG. Some exchanges also accept Litecoin.

You can use any ERC 20 compatible wallet to store OMG. Hardware wallets such as Trezor, Ledger Nano, Cobo Vault, and Cool Wallet S are also recommended.

Conclusion

OmiseGO promises to change the crypto exchange landscape with cheaper fees, a decentralized function, and creative, user-friendly wallets. The company behind it is an established player in the Asian market, boasting a massive base of users. The project is also supported by leading players in the blockchain and crypto space, putting it in a competitive spot. Its Plasma technology has capabilities that could see OmiseGO disrupt the crypto exchange industry. It should be interesting to watch how the OMG evolves in the coming years.

Categories
Blockchain and DLT

Distributed Ledgers – The Technology That Could Revolutionize Industries 

If you’re regularly tuned to cryptocurrency subject, no doubt you’ve heard the term ‘distributed ledger’ or DLT, thrown around once or twice. You’ve probably also heard some people use the phrase to refer to blockchain – the technology underlying everyone’s most familiar cryptocurrency. But does a distributed ledger and blockchain mean the same? And what is this distributed ledger thingy anyway?

If you’re regularly tuned to cryptocurrency subject, no doubt you’ve heard the term ‘distributed ledger’ or DLT, thrown around once or twice. You’ve probably also heard some people use the phrase to refer to blockchain – the technology underlying everyone’s most familiar cryptocurrency. But does a distributed ledger and blockchain mean the same? And what is this distributed ledger thingy anyway?

If you’re regularly tuned to cryptocurrency subject, no doubt you’ve heard the term ‘distributed ledger’ or DLT, thrown around once or twice. You’ve probably also heard some people use the phrase to refer to blockchain – the technology underlying everyone’s most familiar cryptocurrency. But does a distributed ledger and blockchain mean the same? And what is this distributed ledger thingy anyway?

In this guide, we dive full form into the world of DLTS: some of their popular examples, how they can be integrated into real life, and that burning question – whether they are the same thing with blockchain. But first, a little background is in order. 

What Are “Distributed Ledgers”? 

A distributed ledger is simply a database that is shared and replicated across multiple locations or institutions and among multiple participants. No central authority or third party is involved. Every entry in a distributed ledger is immutable – that is, it cannot be changed, and every participant in the network has an identical copy of it. 

We can think of a distributed ledger in terms of its opposite – a centralized ledger. A centralized ledger has one point of control and has a single point of failure. On the contrary, it’s hard to attack a distributed ledger because all the distributed copies would have to be attacked simultaneously for the attack to be successful. 

Ledgers have existed for centuries. People in the early days would record transactions on clay or papyrus. Over time, these were replaced by paper, and then computers, and now we’re entering into the realm of distributed ledger technology. 

In the past, the word ledger referred to financial records. Distributed ledgers are used to refer to the database, without any specific inference for the contents. Nowadays, the uses cases of distributed ledgers are numerous and varied. 

How Do Distributed Ledgers Work?

Distributed ledgers function via nodes – which, in simple terms, are connection points within the network that can receive, store, share, or synchronize data. The connection points allow users within the network to be linked to each other – facilitating peer-to-peer, decentralized transactions between individuals on the network. 

All updates to the ledger are first agreed upon by the nodes via a voting process known as consensus. Once consensus has been reached, the distributed ledger automatically updates this, and the latest version of the ledger is saved on every single node. 

Blockchain vs. DLT

A lot of people use the terms ‘blockchain’ and ‘distributed ledger’ as if they meant one and the same thing. However, it helps to remember something simple: all blockchains are distributed ledgers, but not all distributed ledgers are blockchains. Any database that’s shared across multiple sites and participants, decentralized, and that needs consensus among nodes can be described as a distributed ledger.

A blockchain is simply a subset of DLTs. It’s a series of blocks of data chunks known as ‘blocks,’ which are encrypted after every transaction. ‘’Miners’ validate transactions and ensure they are accurate – that is, ensuring a coin is not being double-spent. Miners then get rewarded with coins of the native cryptocurrency or a fraction of the transaction fees.

On the other hand, DLTs do not feature or require such a chain, nor are there miners to validate transactions. DLTs also do not need to have a data structure in the form of blocks.

Suffice it to say, many DLTS today were designed to circumvent the shortcomings of blockchain – issues like scalability, processing time, massive computational power, transaction fees, and so on.

Types of Distributed Ledger Technologies

There are a few types of distributed ledger technologies today, with some being more popular than others. We’ll look at four of these – specifically blockchain, Directed Acyclic Graph (DAG), Holochain and Hashgraph.

Each of these DLTs has their strong and weak points, but they all aspire to offer the same solution – a decentralized, transparent, fast, and safe avenue for relaying transactions and/or data. Let’s take a look at each, starting with the most familiar one – blockchain.

1. Blockchain

Satoshi Nakamoto, the creator of Bitcoin, noted that a network would collect and record information in blocks – which would be linked to each other, hence blockchain. Each block in the blockchain is identified by a unique hash generated by the SHA256 cryptographic hash algorithm. Due to the uniqueness of each block, it’s impossible to alter a transaction since that would result in the creation of a new block – indicating an invalid transaction.

In addition, transactions are added on a public ledger and are accessible to every participant in the network. This distributed and transparent nature of the ledger makes it even more difficult for any actor to modify the details of a transaction.

These qualities of immutability (unchangeable, and hence tamper-proof) and transparency are the major factors that make the blockchain so revolutionary. Its ability to inject integrity and transparency in processes and data storage is the chief reason blockchain is disrupting entire industries.

2. Hashgraph

Hedera hashgraph is a type of distributed ledger that works like blockchain but uses a different kind of consensus mechanism that relies on the concept of gossip, gossip about gossip, and virtual voting. Gossip here means that information is relayed by each participant repeatedly to another randomly selected member – informing him everything about the transaction.

This “gossip protocol” utilizes this mechanism for building network consensus as more and more people become aware of the information, whether in full or partially. In hashgraph, transactions are arrived at fully by consensus. As such, unlike blockchain, nodes or members do not have to validate transactions that are conducted on the network, and service requesters do not have to submit “proof of work.”

With the blockchain, proof of work causes transactions to be bulky, leading to very low transactions per second (transactions take place every 10 minutes.) By contrast, the gossip protocol enables hashgraph to support up to 10.000 transactions per second.

Hashgraph’s creators claim that it has overall efficiency than blockchain, “making it suitable for enterprises and commerce.” The CEO maintains that “…it’s a different data structure, different technology and looks nothing like blockchain, but solves the same kind of problems with better security and better performance.”

3. Directed Acyclic Graphs

Directed acyclic graphs are a type of distributed ledger that requires newly added data to be validated previously entered data. Usually, every new transaction involves the confirmation of at least two previous transactions before it is added onto the network. As more transactions are submitted, more are validated and recorded, and we end up with a mesh of doubly-confirmed transactions.

Directed acyclic graphs are by no means a new concept. In Mathematics, a DAG is a graph that has no cycles connecting to the other edges. As such, it’s impossible to navigate through the entire graph by starting from one point.

In a DAG ledger, all transactions are linked to at least one transaction in the following way: 

  • Directed – all links are in the same order and point in the same direction, with previous transactions linked to subsequent ones
  • Acyclic – A ‘cycle’ or loop is not possible. A transaction cannot circle back on itself after being linked to another transaction
  • Graph – the connected transactions can be represented on a graph, with nodes being linked to each other by links.

DAGs do not require miners to validate the authenticity of transactions since each transaction is automatically verified by at least two earlier transactions. The result of this process is that transactions are confirmed almost instantaneously, and it also removes the need for miner’s fees, helping to keep transaction fees at a minimum. 

DAG is commonly applied to processes dealing with data processing, scheduling, navigation, and data compression. ByteBall, Nano, and Fantom are some of the cryptocurrency projects utilizing the technology. 

4. Holochain

Holochain, according to the project’s white paper, is an amalgamation of blockchain, BitTorrent, and Github. With the DLT, each node runs on a chain of its own. It has a feature known as distributed hash table (DHT) where users can store data using certain keys. However, the data stays in actual locations “distributed” globally.

The distribution of locations around the globe decongests the network – rendering it a good candidate for scalability and poising it to achieve even millions of transactions per second.

Scalability is an issue that’s been dogging the traditional blockchain – since developers need validation from a majority of the network participants. On the other hand, a developer only needs confirmation from the single chain that makes up the whole Holochain network, dramatically reducing the wait time that is associated with the traditional blockchain.

Use Cases of Distributed Ledgers

Distributed ledgers can be applied across many industries – both as the driver of processes or to improve existing processes.

Blockchain, thanks to the world’s most popular cryptocurrency – Bitcoin, is the mostly applied DLT today. The most obvious application of blockchain is Bitcoin. The technology is also being applied in finance to reduce duplication of information that creates delays and confusion in many aspects of financial services.

The blockchain is also helping to reduce intermediaries in international remittances who not only prolong waiting times but are also expensive. Furthermore, blockchain allows securities trades to be settled within minutes – instead of the traditional several days.

DLT networks are also being used in supply chains to increase transparency and enhance accountability by tracking and logging details, flow, and payment of goods in real-time.

They can also be used to prevent fraud in financial transactions by providing immutable – and hence unchangeable audit trails and demanding more transparency and a higher standard of data integrity than the existing system.

DLTs could also be used in the food industry to prevent food fraud. Food can be tracked ‘from farm to plate’ so that customers can see the origin and handling of food.

Smart contracts – which are pieces of code on a DLT are another case of use of DLTs. Smart contracts define the terms of the agreement between parties – with the agreement unalterable and available for every party to see and refer to. They can be used in such cases as invoicing, shipping, procurement systems, quality assurance, compliance, and so on.

Benefits of DLTs

  • The immutability, i.e., permanent nature of DLTs records, leads to improved transparency, improved speed of processes, reduced costs, and so on. Also, it removes the need for paper trails that are not only labor-intensive but are vulnerable to damage, theft, or loss.
  • DLTs consensus mechanisms allow processes to be more consistent – facilitating reduced errors, real-time data, and flexibility for network participants to take part in decision making
  • Decentralization of DLTs removes the need for a central authority which means increased trust and integrity and multiple sources of authentication
  • Their distributed nature removes the single point of failure since the data is backed up by every node in the network – multiple participants
  • DLTS are less complex to build and operate, and they need very minimal work to maintain – which makes them less costly than many current systems
  • Distributed ledgers can manage real-time data across varying scenarios, places and contexts, eliminating the clutter that is associated with managing multiple centralized ledgers

The Future of DLTs

DLTs are still a nascent technology. However, they present a fundamentally new way to run processes, conduct business, and carry out transactions. For now, it remains to be seen if they will gain mainstream traction and change how businesses, institutions, and industries operate. 

As of now, academic and financial experts question whether DLTs – in their current form, are reliable enough to be adopted for full-scale use. Still, influential finance institutions such as the World Bank recognize their potential to transform various sectors such as manufacturing, government financial management systems, and clean energy.” 

What’s clear, though – their incorporation into systems will likely be done incrementally – by first replacing redundant and manual procedures and activities. They could come handy in areas such as record-keeping in payment and settlement processes, tracking agricultural systems, syndicated loans, and so on.

Conclusion

DLTs hold vast potential for changing the way we organize our lives and societies – thanks to their radically transparent, unalterable, and democratic nature. From food to finance to supply to negotiations – incorporating DLTs could transform our very lives and societies. This, however, is entirely contingent on whether they will transcend the current scalability issues, or whether they will gain widespread acceptance across industries.

Categories
Crypto Daily Topic

Luxury Car Lamborghini Embraces Blockchain

Ten years after blockchain came to life, we’re seeing new adoptions of the technology on a larger scale than ever before. These days, barely a week passes without hearing another blockchain application in news headlines. The latest to enter the fray has been none other than sports car favorite Lamborghini – which is now using Salesforce blockchain to authenticate cars.

Ten years after blockchain came to life, we’re seeing new adoptions of the technology on a larger scale than ever before. These days, barely a week passes without hearing another blockchain application in news headlines. The latest to enter the fray has been none other than sports car favorite Lamborghini – which is now using Salesforce blockchain to authenticate cars.

Ten years after blockchain came to life, we’re seeing new adoptions of the technology on a larger scale than ever before. These days, barely a week passes without hearing another blockchain application in news headlines. The latest to enter the fray has been none other than sports car favorite Lamborghini – which is now using Salesforce blockchain to authenticate cars.

One of the most recognized luxury car brands, Lamborghini, has been leading from the front in innovation in the automobile industry since 1963. And the brand is now tapping into blockchain’s potential to streamline its processes, enhance customer experience, and maintain the value of its legacy autos.

“Innovation has been at the core of our company since its founding,” said Paolo Gabrielli, Head of After Sales at Automobili Lamborghini, adding “Salesforce Blockchain will allow us to take our innovation a step further, accelerating the authenticity of our heritage vehicles faster than ever.”

And Adam Caplan, senior vice president of emerging technology at Salesforce, said: “Blockchain is changing the way companies approach trust and transparency. Lamborghini is a perfect example of this – we’re excited to see how such an iconic brand is able to innovate and transform the vintage car market with cutting-edge technology like Salesforce Blockchain.”

A Brief Background

Lamborghini’s application of blockchain follows a recent pilot project involving its first car to be certified using the technology. In August, Lamborghini Aventador S was certified on Salesforce Blockchain for a show at the Monterey Car Week in California – to protect the authenticity and art of the car. Salesforce announced that the process was one of “authenticity certification, which makes use of Salesforce Blockchain to guarantee data security and incorruptibility.”

The goal, the company announced, was to “prevent counterfeiting; to trace and certify all the information related to the model, and at the same time favor an increase of value for all the stakeholders.”

What is Salesforce Blockchain?

Salesforce is an American digital marketing automation and analytics company. In May this year, the company announced a Blockchain-powered solution that “extends the power of client relations management.” The answer would help users build and maintain the blockchain network, apps, and smart contracts.

The Salesforce Blockchain is built on the Hyperledger Sawtooth Platform – an open-source blockchain platform that allows companies to develop distributed ledger applications and networks.

Salesforce and Blockchain: a History

Salesforce and blockchain go back a year ago – when the company announced its blockchain plans at TrailheadDX. Marc Benioff, the company’s CEO, told Business Insider that he had been thinking about the idea after an attendee at the World Economic Forum approached him and suggested Salesforce should incorporate blockchain in its services. Benioff said he was intrigued by the idea, stating, “And it’s like you know if you did this, this and this you could add blockchain and cryptocurrencies into Salesforce…and I’m like ‘wow,’ and that’s kind of how it works.”

The company had had a dalliance with blockchain before, partnering with the blockchain startup Dapps Inc, which in May 2017 had announced the release of a product allowing users to integrate the Salesforce system with the Hyperledger, Ethereum, and Bitcoin blockchains.

This year, the company joined the Blockchain Research Institute, the global blockchain think tank, which boasts members like Microsoft, IBM, the Bank of Canada, PepsiCo, and other influential companies. In November, Salesforce secured a patent for a blockchain system that would enable it to filter spam and verify the authenticity of emails after they were sent. The patent spoke to the immutability (unchangeable nature) and distributed nature of blockchain that makes it impossible to modify information once it’s been committed to the blockchain.

On May 23, the company published a brief primer of the technology on its blog – recounting the basic principles of blockchain-like its ability to facilitate faster money transfers, improve medical storage procedures and increase transparency in supply chain management. It also explained how blockchain could help Salesforce in its customer relationship management field.

“Blockchain is a technology that promises to fundamentally change how we share information, buy and sell things and verify the authenticity of the information we rely on every single day – from what we eat to who we say we are. And because it can facilitate all of this in a secure, efficient, and transparent ways across many different domains, the effects can be transformative –every business, government, and individual can benefit.”

How Lamborghini Uses Salesforce Blockchain

As a high-end luxury car brand, Italian car manufacturer Automobili Lamborghini has been at the forefront of innovation all its existence. The brand is known for its agility in adopting innovative technologies to transform operations.

Its latest move to leverage blockchain has shown the auto industry that utilizing novel technologies can streamline processes, increase value for customers, and uphold brand value.

In the official press release on November 19, Salesforce gave some insights into how the car brand is using blockchain to improve processes. Divulging that each Lamborghini vehicle undergoes at least 800 certification checks before being released, they stated that the inspections require a massive network of people – “photographers, auction houses, dealerships, repair shops, newspapers, magazines, and other media sources – to curate the full history and most importantly verify all of the parts and service of each unique vehicle.”

The Blockchain Approach

In light of how grueling the process is, Salesforce is stepping in to create trust between all the partners involved and to enable Lamborghini to authenticate each vehicle faster and more securely than ever before.

Blockchain is designed to increase trust, transparency, and accountability with every player involved receiving secure, verified, and tamper-proof information. Any change to the chain is immediately recorded on the blockchain and is visible to everyone.

But getting every party involved on board has always been challenging– as it requires heavy-duty data integration at each stage. To resolve this, Salesforce uses clicks – rather than code, to achieve a faster set-up process. This saves the time that would have been used building up lines and lines of code as well as helps to integrate partners who are aren’t Using Salesforce applications.

Lamborghini has named its blockchain system “sicura” – which means safety in Italian. Sicura is the layer that links all the parties involved – dealers, logistics companies, auction houses, media houses, dealerships, photographers, and the car manufacturer itself – so that data can be gathered and shared faster and in a trustworthy manner. Before, the verification process for a car was three to six months, but thanks to Sicura, the process now takes place in a matter of days.

Customers can also download an app that allows them to request a certification or hire a car. And partners can access real-time info, enabling everyone to track progress every step of the way. Once authentication is complete, data is stored on the blockchain where all current and future owners of a vehicle can access it.

Conclusion

Lamborghini is only one in a growing field of companies that are adopting blockchain to make processes quicker, more transparent, and make information permanent and hence tamper-proof. By utilizing the technology, plenty more companies could cut on costs, increase accountability, and enhance the customer experience. One thing is clear, though – the technology is here to stay, and we can expect to see it being adopted on a larger scale in the coming years. 

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Crypto Daily Topic

Blockchain World Wire: The Future of Cross-Border Payments?

Sending money across borders – whether to friends and family or paying for goods and services – is expensive, cumbersome, highly inconvenient and takes a lot of time. Sending money from one country to another may have gotten better in the age of the Internet, but you will agree that there is still a long way to go before the whole world becomes one village – financially.

Sending money across borders – whether to friends and family or paying for goods and services – is expensive, cumbersome, highly inconvenient and takes a lot of time. Sending money from one country to another may have gotten better in the age of the Internet, but you will agree that there is still a long way to go before the whole world becomes one village – financially.

Sending money across borders – whether to friends and family or paying for goods and services – is expensive, cumbersome, highly inconvenient and takes a lot of time. Sending money from one country to another may have gotten better in the age of the Internet, but you will agree that there is still a long way to go before the whole world becomes one village – financially.

Globalization has completely revolutionized possibilities for businesses as an increasing number of individuals and businesses are tapping into overseas suppliers. In the same breath, more people are finding it easier and necessary to live away from home. These two factors have fueled the surge in cross-border payments, and with fintech technologies evolving rapidly, a lot has changed from just a few years ago.

To understand what the future of cross-border payments is, we will first briefly cover present-day options and briefly compare the top cross-border remittance options of tomorrow already in the market.

Popular Cross-Border Payment Options

The most popular international money transfer methods vary depending on where you live. These preferred methods are international wire transfers, credit card payments, and eWallets.

International Wire Transfers

The term wire transfer refers to a method of sending money across borders electronically, often through a money transfer service such as a Bank, MoneyGram, Xoom, or Western Union. In a wire transfer remittance, money is transferred from the bank or credit union to another using an existing network such as ACH, SWIFT, or Fedwire.

For a long time, bank transfers have dominated the international money transfer scene, just as they have dominated every aspect of people’s financial world for decades. International wire transfers, which plainly refers to funds transfers between banks in different countries, are known to be quite cumbersome and expensive.

International wire transfers are often used for large payments due to their high transfer fees that often exceed $50. This option also offers limited traceability since the routing methods may vary from country to country. Wire transfers are also non-reversible, which in itself is a great risk to the sender. This is what makes wire transfers very attractive to scammers. 

The main reason that alternative ways of cross-border remittances were developed and prospered in a short time is that banks and companies dominating the wire transfer sector refused to evolve with advancements in communication technologies.

Credit Card payments

Credit cards are the go-to money remittance option for many people who pay for almost everything using the cards. From the consumer’s perspective, since the cards already play a major role in their financial life, it is only reasonable that it is their first option. All they have to do is enter their card details on to a browser and wait for them to be verified and transaction initiated.

Behind the scenes, cross-border payments using credit cards take a lot of work from the credit card company and the involved banks. For instance, the money oftentimes has to be converted to different currencies by an exchange, and the receiving banks may have to take longer to confirm receipt, especially if they are not a part of the credit card network. This explains why cross-border credit card payments can be expensive and take a lot of time.

eWallets

eWallets, or electronic wallets, is a form of electronic payment system that uses a computer or smartphone connected to the internet. This type of money transfer works a lot like a credit or debit card and is often linked to the user’s bank account to make and receive payments. The most popular global eWallets today are PayPal, Stripe, Payoneer, and Skrill.

eWallets rose in popularity fast to threaten old-school cross-border money remittance methods, including wire transfers, bank transfers, and paper checks, because they use the latest technologies to make funds transfer faster and more convenient for the users.

The biggest downside to eWallets, however, is that they attract high transaction fees because, behind the scenes, the money still has to be moved using traditional methods such as bank or wire transfer. This explains why eWallet companies do not always operate globally, and transactions may not be instantaneous in every transfer. Worse still, these companies do not have a clear policy that explains how and why funds may be held.

Blockchain World Wire solutions

Blockchain World Wire is an innovative blockchain-based global money transfer solution developed by IBM in an effort to solve all the obstacles in cross-border presented by current methods. The selling point of BWW is that it offers near real-time payment exchange and money transfer in 47 currencies between 72 countries. The company touts it as the first-ever blockchain network that integrates cross-border payments with messaging, fund clearance, and settlement – all in a single network.

Cryptocurrency, the form of money created with the invention of blockchain, may be all the rage today, but unfortunately, people still heavily rely on traditional government-issued money for everyday payment. IBM came up with BWW as a modern-day solution to offer the benefits of cryptocurrencies without forcing people to convert their fiat money into cryptocurrency before sending it across borders.

Blockchain World Wide was created specifically to disrupt cross-border payments. It is a completely new type of payment network that accelerates remittance by revolutionizing how money moves from one country to another. It works by bringing on board different financial institutions and supporting multiple digital assets to encourage financial inclusion globally. The blockchain network on which the platform runs uses a Stellar blockchain protocol to facilitate sender-to-receiver money transfer, effectively cutting out middlemen such as banks and exchanges.

Under the hood, Blockchain World Wide actually remits money as digital assets. The sender’s funds are sent as either cryptocurrencies or stable coins. The term stable coins refer to digital assets whose value is pegged on the value of another currency such as USD or Euro. This conversion is what makes it possible to send money almost instantaneously at no charge.

Bringing banks on board and supporting multiple currencies

When launched, BWW already had the support of some of the major financial stakeholders in the world. Six global banks had already expressed interest in joining the network and issue their own stable coins to take advantage of the benefits of cryptocurrency without severely altering their business modus operandi. Presently, supported currencies already backed by stable coins include US Dollar, Euro, Indonesian  Rupiah, Korean Won, Philippine Peso, and the Brazillian Real.

IBM’s cross-border payment solution wins against current solutions for the simple reason that it is efficient and has the capacity to scale well. By eliminating the need for many intermediaries and removing the bureaucracies in clearing and settlement, the company is setting the stage for a payment solution that gets the world ready for a future of cryptocurrencies.

The payment system is designed to make it easy for money to flow in and out of the blockchain network using gateways such as banks for easier integration with existing payment systems. Banks and other gateways do not need to set up a new infrastructure for their clients to use this money transfer system.

The Stellar Protocol and Digital Assets

The backbone of the Blockchain World Wire is an open-source, decentralized blockchain platform called the Stellar Protocol. This serves as the engine that powers the entire payment platform and facilitates the cross-border payments and settlements. The platform uses its own cryptocurrency known as the Stellar Lumens (XLM). The platform promises the scalability the World Wire will need to process all the payments the world will make in the near future, which is expected to run into thousands every second.

Adopting the use of existing digital assets, including cryptocurrencies and stable coins already in use, adds trust and efficiency as well as improves the system’s simplicity. Since these digital assets already have an ‘agreed-upon’ value, parties transacting save time and costs of the transfer while sending and receiving money. Blockchain World Wire chose to use the open approach in selecting digital assets to use on the platform to encourage financial institutions as well as individuals to use the platform for their everyday payments as well as cross-border remittances.

In the near future, IBM aims to allow customers to use every major digital asset to send and receive money on the BWW platform. It will not be long before anyone can send and receive Bitcoin, LiteCoin, XRP, Bitcoin Cash, and any other digital assets.

How Blockchain World Wide’s competition stacks up

IBM is not the only company to come up with a potential solution to the serious shortcomings in the cross-border money transfer industry.

SWIFT

SWIFT, which is an acronym for The Society for Worldwide Interbank Financial Telecommunication, was founded back in 1973 as a cooperative organization to promote and develop standardized global interactivity for cross-border transfers. SWIFT is essentially a large network of Banks that uses the old wire transfer techniques to send money from one member bank to another using special codes. Although it has been around for quite a while, SWIFT is still slow and expensive, largely due to the large number of intermediaries and the old technologies it uses to this day.

Ripple

Ripple was formed to take on SWIFT and become an affordable, reliable, and fast global payment option. Simply put, it was meant to replace SWIFT. Just like Blockchain World Wire, it runs on a blockchain platform and links numerous financial institutions, including banks, to make cross-border payments a breeze. Presently, Ripple operates in over 40 countries across six continents and has recruited over 300 financial providers into its network.

Through its two remittance products, xCurrent, and xRapid, Ripple implements highly efficient protocols with private nodes to offer near-instant payments with complete transparency and without intermediaries. Its main selling points are low clearing fees, thorough transaction tracking, and compatibility with numerous currencies and various digital assets.

How does IBM’s BWW differ from Ripple’s service?

For starters, Ripple focuses on facilitating payments for financial institutions and not cross-border remittances. Since the company issued its XRP token, it has been the go-to remittance platform for cross-border payments in the world of cryptocurrency and has established an impressive customer base.

However, despite its commendable performance so far, Ripple has a weakness in that although it runs on a blockchain platform, it is not fully decentralized. This means that the company controls all the transactions processed by its platform, and it has to approve all transaction validators. Essentially, Ripple’s blockchain platform is a centralized blockchain. In choosing an open-source blockchain platform, IBM is positioning itself to offer the full benefits of decentralization that Ripple cannot. 

Presently, IBM is rolling out a set of APIs that institutions can use to integrate their existing payment systems. The company is also in the process of actively working with regulators all over the world to bring the cross-border remittance platform online in every jurisdiction. The seamless integration of legacy payment systems is expected to gradually phase out the need to use alternative money remittance systems.

IBM is laying the infrastructure required to make their cheap and fast money transfer system available “anywhere and everywhere in the world.” In time, the company hopes, Blockchain World Wide will phase out its rivals, including SWIFT and Ripple’s XRapid platform, to be the go-to payment system for cross-border remittances.