Category: Crypto Daily Topic

A Crypto daily topic is a hot piece of news, amazing fact about cryptocurrencies or some aspect of it in regards to trading, regulatory, market manipulation, heated debates in social networks, and the like.

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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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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.

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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.

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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. 

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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.

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Crypto Daily Topic Forex Price Action

Calculate Risk-Reward along with Candle’s Attributes

In today’s lesson, we are going to demonstrate an example of the importance of risk-reward. To be successful in price action trading, traders are to calculate risk-reward before every single entry they execute. Let us find out from the charts below the importance of risk-reward.

In today’s lesson, we are going to demonstrate an example of the importance of risk-reward. To be successful in price action trading, traders are to calculate risk-reward before every single entry they execute. Let us find out from the charts below the importance of risk-reward.

In today’s lesson, we are going to demonstrate an example of the importance of risk-reward. To be successful in price action trading, traders are to calculate risk-reward before every single entry they execute. Let us find out from the charts below the importance of risk-reward.

The price heads towards the South with an average bearish momentum. Ideally, it is the sellers’ territory. However, it has come a long way. The buyers must wait for a strong bullish reversal candle to go long on this chart.

This is an extremely strong bullish reversal candle. The buyers may wait for the price to consolidate and produce a bullish reversal candle. Within a candle, things are very different now.

The chart produces a bearish inside bar. Thus, buyers may get more optimistic. They are to wait for a bullish engulfing candle closing above the last swing high to trigger a long entry. The price may travel towards the drawn level, which is a significant level of resistance on the chart.

The chart produces a bullish engulfing candle closing well above the last resistance. As explained earlier, the buyers are to set their stop loss below the last candle and trigger a short entry right after the candle closes. The question is whether they shall take a long entry here or not. Think about it. The last candle closes within the level of resistance. Technically, there is no space for the price for traveling towards the North unless it makes another breakout here. The reward is zero here.

As anticipated, the price consolidates again and struggles to make another breakout. The last candle comes out as a bearish candle. Thus, things do not look good for the buyers. It may change its direction. If it makes a bullish breakout, that is another ball game, though. Let us proceed to the next chart.

The price does not make a bullish breakout but changes its trend. It is the sellers’ territory again. By looking at the last candle, the sellers may trigger a short entry by setting their take profit at the last swing low.

In this lesson, we have seen that the trend-initiating candle and the signal candle both get 10 on 10. However, the chart does not offer an entry because there is no space for the price for traveling towards the upside. Consequently, the sellers take over and drive the price towards the downside. To sum up, we not only look at the candle’s attributes but also calculate risk-reward.

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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
Crypto Daily Topic Crypto Guides

Is Crypto Money Laundering A Real Problem?

What is Money Laundering?

What is Money Laundering?

What is Money Laundering?

Money Laundering is the legitimization of money earned through illegal means. Generally, it is the separation of money obtained through illegal activities and mixed with the money made from legal sources like small businesses that accepts cash as the primary mode of payment. The legitimized money is again funneled to the criminal enterprises to fund illegal activities.

Different Ways of Money laundering

Money laundering is prevailing for many decades in our financial history. Governments have been continuously upgrading the technology to avoid the money laundering cases, especially to reduce the funding of illegal activities. Cash still occupies the first place when it comes to laundering the money. Because it is difficult to trace the money that is transacted in cash. Hence selling/buying drugs, trafficking, and theft are mostly dealt with cash.

Gold is another popular form of laundering money. Other than these, we have large banks that don’t question with the source of the wealth when the cash is deposited in their vaults, casinos, tax havens, etc. But ever since the revolution of Cryptocurrency has begun, this asset is paving new ways for money laundering. Let’s discuss more about this below.

Is Money Laundering Using Cryptos A Real Problem? 

There are significant concerns across most of the governments with regard to money laundering using cryptocurrencies. But most of them are not true when it comes to reality. It is estimated that since 2009 approximately $2.5 billion worth of Bitcoins are laundered, whereas ~ $100-$300 billion dollars are being laundered every year in different ways.

Hence, if we compare the stats, the amount of money laundered using Cryptocurrency is very sparse. Moreover, it is not advisable to launder money using Cryptocurrency as all the crypto networks are permissionless and transparent for literally anyone to check. It is easy to put together the Bitcoin transactions as the transactions are only pseudo-anonymous.

How are cryptocurrencies used to launder money?

These are some of the ways how Cryptocurrency is used for money laundering:

₿ While most of the cryptocurrencies are regulated there are some exchanges that aren’t. This means they don’t perform KYC procedures and none of the details of their customers is collected while they perform crypto transactions. This makes it challenging to match the transactions made by their customers to their id’s. When several such transactions are made using unregulated crypto exchanges, a degree of privacy is added which may eventually result in using that money for illegal activities.

₿ Exchanging the Cryptocurrency with different altcoins, thus making it difficult to know the origins of the actual cryptos. This can also quickly be done by participating in an ICO.

₿ Using Bitcoin ATM’s, we can deposit fiat cash and take Cryptocurrency at any place where a crypto ATM is available.

₿ As the cryptocurrency market is too volatile, it is easy to show that the illicit income is a result of some profitable venture or some other currency appreciation.

₿ With ever-increasing online payments using Cryptocurrency, we can easily create an online company which accepts Bitcoin and convert black money into clean Bitcoin.

How are the governments controlling the crypto money laundering?

Governments are taking various measures by developing multiple tools to link the transactions to the ids of the users using KYC details. Anti-laundering laws are amended to include cryptocurrencies. The US, Canadian, and European governments have made changes to the rules already. Some governments are, in turn, taking measures by legalizing cryptos so that the transactions would be made through regulated exchanges instead of fraudulent ones.

Finally, it can be said that, since the usage of digital cash is going to be inevitable, all measures are being taken to curb the negativities that we see in today’s world with fiat cash. If you have any questions, shoot them in the comments below. Cheers!

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
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
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. 

 

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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.

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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. 

 

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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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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.

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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.

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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 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.

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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.

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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. 

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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.

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Crypto Daily Topic

Bitcoin is the Best Asset of the Decade, According To Bank of America Merrill Lynch

Bitcoin has been ranked as the best asset of the decade. This is according to Bank of America Merrill Lynch (BAML), which has made a list of the best and worst asset classes of the last ten years.

Bitcoin has been ranked as the best asset of the decade. This is according to Bank of America Merrill Lynch (BAML), which has made a list of the best and worst asset classes of the last ten years.

Bitcoin has been ranked as the best asset of the decade. This is according to Bank of America Merrill Lynch (BAML), which has made a list of the best and worst asset classes of the last ten years.

CNBC reporter – Carl Quintanilla tweeted today that the banking giant has listed Bitcoin as the best asset class, with the worst spot going to the Myanmar Kyat. In the analysis, BAML indicates that an investor who paid $1 for a Bitcoin in 2010 would have an equivalent of $90, 026 today. This is a stark difference from an investment in U.S equities, which would have yielded $3.46 today for a $1 investment in 2010, and shows Bitcoin’s impressive performance ten years after it was launched by the anonymous individual(s) Satoshi Nakamoto.

Bitcoin’s Volatility over the Years

Bitcoin had come a long way from 2010 when it was worth $0.0025. The bitcoin community knows this because that’s the year computer programmer Laszlo Hanyecz famously bought Papa John’s pizza for 10,000 BTC on May 22, 2010. The day has become folklore, not for the transaction, but the price – Hanyecz paid for the pizza with 10,000.

Since “Bitcoin Pizza Day,” the cryptocurrency has steadily witnessed an astronomical rise in price. Nine months after the purchase, the crypto attained equal value with the US dollar, making the pizza $10,000. In 2015, the two pizzas would’ve gone for $2.4 million. As of December 13, 2019, the pizzas are worth $72.2 million.

Bitcoin’s all-time high was a staggering $20,000 in 2017, after which it started declining, experiencing an incredibly bearish market. Today, the cryptocurrency tends to stagnate between $7000 to about $7,250. Bitcoin investors are hoping for a bullish market after the crypto’s halving in May 2020.

The Crypto Decade?

Bitcoin’s strong showing comes against a backdrop of a year when cryptocurrencies, in general, outshined other major asset classes. Despite kicking off the year with a dismal run, large-cap cryptos started picking up around March, and by June, the asset class was way ahead of other assets. 

Establishing themselves as the world’s leading asset class this year, cryptocurrencies have outperformed annualized returns of US equities, bonds, and commodities such as gold and oil.

Digital Assets Data co-founder and President Ryan Alfred told Coindesk that big-name cryptocurrencies posted significantly higher returns this year when compared with traditional markets.

“Looking back at the performance of the top ten large-caps in comparison to other major asset classes, we can see their special signature,” said Alfred.

Of course, cryptocurrency’s big rally is attributable to Bitcoin, which is currently up 100% since the year kicked off.

The asset class’s success can be attributed to the very reason risk-averse investors steer clear of it: its unpredictable volatility. This volatility creates a satisfactorily liquid market – allowing traders to quickly trade between digital and fiat currencies.

Being still a burgeoning market, crypto prices are bound to jump back and forth in a frantic manner, which actually works to the assets’ advantage.

And with Bitcoin being the most popular cryptocurrency, it is no wonder it is the best asset of the decade.

Conclusion

Having marked its 10th year with a bang, what’s next for Bitcoin? As usual with cryptocurrency, it’s impossible to tell. Bitcoin devotees are hopeful the cryptocurrency will retain its lead over other asset classes. Remember that events like crypto whales – for example, investor organizations entering the market could significantly boost its price. But most observers are pegging a bullish return on the next Bitcoin halving, six months from now.

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Crypto Daily Topic Cryptocurrencies

The Future of Blockchain

Even though blockchain is mostly known for being the technology behind Bitcoin – and other cryptocurrencies, it is more than that. And yes, the revolutionary nature of cryptocurrencies is what makes cryptocurrencies stand out from other digital currencies. Blockchain is known for many things – but its immutability, transparency, and decentralization are what make it such an object of frenzied interest, research, and even apprehension from traditional systems.

Even though blockchain is mostly known for being the technology behind Bitcoin – and other cryptocurrencies, it is more than that. And yes, the revolutionary nature of cryptocurrencies is what makes cryptocurrencies stand out from other digital currencies. Blockchain is known for many things – but its immutability, transparency, and decentralization are what make it such an object of frenzied interest, research, and even apprehension from traditional systems.

Even though blockchain is mostly known for being the technology behind Bitcoin – and other cryptocurrencies, it is more than that. And yes, the revolutionary nature of cryptocurrencies is what makes cryptocurrencies stand out from other digital currencies. Blockchain is known for many things – but its immutability, transparency, and decentralization are what make it such an object of frenzied interest, research, and even apprehension from traditional systems.

Today, blockchain applications have transformed how things are done across multiple industries – from manufacturing, to supply chains, to identity management, to finance and countless others. Given that it’s still a young technology but with incredible potential, how does the future look? 

Blockchain: A Background  

The concept of blockchain was first ever mentioned by Scott Stornetta and Dr.Stuart Haber in 1991. In a white paper titled ‘How to Time-Stamp a Digital Document,’ the two discussed the idea of timestamping a document and linking it to the previous document in a manner that rendered it impossible to change the content of the documents. Essentially, this was the first idea of “cryptographically linked chain of blocks,” which is how we know the blockchain today. 

Of course, Bitcoin’s burst onto the scene and gave blockchain an impetus it hadn’t seen before.

However, in 2014, the conversation started shifting from Bitcoin and to the potential of its underlying technology. People began to realize blockchain’s potential for other uses, and the exploration of this idea kicked off. Blockchain 2.0 was now the next buzzword – referring to applications beyond cryptocurrency. Today, there are hundreds of blockchain applications already active, with even more being explored. 

The reason blockchain has gained so much traction is because it has brought out business-changing ideas in plenty of industries. It’s hailed for facilitating complete transparency, a peer-to-peer model of sharing information, and the unchangeable nature of its records. 

And its influence seems to be getting only stronger – to the tune that the International Data Centre predicts global investments on the technology to hit $11.7 billion in 2022. Blockchain solutions also feature in increasingly many companies’ agenda. 

What’s Holding Back Blockchain from the Mainstream?

For now, blockchain’s implementation faces many hurdles. These limitations have slowed it down – but only just, its mainstream adoption. It’s important to note that ‘slowed’ here is relative because, given the stakes, blockchain has, in fact made such an impressive showing. With that, let’s briefly look at some reasons why its implementation is still not full-throttle a decade later:

☑️ Cost – Most blockchain platforms consume too much energy compared with their actual transaction throughput, e.g., Bitcoin’s 7 per second and Ethereum’s 15 per second

☑️ Scalability – Partly due to the issue of low transaction throughput with blockchains, blockchains have just not attained the potential to serve many users

☑️ Data privacy – The public model of public blockchains is not very enticing to enterprises who would rather keep their sensitive data private (through projects like Hyperledger have made it their goal to solve this problem by developing private blockchains)

☑️ Insufficient blockchain knowledge – Blockchain solutions are still a novel and complex concept for the majority of people. Also, most organizations lack people who have an in-depth knowledge of the technology

☑️ Entrenched systems – most organizations see no reason to “fix something that’s not broken.” They have been working with established methods for so long and providing services to customers. Transitioning into fresh mechanisms can prove challenging.

Blockchain’s Development Trajectory

Despite blockchain being so promising, it’s still very much at the teething stage. Some people see it as not a technology issue, but an issue of breaking down barriers and collaboration between companies.  

And we already see this happening. Hyperledger is one example of a successful collaboration of organizations with the sole aim of pushing blockchain into the mainstream. With the coming together of more than 200 influential organizations spanning the blockchain, finance, manufacturing, academia, and more fields, Hyperledger is determined to ensure blockchain counts. Today the group has released about 15 projects, including blockchain projects, blockchain tools, and libraries, and so on.

Furthermore, many in the blockchain space contend that the technology is still struggling to break ground. However, the progress so far can’t be denied. 2014 was the year when Blockchain 2.0 became a thing. The next year we saw the introduction of an entire blockchain dedicated to smart contracts, one of the most touted and promising applications of the technology. Already, major industry players like Microsoft, UBS Group, and the BBVA group have already integrated smart contracts in their organizations – in various forms.

The year 2016 saw the explosion of more pilot projects. 2017 brought along with it more enterprise-level experiments, while 2018 and 2019 were the years we saw the crystallization of many projects and, ultimately, their application. 2019 has been the year of bolder forays into the blockchain sphere.

Blockchain: Thinking Ahead

Based on blockchain’s showing in the last few years, many experts think brightly of its future. The blockchain and its fellow distributed ledgers will soon become the preferred mode for many business transactions.

Forbes predicts that stablecoins – the “incredible manifestations of blockchain power” will find even more popularity. The publication also asserts that as fiat currencies falter, people will likely “turn to blockchain to safeguard their savings.” What’s more, it makes a strong case for blockchain’s future, saying it deserves to be applied to “better technologies” and that “those improvements are on the way.”

Author of “Blockchain Revolution” Don Tapscott calls blockchain a “platform for truth and trust” with “staggering implications…for virtually every aspect of society.” The technology, according to him, is revolutionary with “vast potential to change society.”

The Institute for Innovation Development notes that there are more than 50 industries already deploying blockchain, and that “this corporate activity and experimentation will increase exponentially.” It also foresees blockchain changing “how transparency and authenticity are derived” with all types of things – from food, to property ownership, to verifying memorabilia, to personal identification.  

Spencer Bogart of Blockchain Capital Blog sees blockchain’s development shifting from the “launching of insufficiently differentiated new chains to improving and building ‘up the stack’ of winning protocols.”  

The Future of Blockchain 

Blockchain is still experiencing “growing pains,” and thus, its potential is yet to be fully realized. However, given that it has already successfully penetrated so many industries, it’s likely a matter of time before it penetrates nearly every industry.    

Many people, from both within and without the blockchain community, acknowledge blockchain’s powerful potential to instill transparency in all aspects of the business. Dataversity says that the technology will “emerge as a savior for transactional integrity.”

Blockchain has also received support from higher-ups in the finance regulation sector. Former chairman for the US Commodity Futures and Trading Commission, writing for Coindesk, asserts that “emerging digital technologies” have “far-ranging implications for capital formation.”

The Future of Blockchain Companies foresees a blockchain era when businesses will easily exchange assets in a peer-to-peer environment without government interference or regulatory fear. If blockchain maintains its current level of trust, then the current lack of transparency and “lack of governance over personal data” will be a thing of the past. 

Conclusion

Blockchain is here to stay, and soon, we will be using it in our daily lives without even realizing it. And for the better – because, as stated many times in the article, this technology has the potential to revolutionize how we do things. And while blockchain’s development and adoption has been slow, we know its mainstream adoption is a matter of “when,” not “if.”

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Crypto Daily Topic

Are Bots Manipulating the Crypto Market?

Cryptocurrency nowadays is a far cry from the time it was introduced to the world. With nearly 3,000 cryptocurrencies and more investors moving in to cash on this digital asset, cryptocurrencies are more popular than ever.

Cryptocurrency nowadays is a far cry from the time it was introduced to the world. With nearly 3,000 cryptocurrencies and more investors moving in to cash on this digital asset, cryptocurrencies are more popular than ever.

Cryptocurrency nowadays is a far cry from the time it was introduced to the world. With nearly 3,000 cryptocurrencies and more investors moving in to cash on this digital asset, cryptocurrencies are more popular than ever.

As a result, crypto traders are continually looking for ways that can help them execute trades quicker and more efficiently – especially considering the unpredictable nature of cryptocurrencies. Bots have been one of the answers to this, and while they may be handy for some traders, they also manipulate the market and can prove annoying for human traders.

In this article, we will be exploring what exactly bots are, how they manipulate the crypto market, and how you can respond to them as a trader. 

What is A Bot?

A crypto trading bot is a software program that’s designed to analyze market trends and execute trades automatically. They are essentially robots that replicate what human traders would do in various market conditions.

One of the reasons bots have really caught on in crypto markets is the well-known volatility and unpredictability of cryptocurrencies. For instance, a trader could go to sleep with their holdings in a favorable trading position only to wake up and find they have plummeted significantly – all in a matter of hours.

Unlike humans who sleep, bots don’t. Crypto trading bots work around the clock to maintain full control of a trader’s holdings position. What’s more, a bot can process information and make trades much faster and more efficiently than any human ever could.

Bots have gradually become a strong presence in financial markets. They are especially popular with high-frequency traders because they can detect and take advantage of tiny pricing discrepancies.

As cryptocurrencies have become popular, so have cryptocurrency trading bots. Today there are many types of trading bots – some being free and open-source and others available for a subscription fee from specialized companies.

Types of Bots

There are various types of cryptocurrency trading bots. Arbitrage bots are one of the most popular. These bots analyze crypto prices across various exchanges and execute trades taking advantage of the price differences.  Arbitrage bots also take advantage of how slow some exchanges might be in updating the price of specific cryptos, for example, Bitcoin.

Other types of bots test out potential trading strategies by utilizing historical market data. Still, others have been programmed to make trades in response to changes in prices or trading volume.

How Do Crypto Trading Bots Work?

Bots use application program interfaces (APIs) to process the relevant information in an efficient manner. Then, with the data that has been processed, these bots will generate both buy and sell orders for the trader based on how they have interpreted the data.

Such data will include information such as market volume, price movements, current orders, etc. Bots are customizable, and as such, a trader can configure them to analyze even more complex data. Crypto trading bots work in several ways – some through browser plugins, OS clients, trading servers, and others infused in cryptocurrency exchange software.

The Uncanny Relationship between Bots and Crypto Markets

The crypto market seems to be the perfect environment for bots to grow and expand their influence. Unlike traditional markets that close in the evening and on weekends, the crypto market is open for trading 24/7 – and nowhere could automated trading be optimal.

Also, the number of crypto exchanges has exploded in recent years, providing excellent opportunities for arbitrage trading. It can be difficult and extremely time-consuming, keeping up with all the exchanges to exploit these opportunities. As such, many traders employ bots.

Bots can make crypto markets more liquid and efficient – thanks to their rapid and voluminous execution. But this can also make the markets more volatile.

Bots are influencing a large percentage of crypto exchange trading volumes. Bots’ activity can manipulate the markets by inducing traders to buy at a higher price or sell lower than originally planned – which is very often the case with limit orders.

They can also influence market orders by presenting bot orders of negligible quantities close to the market price before the first real order of any significant volume is observed. These are the bots tricking you into placing market orders that will be filled instantly – but most of which will be filled against the order at a worse price.

Bots can also be an annoyance when you’re placing a bid, and it gets outmatched instantly – and especially if you’re placing an initial order based on what you thought to be a market ‘mispricing.’

How to Deal With Bots

So, how do you deal with bots? Some traders would try to outdo the bots by placing buy orders that are slightly higher than the bot’s bid price, or placing a sell order at a slightly lower price. Although this strategy may work for a one-off trade, it may not be sustainable in the long run –especially if you’re a high-frequency trader. Such little annoyances will eventually amount to considerable losses in the long term.

As such, it’s better to submit the bid price you had originally intended. If the market is volatile, then your order will still be filled, although it will take a bit longer.

Alternatively, you could take time and observe the behavior of the order book. Often, bot orders show up and then quickly disappear, or move around the book if there’s a constant adjustment of prices. By doing this, you could understand the intention of the bots and gain a more accurate perspective of how and when to place your order.

You could also get yourself a bot. While they can be frustrating for the average trader, bots can be a useful aid, especially for those who can’t afford to stay glued to the screen all the time. Also, they can process information and make trading decisions faster. After all, they don’t seem to be going anywhere, and they only become sophisticated with time.

Conclusion

Now that you know what bots are and how they can manipulate the market, you’ll be able to identify certain market movements that seemingly come from nowhere and respond to them accordingly. You can even buy yourself a bot and take advantage of their 24/7 trading ability, their efficiency, speed, and so on. Whatever you do, being aware of bots’ existence and their influence will help you make more informed and better trading decisions.

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Crypto Daily Topic

Top Tips to Secure Your Bitcoin against Theft

Bitcoin inspires all sorts of motivations – from noble ones to less noble ones. It’s an asset class that’s targeted by scammers at an incredibly high rate. Each year, individuals and crypto exchanges lose millions of dollars to such theft.

Bitcoin inspires all sorts of motivations – from noble ones to less noble ones. It’s an asset class that’s targeted by scammers at an incredibly high rate. Each year, individuals and crypto exchanges lose millions of dollars to such theft.

Bitcoin inspires all sorts of motivations – from noble ones to less noble ones. It’s an asset class that’s targeted by scammers at an incredibly high rate. Each year, individuals and crypto exchanges lose millions of dollars to such theft.

But that doesn’t mean Bitcoin or other cryptocurrencies are a security nightmare. It all really depends on how careful you are – and the measures you take to secure your Bitcoin assets. Let’s look at some easy steps you can take to protect your holdings.

Use Long and Complex Passwords

The keywords here are ‘long’ and ‘complicated.’ Even if your password is complicated enough, it’s still an easier hack than a long and complex one. For instance, a hacker would more quickly guess “pas$w0rd” than they would “Hell0Thi$isMyPas$Word”. Also, a single uppercase letter is not enough to cushion you against hacking. At the very least, make sure your wallet and account passwords meet these criteria:

  • Have lowercase letters and uppercase letters, numbers, and symbols
  • Have at least 40 characters or more.
  • Is not in obvious sequences, for example, 12345 or abcdef
  • Is not a common word or obvious character replacements
  • Is not in repeated letters/numbers or keyboard patterns like “444”, “ttt” or “cvbnm”

Now, the longer and stronger password is, the harder it is to remember. There are a few resources you can use to prevent this from happening, including a password management software or secure offline storage, like an encrypted USB drive.  Also, remember never to use the same password for more than one account. A single security breach could result in a hacker getting access to all your funds.

Enable a 2-Factor Authentication (2FA) On All Your Crypto Accounts

With a 2FA, you’re required to use two authentication factors to verify your identity. One identifier is your password, and the other could be a phone call, a biometric factor, etc. That said, you need to watch out for 2FA’s that are still vulnerable – e.g., phone calls or text messages. Hackers have devised a new trick of calling up phone companies and successfully impersonating customers, which makes a phone call or text message 2FA insecure. Instead, you could enable a 2FA via:

An authenticator app, like Google authenticator –which automatically generates 2FA codes for your account every 30 seconds, and is entirely free,

or:

A universal second factor (U2F), which is like an encrypted USB that you can insert into your device as a form of 2FA. Some trusted U2F’s include FIDO and YubiKey.

Enable IP and Wallet Whitelisting

Whitelisting is a security feature that allows you to create a list of trusted IP addresses that can interact with your funds.  Ensure your crypto exchange has these security settings:

  • IP whitelisting – which allows only authorized users to use your IP address to authorize trades, sending of crypto, or paying for things through your exchange account.
  • Wallet whitelisting – in which you share with the exchange your wallet’s public key. After that, only you will be able to withdraw funds from the exchange to your private wallet.

It’s worth noting that not all exchanges have enabled whitelisting options, so make sure to ascertain that before you sign up for any wallet.

Use a Reliable VPN on Public WiFi

Public WiFi connections in restaurants, hotels, airports, etc. are an easy target for hackers.

If you must access your crypto account on a public network, it’s highly advisable to use a reputable Virtual Private Network (VPN) such as ExpressVPN, NordVPN, Tunnel Bear, or VyprVPN. This precaution will prevent your account login information, i.e., passwords, private key, and recovery phrases from being intercepted. A VPN is an extra layer of encryption that will also conceal your identity, location, and IP address.

Separate Your Trading Funds from Your Savings

If you’re a regular trader, separate your trading funds from the rest of your funds. Keep the rest of your funds in a cold storage, e.g., a hardware wallet or a paper wallet.

This precaution is essential because storing all your funds on your exchange renders them vulnerable to hacking, phishing attacks, etc. There are many stories of hackers successfully getting away with lump sums of crypto from crypto exchanges – so be careful.

Back-Up Your Backup

Backing up your back-up means having a second line of defense in case you forget your account or wallet details.

You can do this by first encrypting a flash drive and then adding a text file of information on all your passwords, private keys, and seed phrases. To encrypt a flash drive, simply right click on the drive in your “My Computer” window and select “encrypt,” follow the instructions, and set up a password.

The second step is storing the flash drives in separate and safe places, like a safe deposit box. For an added layer of security, you could even split your private key into two flash drives, i.e., one half in one drive and the other in a second drive. That way, even if someone manages to get hold of one flash drive, they can’t access your crypto. Make sure you don’t forget the passwords, however.

Encrypt a “Digital Will”

Treat your crypto holdings like any other asset – you need to ensure they go to your beneficiaries when you’re gone. But, leaving a will for your crypto assets for your loved ones requires a bit more planning than that for traditional assets. So how do you go about it? While you will eventually have to talk to an estate planning lawyer, you can get started with the following steps:

  • Ensure your beneficiary knows the location of at least one of your encrypted flash drives.
  • Ensure they have the password to decrypt it
  • Include in the flash drive a “digital will” – a file that lets them know how exactly to access your Bitcoin.

Some people may find it challenging to understand how to handle cryptocurrency. To make it easier for your inheritor(s), try writing down the instructions in a manner that a crypto novice would understand. Let details include how to access your wallet, exchanging of cryptos to traditional currency, etc.

Don’t Brag About Your Holdings

Finally, when it comes to cryptocurrency, discretion is key. You’re much safer that way. There are a lot of people who have been targeted in extortion to ransom attacks. Often, these people were known traders, investors, or just people who couldn’t keep quiet about their hoard.

One common ploy is for extortionists to offer to buy crypto at a price way higher than the market price, and suggest a face to face meeting. Once the person arrives, they ambush them and strong-arm them into transferring the funds without payment.

It’s better to remain tight-lipped about your crypto holdings. And just to be extra safe, consider splitting your cryptos into more than one wallet to mitigate the risks of any such occasion.

Just like you would take steps to protect your other valuables – you should (and even more so) take steps to protect your cryptocurrency. Securing your crypto shouldn’t be a daunting task. Follow this guide and get started on safer interaction with your cryptocurrency today. Also, remember to do more grounded research on best practices to secure your crypto – and you’ll be good to go.

Categories
Crypto Daily Topic Cryptocurrencies

Hyperledger Fabric – A blockchain based enterprise solution

Blockchain is the future. Yes, the technology powering cryptocurrencies has incredible potential to change how institutions and industries work – and our very lives. When you’re talking about radical transparency

Blockchain is the future. Yes, the technology powering cryptocurrencies has incredible potential to change how institutions and industries work – and our very lives. When you’re talking about radical transparency

Blockchain is the future. Yes, the technology powering cryptocurrencies has incredible potential to change how institutions and industries work – and our very lives. When you’re talking about radical transparency in supply chains, no more annoying red tapes, and contracts without a horde of lawyers – you’re talking about blockchain technology.

These are just examples of what blockchain is capable of. It’s a revolutionary technology that could be used for good. And no entity or organization recognizes this more than Hyperledger – a global coalition of forward-thinking organizations whose aim is to advance blockchain.

It’s one of the most exciting organizations in the blockchain sphere – and whose work is incredibly important. But what is Hyperledger? Let’s dissect everything about it – from members to its architecture to its exciting projects, to companies that are already utilizing its platform. 

What is Hyperledger?

Hyperledger is an umbrella network of institutions that seeks to support the collaborative development and improvement of distributed ledger systems so that they can support global business transactions.  The project was founded by the Linux Foundation in 2015, with the founding members announced in February 2016. Hyperledger calls its design ‘’The Greenhouse for Enterprise Blockchains” – as it aims to incubate and develop practical blockchain-based solutions and applications to today’s challenges

The project is backed by a global alliance that includes over 200 leading organizations from the blockchain technology, finance, technology, software, academia, system integration, manufacturing, Internet of Things (IoT) and more fields. They include big names such as Accenture, Airbus, American Express, Cisco, Consenys, SAP, Huawei, Samsung, Microsoft, Oracle, Ripple, YaLE, UCL, University of Cambridge, and more.

The Hyperledger Architecture

Hyperledger’s architecture utilizes the following business components:

☑️ Consensus layer – which deals with creating agreement on the priority of transactions, as well as the accuracy of transactions contained in a block

☑️ Smart contract layer- which takes care of processing transaction requests and authorizing valid transactions

☑️ Communication layer – which deals with peer-to-peer communications

☑️ Identity management service – the function that maintains and validates the identity of users and maintaining trust on blockchain

☑️ API (Application Programming Interface) – a software that facilitates external applications and users’ interaction with the blockchain.  

What Hyperledger Is Not

When talking about Hyperledger, it’s important to get it right about what it’s not. Hyperledger is not a company, a cryptocurrency, or a blockchain. Hyperledger is something of an open hub for pushing enterprise blockchain development. The platform does not endorse any cryptocurrency. Its focus is on blockchain technology and how to harness it for the good of the world.

Its website tells us: “Not since has the web itself has a technology that promised broader and more fundamental revolution than blockchain technology. Blockchain can be used to build a new generation of transactional applications that establishes trust, accountability, and transparency at their core, while streamlining business processes.”

Hyperledger wants to ensure that blockchain thrives, stating, “Only an open-source, collaborative software development approach can ensure the transparency, longevity, interoperability, and support required to bring blockchain technologies forward to mainstream adoption.”

In short, the project is about bringing minds and brains together to further the blockchain idea. It’s not about commercial incentives or a get-rich scheme. That’s why Hyperledger has no plans for developing a cryptocurrency. Executive Director Brian Behlendorf made this clear from the start, saying, “You’ll never see a Hyperledger coin. By not pushing a currency, we avoid so many of the political challenges of having to maintain a globally consistent currency.” (source: https://www.bitcoininsider.org/article/43420/wtf-hyperledger)

Hyperledger Projects

The Hyperledger ‘greenhouse’ incubates and promotes a range of industrial blockchain technologies, frameworks, tools, interfaces, and applications. As of November 2019, Hyperledger projects are as follows:

Hyperledger Aries

This is the youngest project by Hyperledger. Its goal is to advance the use-case of blockchain to provide identity solutions. It does this by providing an open-source, interoperable tool kit for creating, transmitting, and storing genuine identities. It relies on another Hyperledger project – project Ursa, for cryptographic support to achieve security and safety for identity credentials.

Hyperledger Avalon

Avalon is the project’s implementation of the Trusted Compute Specifications published by the Ethereum Enterprise Alliance. Avalon is intended to provide safe and trusted off-chain computing resources to improve the scalability of public blockchains, all without compromising on the privacy accorded by these blockchains. 

Hyperledger Besu

This is the first public blockchain project to join the Hyperledger fold. It was formerly known as Pantheon, a project by the blockchain company ConsenSys. Besu is an Ethereum client (software that executes Ethereum’s protocol) that allows users to create decentralized application (DApps), smart contracts, and mine ether. The project is keen to separate concerns between consensus algorithms and other blockchain features.

Hyperledger Burrow

Burrow is a permissioned Ethereum smart contract machine that handles transactions and executes smart contracts on the Ethereum Virtual Machine.

Hyperledger Caliper

Caliper is a framework meant to measure the performance of multiple blockchain solutions. It contains several performance indicators such as Transactions per Second, transaction latency, resource consumption (CPU, memory, etc.), and so on. The resource is meant to be used by various Hyperledger projects as they roll out frameworks.

Hyperledger Cello

This is a tool designed to be the operational dashboard for Blockchain – to minimize the effort applied while creating, managing, and using blockchains. It can be used as a reference tool by blockchain developers.

Hyperledger Explorer

This a dashboard utility module that lets users create various user-friendly applications on which others can view, monitor, search, organize, or query various artifacts and developments in blockchain. It includes details such as name, chain codes, details of blocks, transaction data, and other relevant information on the blockchain network.

Hyperledger Fabric

Hyperledger fabric is a framework that acts as a foundation for creating blockchain-based products, solutions, and applications. Its components, such as membership and consensus, can be used on a plug and play basis. It fills the privacy and confidentiality gap that makes traditional blockchains less than ideal for enterprise-level blockchain solutions.

Hyperledger Grid

This a set of tools that allows developers to select the most optimizable components for developing supply chain blockchain-based solutions.

Hyperledger Indy

This is a distributed ledger that provides tools, libraries, and components for decentralized identities to address issues of identity management. Indy can be used solely but is interoperable with other blockchains.

Hyperledger Iroha

Iroha is a distributed ledger software that infrastructural and IoT projects can easily incorporate into their systems. It features simple construction, a crash tolerant consensus algorithm, and other characteristics that make it easy to integrate into such systems.

Hyperledger Quilt

This is a Java version of the Interledger protocol that allows payments across any payment network, whether with fiat or crypto. It has an implementation of all core functions required to send or receive payments. 

Hyperledger Sawtooth

The Sawtooth project aims to keep ledgers truly distributed and make smart contracts more secure. It is designed for use across many fields, including IoT and finance. Its dominant characteristics include being both permissioned and permissionless and using the Proof of Elapsed Time (PoET) consensus algorithm.

Hyperledger Transact

Hyperledger Transact is a library that provides a standard interface for writing distributed ledger software – in order to simplify the task for developers.

Hyperledger Ursa

Ursa is a shared cryptographic library that seeks to assist developers not to duplicate cryptographic work and hopefully increase security for future developer applications.

Real-Life Applications of Hyperledger

Hyperledger is already in application across industries – from food to diamonds to healthcare. Companies are using the platform to achieve more transparency, eliminate fraud and streamline processes. Here are examples of such companies:

Everledger is a company that uses a blockchain solution based on the Hyperledger platform to inject more transparency in the diamond supply chain – and thus help prevent fraud and illicit trading. The diamond community shares concerns over stone’s origins and authenticity – and this is where Everledger comes in. It traces the journey of every stone from mining to the consumer so that customers are assured of the integrity of their diamonds.

DigiPharm is a company that aims to promote fair pricing in the healthcare sector. It has built its platform on the Hyperledger Fabric protocol to enable seamless implementation of fair pricing agreements, lower costs, and help remove long-standing barriers that prevent patients from accessing quality healthcare. 

HealthVerity is a platform that creates, aggregates, and exchanges healthcare and consumer data.  It has integrated the Hyperledger Fabric protocol to better manage consumer and patient preferences in a way that best complies with changing privacy requirements.

E-Food is a food traceability program based on the Hyperledger platform that traces all quality and logistics activities on the supply chain. It enables a ‘food to farm’ approach to making food supply and production more transparent – enhancing customer trust and preventing food fraud. 

Conclusion 

Hyperledger has taken a rare and noble path – one for advancing the blockchain idea without monetary incentives. Its projects already demonstrate the ability to transform industries by making it easier to adopt and utilize the technology for the benefit of both businesses and the most important player in it all – the customer. We can only hope that more companies across the board will take up the Hyperledger idea and deliver blockchain benefits to the grassroots.

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Crypto Daily Topic

NANO vs. BAT: The coins to watch in 2019 and beyond

Are you considering investing in cryptocurrencies? Read on to understand just why NANO and BAT should form part of your portfolio.

The meteoric rise of digital assets over the past

Are you considering investing in cryptocurrencies? Read on to understand just why NANO and BAT should form part of your portfolio.

The meteoric rise of digital assets over the past

Are you considering investing in cryptocurrencies? Read on to understand just why NANO and BAT should form part of your portfolio.

The meteoric rise of digital assets over the past couple of years has often revolved around the top cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, LiteCoin, Dash, etc. With thousands of other cryptocurrencies still trading in the market today, you would be ill-advised to think only the most popular coins that you already know about the matter.

The best thing about the creation of tens of thousands of cryptocurrencies when blockchain technology was at its peak, was the variety. Almost every asset that reached the market brought unique features, offered differing options to users and investors, and aimed to dominate the blockchain space by making the world a better place. While not every crypto asset made it this far, in this post, we will be comparing two of the most promising tokens for investment in 2019 and beyond.

Why NANO and BAT stand out

Nano and BAT are relatively comparable by market cap. At the time of writing of this report, Nano was priced at $0.909 with a market cap of $121.16 Million and a supply of 133.25 Million while BAT was priced at $0.266 with a market cap of $361.00 Million and supply of 1.36 Billion. However, from a utility perspective, the two assets vary significantly because they were both created to serve fundamentally different purposes in the market.

If you are looking to find the better of the two tokens – perhaps one that best suits your investment profile, you have come to the right place. In this post, we will compare the two assets based on what each brings to the market, their strengths and weaknesses, as well as the investment opportunities each has to offer. 

Both Nano and BAT have stood strong even in the face of a massive cryptocurrency wipeout that began in early 2018 and killed over 70 percent of all the cryptocurrencies that once traded in the global market. Given that the two have commendable technical specifications and strong development teams and present impressive utility to users, they both offer great investment opportunities.

The basics of Basic Attention Token (BAT)

The world today is run by advertisers. Look at Google. Facebook, too, while it sells itself as a social platform, it mines people’s data to stay rich. Basic Attention Utility, or simply BAT, is a token that was created as a genuine utility to deal with the ills that individuals and businesses in the world of digital advertising have to put up with today.

The creators of this cryptocurrency were inspired by the need to address numerous problems that plague both consumers and publishers in the industry. The biggest of these issues being the economics and organizational dynamics imbalance that benefits only a few players in the industry at the expense of many stakeholders.

In what the creators of BAT call “electronic pollution” in their Whitepaper, individuals are subjected to unnecessary inconvenience and high costs whenever they attempt to make any headway in the digital advertising arena. These inconveniences and costs often come in the form of high data costs, long load times of content, device battery drainage, privacy breaches, and malvertisements (ads that spread malware to users).

Mobile users, in particular, are the worst hit by electronic pollution served by the corporations dominating the advertising space. As user privacy continues to become a major issue of discussion, advertisers are relentlessly pushing the envelope coming up with shrewd ways to harvest user data and often use it against them. Cases of user data and device batteries drained by ads have been so prevalent in the past that many users have resorted to using ad-blocking software.

How BAT works

When users are so fed up with ads that they resort to blocking them, it hurts the publishers, gives the industry a bad name, and prevents legitimate advertisers from generating income even from the remaining ad-viewing users. Before the launch of BAT, the creators of this ad-focused token first created the Brave browser that is open-source and focused on user privacy. It was designed to block off invasive ads and browser trackers as well as accurately measure the user’s attention anonymously in an effort to reward publishers and users what they truly deserve.

The BAT token came soon after the Brave browser, and it runs on the Ethereum blockchain platform. Derived from the user’s attention or ‘mental engagement,’ it makes the users just “targets” for advertisers, but also active players in the advertising and publishing economy by granting them access to a portion of the advertising budget in BAT. Users can purchase content for their friends and even donate to publishers and content providers using BAT. This is how BAT has been able to promote an equitable and fair exchange of value.

Why BAT?

The BAT price has shot up by 150% from its lowest in December 2018 to its current 0.2616. It has never been able to get back to its peak price of $0.86, attained in January 2018. The token’s current market cap is $365 million, with a $65.90 million trading volume as of November 18, 2019. This places it at the 29th spot in the cryptocurrency market.

BAT is most attractive to investors and users who value online content or understand the stakes in the digital advertising world. These are:

☑️ Advertisers: The BAT incentivizes advertisers to integrate the coin in their list of ads. This enables them to receive specific data and a range of analytics regarding their ads and the users they target. Since users’ systems are equipped with attention measurement tools and machine learning algorithms that extract clear and precise advertising and content data, advertisers get deep insights into how their ads are doing and what they need to do to get better returns.

☑️ Publishers: Content creators and publishers are hugely incentivized to create content of greater value, and to expand their publishing platforms to reach wider audiences and earn more. Better still, publishers and advertisers get accurate user feedback when they hand-pick ads they like to see or are relevant to them. Some of the top publishers who currently accept BAT and work with its platform tools are Vimeo, Vice, and The Washington Post.

☑️ Users: If you would like to hop on to the BAT wagon, you can download and use the Brave Browser. You can then interact with the platform and use BAT tokens in a give-to-receive scheme. When you view ads, you get compensated with a certain amount of BAT tokens for your time. You can accumulate and choose what to do with these tokens – from making payments to gifting publishers.

What is Nano?

Unlike BAT that runs on the Ethereum blockchain platform, Nano is a standalone cryptocurrency. It was developed as an alternative to fiat currencies and to bring crypto into the daily lives of ordinary people. However, unlike Bitcoin, Nano is designed to carry out transactions much faster with a more seamless, faster, and flexible Direct Acrylic Graph (DAG) platform.

Nano was launched as RailBlocks (XRB) in December 2014 and is defined as a ‘trustless, feeless, and low latency’ crypto token developed especially to deal with various issues that have held the cryptocurrency industry back, primarily the weaknesses plaguing Bitcoin. Yes, it is accurate to say that the Nano was created as an antidote to the blockchain platform in general, and Bitcoin specifically.

One of the main reasons why many crypto investment reviewers consider Nano a good investment is what happened after the 2018 crypto crash. This was a result of many factors, but many governments banning cryptocurrencies was one of the greatest contributors. The crash was the biggest and first-ever ‘filter’ of the cryptocurrency market that filtered out the chaff from the grains.

This was a strange time when the prices of digital assets massively inflated across the board and then suddenly crashed. While many cryptos did not recover after this, the Nano recovered, and by September of 2018, its price had stabilized. To this moment, the coin is in a good position, gradually growing and showing signs of maintaining it.

How the Nano works

The Nano works using a very simple principle: It stores the data of incoming and outgoing transactions in individual designated blocks of an account, a kind of personal blockchain for the account holder. The main advantage of this setup is that the account balance is securely, quickly and conveniently updated after each transaction. The network does very little work in the process, and this explains why this platform runs smoothly and uses minimal power to process transactions.

The general concept of the Nano cryptocurrency is focus on scalability. The underlying layer that provides security for the platform comes second. The team that developed it succeeded in all fronts – necessitating fee-less transactions while providing all the benefits that dominant cryptos such as Bitcoin have to offer.

To make their coin a better alternative to Bitcoin, the creators of Nano designed it to use a hybrid consensus that combines Proof-of-Stake (PoS) and Proof-of-Work (PoW) algorithms. This combination is aptly named ‘delegated Proof-of-Stake, and it solves three of Bitcoin’s biggest problems in the following ways:

☑️ Nano is scalable: Bitcoin’s biggest problem is that it is very limited and not scalable. Each block in its chain is limited to holding 1 megabyte of data, and one block of transactions can be mined only once every 10 minutes. This limits the Bitcoin network’s speed to a maximum of 7 transactions per second.

☑️ Low latency: The average confirmation time for a transaction on the Bitcoin network is 164 minutes! Nano uses novel architecture dubbed ‘block-lattice,’ which assigns every individual their own blockchain or ‘account-chain’ rather than just a single chain for all transactions on the platform.

☑️ Power efficiency: One of the excuses that some governments use to restrict and even outrightly ban Bitcoin is the fact that mining it uses a lot of electricity. The latest statistics show that the Bitcoin network uses approximately 79.79 terawatt-hours (TWh) of power every year. The Nano platform promises to solve this power problem as it is more power-efficient compared to the blockchain network.

Nano Performance

Nano boasts of a market cap of 122 million and a unit price of $0.919 as of November 18th, 2019. Its trading volume of 3 million and availability supply of 133 million places it on the 45th slot on the global cryptocurrency ranking, way below that of BAT.

The most attractive feature that Nano presents is its development team, which has proven its commitment to creating a project that will save cryptocurrencies even from governments. The team is constantly engaging the cypherpunk community and has previously been described to be “notoriously active” and “very communicative with the community – both on the Telegram and Discord channels,” according to the Cryptorated magazine. 

In summation…

If you are looking to invest in an asset that has demonstrated that the future of payments is crypto, and addresses the core issues that even Bitcoin is still grappling with, then Nano is your go-to asset. The trying times of early cryptos and cryptocurrencies crash of 2018 were the most trying time for both BAT and Nano, but they both survived and are thriving relative to the performance of other assets on the market.

Therefore, as you consider either of the two coins, consider which one best suits your profile, what returns you expect out of your investment, and, more importantly, weigh the opportunities based on how far in the future you look forward to earning your returns.

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Crypto Daily Topic

Lightning network: A major hurdle in the path of crypto regulation

The very first public critique of Bitcoin right after Satoshi Nakamoto proposed it was made by James A. Donald. He said that while such a system (Bitcoin network) was very

The very first public critique of Bitcoin right after Satoshi Nakamoto proposed it was made by James A. Donald. He said that while such a system (Bitcoin network) was very

The very first public critique of Bitcoin right after Satoshi Nakamoto proposed it was made by James A. Donald. He said that while such a system (Bitcoin network) was very, very much needed, the way he understood it, “it does not seem to scale to the required size.” Sure enough, over a decade after its launch, Bitcoin is being plagued by scalability problems – apparently its biggest challenge. But there is another less discussed one: taxation.

For a long time since its rollout, Bitcoin was used primarily by enthusiasts and speculators more as a store of value than a medium of exchange in everyday payments. Bitcoin has a serious scalability problem for two main reasons: the blockchain technology on which it runs limits the amount of information that a single block can contain to 1 megabyte, and a block of transactions can only be added to the chain every 10 minutes. These limit Bitcoin’s processing speed to about 3.3 and 7 transactions per second (TPS). In comparison, Visa does an average of 1,700 transactions per second.

Enter the Lightning Network

Today, more people are adopting Bitcoin to make everyday payments, largely because of the development of the Lightning Network. Popular Bitcoin apps such as Fold and Bitrefill that are designed to make it cheaper and easier for users to make payments with Bitcoin have integrated the Lightning network in their payment systems.

What is the Lightning Network?

The Lightning Network is an additional layer on top of the blockchain network on which Bitcoin runs that is designed to make transactions between nodes faster and cheaper. It is implemented to be a solution to Blockchain’s scalability problems.

How does it work?

The Lightning Network creates a temporary communication channel between two nodes, much like how the Bitcoin Network does, allowing them to carry out as many transactions as they need. When the transactions between the two nodes are completed, the channel is closed, and the outcome communicated to the underlying Bitcoin network. Transactions carried out on the Lightning Network will, as a result, cost only a fraction of a cent while taking a load off the Bitcoin Network.

There is a problem, though. While the Lightning Network significantly improves user’s Bitcoin transaction experience, lowers the costs of transactions, and improves the overall Bitcoin Network speeds, it presents a serious challenge when it comes to taxation.

Bitcoin’s taxation problem

Under the US law, the Internal Revenue Service (IRS) considers Bitcoin and other digital currencies ‘intangible property’ and as such, are subject to capital gains taxes. Everywhere else in the world, cryptocurrencies are rightfully regarded as money that can be used as legal tender in exchange for goods and services.

The United Kingdom treats Bitcoin as a foreign currency, while Germany does not subject it to capital gains tax. Even Switzerland, a tax haven, levies various taxes on Bitcoin, including income taxes, wealth taxes, and profit taxes.

Since Bitcoin payments are taxable transactions, it is vital that users accurately track capital gains accrued when they use it. However, there is a serious problem because its transactions are peer-to-peer, meaning that there is no middleman, such as a bank, between the parties involved in the transactions. Governments have always had an easy time regulating, monitoring, and taxing transactions because of middlemen.

With the widespread adoption of cryptocurrencies and the introduction of efficiency platforms such as the Lightning Network, more people are choosing to make regular payments for goods and services with Bitcoin and other cryptocurrencies.

The problem here is that cryptocurrency users are generally reluctant or find it too bothersome to report taxable Bitcoin transactions to tax authorities, more so for small transactions such as buying a cup of coffee or paying for software. Keeping detailed records of every Bitcoin transaction can be exhausting as there are virtually no tools on the market that simplify the process or make it easy to report such events to the taxman.

To the minority of people who care a lot about conforming to their tax obligations have three options: painstakingly keep records of their transactions, risk getting in trouble with the taxman, or avoid using Bitcoin altogether. To most people in this category, the tax burden associated with making regular payments using Bitcoin overshadows the potential benefits.

How Lightning Network makes the situation worse

Cryptocurrencies and tax laws have only one thing in common: most people do not know the first thing about them. From a cultural and worldview perspective, these two subjects are polar opposites.

Bitcoin was created and is largely accepted as a solution to financial control by governments, exploitation by banks, and abuse by corporations. Cypherpunks, who form the majority of individuals who lead the embrace of cryptocurrency, use it to make a political statement against authority. By using Bitcoin, they are happy to escape the rules and regulations that define the traditional financial world.

In October 2019, the Internal Revenue Service, in its attempt to catch up with the users of cryptocurrency, published its first guide on how cryptocurrency holders can calculate taxes owed on their holdings. The agency admits that the world of cryptocurrency ‘has grown more complex over the years.’ As the general public increasingly adopts the digital currency, IRS’s attempts to come up with regulations and guides on how individuals can remit taxes is a game of playing catch up, to say the least.

The Lightning Network makes it easier for ordinary folk to make payments with Bitcoin, but not to keep records of them. In the eyes of many people all over the world, tax laws are a symbol of the excessive and unnecessary regulations imposed by politicians. Technologies such as the Lightning Network are a savior that finally enables them to take advantage of the benefits of decentralization of digital money, transactions with no regulations, and living in a free society rather than under the foot of a central power of the elite.

Is there a possible solution in sight?

Governments all over the world, including the Lawmakers in the US and China, have realized that outrightly banning Bitcoin is pointless. Governments are slow to find ways to bring cryptocurrencies into the tax bracket and presently have to rely on the goodwill of the citizens to keep records of their transactions and to diligently report and pay their taxes.

However, some industry leaders are making reasonable propositions that may just work. For instance, Coin Center is pushing a bill in the US that would exempt Bitcoin transactions less than $600 from capital gains taxes.

The most viable solution to the Bitcoin taxation problem, according to industry experts, is in policy level and not technical. While regulating Bitcoin wallets may seem like a simpler way for governments to make the taxation problem more manageable, a more practical solution would involve exempting more payments from the burden of taxation rather than attempting to regulate all payments across the board.

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Crypto Daily Topic

Solving Blockchain’s Scaling Problem

Blockchain was conceptualized the first time in 2008 with the launch of Bitcoin. However, it took almost a decade to be fully appreciated as an invaluable public ledger with the

Blockchain was conceptualized the first time in 2008 with the launch of Bitcoin. However, it took almost a decade to be fully appreciated as an invaluable public ledger with the

Blockchain was conceptualized the first time in 2008 with the launch of Bitcoin. However, it took almost a decade to be fully appreciated as an invaluable public ledger with the potential to disrupt virtually every modern industry. That was the year when the price of Bitcoin got close to $19,900 from a low of $978 at the start of the year, and Ethereum went above $850 from just over $8. At its peak value, Bitcoin’s market cap stood at $320 billion – higher than the total value of all M3 UK currency in circulation. This was before the infamous 2018 cryptocurrency crash of January 2018.

Predictably, the massive cryptocurrency explosion was followed by a big crash, from which many cryptocurrencies that had successfully launched ICOs (Initial Coin Offerings) never recovered. During the preceding explosion, blockchain technology was hyped as the most revolutionary since the internet, and many industries started figuring how it could work for them. From transportation and health industries to banking and voting, the promises and claims that the new technology brought may have set people’s expectations a bit too high too fast.

While famous investors, economists, and even finance professionals warned that the rapid rise of the cryptocurrency prices was a bubble that would ultimately burst, a world driven by vague expectations and hunger for profit failed to listen. Most people read the most subtle signs they wanted to see – such as the listing of bitcoin futures by the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME) in December 2017 as a stamp of approval that Bitcoin and cryptos, in general, were ripe for investment.

Weaknesses of blockchain come to light

The rise in the popularity of blockchain and the rapid adoption of Bitcoin, Ethereum, and other cryptocurrencies brought blockchain’s most significant problem to light: it is expensive and can barely work on a large scale. When Bitcoin’s price soared to almost $20,000, its network quickly became overloaded, transactions took as long as a day to confirm, and transaction fees shot up to as much as $60 per transaction.

The world may not have been wrong to believe that blockchains presented a massive opportunity for the human race, but it was at this point that many started having doubts about whether Bitcoin was the currency of the future.

The blockchain technology was introduced to the world just at the right time when we were dealing with the aftermath of the 2008 financial crisis. However, in its current state, it cannot deliver on these promises on a global scale because it has one glaring weakness: it just cannot scale.

To see why this is such a concern, it is necessary to understand how blockchain works.

Blockchain is basically a list of ‘blocks’ of ordered data, in the case of cryptocurrency transactions, ‘chained’ together as a linked list. The blocks, once added to the chain, cannot be modified, which means that the list is add-only. There are specific rules that are followed before a block of data is added to the chain known as ‘consensus algorithm.’ In the case of Bitcoin, it is Proof-of-Work (PoW), while Ethereum is presently switching to Proof-of-Stake (PoS).

Due to this nature, blockchain has no single point of failure or control, its data cannot be altered, and the trail of changes made on the platform can be easily audited and verified. However, these benefits do come at a cost because blockchain is slow, and its immutable database has a very high redundancy rate. This is what makes it very expensive to use and virtually impossible to scale to a global scale.

Blockchain’s need to scale

The evolution of the entire blockchain ecosystem has been rapid over the past couple of years. The widespread implementation of blockchain systems for public use has been a significant vote of approval that the world is ready for it. However, the increasing adoption of these systems has brought to light the need for better design or alternatives.

The consequences of the increase in the number of daily transactions on a blockchain network have shown that block difficulty increases, thus increasing the average computational power required to mine a block of transactions. This translates to increased electricity consumption.

Another problem that prevents blockchain from scaling is that an increase in the number of transactions increases the size of the blockchain, making it harder to set up new nodes on the network to help in maintaining the complete blockchain network and to process and verify transactions. Therefore, the systems get not only slower and more expensive, but also unsustainable for such use cases as making regular small payments.

Potential solutions for blockchain scaling

There are numerous real-world uses of blockchain that have shown just how necessary the technology is for the future of humanity. Aside from payment processing and money transfer, it can also be used in monitoring supply chains, digital identification, digital voting, data sharing, tax regulation, and compliance, weapons tracking, and equity trading, among others.

One area that shows great promise and has accelerated the need for blockchain to scale is dApp or distributed apps that run on the blockchain network.

Over the past year, many developments have been proposed to resolve the platform’s scalability problems  – even implemented in some industries. So far, it shows great promise.

Here are some of the most sustainable ideas that blockchain platforms can implement to scale

☑️ Increasing the number of transactions in a block

A blockchain network would scale better when the number of transactions in a block is increased. This can be achieved by either increasing the block size or compressing individual transactions.

Bitcoin’s block size is limited to 1 megabyte. There was a lot of controversy in 2010 through 2015 on whether this size should be altered to accommodate more transactions to help the network scale.

Blockchains can also implement more efficient hashing algorithms that better compress the data to be added to the block. Algorithms that generate shorter signatures would go a long way to reduce the size of the block, and using better data structures to organize transactions may not only reduce the size of the block but also improve the privacy of its content.

☑️ Increasing the frequency in which blocks are added to the chain

The Bitcoin network adds a block of transactions every 10 minutes, while Ethereum does so in about 7 seconds. This duration is a function of the block difficulty level in a Proof-of-Work consensus. Since the frequency in which a new block is added to the chain significantly affects its transaction rate (TPS), reducing this time would significantly increase the network speed and reduce delays.

However, this rate of adding block cannot be arbitrary. Increasing the frequency would mean an increase in the block orphan rate (the rate at which mined blocks are not added to the blockchain due to competition) and an increase in the network bandwidth.

A change of such magnitude would require a hard fork of an existing blockchain platform. Since this is not backward compatible, it would not work for Bitcoin, Ethererum, or other established blockchain systems.

☑️ Implementing alternative communication layers between nodes

There is constant communication between nodes on a blockchain platform depending on the protocol it implements. For instance, in the Bitcoin network, transaction information is sent twice: the first time is in the broadcasting phase of the transaction, and then after the block is mined.

The Lightning Network is an excellent example of a second layer payment protocol that runs on top of the Bitcoin blockchain. It enables faster transaction speeds between nodes by opening a payment channel that commits funding transactions to the underlying layer without broadcasting to it until the final version of the transaction is executed. This is presently touted as the best solution to Bitcoin’s scalability problem.

☑️ Adopting better consensus and verification methods

At the time of writing this post, Ethereum is in the process of switching its consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake (PoS) to mitigate its scaling problem. Bitcoin uses the oldest yet most difficult to scale PoW. PoS is not only sustainable in power consumption but also results in higher block addition frequency to the blockchain and, ultimately, better scaling platforms.

Other than the blockchain consensus, a blockchain platform can scale better when better storage architecture that saves space is implemented. Blockchain takes up a lot of storage space because each node is required to have the whole blockchain state in order to verify new blocks. Since the size of the block increases with time, the platform would scale better if nodes could only store parts of the chain required to verify current blocks.

Bottom line

Different blockchain platforms have implemented various strategies in an effort to make their platforms scale better. The bottom line, however, remains that blockchain’s scalability problem persists as no solution has proven to be effective without compromising any of the top features that make blockchain a transparent, secure, and truly decentralized ledger system. However, considering how far the world has come in developing this new technology, we remain optimistic that there will come a solution that will finally make a global-wide blockchain system practical and seamless.

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Blockchain and DLT Crypto Daily Topic

Smart Contracts: A new phase of contracts

When the first cryptocurrency – Bitcoin, came into existence, it brought with it more

When the first cryptocurrency – Bitcoin, came into existence, it brought with it more

When the first cryptocurrency – Bitcoin, came into existence, it brought with it more than a digital medium of exchange. Blockchain, the technology underlying it, has brought with it more possibilities that can revolutionize entire industries and even society itself.

Smart contracts are one of the most interesting and explored applications of blockchain technology. Today, Ethereum is almost synonymous with smart contracts – and that’s because it’s the most successful blockchain in providing a platform for people to create smart contacts. In this article, we discover what exactly smart contracts are, their current standing in today’s world, their strong and weak points, and more. But first, where did this whole concept of smart contracts emanate from?

The History of Smart Contracts

The concept of “smart contracts” originated in 1996 with Nick Szabo, a computer scientist, legal scholar, and cryptographer. He defined smart contracts as “a set of promises, specified in digital form, including protocols within which the parties perform on these promises.” As for why “smart,” he explained: “I call these new contracts “smart” because they are far more functional than their inanimate paper-based ancestors.”

Szabo went on and refined the concept over several years – releasing new literature on the subject. He described the concept of establishing contract laws via e-commerce protocols between strangers on the internet.

But the idea of smart contracts remained that – just an idea, until 2009, when Bitcoin, the first cryptocurrency emerged, along with blockchain technology. Blockchain provided the environment where smart contracts could now be implemented.

Nowadays, smart contracts are mostly associated with cryptocurrencies, whose underlying technology is blockchain. And although Bitcoin broke the ground for smart contracts, it has limited support for the function. Today, the Ethereum blockchain is the most popular platform for creating smart contracts.

What Are Smart Contracts?

A smart contract is a protocol that allows you to exchange anything of value in a transparent, self-executing, and undeniable way without the need for a middle man. Smart contracts are indeed the reason why the blockchain is referred to as decentralized because they allow us to execute trackable, unalterable, and safe transactions without the involvement of a central authority.

Smart contracts have all the information about a transaction, and they self-verify and self-execute once all the conditions have been met. Unlike traditional contracts, smart contracts are purely computer-generated. A programmed code delineates the obligations, rules, and penalties of the involved parties – the parties involved can even be people who have never met but who are nevertheless bound by the agreement.

With smart contracts, a party cannot deny their involvement at a later date. 

Jeff Garzik, the owner of blockchain technology company Bloq, describes smart contracts as such: “Smart contracts guarantee a very, very specific set of outcomes. There’s never any confusion, and there’s never any need for litigation.”

Objects of Smart Contracts 

Any smart contract has three integral parts to it. Also known as objects, the three integral parties are as follows:

  • Signatories – who are parties subject to the contract and who agree or disagree with the terms set out – using digital signatures
  • Subject of agreement – this object has to exist within the smart contract’s environment.
  • Specific terms – these are the obligations expected of all parties and the rules, rewards, and penalties associated with those terms. The terms must be mathematically described using a programming language suitable for the particular contract’s environment.

How Do Smart Contracts Work?

Smart contracts are essentially deterministic processes – which means their end behavior is entirely dependent on initial input. They execute agreements if and when certain conditions are fulfilled. As such, smart contracts work on the “if…then” premise. It’s important to note that smart contracts are not legal contracts, but pieces of code running on a blockchain.

Smart contracts running on the majority of blockchains are akin to a vending machine. You simply input your cryptocoin into the vending machine (in this case, the blockchain ledger). If your input satisfies the code within the smart contract, the smart contract executes the terms of the agreements set out in it.

For instance, “If Person A completes task 1, then payment from Person B is delivered to Person A.” Based on this protocol, smart contracts allow for the exchange of any kind of value, with each contract duplicated many times over and stored on publicly distributed ledgers. Once that happens, data encryption is employed to ensure the full anonymity of the participants.

Features of Smart Contracts

Smart contracts have inherent characteristics that are unique to them, and that set them apart from conventional contracts. These characteristics are as follows: 

Distributed. Smart contracts are replicated and distributed across all the nodes in a blockchain network 

Deterministic. Smart contracts only execute the actions they were instructed to, provided the conditions are met. Also, the outcome is the same, no matter who executes it

Autonomous. Smart contracts self-execute themselves by automating all sorts of tasks

Immutable. Smart contracts are unchangeable after being executed. As such, we can say they’re tamper-proof

Customizable. Before they’re deployed, smart contracts can be coded to suit specific preferences and needs

Trustless. Thanks to their automated process, parties can transact via smart contracts without knowing or trusting each other

Transparent. Smart contracts take place on a publicly available ledger. So, anyone can verify the details of a transaction

Potential Applications of Smart Contracts

Smart contracts can be used to improve and streamline processes across a wide chain of industries. Here are some examples:  

☑️ Elections

Since they are publicly verifiable, trackable, and irreversible, smart contracts would provide a fool-proof, secure system, allaying all concerns about elections rigging. Also, smart contracts would enable voters to vote online, allowing them to make their voice heard from whatever location they’re in. 

☑️ Management

Today’s business operations are riddled with back-and-forth verification and approval processes that slow down productivity. A blockchain ledger acts as a single source of trust as well as streamlines communication and work processes thanks to its accuracy, transparency, and autonomy.

☑️ Automobile

By using smart contracts, it could be easier to determine whose fault it was in an accident – the sensor or the driver, in self-driving cars. Also, automobile insurers could know how to charge rates depending on where, and under which conditions customers were operating their vehicles.

☑️ Real Estate

Smart contracts would help real estate agents cut on advertising costs. Since the blockchain is publicly available, all you would need to do is pay with cryptocurrency and encode your contract on the ledger. On the ledger, your services are open for everyone can see, helping you cut on advertising costs and so on.

☑️ Healthcare

Smart contracts could improve the healthcare industry in so many ways. Firstly, personal health records could be encoded and stored on the blockchain with a private key available to only the relevant parties. Receipts of delivered services could be stored on the blockchain and sent to insurers as proof of delivery. Smart contracts would also make it inherently easier to perform general healthcare management tasks such as regulation compliance, result testing, and managing health care supply inventories.

☑️ Insurance

With smart contracts, it would be easier to fulfill insurance claims when certain conditions are met as per the client-company terms of agreement. Also, smart contracts would come in useful in times of disaster by allowing people to claim their money in a timely fashion. Details like the degree of damage or loss can be recorded on the blockchain and compensation decided upon accordingly. 

☑️ Internet of Things (IoT)

IoT technology enables everyday devices to be connected to the internet in order to improve their usefulness to us. These devices could be connected to the blockchain to track all the products and processes in action.

And in e-commerce, Blockchain technology combined with IoT would enable the location and possession of products so that the right product gets delivered to the right person.

☑️ Mortgaging

Smart contracts would eliminate the need for middlemen and lengthy processing usually involved in mortgage agreements. Also, all details and information could be stored in a location where anyone can verify at all times.

☑️ Employment Contracts 

Smart contracts could help reinforce employer-employee contracts. The terms, conditions, and expectations on either side would be made clear, helping to improve fairness. Moreover, smart contracts can be used to streamline salary processing and avoid delays. They can also be used to improve transparency by preventing companies from altering an employee’s contract once they’re hired. 

☑️ Supply chains

The supply chain – the flow of goods from production to the final user is a central part of many industries, and it involves a lot of work verifying and tracking products. Smart contracts can remove the need for this as every detail is available on the blockchain, where everyone can track the location of commodities at any time. And if an item is lost in the process, smart contracts can be used to identify its exact location.

Besides, smart contracts bring transparency to the whole supply chain so that no party can default or breach the contract terms.

Blockchain platforms That Support Smart Contracts

The following blockchains are some of the most popular platforms facilitating the creation of smart contracts. Of course, Ethereum is the most recognized of them all because it was built almost solely as a smart contract platform. NEM, the blockchain supporting the cryptocurrency XEM, is also popular because it allows users to create smart contracts with Java, one of the most widely used programming languages in the world. These are the go-to blockchains for smart contracts in 2019:

Pros and cons of Smart Contracts

Smart contracts provide several benefits to users. From watertight security to saving on costs to accuracy, the following are the advantages of using smart contracts:

Pros of smart contracts:

Autonomy

Smart contracts allow you to eliminate the need for third parties, e.g., lawyers, facilitators, guarantors, etc. – granting you full control of the agreement process.

Time-efficient

Smart contracts remove the need for intermediaries and the lengthy processes involved in traditional contracts. Everything is executed in a timely fashion, which avoids delays.

Precision

The code that is the smart contract is written in a detailed manner outlining the obligations, rules, and penalties pertaining to the agreement. As such, the smart contract becomes a comprehensive agreement that accomplishes everything upon execution. This precision helps ensure there can be no room for miscommunication or misinterpretation. And in case of any error, it’s easy to track exactly where it occurred.

Safety

Smart contracts are protected with high-level cryptography, which provides the highest safety standards. It’s extremely difficult to hack smart contracts – so users can be sure their documents are safe and secure. 

Efficient

Owing to their accuracy, security, and time-saving qualities, smart contracts provide a high level of efficiency that helps the parties involved realize more value-generating transactions.

Paperless

Since smart contracts use computer codes, the use of paper is eradicated. This saves on stationery costs and also helps companies reduce their carbon footprint and contribute to environmental protection.

Storage and Backup

Smart contracts are accurate to the tiniest of details. All the details of any transaction are stored on a public ledger, and any of the signees can access them at any time. And in case of any dispute regarding the terms of agreement, the parties can refer to the public ledger.

Saves money

As smart contracts only involve the signatories to the agreement, there’s no need for intermediaries and third parties like lawyers, witnesses, etc. Thus, the money that would have been used to pay these third parties is removed from the equation.

Trust

The properties of transparency, autonomy, and security of smart contracts generate confidence in their execution. They eliminate any chance for manipulation, bias, or manual errors. Also, their undeniable nature significantly removes the need for litigations since every detail is clear on the blockchain.

Speed

Smart contracts run on computer codes and exist on the internet. There is no need to process or verify documents manually or correct every little detail. As a result, they can complete transactions very fast. 

Cons of Smart Contracts:

Smart contracts also have their own share of challenges. Most of these challenges arise from the fact that they are still an evolving technology. Some of the challenges are:

They Are Vulnerable

Smart contracts are still a young technology. For example, the code that makes up the contract has to be perfect and bug-free. However, mistakes can still be made that would allow bugs into the network – which would be exploited by scammers.

Government Regulation

The novelty of smart contract technology leaves a lot of questions unanswered. How will governments regulate these contracts? How will they be taxed? What happens when the contract can’t get to the subject of agreement?

Immutability

The unchangeable nature of smart contracts can be advantageous in some situations, but not so much in others. For instance, hackers made away with millions of ether (ETH) after they hacked a decentralized autonomous organization (DAO) in 2016. This was possible partly because developers were unable to fix the code. This is what eventually led a hard fork that gave rise to a second Ethereum chain – Ethereum Classic. Had it been possible to fix the code, this situation would have been mitigated.

Uncertain Legal Status 

Smart contracts do not fit into the current legal framework in many countries. Most contracts today require parties to be at least a certain age and be properly identified. The anonymity and lack of intermediaries make those requirements a challenge.  

Limited Use

For now, smart contracts can only be used to agree on assets of digital value. This poses a challenge when it comes to transacting in real-life assets.  

Examples of Real-life Uses of Smart Contracts

While most governments and the banking establishment have an ambivalent attitude to cryptocurrencies, the technology behind – blockchain, and smart contracts have had a more welcoming reception. Smart contracts are now being implemented across various industries. The following are examples of real-life applications of smart contracts:

Inmusik is a streaming platform that uses smart contracts to decentralize revenues and properly allocate revenues to the rightful contributors. Powered by blockchain technology, the company can facilitate fair and lucrative payouts for artists, collaborators, labels, and also incentivize music listeners by offering rewards to music listeners.

Ascribe is a digital platform that uses smart contracts to facilitate secure ownership of digital work by the rightful artists. The blockchain technology enabling this allows artists to track where their work is published on the web so that they can claim their rightful publication fee.

Tracr is a blockchain-based project that helps improve the diamond industry’s supply chain by monitoring the production and traceability of diamonds, reducing compliance costs, and improving visibility in the chain. It also helps to enhance privacy and security in regards to handling sensitive data in the chain.

Applicature is an agency that uses smart contracts to protect patients’ privacy, reduce healthcare transaction costs, and improve healthcare protocols. Patients have access to a secure and transparent record of their health information, and practitioners get rid of go-betweens and red tape in data conservation and compliance procedures.

The Future of Smart Contracts 

Smart contracts are still an evolving technology. Their future lies in detangling some of the issues that have held smart contracts from achieving mainstream acceptance. Some of these are the question of their legal status, regulation, and the ‘final’ nature of their transactions. 

Still, blockchain enthusiasts see the technology making a significant impact on law, the merchant industry, credit, accounting, etc. It’s possible that we’ll begin seeing smart contract templates – which are legally enforceable smart contracts. We’ll also start seeing accountants utilize smart contracts for real-time auditing as well as the merging of smart contracts into a hybrid of paper and digital content where transactions are verified on the blockchain and corroborated by physical copy.  

Conclusion

Smart contracts have the potential to change how we carry out daily transactions. They can help increase trust, save money, and revolutionize entire industries by introducing more transparency and facilitating accountability. For now, crypto and blockchain enthusiasts are keenly watching smart contract technology evolve further, and if after all, the technology will manage to transcend the current barriers to its full-scale adoption across different facets of businesses and society.

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Crypto Daily Topic

Golem: The Disruptive Blockchain You Haven’t Heard About

The first-ever cryptocurrency – Bitcoin, brought along with it a host of possibilities that couldn’t be imagined before. The technology behind it – blockchain, is now being incorporated into various

The first-ever cryptocurrency – Bitcoin, brought along with it a host of possibilities that couldn’t be imagined before. The technology behind it – blockchain, is now being incorporated into various

The first-ever cryptocurrency – Bitcoin, brought along with it a host of possibilities that couldn’t be imagined before. The technology behind it – blockchain, is now being incorporated into various facets of our lives – from letting people share monetary value to hard drive storage and now, thanks to Golem, a way to let people share computing power.

Golem is a global, open-source, and a decentralized supercomputer that combines the computing power of machines in its network – from PCs to data centers. The idea is to capitalize off of idle computing power by letting users rent processing power to other users and being paid for it. The Golem concept was in development for three years before being launched in the Ethereum blockchain.

How Golem Works

Golem’s end goal is to build a distributed and decentralized supercomputer by connecting computers around the world via its blockchain.  Golem users will be able to rent their spare computing power to other users who will, then, pay with the Golem Network Token (GNT). The network will allow you to perform such tasks as artificial intelligence (AI), Computer Generated Imagery (CGI) rendering, simulating neural networks, machine learning, DNA sequencing, scientific computing, simulation building, and more.

The interesting coincidence is that Golem has built its decentralized computer on the decentralized Ethereum network – making it a decentralized supercomputer on a decentralized computer. So how will users transact on the Golem network?

Now, the user buying computing power is the requestor, and the one renting it out is the provider. Let’s assume the requestor’s task is the same class as one of the task templates that Golem provides. If it isn’t, they would have to write their own code for the task using the task definition framework provided by the network.

The provider receives all the broadcasted task offers and chooses the best one based on each one’s reputation. They then send the price and the computing power info to the requestor. The requestor then assesses the provider’s reputation to determine if to go ahead and work with them. If everything checks out, the provider receives the appropriate resources through the InterPlanetary File System (IPFS) and initiates the computation on the task computer. (IPFS is a peer-to-peer file and data sharing system in a distributed file network.)

The task manager then passes this info to the appropriate node for verification of the results. (The requestor may also decide to run the info via numerous nodes). Lastly, the payment system is notified through an Ethereum smart contract, allowing the funds to be transferred from the requestor to the provider. The reputation of both parties relies on each one’s execution in the transaction: the provider sending accurate results and the requestor paying promptly.

The Golem Network Token

The Golem Network Token is the native currency of the Golem network and is the medium through which requestors pay for renting computing power. The token can only be used to transact in Golem’s products and services. 

GNT has a total supply of 1 billion. Its Initial Coin Offering took place in November 2016, during which 820m coins were distributed. It has an impressive record of raising 820,000ETH (around $340m) in 20 minutes. Another 120m was held by the Golem project, and the rest of 60m was distributed among Golem’s team members.

The token cannot be mined. You can earn it by sharing your free processing power. The more power you share, the more you GNT you earn.

Supercomputing and Golem’s Plan

Supercomputing is one of the modern age’s most crucial innovations. New technologies such as machine learning, CGI, artificial intelligence, and scientific computing require a lot of processing power.

The Golem whitepaper has planned four key network supercomputing milestones for the network in the following progressive order: Brass, Clay, Stone, and Iron. The network first released Brass – which includes Blender and LuxRender, two software programs for CGI rendering.  Later releases are scheduled as follows:

☑️ Clay – which includes the Application Registry and Tak API

☑️ Stone– which includes the Certification Mechanism and Transaction Framework. Users will be able to use this release in a Software as a Service model (SaaS)

☑️ Iron – this release will feature more security and stability and will allow developers to design applications that can run outside the sandbox

As of now, the network is still in the Brass stage. As a result, disappointed fans have accused it of “over-promising and under-delivering.” Others contend that a slow and secure approach is crucial for a project of such an ambitious scale.

Could Golem Profit Off Of Artificial Intelligence and Supercomputing?

Golem could definitely make money as a hosting solution – if it works as planned. The company could make money by hosting digital supercomputers and AIs. Let’s say, for example, a government institution with spare computing power. It could rent its extra power through Golem.

Meanwhile, a new tech company that needs a supercomputer could use one through Golem – by renting the institutions’ extra computing power. This would be a convenient and cost-efficient alternative to buying or renting.

Unfortunately, there is no indication that the network is offering these services as of yet. It’s worth mentioning though that the Golem website suggests the possibility of hosting decentralized apps (DApps) – which could provide a suitable environment for the above services.

These decentralized apps would find a ready market. For instance, a filmmaker in Australia who wants to add CGI to their movie could use the Golem CGI DApp. A DApp maker in Japan could make money by renting or selling their DApp to the filmmaker using the Golem platform.

Could Golem Profit Off Of AI and Supercomputer DApps?

AI and supercomputer DApps are technologies in a lot of demand across multiple industries these days. A network that can host and avail them to organizations is in for profit.

Industries ranging from game development, data harvesting, intelligence, scientific research, and AI building are all in need of supercomputer DApps.

Meanwhile, AI DApps could find use in autonomous vehicles, hedge fund management, store management, financial investment, online gaming, financial services, robotics, industrial equipment, and scientific research.

Do Supercomputer DApps Have Money Making Potential?

Although at this point, these two are theoretical, they have market potential, especially considering regular apps are already very popular.

Statistics estimates the Apple Store apps generated $120 billion in aggregate revenue by January 2019. It’s worth noting App Store developers made that money with simple entertainment apps. Golem could offer apps with way more utility. Institutions ranging from governments to universities to labs to research organizations could pay a lot of money to use such apps. 

Is Golem A Cryptocurrency worth your time?

Golem stands out for its disruptive technology and potentially lucrative application of blockchain technology than for its cryptocurrency. Also, its cryptocurrency’s value remains hypothetical until the network enables a blockchain supercomputer. 

As of November 20, 2019, Golem is the 93rd most valuable cryptocurrency according to the crypto tracking website CoinMarketCap. It has a coin price of $0.042789 and a 24-hour volume of $2,599, 810. Its circulating supply is 980, 050, 000 while its market capitalization stands at $41, 934, 880. Its all-time high was $1.25 on January 08, 2018, with its all-time low coming to $0.008797 on December 12, 2016.

Essentially, Golem presents this deal to investors: you could make a lot of money in the long run if you’re willing to lose some now. While its cryptocurrency is cheap now, its blockchain holds massive potential. However, individual investors would better hold off for now as there is no indication of the network presently making any money.

Conclusion

Golem is an ambitious idea – and for a good reason. It’s decentralized, open-source, and worldwide supercomputing promise is good news across multiple industries. Whether as a recruiter or provider, many organizations will find the platform extremely valuable. The team’s slowness has been a bit disappointing, though. Will it turn out to be another hyped but hollow proposal, or is the slow and steady pace a winning strategy? The crypto community is watching to see how this turns out.

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Crypto Daily Topic

Bitcoin’s Thirst for Power: Why it Uses a Quarter Percent of the World’s Electricity?

If you thought the report by Nature.com a few days ago that it takes more energy to mine Bitcoin than mining gold of similar value was the most surprising thing

If you thought the report by Nature.com a few days ago that it takes more energy to mine Bitcoin than mining gold of similar value was the most surprising thing

If you thought the report by Nature.com a few days ago that it takes more energy to mine Bitcoin than mining gold of similar value was the most surprising thing you read about Bitcoin this week, you’re in for another surprise!

The amount of power Bitcoin mining consumes has been a growing concern over the years, but it has reached a point where it is plainly alarming. Today, it is estimated that Bitcoin consumes as much as a quarter percent of the world’s electricity supply, according to a tweet posted by James Todaro, the Managing Partner at Blocktown Capital and Columbia University Alumni.

James points out that humanity is justified to devote such a significant amount of resources to an asset because of how important it is to our future. If anything, he implies, Bitcoin as a technology asset is here to stay, and such assets as rat poison, tulips, beanie babies, and others that have already disappeared cannot be compared with Bitcoin.

Why Bitcoin is so power-hungry

You already know that Bitcoin runs on a blockchain network. You probably also know that at the core of its network is the Proof-of-Work consensus, a protocol that requires work in terms of data processing by a computer that takes time in order to validate blocks. Miners, a term that refers to the owners of computers that do the processing work, are rewarded with a certain amount of Bitcoins for every block validated.

Bitcoin’s Proof-of-Work consensus verifies the legitimacy of each block of blockchain transactions added to the chain using complex mathematical processes that uses the computer’s processing capabilities. In the early days of Bitcoin, mining was an easier process that required very little processing power. This is why anyone with a half-decent computer could use it to mine the coins back in the day.

With time, as the Bitcoin network scaled and grew in size, it demanded more processing power to validate blocks of transactions. This meant that the more powerful computers aptly known as ‘rigs’ had to enter the mining scene to meet the platform’s thirst for processing power. Mining Bitcoin became expensive because these powerful machines are not only expensive to acquire, but also use up a lot of electricity. It requires tremendous processing power to validate blocks of transactions in the shortest time possible.

How much power is 0.25% of the global supply?

Current statistics on the Digiconomist Bitcoin Energy Consumption Index show that Bitcoin mining uses as much as 79.79 terawatt-hours (TWh) of electricity annually, which is comparable to the amount of power consumed by Belgium estimated to be 82.1 TWh and higher than that of the Philippines which stands at 78.3 TWh annually.

Going by Digiconomist estimates, the amount of power the Bitcoin network gobbles up is in the upwards of $3.66 billion, but it generates revenue estimated to be $5.72 billion, a cost percentage of 63.9%. This is a lot of investment in a single asset, especially since the global adoption of the Bitcoin is still relatively low. While more people are appreciating and embracing cryptocurrency, and in particular Bitcoin, the uptake is generally gradual. It is estimated that it may take as long as 24 years for half of the global population to start using Bitcoin for regular payments.

While these figures may look scary, it is important to note that the Bitcoin technology platform has merit and is expected to ultimately grow to become the world’s primary form of payment. Considering that Television, the world’s most power-hungry electronic device now used in most households, uses as much as 8% of the total global electricity, Bitcoin’s 0.25% is not a figure to worry about at this point.

Effects on the environment

Bitcoin mining uses electricity that is not always harvested from renewable sources. If the figures on the Digiconomist’s Bitcoin Energy Consumption Index are anything to go by, the Bitcoin mining industry has a carbon footprint of 34.73 metric tonnes (MT) of carbon dioxide (CO2), a figure comparable to the carbon footprint of Denmark. It also produces as much as 10.62-kilo tonnes (KT) of electronic waste that is made up of discarded electronic devices that rarely ever make it back to recyclers.

In many ways, Bitcoin is like gold. It cannot be arbitrarily created, and its supply is limited. It was easy for the Nature magazine to compare Bitcoin mining to gold mining, not just because of the amount of resources it requires, but also because it takes increasingly greater effort as more of it is mined. Since the supply of Bitcoin is limited to 21 million, it will get to a point when miners will have unlocked all the available supply, unless its original protocol is altered to allow for more.

Presently, about 18 million Bitcoins have been mined, leaving just under 3 million left to be mined. It will cost more in terms of electricity consumption to mine the remaining quantity compared to what has already been mined. As such, it is expected that Bitcoin mining rigs will continue to demand more power until the last coin is mined sometime in the year 2140 if the bitcoin network protocol remains unchanged between now and then.

Conclusion

In 2015, Adam Hayes published a paper titled “A Cost of Production Model for Bitcoin,” in which he compares the production of Bitcoin to a competitive market where the miners “produce until their marginal costs equal their marginal product.” Since the marginal costs, in this case, is electricity costs (once the initial costs of equipment and infrastructure have been settled), he concludes that the costs of electricity will determine the future of Bitcoin mining.

It is expected that within a few months to years, Bitcoin will need as much as 1% or more of the total global electricity supply. However, all this will happen only if the energy does not become prohibitively expensive as to cost more than the miners will earn from the Bitcoins they mine.

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Crypto Daily Topic

Ethereum 2.0: Ethereum’s new dawn

Ethereum, the world’s most popular blockchain platform for decentralized applications, is undergoing a revolution, and it promises to be BIG!

If you are savvy with the developments in the tech

Ethereum, the world’s most popular blockchain platform for decentralized applications, is undergoing a revolution, and it promises to be BIG!

If you are savvy with the developments in the tech

Ethereum, the world’s most popular blockchain platform for decentralized applications, is undergoing a revolution, and it promises to be BIG!

If you are savvy with the developments in the tech world, then you probably already know what Ethereum is and why Ethereum 2.0 is a big deal. If you don’t, Ethereum is a blockchain platform proposed in 2013 by Vitalik Buterin, the then young student at the University of Waterloo, to support application development as well as generalized scripting language.

Over the course of two years, Vitalik, together with seven other developers, created Ethereum as a robust smart contract platform on which anyone can develop and run decentralized applications. The project went live in 2015 and has generally fulfilled its promise to become a global decentralized computer on which anyone can run their code at a small fee.

Fast forward four years, and the platform is getting ready for its biggest upgrade leap since it was first rolled out. Ethereum 2.0 has been discussed since mid-2018, and the first phase is expected to be rolled out at the end of 2019. But before going to the details of the upgrade, let’s first review the current position of the Ethereum platform.

Understanding Ethereum

The first stable version of Ethereum, ‘Homestead,’ was released in March 2016. Like Bitcoin, Ethereum is essentially a distributed public ledger but with some significant differences in purpose and capability. While Bitcoin’s major and only blockchain application is of peer-to-peer electronic cash payments system online, the Ethereum blockchain platform is focused on running the programming code of third-party developers published on the platform.

Miners on the Ethereum blockchain earn Ether/ This is a form of cryptocurrency tokens that essentially fuels the network. Other than being a tradeable crypto, Ether is also used by developers on the network to pay for services and transaction fees. 

Just like the Bitcoin network, Ethereum uses a Proof of Work (PoW) consensus system.  In this system, a participant node in the network is required to submit proof that they have done some work in order to receive the rights to new transactions to the blockchain. The ‘work’ in PoW protocol refers to the computer processing time and effort that often uses power. As a result, PoW is not only hard but also expensive.

The switch from Proof-of-Work to Proof-of-Stake

The biggest change in the upgrade of Ethereum from 1.0 to 2.0 is the switch from the work-based PoW to stake-based PoS. PoS (Proof of Stake) is a low-cost, low-energy type of consensus that involves the allocation of responsibility of maintaining the blockchain ledger to a participant node based on their proportion of the virtual currency they hold. With PoW, getting the right answer is easy, but getting the wrong answer is expensive. PoW rewards the miner for finding the right answer while PoS punishes the miner for getting the wrong answer.

The switch from PoW to PoS will not only make Ethereum a more secure platform, but it will also improve its scalability. The new consensus will be less susceptible to the 51% attack, which happens when a miner or miners in a pool take control of more than half of the network’s computational power. With such an ability, malicious attackers will have the power to invalidate even valid transactions and even approve the double-spending of cryptocurrency.

Ethereum is planning a hard fork by the end of 2019 to switch from the current PoW to PoS. The switch will be implemented in three phases to minimize the risks that such development brings.

Phase 0 (Beacon Chain): The Beacon Chain will be a proof-of-stake chain that will be implemented to run parallel to the current proof-of-work chain. In the beginning, the new chain is designed for simplicity and will not support accounts or smart contracts.

Phase 1 (Basic Sharding): Sharding will divide the network across multiple shards to enable the network to process the many transactions on the network concurrently. This is necessary to help transactions to scale.

Phase 2 (eWasm): eWasm is the new rebuilt Ethereum Virtual Machine. It will fully support the proof-of-stake consensus as well as sharding. This phase will introduce accounts and smart contracts to Ethereum 2.0.

Sharding will help Ethereum to scale by partitioning the network’s database into smaller and faster pieces called shards. Each of these shards will have a chain of transactions, and accounts on the network will be assigned to a shard. They will then be able to seamlessly transact with other accounts within and outside the shard.

The planned rollout of the Ethereum 2.0 will be implemented in phases to test every element of the network in a safe environment to uphold the integrity and security of the system. 

Design Goals of Ethereum 2.0

Ethereum 2.0 was developed with five core design goals.

  1. Simplicity: The platform will be less complex compared to the current network. However, this will be at the cost of some network efficiency.
  2. Resilience: The network will stay live even when undergoing major partitions or when large portions of network nodes go offline.
  3. Longevity: All components of the network will be quantum secure. Those that are not will be easily and safely replaced with quantum secure ones when available.
  4. Security: Ethereum 2.0 uses cryptographic and design techniques that facilitate greater participation of validators per unit time.
  5. Decentralization: The network will allow for a typical consumer laptop with O(C) resources to validate (process) O(1)  shards (this includes system-level validation).

What the rollout of Ethereum 2.0 means

Vitalik shared a broken-down overview of what network users should expect during and after the transition from Ethereum 1.0 to Ethereum 2.0. Here is a summary of what you should expect:

☑️ It may be possible to move ETH from the new to the old network for a short time.

Since it may take a couple of years for the new PoS platform to be fully merged with the older PoW platform, users may be able to move their crypto back and forth within this time. However, during the transition period, the transfer of ETH between the old and new chains will be disabled largely due to the complexities involved in creating a two-way bridge between the two chains.

☑️ A complete transition from Ethereum 1.0 to Ethereum 2.0 is expected by Jan 03, 2020.

The switch from PoW-based to PoS-based consensus will be officially launched on December 4th, 2019 and is expected to take a month. To avoid any hiccups, all developers, stakeholders, and major Ethereum clients are expected to have completed the transition during the switchover month.

☑️ You need to have 32 ETH to be a master node

To be eligible to stake or perform the functions of a master node, you would need to own 32 ETH on the network. The new economic model of the Ethereum network suggests that validators will be able to earn between 4.6% and 10.3% in annual returns. You can use the ETH 2.0 Calculator available on the Telegram app to estimate net returns based on the adjusted dynamic rewards scale.

☑️ It will be more expensive to recall data on the Ethereum blockchain

If you are a DApp developer, recalling and accessing data on Ethereum 2.0 will incur increased transaction costs. This is because of the changes in how the Ethereum state (the full account of transactions) is stored on the PoS network. However, there are ways in which developers can minimize these costs.

☑️ Ethereum will no longer be able to execute transactions atomically

The upgrade will break the ability for Ethereum transactions to occur all at once. To developers, this means it will no longer be possible to execute transactions between two or more applications such that when they fail, they can recover the entire series of transactions. Ethereum 2.0 will break up transaction loads into different shards, unlike the current network, which has all the dapps on one shared chain.

Ethereum 1.0 has the capacity to process roughly 25 transactions per second (TPS). The old PoW consensus clearly is not capable of taking the blockchain platform mainstream. For comparison, Visa has the capacity to process 24,000 transactions per second.

During the transition period, Ethereum 2.0 is expected to be capable of only half the total speed of transaction processing speed of 1,024 shards. Depending on the number of shard chains and the shard block sizes, this can translate to as much as 15,000 transactions per second. This limit is put in place to enable simpler and faster communication between shards in the early stages of Ethereum 2.0.

Ethereum 2.0, even after launch, will remain a work-in-progress. The hard fork will be a major leap in the lifetime of the network, and while it is expected to go smoothly, there is always a risk in implementing something new. As such, users and stakeholders are advised to stay updated on the upgrade.

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Crypto Daily Topic

Why Crypto Spells the Death of Government Fiat Money

For most of human history, money has been used not only as a measure and exchange of value but also a tool for elites and governments to oppress and control

For most of human history, money has been used not only as a measure and exchange of value but also a tool for elites and governments to oppress and control

For most of human history, money has been used not only as a measure and exchange of value but also a tool for elites and governments to oppress and control those who had less of it. The phrase ‘money is evil’ has been coined in every language largely because the precious currency that revolutionized humanity has also been at the center of world wars, enormous government indebtedness, inflation, depression, and even the rise of tyrannical states all over the world.

Blockchain, the first distributed ledger technology that gave birth to Bitcoin and cryptocurrencies, promised the end of elite and government-controlled money. The mysterious inventor of blockchain Satoshi Nakamoto buried an Easter egg in the genesis block of Bitcoin that reads:

‘Chancellor on Brink of Second Bailout for Banks.’

The notation, which was the cover story of The Times on January 3, 2009, is believed to have been instilled in the Genesis Block of blockchain possibly to timestamp the beginning of a new financial system out of the control of the banks, corporations, wealthy families, and governments among others.

Crypto getting more love than ever before

In its whitepaper published on bitcoin.org, Bitcoin claims to be “the first decentralized peer-to-peer payment” system that “has no central authority or middlemen” because it “is powered by its users.” This is what makes this currency very powerful.

In the beginning, governments were the most afraid of cryptocurrency largely because they could not control it. However, as more cryptocurrencies were created, bought, and sold and used to store and exchange value, everyone’s perception gradually leaned towards appreciating it as money.

Since the age of cowrie shells, man’s relationship with money has changed very little. Its value has always depended on how everyone who uses it sees it, and not what the issuer wants it to be valued.

However, since the 16th century, when the gold standard of money was introduced, and banks arose to monopolize its issuance and control, perception of money has changed a lot. This explains why banks and governments were the first to dismiss cryptocurrency and why they have been the slowest to embrace it.

There is a simple reason why cryptocurrencies will be the future of money: they are already in use, and everyone sees their potential now. Just the other day, the price of Bitcoin spiked after China, which had banned bitcoin and heavily regulated cryptocurrencies and blockchain had a dramatic shift in perception after it called Bitcoin “a success” and urged its banks to step up their development of blockchain applications to “embrace digital finance.” This is a clear sign that cryptocurrency adoption has reached a critical point, and no power can roll it back.

Exploitation: the old currency strategy

Throughout history, man has relied on exploitative and collaborative strategies to scale socially as societies grew beyond tribes, kingdoms, empires, cities, and countries.

The exploitative strategy often rewarded the most violent individuals with sociopathic tendencies in society. However, such societies rarely ever thrive for a long time.

The collaborative strategy rewarded individuals who are empathetic and generous. Societies that valued such individuals often prospered, proving that this is the optimal strategy to grow a group of people and to scale a society.

However, considering that every growing society has to eventually grapple with the scarcity of resources, and will need more labor to support itself, even societies that initially arose due to their empathetic and generous nature in most cases fell to the exploitative vices.

The problem here is that the ‘leaders,’ ‘rulers,’ and other central entities tasked with equal distribution of such resources (money in the present-day case) will eventually monopolize and abuse it. This is the case with government-issued money everywhere in the world today.

Government-issued money is also referred to as fiat money. The monetary system used in the world today is a faded shadow of the gold standard monetary system where the value of a country’s currency was directly linked to the value of the gold they held in reserve.

Since most countries already depleted their gold reserves in wars and whatnot, most paper money in circulation is minted by those in charge of governments, and ‘value is created out of thin air.’

Money is no longer primarily a measure or exchange of value but a tool to impose regulatory control. Everywhere in the world, governments of the day have been observed to change inflation rates for personal interests, use government money to finance surveillance on its people, and exploit its people through hefty unavoidable taxes, interest rates manipulation, price and wage restrictions, and capital controls.

Collaboration: the new currency strategy

There is a good reason why banks and governments are on top of the list of cryptocurrency deniers: a new kind of money that promises to distribute wealth and cannot be controlled by a central authority would mean the death of the old exploitative financial strategy. Money that is ‘owned’ by everyone is naturally a threat to entities that thrived in the legal monopoly of money creation.

Cryptocurrency is decentralized in nature, meaning that the creation of value is done transparently on a blockchain or similar platform in such a way that everyone can trust the system. Cryptographic tools that make digital money a reality empower ordinary people to verify and carry out transactions on the platform without the need for a third-party ‘middlemen’ such as banks.

With the new decentralized digital money, the rules of incentivizing everyone are clearly spelled out: collaborators are rewarded, and exploiters are punished. The consensus rules of blockchain platforms are designed to eliminate the chances of monopoly and centralization and to enable free-market competition that nurtures creativity and collaboration.

As proof of this free market and creativity nurtured by blockchain, there have been thousands of cryptocurrency tokens developed and distributed since Satoshi Nakamoto first introduced Bitcoin to the public in 2009. In the global market, government-issued and distributed currencies are competing openly to win over users, and this has spurred all kinds of innovations as each currency does its best to improve its features and make itself the most formidable money of all.

The dark side of cryptocurrency

One of the reasons that governments give for attempting to control and even ban cryptocurrency is that it can and has been used in criminal and illicit transactions. While they often conveniently fail to point out that cash is also used in these transactions, it is true to say that digital money has had its fair share of headline-grabbing bad publicity.

The anonymity that cryptocurrencies accord its users in transactions is one of their core strengths. Unfortunately, this has also turned out to be one of its greatest pitfalls. This is because the privacy of transactions without a middle-man has enabled criminals to commit crimes and evade identification by law enforcement. As cryptocurrencies become more popular and stronger, proponents of fiat money argue that it will become even more difficult for authorities to fight crime.

Price manipulation and financial fraud are serious problems that often plagued fiat financial assets. Unfortunately, cryptocurrencies are not immune to them. The new markets are also at risk of shrewd traders and hackers known to work together to manipulate financial instruments to their advantage at the expense of everyone else. It is a consolation, however, that fraud and price manipulation is much more difficult in the cryptocurrency markets.

The future of money

Governments still have full control of fiat currencies.  A decade after Bitcoin became public, some governments have attempted to regulate cryptocurrencies in an effort to maintain their control but have eventually given up and even attempted to introduce some form of fiat cryptocurrencies that they can still control.

When Bitcoin and other forms of cryptocurrencies become widely accepted globally, there is a good chance that the entire banking system, as we know it, will be rendered irrelevant. Presently, banks and financial institutions are on the race to become blockchain-compliant to the extent of issuing their own fiat currencies, but it is unclear how far their efforts will go.

The future of money is a subject of debate and speculation. The concept of a global financial system without banks as middlemen sounds wonderful, but no one can predict how it will work. How will savings earn interest? Who will be responsible for distributing your wealth to your dependents when you pass on? How will an asset transfer failure due to a technical glitch be resolved? Who will be called to the rescue if one genius psychopath takes control of an entire cryptocurrency network?

There is no way to shut down cryptocurrencies. As more people understand how these currencies work and appreciate the benefits they bring to the masses, the value of existing currencies will rise, and individuals and businesses will embrace its use. Ultimately, all monies in use in the world will be digital money, and we can only hope that by then, humanity will have devised new forms of government free from exploitation that works well with decentralized forms of currency.

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Crypto Daily Topic

Will DAG Replace Blockchain as the Future of Crypto?

Blockchain has been a breakthrough technology, but would you believe it if I told you a new kind of DLT that promises to render it useless is almost ready for

Blockchain has been a breakthrough technology, but would you believe it if I told you a new kind of DLT that promises to render it useless is almost ready for

Blockchain has been a breakthrough technology, but would you believe it if I told you a new kind of DLT that promises to render it useless is almost ready for production?

Blockchain has been great thus far. It brought us cryptocurrency and was the technology that set the pace for a myriad of industry-disrupting innovations. If you know what blockchain is, you probably also know that it is a kind of distributed ledger.

And if you heard this for the first time, a  distributed ledger is a database that is shared and synchronized in real-time across many different users, sites, institutions, and physical locations. A distributed ledger is said to be decentralized because it is not ‘owned’ or ‘controlled’ by one entity. Decisions on a decentralized system are essentially made as a contribution by all the members who share it. Because of this, every transaction on the database has public ‘witnesses,’ making the whole system transparent and trustworthy. 

Blockchain is not the only technology that makes use of distributed ledgers. Another newer and less recognized technology is Directed Acyclic Graphs or simply DAG. This new kid on the distributed ledger bloc is dubbed the ‘third-generation blockchain’ because it is developed to cover the shortcomings of blockchain, which limits its adaptive scalability.

Blockchain vs. DAG 

How do blockchain and DAG relate? Well, if blockchain were a staircase, DAG would be a tree. While the former is a list of blocks, the latter branches out from one transaction to another.

Distributed ledger technology (DLT) does not refer to just blockchain technologies. DAG is another type of DLT that works differently from the blockchain. Most industry experts agree that DAG is a rival technology to the blockchain that offers solutions to some of the major shortcomings of the latter, while others view it as an enabler that only works better in different applications.

While both blockchain and DAG are ledgers that stores records on a distributed ledger, they are very different in structure, and uses contrasting consensus techniques.

A blockchain is an ever-growing chain of blocks of transactions ordered in a linear and chronological manner in such a way that each of them contains a timestamp as well as a link to a previous block. DAG, on the other hand, is a newer kind of distributed ledger that offers all the benefits blockchain offers but with better performance and greater scalability.

In mathematics, DAG refers to a graph that flows in one direction and with no cycles that connect other edges. There is no way to move to every point of the graph, starting from only one end because its edges go only one way.

Picture a collection of transactions where every transaction is linked to one or more transactions. The image below compares blockchain’s ‘chain of blocks’ to DAG’s graph of transactions:

Difference between blockchain and DAG

You should see that in the second formation, transactions are:

  1. Directed: This means that the links all point in the same direction. Earlier transactions are linked to later transactions.
  2. Acyclic: There are no loops in the formation of the transaction. This means that a transaction cannot loop back to link to itself after linking to a later transaction.
  3. Graphical: The mesh formed by the connection of transactions are essentially nodes in a graphical network. The nodes connect to each other via links.

In summation, DAG is a ledger of records of individual transactions that link to multiple newer transactions, whereas blockchain is a linear formation of blocks of validated transactions.

Since there are no blocks transactions in a DAG network, it is ideal for use in data processing, scheduling,  data compression, and finding routing navigations.

Shortcomings in blockchain consensus

In our analogy, we equated the blockchain network to a staircase where a DAG network is a tree. Most cryptocurrencies today use the blockchain network. Therefore, when one block of verified transactions is added to the chain, it extends the network in one direction. This means that transactions have to be synchronized one at a time, much like stacking a staircase. 

This is how blockchain maintains consensus, ensures security and trustworthiness of the blocks of transactions without a central authority. It not only guarantees that all the blocks of transactions are the same across all the nodes in the network but also ensures that no block can be easily altered or manipulated by a single node.

While this way of enabling and maintaining consensus has been an ingenious innovation, it has its shortcomings.

To guarantee a consistently good quality chain of blocks, to verify them and to add them to the network takes time and effort. There must be quality checks just to be sure that every transaction meets pre-set rules.

Creating blocks that meet set criteria such as size also takes time, and chances of fake transactions slipping through are significantly reduced when nodes are accorded more time to process transactions and verify blocks. The Bitcoin network takes 10 minutes to process transactions and verify 1Mb blocks while Ethereum takes 16 seconds to complete blocks of varying sizes.

Consensus in DAG Networks

DAG, as a tree, uses a different technique to maintain consensus and security of the records in its network. The network is much like a collection of interlocking branches that grow outwards in different directions. Each transaction in this tree is only required to verify the preceding transaction to be valid itself. A standalone transaction without a valid preceding transaction would be easily singled out by the nodes in the network and removed from the records.

The best part about DAG consensus is that one transaction can confirm multiple transactions in succession. In the process, the transaction output grows much like the fractal’s outward growth of branches on a tree. The higher the number of transactions processed in the network, the higher the number of transactions the network will be able to process.

Benefits of DAG over blockchain

Blockchain technology was a hit and continues to be the greatest DLT technology because it brings transparency, immutability, and trustworthiness to public transactions. DAG has the same benefits and more. While the storage, network bandwidth, and ‘proof of work’ requirements of blockchain increase with the growth of volumes of transactions, with DAG, scaling is not only efficient in power requirements but also in reducing transaction fees.

DAG, as a decentralized ledger, is not limited by lengthy block verification periods and block sizes. A DAG DLT is much faster than a blockchain one, and while it is still relatively new, it has been tested to provide as many as 300,000 transactions in a second according to figures by  Korean DAG startup Fantom.

By completely doing away with blocks, DAG addresses bitcoin’s major disadvantages: scalability, speed, and efficiency. Being a new technology, this DLT remains untested outside development labs, but most industry experts who have had a say about it laud the innovation for its unprecedented speed potential, scalability, and promise to catch up with established blockchain networks.

At present, there are numerous DAG-based projects in development. One of the most famous is a smart contract platform being developed by Fantom that promises to rival Ethereum in just a few months. Only time will tell whether cryptocurrencies and projects running on the DAG will indeed be the ‘blockchain 3.0’ when it matures.

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Crypto Daily Topic

Radix: Why Blockchain could be on its deathbed

Many tech experts believe that blockchain may have been the best thing to happen to humanity since the internet. Considering how revolutionary this technology is, and how disruptive it has

Many tech experts believe that blockchain may have been the best thing to happen to humanity since the internet. Considering how revolutionary this technology is, and how disruptive it has

Many tech experts believe that blockchain may have been the best thing to happen to humanity since the internet. Considering how revolutionary this technology is, and how disruptive it has been on almost every industry, you wouldn’t be mistaken to agree with them.

However, blockchain has some serious limitations that are not easy to overcome and it was only a matter of time before something better came along. That better thing is already here, and its name is Radix.

What is Radix?

Radix is not a better version of blockchain. It is a new kind of technology that makes trustless and decentralized digital ledgers (DLT) that will ultimately use smart contracts, but without the scaling limitations of blockchain. The Radix platform will be powered by the super fast and highly scalable Radix Engine, which is designed and built to make the creation of on-ledger solutions easier and safer with certain constraints. This is what makes Radix much more superior to blockchain and a safer bet for the future of crypto.

What makes Radix special is that it is a high-throughput platform to develop and distribute decentralized applications, faster and more efficiently than existing platforms.

The network on which it runs, called the Radix Public Network (RPN) is modular and general purpose. This means that the technology the network uses has multiple layer ‘constraints’ that allow for validation of state transitions rather than compute them. It opens up the possibilities of the network to facilitate the development and deployment of all kinds of smart contracts and high-level APIs.

It is designed to be a global computer on which decentralized applications can run efficiently and inexpensively and the company ran a test to prove it.

The Radix Tempo

Think of a blockchain platform, but without blocks. This new platform uses a new kind of consensus protocol known as logical time. It is completely different from those of blockchain and has given birth to its own kind of data structure dubbed ‘Tempo’. 

The Tempo Ledger is made up of three core components:

  1. A connected cluster of nodes
  2. A global ledger database. This is distributed across the nodes.
  3. An algorithm that generates secure cryptographic records of temporal ordered events.

An instance of Tempo is referred to as a Universe. Any event such as a transaction or a message within a Universe is represented by an object referred to as an Atom. All atoms on the network have at least one endpoint destination that is represented by an endpoint address. Such an address is used to route events throughout the network and is derived from a key identity, such as a user’s public key.

The power of Radix

In a live online test, the startup behind Radix simulated the entire 10-year transactions on the Bitcoin network in just 15 minutes. This was about 400 million transactions between 460 million addresses including full signatures and transaction validations across 1,187 nodes in 17 cities around the world. RPN crossed the one million transactions mark in just one minute and recorded a peak speed of 1.4M TPS (transactions per second)!

Radix has been in development since 2011. The developers tout its protocol as the first consistent distributed database with infinite scalability capability – with relative ordering of related events as well as n-1 fault detection. Radix is designed and built to be easy to use and to use minimal resources. Since it can run efficiently even on devices with limited processing and storage resources, it is expected that it will be massively adopted for use with IoT (Internet of Things) networks and devices.

Shortcomings that spell the demise of blockchain

For a long time, the dominant technology the world relied upon to build and deploy distributed ledgers was blockchain. Since the launch of Bitcoin, everyone saw this technology as the savior of mankind – the tech that finally made it possible for everyone on the planet to be on the same page at the same time on almost everything.

However, with the rapid adoption of blockchain, its two main limitations quickly came to light, and proved almost impossible to solve without coming up with a completely different kind of platform. They are:

☑️High risks of centralization: Consensus protocols are the basis of trustless DLT. Blockchain uses very dangerous consensus protocols that place the platform at a very high risk of centralization. If you have heard of the 51% attack, that is just one example. While each consensus protocol carries a certain level of centralization risk, the most secure and most viable are those with the lowest risk.

PoW used in early blockchain networks are not only very inefficient, they are also only as safe as the amount of computing power dedicated to them. This means that the security of a blockchain network is highly dependent on the cumulative power of the nodes on the network and a more powerful adversary would pose a serious threat.

☑️Scalability: While blockchain is a powerful concept with few weak points from which a threat would attack or disrupt its network, it has a serious scalability problem. This technology was a hit largely because it is decentralized and certainly provides data integrity and transactional trust, but it does not scale very well. 

Blockchain 1.0’s scalability problem is what led to the rise of blockchain 2.0 that powers such platforms as Ethereum. However, they too still have scalability problems that holds the platforms back.

In an attempt to overcome blockchain’s PoW risks, industry experts developed the PoS (proof of stake) and DPoS (delegated proof of stake) consensus protocols. While these protocols mitigated the risks and reduced the processing requirements and power intensity of blockchain networks, they are not fool-proof. To date, it is clear that it is not possible to make a blockchain network 100% decentralized.

Technological solutions presented by Radix

Decentralization is the key attribute that adds value to the creation and distribution of data and assets in DLT systems. This is so since it eliminates the need for a trusted third-party and prevents the abuse of power by a central authority. It was only through a distributed ledger that for the first time, people were able to peg value on created digital objects. Cryptocurrencies are so far the most notable products of distributed ledgers and everyone is keen to see how well they will fare in a Radix system.

Radix has three core guiding principles:

  1. True decentralization
  2. Linear scalability
  3. Developer gratification

True decentralization

Radix is a truly decentralized platform with no staking, no masternodes, no coordinator, and no central council. All the current blockchain platforms have some kind of masternodes, stakes, platform coordinators and even governing councils that to some extent ‘own’ the platform. With Radix, there is just a company to administer the platform.

One special way in which Radix eliminates risk of centralization is by use of permissionless consensus system that scales well in both small and large networks. The system is secured by the passage of logical time. This is a property that cannot be faked or bought within the Radix platform. This consensus mechanism is not only incredibly efficient and reliable, but also very power efficient because it does not use more power unless there is a conflict to resolve.

Additionally, Radix does not apply consensus to all events, only those that are in conflict. This feature makes the entire system highly efficient and scalable even at a global scale.

Linear scalability

A truly global decentralized system must have the capability to scale to every single device and be used by every person simultaneously all over the world with no performance bottlenecks. Blockchain cannot offer such scalability.

Radix’s structure makes it easy to fragment and index the data on the platform such that when there is an increase in network demand, more devices can be added to the platform to boost its throughput.

The data on the Radix network is not cut up ad-hocly; the developers of the platform had the foresight to strategize the fragmentation such that devices would have an easy time finding where any piece of data lives in the overall network structure. This eliminates the need of re-indexing every time data is cut up or added to the network and significantly speeds up the performance of the network.

The data structure on the Radix network is pre-cut to 18.4 quintillion shards and key fields are referenced to find where a particular piece of data is on the structure. This ingenious data structure makes the platform highly scalable with no overhead. Both tiny and humongous data sets will find a snugly place to live on the network, meaning that large businesses will find it just as easy to use as an individual does.

Developer gratification

The core mission of the Radix startup is to develop a platform on which developers can build and deploy their decentralized applications (DApps). Much like the Internet has been an enabling technology, Radix aims to offer the very best tools that anyone can use to develop and distribute anything they can think of.

The Radix platform is still under development but this far, it has proven that it can deliver what it promises. The geniuses behind it are imagining a reality where every device with connectivity – smartphones, security cameras, microwave ovens, televisions, smart cars – can join the network and be a part of the consensus mechanism. In all these, the developers should be the biggest winners to spur even greater innovation and to nurture a community in which everyone can believe in.

Blockchain may have ushered in the age of decentralized ledgers, which birthed cryptocurrency, but it has run its course. A blockchain platform cannot be truly decentralized, and there is nothing that can be done to make it scalable enough to be as powerful as a Radix system. It is justifiable, therefore, to conclude that blockchain was the past and will eventually be replaced by Radix, the future of true decentralized digital ledgers.

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Crypto Daily Topic

Tips to Trading Cryptocurrencies

Cryptocurrencies present a world of possibilities. Trading in cryptos can be a thrilling endeavor, not just because of their novelty but also their volatility. Many traders and investors – new

Cryptocurrencies present a world of possibilities. Trading in cryptos can be a thrilling endeavor, not just because of their novelty but also their volatility. Many traders and investors – new

Cryptocurrencies present a world of possibilities. Trading in cryptos can be a thrilling endeavor, not just because of their novelty but also their volatility. Many traders and investors – new and experienced alike, are moving in to try their hand at crypto trading.

While trading in cryptos can be profitable, it’s also really easy to lose your money – thanks in part to their wild volatility and unpredictability. A single mistake in crypto trading can be very costly, and that’s why you should go in with a strategy.

With that, the tips below should set you in the right direction in crypto trading; whether you’re looking to dip your toe in the water or have been in the game for a while. 

Research and Research More

Before diving headfirst into what is usually a murky world of cryptocurrency trading, it’s important to arm yourself with its very basic concepts. This starts with knowing the terminologies mostly thrown around and understanding what they might mean for you. Understand what cryptocurrencies are, the technology powering them (blockchain), how to be safe while trading cryptocurrencies, and so on.

You will also need to read up on the language used in crypto trading, such as limit order, bullish, bearish, market depth, all-time lows, all-time highs, etc. It’ll also be essential to keep tabs on what is happening in the cryptocurrency world. This means knowing new cryptocurrencies, which cryptos are increasing or falling in prices, the market value of different cryptos, etc.

Knowing how different cryptocurrencies have performed in the past, their all-time lows and all-time highs is also necessary. It will help you assess the volatility of cryptos you’re interested in and determine if they’re worth investing in. It might even give you an inkling of their probable future market trends.

Bear in mind that things keep changing in cryptoverse, so one single sitting of research is not nearly enough. What was true six weeks ago may not be true today. The regulation, technology, news, and pretty much everything concerning cryptos is always changing at a fast pace.

Understand Arbitrage

Arbitrage is the difference in the price of the same commodity in two different exchanges – like, say, Bitcoin trading at a slightly lower price on Coinbase than on Binance. Understanding this and acting accordingly can be profitable for you, the trader. But keeping track of the different prices on crypto exchanges is a difficult and time-consuming thing to do.

Other factors that may affect your trading are current volumes of the currencies, variation prices, network fees. To stay on top of these elements, resources such as CoinScanner and other similar tools should be of help. They can help you understand arbitrage better and how to capitalize on it, as well as trade cryptos at the cheapest prices and gain profits.

Be Safe

The first safety rule is to find out the safest places for buying cryptos. The second is to know how to protect them once you’ve bought them. Cryptos, in particular, tend to attract scammers, hackers, phishing attacks, impostors, etc. Take precautions. Always double-check before you enter passcodes/private keys or send money to accounts. Disable any unnecessary extensions in your browser and be careful before opening any URLs.

Protection also means knowing how to store your crypto coins. There are several purpose-built crypto wallets designed with security as a priority. Ledger Nano S, TREZOR, Atomic Wallet, Abra, are some of the most trusted wallets out there.

Crypto Exchanges Are For Just That – Exchanging

Even if you’re a pro at crypto trading, you could lose your money if you’re not careful enough. Cryptocurrency has no insurance, and the responsibility of protecting your coins is yours only.

Many people make the mistake of leaving their fiat holdings on crypto exchanges after they make profitable trades. Yet, exchanges are not a secure place to store your assets. The story of Mt. Gox illustrates this too well. The former world’s leading Bitcoin exchange was put out of business, and thousands of customer coins stolen after a cyber-attack.

The best way to avoid losing your assets on exchanges is to keep your coins in a secure wallet. Also, don’t use the device that contains your assets over public Wi-Fi. Apply other precautions detailed on the safety tip above.

Don’t Ignore the Market Cap

Most inexperienced traders are prone to making trading decisions based solely on the current coin price of a crypto. The reality is the value of a crypto includes the current circulating supply. So when you’re considering whether to buy a cryptocurrency, try to look beyond the current going price and look at the percentage of the total market cap for the currency. The closer a cryptocurrency is to its market cap, the likelier its demand will rise in the near future. 

Beware of Pump and Dump, FOMO and FUD

FOMO is an abbreviation for fear of missing out. FOMO is one of the reasons many crypto traders fail in the art. This a trick that most ‘whales’ use. Whales are people who are holding massive volumes of crypto coins. Some whales buy (pump) the coins in an attempt to show that the currency is in such high demand, only to come and sell it at high prices (dump) after many people have bought the lie. But once they’ve bought it, they may never get the opportunity to trade it for profit, making losses.

When you see a sudden euphoric rush by many traders to buy a crypto, don’t jump in too because of FOMO. Always do your research and rely on your gut to make decisions – following the crowd might cost you big time.

FUD, on the other hand, stands for fear, uncertainty, and disinformation/doubt. Some people deliberately spread FUD with fake news, fake social media accounts, and manipulated facts just to dump some coins. Always verify the sources and intentions of any crypto news before being driven by FUD to make trading decisions.

Invest With Money You Can Afford To Lose

This goes without saying. The first thing to know is: the only predictable thing about crypto prices is their unpredictability. While this might actually be a good thing for crypto trading, it also might mean that nothing’s ever really assured.

Cases abound of many who have emptied their savings in cryptos, took loans, and lost most of those savings. The bottom line: never invest too much money in a very high-risk market (like cryptos).

Diversify Your Portfolio

The reason why it’s important to diversify your portfolio when trading in cryptos comes down to their unpredictability, again. Don’t be tempted to “hold all your eggs in one basket” and invest in one crypto only.

Also, many people think they should spread risk across several cryptos so that in case one tanks, the rest will turn a profit. But what they need to know is all cryptos seem to follow the pattern set by Bitcoin. When Bitcoin decreases in value against the dollar, all other coins almost always follow suit. So, diversifying among different cryptos may not be enough to cushion you against losses. The idea here is to trade in other types of assets as well.

Know Which Altcoins to Trade In

The truth about many altcoins (all other cryptos besides Bitcoin) is they end up losing value over time, sometimes unexpectedly. This means you shouldn’t hold on to an altcoin for too long.

One way to know if an altcoin is ideal for long term investment is to check the daily trading volumes. If a crypto has a high daily trading volume, then chances are it’s a good option for HODLing to sell in the future. Ethereum. Monero, Litecoin, and Dash are some of the currencies that have displayed consistent daily trading volumes.

Also, check regularly the charts of these cryptos and note spikes in price. The patterns can help to identify the perfect time to sell or buy a coin.

Have a Reason for Your Trades

You need to have a purpose for entering any crypto trade. This is because in cryptocurrency trading, someone always wins, and another one always correspondingly loses.

The crypto market is unfortunately controlled by whales who wait for the ‘small fish’ to make a mistake that will land more money on their hands.

Whether you’re a casual or active trader, sometimes it’s better to cool off and not gain anything than rush in and lose. It may seem counterproductive, but sometimes not trading at all is the only way to stay profitable.

Set Profit Targets and Stop Losses

Trading in any asset requires us to determine a point when we’ll exit the market, whether we’re profiting or losing. The target level is an upper limit where you will close the trade after you have reached a certain profit. If you had set a particular profit target and have achieved that target, it’s time to exit the market.

Also, a stop loss level can help you not lose more than you’re willing to lose. A stop-loss is the limit at which you close out your position if the price is falling. For example, if you bought a coin at $600, you can set that as the minimum point you’re willing to trade it. So if the market doesn’t go as expected, you can walk away without losing much. 

The crypto market is exceptionally volatile, and prices can fall any time. Don’t let greed or emotion guide your decision making.

Do Your Due Diligence on Initial Coin Offerings (ICOs)

ICOs offer the public a way to invest in a crypto coin and make a profit when the coin is listed on an exchange. Since they promise high returns, many traders rush in without conducting some due diligence. This is a mistake because some ICOs have turned out to be scams, and many people have lost money this way.

‘‘Trust, but verify’’ is true when it comes to ICOs. Do your own research about the project. Who are the people behind it? Analyze, based on your research, if they really have the ability to deliver on their promise. Analyze, too, the feasibility of the project. Scrutinize the white paper and seek answers where it doesn’t add up. If by the end, you still doubt the credibility of the project, you’d instead give it a pass than sink your money into it.

Don’t Buy Just Because the Price Is Low

Some beginner traders make the mistake of buying a coin just because it has a low price or is “affordable.” But the decision to buy a coin shouldn’t be determined by its affordability, but rather its market cap.

It’s just like with conventional stocks – they’re evaluated with this formula: Current Market Price multiplied by the Total Number of Outstanding Shares. This same formula applies to cryptocurrencies.

Thus, it’s better to determine a coin’s worth based on its market cap than its market price. The larger a coin’s market cap, the more it is worth to invest in.

Find a Community

It can be challenging to keep up with cryptoverse. There is a lot of information about it, and everything is always changing. To stay on top of things, find a reliable group of fellow traders with whom you can share trends, ideas, strategies, and analyses. And whether it’s on Facebook, Reddit, WhatsApp, or Telegram, remember not everyone is worth listening to.

Conclusion

Crypto trading can turn handsome profits, but the opposite is also true. The very aspect that makes cryptocurrencies an attractive trading option is the same one that requires you to tread carefully when dealing with them. Before you invest your hard-earned money in cryptocurrency, remember these cardinal tips. Also, remember trading in any asset requires a cool and sober head – whether you’re winning or losing. Good luck.

 

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Crypto Daily Topic

The Mess That is Telegram’s $1.7 Billion Token Sale

The unexpected growth and ultimate dominance of messaging apps in the tech world – prime examples being WhatsApp, Facebook messenger, Viber, Telegram, and WeChat – has been phenomenal. Everyone who

The unexpected growth and ultimate dominance of messaging apps in the tech world – prime examples being WhatsApp, Facebook messenger, Viber, Telegram, and WeChat – has been phenomenal. Everyone who

The unexpected growth and ultimate dominance of messaging apps in the tech world – prime examples being WhatsApp, Facebook messenger, Viber, Telegram, and WeChat – has been phenomenal. Everyone who bought into the craze early enough will probably retire richer than they ever imagined.

Combine this staggering success with the emergence of blockchain technology, in particular, cryptocurrency, and you have a combination that no investment expert will advise against. If you doubt it, ask yourself why Facebook is so adamantly pursuing the Libra – or why a simple search for messaging brings up crypto as a related search.

Considering how privacy-focused the world of crypto is, and seeing how fast the crypto industry is evolving to revolutionize every other industry, it was only a matter of time before it catches up with messaging. This is where Telegram’s messaging app rules.

Telegram may not be the top messaging app in the world by number of users, but it ranks highly. This is largely because of its speed and history of focus on user security and privacy. The app’s enhanced privacy protection is one of the top reasons why it has grown from obscurity to having over 200 million active users in just over five years.

It is an open secret that Telegram enjoys fanatic following and loyalty in the crypto world, and it is for this reason that the company was able to raise over $1.7 billion from private token sales as it prepared to launch its ICO.

Telegram Open Network’s breakthrough private sales

Telegram’s most recent and most controversial endeavor has been the launch of its own token, the Gram or Telegram Open Network (TON). The third-generation blockchain token that promised ‘superior capabilities’ was an instant hit, with demand hitting the roof even before it was official. Telegram’s founder, Pavel Durov, launched the ambitious TON project as a future payment option that would be used outside the global regulatory system, a lot like Facebook’s Libra would have.

TON was supposed to have a record-breaking ICO that would see them develop a blockchain-based one-of-a-kind decentralized messaging internet. In an industry with over 2.5 billion users already and projected to have about 3 billion by the end of 2022, their idea for a new communication platform that is independent from traditional bottlenecks and detractors was grand.

The tightly controlled process the company used to raise funds ended in disarray as its earliest backers sold their tokens too early, earning good profits in the process. While the company initially aimed to raise $1.2 billion through invite-only private sales and public offerings, it extended its target to $1.7 billion, which it raised from private backers before the public sale was canceled altogether.

The trouble with SEC

There is a universal disdain from governments and regulatory bodies for companies and technologies that are outside their reach. This explains why Telegram is always under scrutiny, and unnecessary controversies world over. Shortly after the company raised the funds it needed to bankroll the TON, the United States Securities and Exchange Commission (SEC) abruptly declared that the token offering was illegal.

Telegram had raised the entire $1.7 billion by selling the tokens to qualified investors in two rounds. The company had submitted a Form D, required when selling securities without registering with the SEC, back in February 2018. However, SEC found fault in the process in that qualified buyers of Gram tokens resold their assets in violation of the Form D exemption.

The regulator quickly obtained a court order to stop Telegram from distributing the Gram and outlawing trading in it in the United States. Hearing for the case is scheduled for February 2020.

What does this mean for the buyers, the public with interest in the Gram, and, more importantly, for Telegram?

While the SEC has the authority to stop the sale of Telegram’s tokens in the US, there is little it can do to prevent it from being traded openly in the international market. The whole point of Telegram launching its own token was to beat such regulatory bottlenecks and launch a genuinely open asset that the entire world can use with minimal interference from the bureaucrats. However, the influence of the SEC should not be underestimated, considering how early in its stages of conception, the Gram is.

The move by the SEC has had multiple adverse effects on the investors of TON:

☑️ First, they have been forced to choose between making a guaranteed 23% loss on their investment on the token, or sitting tight and waiting (hoping for) the token’s official launch in April 2020.

☑️ Public investors who bought the TON at $4 will be under pressure to sell it off along with the first and second round private investors who bought it at $0.37 and $1.37, respectively.

☑️ The move by the SEC may have set a precedent that will deter the Gram, or any other such blockchain tokens, from ever successfully raising funds in the US.

Why does the Gram stand out?

There are thousands of crypto tokens in use and being traded in the US today. Despite the TON being launched by a popular messaging company with a strong foundation, what makes it so unique as to attract the wrath of SEC?

In our view, Telegram’s token has three major strengths that makes it stand out:

☑️ Telegram’s TON promises lightning transaction speed – the kind that no other blockchain platform is capable of. It is estimated that TON’s third-generation blockchain platform will be capable of executing over 10,000 transactions every second, a speed which even Ethereum is not capable of.

☑️ Great infrastructure: Telegram promises to deploy massive storage and processing power to the decentralization of TON’s files. The already-popular messenger app will be an added advantage for quick and easier user onboarding.

☑️ The platform is already popular and trusted. Telegram already has over 200,000 loyal and informed users and a brand that sells itself. The Gram does not need to start from scratch, and neither does it have a baggage of distrust like Facebook’s Libra.

There is a vast potential for growth and prosperity of the Gram, despite the mess with the SEC. Early investors have proven that the company has the backing of the crypto world, and the company has shown that it has the tech to deliver on its promises. It is unclear what the way forward is for the Gram, but for now, we just wait.

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Crypto Daily Topic

Is Ripple a Cryptocurrency?

Ripple has long generated a lot of debate as to whether it’s even a cryptocurrency after all. Crypto enthusiasts and experts have always been at loggerheads on whether Ripple meets

Ripple has long generated a lot of debate as to whether it’s even a cryptocurrency after all. Crypto enthusiasts and experts have always been at loggerheads on whether Ripple meets

Ripple has long generated a lot of debate as to whether it’s even a cryptocurrency after all. Crypto enthusiasts and experts have always been at loggerheads on whether Ripple meets the tenets of a “real” cryptocurrency. One of these people is Anatoly Castella, CEO of Elpis Investments, who has gone on record to say Ripple’s XRP is “neither a digital fiat nor a real cryptocurrency,” and that it does not fall under the “purest interpretation of cryptocurrency.”

A crypto exchange – Coinmotion, even warned users about XRP not being a real cryptocurrency. “What one needs to know about XRP is that it is not a cryptocurrency in the strict meaning of the word…What differentiates XRP from other cryptocurrencies is that it is not based on blockchain, it is not mined and it is heavily centralized.”

The 2000+ cryptocurrencies out there all derive inspiration from Bitcoin, the world’s first Bitcoin. Some of these cryptocurrencies strive to remain “true” to what exemplifies Bitcoin, e.g., running on a decentralized blockchain ledger, using cryptography to secure the network, transactions being carried out via mining, a finite supply of coins, etc.  But should a cryptocurrency take after each of bitcoin’s traits to be labeled as such? 

Let’s begin by understanding Ripple

Ripple was released in 2012 as a payment settlement, currency exchange, and money transfer network. Ripple’s goal was to circumvent the lengthy waiting processes and expenses involved in the traditional banking model.

XRP is the native currency for the Ripple platform. The company has issued 100 billion XRP tokens, which the company promises to be the maximum number to ever be in existence, although some in the crypto community think Ripple may not adhere to this vow in the future. The XRP token is meant to be the bridge between currencies. It treats all currencies the same way –from fiat currency to gold to even airline miles, which makes it easier to exchange any currency for another.

As a cryptocurrency, Ripple has only recently achieved “mainstream” popularity. Traders and investors have long kept it at arm’s length, mostly due to its traditional makeup that reconciles crypto with fiat currency. For this reason, among others, some in cryptoverse have refused to recognize it as a real cryptocurrency. The question is, are they right? Let’s review some aspects of XRP that will help us answer this question.

XRP is More Premium on Blockchain

XRP was not designed to be a coin, at least in the sense of Bitcoin, Litecoin, etc. While Bitcoin, for instance, accords the cryptocurrency and the network both equal importance in security, speed, availability to all, and applicability, Ripple does not place too much weight on XRP as an investment-worthy security. Instead, it focusses on making the blockchain as robust and scalable as possible. This enables Ripple to enable seamless processes with its client organizations, e.g., the American Express and Santander Bank.

Ripple doesn’t support mining

Unlike Bitcoin and other comparable cryptocurrencies, there is no mining or miners with Ripple. Most other cryptocurrencies utilize different mechanisms which accord varying levels of power to the miners. Proof-of-Work, Proof-of-Capacity, Proof-of-Stake are just some of the many consensus mechanisms used by cryptos to power transactions. However, Ripple transactions are powered via a “centralized” blockchain. The idea behind the centralized network is to make it more reliable and quick.

Again, with most cryptocurrencies, miners are motivated to conduct network transactions by being rewarded with the currency of the network. For Ripple, however, this is unsustainable. In a service built for the benefit of the banking establishment, it makes no sense to have a separate group with different incentives for running/maintaining the network. 

The idea of mining and making the network open for any interested miners is to aid other cryptocurrencies to remain decentralized – with no central authority making the rules. While this has helped them stay true to the “spirit” of censorship-resistance, freedom from interference by corporates and governments, it also slows them down. This is something Ripple cannot afford. The no-mining aspect bleeds into other Ripple features as well, taking it further apart the standard.

Can XRP Be Minted on Demand?

In the majority of cryptos, miners are rewarded with cryptocurrency. This pretty much sums up how new crypto coins are released: by mining. Ripple has created 100 billion XRP already in circulation, which makes it nonvolatile for its clients.

This has led to some people in the crypto community to conclude the currency can be minted anytime – which is against the deflationary nature of cryptocurrencies. But this has been refuted by David Schwartz – one of the original architects of XRP ledger. In a Twitter post in November 2017, Schwartz stressed: “There was never any way to create additional XRP.”

He noted that the original code was prone to a malicious act that would conceivably allow someone to “violate system invariants” and add more XRP. But, they’ve since added an “invariant checker” that seals this loophole.

In other words, there is currently no functionality of adding XRP in the code. If, for any reason, new XRP needed to be printed, it would require a major amendment to the code and adoption into the whole network of validators.

Centralized Blockchain?

Users have access to a Ripple wallet, but accessing the Ripple network is another matter altogether. In the case of Bitcoin, the blockchain network is controlled by Bitcoin users all over the world. By contrast, the Ripple blockchain is not open for all, because that would create risk for the otherwise sensitive environment.

And while XRP uses cryptography to protect participants, in essence, it’s protecting “trusted” parties registered on the network. This way, the cryptocurrency has the benefits of a blockchain ledger, but in a safer and walled ecosystem that lends it more efficiency and control. We could say Bitcoin is maintained by participants who have an incentive to continue doing so, but still, they could decide to shut off their computers and walk away. This event would put Bitcoin in a sort of a precarious position, something which Ripple has avoided.

Conclusion

Ripple is not a “real” cryptocurrency, at least by the standard definition. It is more of a solution than an asset. While other cryptos may fit in the asset mold – complete with the deflationary qualities of mining and volatility, which makes them attractive to investors – Ripple offers a platform that may, technically, be a “cryptocurrency,” but one which cannot be regarded as such by crypto hardliners.

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Crypto Daily Topic

Dusting Attack: What is it and How Does it Work?

Since most cryptocurrencies in use today are open and decentralized, anyone can join the network and set up a wallet without providing any personal or identifying information. This is what

Since most cryptocurrencies in use today are open and decentralized, anyone can join the network and set up a wallet without providing any personal or identifying information. This is what

Since most cryptocurrencies in use today are open and decentralized, anyone can join the network and set up a wallet without providing any personal or identifying information. This is what makes cryptocurrencies somewhat anonymous. But not completely.

Although it is not always easy to find the identity behind a wallet address, each crypto transaction is publicly recorded on the blockchain and open for anyone to see. Therefore, technically, cryptos are not really anonymous but pseudonymous currencies. As such, it leaves users susceptible to a new kind of crypto fraud known as dusting attacks.

What is a Dusting Attack?

A dusting attack is a way in which an attacker steals a crypto user’s anonymity. This is done by analyzing transactions on the blockchain to deanonymize users in a process known as dusting. What may appear as a shower of small amounts of money or ‘dust’ sent to a wallet address could actually be a scam that can help the attackers narrow down on the identity of the user behind a wallet address. Hackers just need a little identifying information such as a pattern of addresses or locations to do a lot of damage on their targets.

What is dust?

In the world of cryptocurrencies, the term ‘dust’ refers to very small amounts of tokens or coins sent to a wallet, often in such insignificant amounts that the wallet’s owner may not notice in his/her balance. For Bitcoin, dust can be multiple amounts as little as 1 Satoshis (0.000000001 BTC). Dust can be hundreds of these tiny amounts sprayed by an attacker throughout the blockchain network with the hope that some of the amounts will ‘get stuck’ on the victim’s wallet.

At the core of cryptocurrency transactions, there is the concept of unspent transactions or UTXO. For every transaction carried out and recorded on the blockchain, there is a record of the input and the output. The output part of the transaction has two elements – the first goes to the recipient of the transaction, and the second returns to the sender as change.

In every successful transaction, the change that goes back to the sender is what makes up the UTXO and automatically becomes a part of the wallet’s UTXO set. The next transaction carried out by the owner of the wallet will include the UTXO from the set.

How a dusting attack works

The next step of the dusting attack is dependent on the victim unknowingly spending the dust. Since the balance amount in their wallet will automatically be a sum of what they had before and after the dust, most victims never realize when they spend it. The attacker will then track the dust funds and eventually deanonymize the owner of the wallet.

Despite how simple it may seem, deanonymizing the identity of a wallet owner is not a straightforward process. The way cryptocurrency wallets work is that a single wallet can generate several addresses when a transaction is initiated. Some tech-savvy and informed users have even set up their wallets such that they use a different address every time they carry out a transaction. The attacker will have a chance to attack only when the wallet owner combines UTXOs from several different addresses along with the dust amounts from those addresses.

By continuously analyzing the addresses on the blockchain network and comparing them with the information from the dust sprayed on the network, an attacker may track back addresses and ultimately find the network of addresses that manage a user’s wallet. The analysis is possible despite the large number of transactions carried out on the blockchain network because the hackers narrow down the transactions using transaction amounts, transaction times, and even exchanges.

The endgame in a dusting attack

What we have covered so far is the preparation stages in a dusting attack. The goal of this form of fraud is to link the dusted addresses with wallets and ultimately single out a wallet address to which they can trace the individual or company operating it. If a dusting attack is successful, the hackers will use this information against their targets, often through elaborate extortion schemes or through old school techniques such as phishing.

In the past, dusting attacks happened only on the Bitcoin cryptocurrency network. Of late, though, there are more of such cases on other cryptocurrencies. Just the other day, a network-wide attack on the litecoin network affected all users who had active addresses at the time of the attack, as reported on the Coin Telegraph. A quick analysis on the LTC blockchain revealed that over 300,000 addresses had been sprayed with dust, showing just how serious this form of attack is growing to be.

Back in October 2018, Bitcoin users who had Samourai wallets were the targets of dusting attacks. Upon noticing the attempts, the developers of the wallet responded in a tweet, alerting their users and explaining how to better protect themselves against the attack, which was still very new then. They then implemented a ‘DO NOT SPEND’ feature that marks suspicious funds sent to its users so that the dust is not included in any future transactions automatically.

The dangers of dusting

While almost all cryptocurrency blockchain networks today are almost impossible to disrupt or hack, users’ wallets are the weak points where attackers are focusing on when carrying out dusting attacks. Dusting and de-anonymizing attacks are not easy to pull off and may not be severe on their own, but it is important that users are educated on the damage that hackers can do when they know who they are.

Since Dusting attackers could use the information they harvest for other more serious attacks such as cryptojacking, phishing, and ransoming, it is important that cryptocurrency users understand the importance of putting in place measures to protect themselves from the moment they choose to open a cryptocurrency wallet. These may include using VPNs every time they access their wallets or the blockchain network, encrypting wallets, setting up different addresses for each transaction, and storing their keys in encrypted folders.

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Crypto investor and victim of $24M SIM Swap Fraud Demands Action from FCC in Open Letter

Michael Terpin is a well-known investor in the cryptocurrency industry, but you perhaps know him best as the individual who lost a whopping $24 million in one of the most

Michael Terpin is a well-known investor in the cryptocurrency industry, but you perhaps know him best as the individual who lost a whopping $24 million in one of the most

Michael Terpin is a well-known investor in the cryptocurrency industry, but you perhaps know him best as the individual who lost a whopping $24 million in one of the most publicized SIM swap fraud cases in history. In an open letter published by Coindesk on October 21, Terpin is demanding that the Chairman of the United States Federal Communication Commission (FCC) Ajit Pai take decisive action against mobile carriers to put an end to SIM swap fraud once and for all.

A couple of years ago, about $24 million was stolen from Terpin’s accounts in a SIM swap hack in which he blames his mobile carrier, AT&T, for their ‘gross negligence’ that resulted in the hack. He alleges that the carrier had failed to put in place basic security protocols that would have prevented his loss and that criminals continue to take advantage of their failure to steal from unsuspecting users.

Terpin reveals in the letter that he has been approached by over 50 victims of SIM swapping hacks who have lost millions of dollars in these fraud schemes that seem to be happening with more frequency and greater losses to the victims even today. He wonders why the FCC had gone after robocalling with so much vigor yet no one ever lost millions of dollars in them, yet SIM swapping is not considered a ‘top priority’ despite the harm it continues to inflict on mobile users.

“I’m sick and tired of this. This is happening while they [AT&T] deny it,” he said. “There will be no future of a billion people making use of blockchain unless the phone carriers fix this problem.”

Carriers must bolster customer security

Terpin, in his open letter to Pai, recommends that the FCC require all mobile carriers in the United States to take extra measures to secure user passwords and personal identification numbers (PINs) from their employees to better protect the users from these kinds of fraud. He insists that the carriers should also be required to inform their customers of high-security plans they offer, which must include a ‘no port’ option. This option would prevent SIM swapping frauds by requiring that a SIM swap request goes through the fraud department for checks and authorization before SIM information is ported to a new phone.

The open letter to FCC lays bare a number of facts that FCC must consider while revising the rules and regulations that guide customer safety as far as mobile carriers are concerned. One of the most notable is the fact that mobile SIMs are no longer just number cards that identify the user’s phone to the carrier, but also a module tied to the user’s identity and ‘key’ to many other aspects of life including financial services and social media accounts.

To put a stop to sim swapping frauds, or in the least make it more difficult for the scammers, Terpin urges the FCC chairman to consider the effect such cases of fraud have on the future generation of people. This is a group of people who look forward to making all their investments in cryptocurrencies and look forward to the transforming benefits of blockchain in general. However, the fear of ‘getting hacked’ and losing everything is very real, and it is something the FCC is tasked to deal with.

How the SIM swapping fraud works

Terpin’s demands are coming at a time when cases of SIM swapping frauds have become very prevalent all over the United States. Also known as ‘SIM splitting,’ ‘port-out scam,’ or simjacking, this account takeover fraud targets weaknesses in 2-factor authentication (2FA) or two-step authentication.

In many cases, mobile carriers’ ability to easily and seamlessly port a customer’s phone number to a different SIM is all the fraudsters need to exploit to gain access to the victim’s account and money. The fraudsters often pose as the legitimate owner of a mobile phone number to dupe the mobile carrier to authorize the porting of the victim’s number to a new device then use two-factor authentication to fully reset associated accounts.

The problem is bigger than the FCC assumes

In his August 2018 suit against AT&T, Terpin laid blame fully on the network, claiming that they were complicit in the hack because the carrier’s employees played a part in the SIM swap process and subsequent theft that spanned over a period of seven months. He alleges that the company and its employees violated the Federal Communications Act, breached the subscriber contract, and violated a number of other legal regulations. He is seeking compensation to the tune of $23.8 million and $200 million in punitive damages against AT&T.

Just a few months ago, Twitter’s CEO Jack Dorsey’s Twitter account was hacked using this exploit method. This demonstrates just how unsafe everyone is from this new form of crime. Terpin notes that the new generation of sim swappers are actually sophisticated and organized criminals, some of them operating in gangs, and should be dealt with more seriousness than is currently accorded. He suggests that to further help the task force mandated by Homeland Security and FBI to investigate such cases of fraud, FCC should immediately initiate a comprehensive study with recommendations for mandatory reforms by mobile carriers, just as was done for robocalls.

Coincidentally, Terpin’s exclusive open letter to the FCC was published by Coindesk on the same day as another sim swapping fraud victim Seth Shapiro was filing a suit against AT&T for the part the company played in a hack that saw him lose over $1.8 million worth of cryptocurrencies from his exchange accounts.

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Crypto Daily Topic

Is EOS.IO Controlled By The Chinese Government?

EOS has something of a celebrity status in cryptoverse. The cryptocurrency broke into the scene in 2018 after the largest Initial Coin Offering in history – a staggering $4.1 billion.

EOS has something of a celebrity status in cryptoverse. The cryptocurrency broke into the scene in 2018 after the largest Initial Coin Offering in history – a staggering $4.1 billion.

EOS has something of a celebrity status in cryptoverse. The cryptocurrency broke into the scene in 2018 after the largest Initial Coin Offering in history – a staggering $4.1 billion. It is also Ethereum’s biggest rival – also supporting smart contracts and decentralized applications. The currency is currently among the largest in the market, taking the number 7 spot with a $2.9 billion in market capitalization.

EOS is based on the EOS.IO network – a type of blockchain technology that its creators maintain is a decentralized system. Founded by the private Cayman Islands-based company block.one, EOS has managed to distinguish itself from other cryptos with unique aspects that have made it one to watch.

First, it is the only cryptocurrency that does not charge transaction fees, although many in the crypto space have wondered if there is more than meets the eye concerning this proposition. Secondly, it claims to circumnavigate the scalability issue faced by the blockchain space. Having a transaction per second (TPS) speed of almost 4000, this makes it a ripe candidate for industrial-scale decentralized applications. Moreover, its Delegated Proof-of-Stake model for verifying transactions is way faster, and not as power-hungry as most cryptocurrencies’ mining procedures.

Background, Criticism, and Controversies

EOS was always rigged with controversy before it even got off the ground. The system was breached by hackers who got away with millions of dollars of investor money. Soon after, it was the subject of a phishing attack, which led to customers losing coins.

Less than a week before the mainnet (main network) launch, a Chinese security firm discovered several vulnerabilities in the EOS system. These vulnerabilities allow hackers to access any EOS node, construct and publish malicious smart contracts, or steal the key to supernodes, manipulate transactions, or acquire sensitive user data, including private keys.

The security firm said it notified EOS about the loopholes and that the network had promised to withhold the launch until the bugs had been fixed. But when the news hit the media, the network disowned the story and maintained that bugs had been fixed, and it was proceeding with the launch. 

For a company that had denied the presence of loopholes, their next move was bewildering. EOS proceeded to announce a Block.one Bounty Program to enlist the help of developers in discovering bugs in the network in return for financial rewards.

Then came EOS’s biggest source of controversy: its 21 block producers – who elicited doubt about the independence of the platform. The crypto community argued that that was too much power in the hands of a few people for such a large platform. The furor intensified when minutes from the 21 delegates meeting showed that they even had the power to “print” new EOS currency. Social media erupted, with the eventual consensus that “this is hardly democratic, let alone decentralized.”

Indeed, EOS has been accused before of colluding and “mutual voting “with Chinese crypto exchange Huobi. In 2018, a leaked Huobi spreadsheet suggested that the network’s supernodes had been colluding with the exchange to maintain power and keep their profits. 

What’s more, blockchain testing company Whiteblock has refuted that the EOS blockchain is truly censorship resistant or decentralized, submitting “the foundation of the EOS System is built on a flawed model that is not truly decentralized.”

China in the Fray

The speculation that EOS is bedfellows with or under the thumb of the Chinese government has been rife for a while. This speculation came to a head in June 2019 when a former member of the block.one and EOS team suggested that EOS was “now governed by a Chinese oligarchy.” This happened during the high-profile Tulip Conference.

And in September 2019, one of the companies that have partnered with EOS since the beginning called it quits. EOS tribe announced, via a blog post on Steemit, that it was stepping away from EOS as a block producer, citing an inability to earn funds for maintaining the blockchain without the support of big token holders.  

Eugene Luzgin of EOS Tribe said in the post: “We At EOS Tribe have never participated in the game of vote-trading and stayed true to our principles, and hence while we leave EOS as Block Producer, we are also free to speak truth and give warnings to the rest.” He added there was “…a vote buying and vote exchange practice” that “went mainstream and wide-spread among BPs” and that one of the “whales” – Bitfinex, had unvoted Western BPs. (For the uninitiated, a whale is an investor holding large amounts of a cryptocoin).

Interesting to note is that a majority of the whales in the EOS network overwhelmingly support BPs located in China. In the EOS Decentralized Proof-of-stake, the 21 nodes exercise all the power over the blockchain. The nodes are chosen by coin holders, who stake EOS coins in a vote for up to 30 BPs. The top 21 BPs are then selected. This vote is dynamic, meaning BPs can lose or gain their top-21 position at any time.

Currently, a majority of the BPs indicate their location to be China. An investigation by Coindesk, the cryptocurrency news site, has established that more BPs are, in fact, located in China, despite outward impressions.

Another factor that has raised eyebrows and led to further speculation is China’s insistence on ranking EOS as the top cryptocurrency whilst ranking Bitcoin, the most valuable and well-known, outside of the top ten. This has led to many in the crypto crowd to characterize EOS as a “censorable blockchain” and “pseudo-decentralized.” As for how the Chinese government arrives at these rankings, that remains a mystery.

What Is The Truth?

After Coindesk published an article that insinuated Chinese influence on EOS, EOS published an article deconstructing the allegation. Luka Percic wrote on Eoswriter (an EOS community website) that “even quoted people are claiming heavy out-of-context quoting…”

He went on to argue that there is no way to check the location of BPs and that most people refute that any BPs are China-based due to fear of the government’s censorship. He renounced the vote-buying as a “lie” and stated vote exchange is standard practice with blockchains, and that there is a democratized access to rewards for both large and small token holders.

Still, according to Coindesk, most of the main BPs on the network did not reply to questions on the controversy surrounding the crypto.

Regarding accusations against the network not being truly decentralized, EOS’s chief technology officer Dan Larimer has since clarified that his firm is not looking to achieve that status. In an interview with YouTube vlog “Colin Talks Crypto” aired on October 3, 2018, Larimer had this to say: “Decentralization isn’t what we are after. What we are after is anti-censorship and robustness against being shut down.”

Conclusion

While the broader crypto community is not privy to the exact inner goings-on of EOS, one thing is clear: long-term supporters of the network are now ambivalent about it while others have abandoned ship outright. Many in the community had hoped the crypto would attract major companies seeking a secure, censorship-free, high-throughput database. That doesn’t seem to be in the cards, at least right now.

Perhaps we should finish by reflecting on this statement to Coindesk by Lugzin: “Any centralized blockchain will be looked down on. I really liked the technology behind it. It’s the governance that’s screwing it now.” Coming from a former EOS insider, that’s pretty telling.

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The Eighteenth Million Bitcoins Will have Be Mined by the of This Week

This week marks a milestone in the life of the world’s first cryptocurrency – Bitcoin. Blockchain.com, the cryptocurrency monitoring platform, reported that the total Bitcoins in circulation had reached 17.72

This week marks a milestone in the life of the world’s first cryptocurrency – Bitcoin. Blockchain.com, the cryptocurrency monitoring platform, reported that the total Bitcoins in circulation had reached 17.72

This week marks a milestone in the life of the world’s first cryptocurrency – Bitcoin. Blockchain.com, the cryptocurrency monitoring platform, reported that the total Bitcoins in circulation had reached 17.72 million by October 14, 2019. It will take the days before next week to mine the remaining amount to 18 million.

It has taken Bitcoin slightly over ten years to expend 85.7 of its total supply, which is quite the metaphorical “drop in the ocean” when compared to the 120 more years it will take for the total number of coins to be mined.

120 Years?

For many people in the crypto community, this seeming discrepancy might prove confusing. How can it take ten years to mine 18 million coins and 120 years to mine the remaining 3 million? The answer is in the network creator’s genius model, which is built to make the currency appreciate as the years go by, rather than devalue.

Now, the number of Bitcoins is finite. There can only be 21 million coins in supply, and when one day all coins are mined, no new ones will be introduced.

Miners get block rewards (free coins) every time they mine new coins. As time goes on, the block rewards are halved – for every 210,000 blocks mined.

When Bitcoin was new, miners could receive 50 coins for every block. The first halving was in 2012, bringing the rewards to 25 coins. The next halving happened in 2016, cutting the rewards to 12.5. The next one will occur on May 2020, making the reward 6.25 coins.

If the Bitcoin protocol remains intact and the halving process remains consistent, Bitcoin will reach the maximum supply cap in 2140.

Bitcoin Investors Are “HODLing” More Than Ever

Meanwhile, the number of addresses hodling 1000+ Bitcoins has increased, as people stockpile on the currency. 

On-chain analyst Glassnode (on-chain refers to transactions that occur on the Blockchain and are only valid when it’s modified to reflect them) has highlighted that the number of Bitcoin wallets holding more than 1000 BTC is now 2100 separate wallets. More wallets are holding bitcoins in the 1,000 – 10,000 bracket more than in any other bracket.

Similarly, the number of bitcoins in wallets with 1000+ wallets has gone from strength to strength: from 6, 919, 950 in September 2018 to 7, 184, 501 in January this year, to 7, 530, 446 as of October 14, 2019. 

These numbers indicate that as we approach the next “halvening,” people are buying Bitcoins in larger volumes, as further indicated by the recent increase in hash-rate discussed in more detail below. 

Bitcoin’s Hash Rate Is at an All-Time High

The hash rate for Bitcoin is also at an all-time high of 110.19 EH/s after being on a steady increase for the last two years – according to the cryptocurrency analysis website Bitinfocharts.com. Hash rate is essentially the rate at which a crypto-miner is working. The faster they are working, the higher the hash rate, and the quicker they can solve the next block and claim their reward.  

Just in July this year, the hash rate was 80 EH/s and has since grown by 37% in that short amount of time. In September, it hit 100 EH/s for the first time ever, with new highs regularly being achieved for the network. A high hash rate indicates surging mining activity on the Bitcoin network. This could be due to more miners scrambling to acquire more block rewards, or simply due to more efficient mining rigs entering the industry. 

Effect of Halving on Miners and a Next-Generation of Mining Rigs

With the next Bitcoin halving event being only six months away, the mining rig industry is rushing to roll out sophisticated and more powerful hardware to meet changing demands. As the reward rate goes down from the current 12.5 bitcoins for each mined block to 6.25, miners will want to mine even faster to get more coins within shorter time frames.

As such, we are witnessing a new wave of mining rigs, each more powerful than its predecessor. Some of the types of equipment are even up to about 500% more powerful than the older models, in terms of hash rate. 

Going by Bitcoin’s previous halving events, the crypto is likely to witness an upswing in the year before and after the event. This is especially likely, considering the currency continues to show strongly this year. Assuming that it remains on that path in the next few months, chances are it will experience an upswing after the next halving.

Bitcoin After 2140

One of the crucial aspects of Bitcoin’s survival is miners – the people who secure the network and verify transactions. Thus, a legitimate question is: what will happen to miners after every Bitcoin has been mined? After all, there won’t be any financial motivation – they will not be able to exchange their block rewards with cash. Will Bitcoin continue to function?

Fortunately, the network’s creator, Satoshi Nakamoto, envisioned this and addressed it with this statement: “Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.” What this means is besides block rewards, the Bitcoin protocol also provides transaction fees as a “compensation” option.

The transaction fees will rise after the maximum supply is reached; hence, mining will not be a loss. The only caveat is: currently, the fees pale in comparison to the reward of Bitcoins. However, as the rewards continue diminishing, the transaction fees will increase. The final result is the transaction fees will become valuable enough so that miners should continue verifying transactions. So, while new Bitcoins cease to enter into circulation, Bitcoin miners still get a payday. 

As these exciting chapters for the world’s pioneer’s currency continue to unfold, we can only wait and see how it holds up. It should particularly be interesting to see the coin prove its mettle after the next “halvening.”

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Crypto Daily Topic

Cryptocurrency market whales – Market manipulation

Advancements in the IT technology sector globalized almost every single market in the world. People are exposed to more information and content than ever. This brings many opportunities but also

Advancements in the IT technology sector globalized almost every single market in the world. People are exposed to more information and content than ever. This brings many opportunities but also

Advancements in the IT technology sector globalized almost every single market in the world. People are exposed to more information and content than ever. This brings many opportunities but also false information. Many people have put traditional market trading aside and chose cryptocurrency trading instead. Cryptocurrency markets bring more risk with them due to extreme volatility, but this also means more opportunity. However, most traders do not know how these markets are “playing out” in the real world, and reality hits them only when they lose their hard-earned money.

This article will hopefully shed light on how big market participants can influence the markets in a somewhat shady and secretive way.

Who are the whales?

As we mentioned in the previous articles, whales are people with enormous amounts of capital to invest in cryptocurrencies. They can be financial institutions but also groups of high net worth individuals. Over 40% of Bitcoin is currently owned by a small minority of people (around 1,000). With this much money in their hands, market manipulation can be quite easy.

Why does market manipulation even happen?

The answer is quite simple: Mostly to profit from it. Some people might indicate that a growing Bitcoin is not an ideal thing from the perspective of financial institutions and governments as they want to keep power in their own hands. However, there is no proof that this is the main reason for market manipulation. As with any tradable asset, people are concerned with their portfolios and risk management, and market manipulation maximizes reward potential while minimizing risk.

Two most common ways of whale market manipulation

CFD and manipulation

Many people thought that putting Bitcoin in front of a broader audience would be a good thing. However, not every way of putting it in front of the whales is a good way to do it. With CME launching their Bitcoin futures, people were expecting great things. Little did they know that this would be one of the main contributors to Bitcoin’s manipulated price.

CFD contracts are trading Bitcoin contracts, but are not actually settled in Bitcoin. This has opened a whole new way to manipulate the cryptocurrency markets.

CFD traders would short Bitcoin and then use their immense funds to influence the real Bitcoin market to drop in price. This is extremely profitable as the whales profit both from settling the short-selling contracts and from rebuying Bitcoin at a lower price. This type of market manipulation has become so obvious that, as CME futures are being settled every last Friday of the month, Bitcoin’s price falls dramatically just a few days before that. This has not happened once or twice, though; it has become a monthly occurrence.

Market spoofing

Another way of influencing the price into rising or falling is by controlling the market sentiment. This is what whales use to complement their CFD positions, or just to make a profit from trading directly. Any trader that has large enough capital can affect cryptocurrency prices simply by using a strategy called spoofing. Spoofing can be described as putting an enormous buy and sell orders above or below the current price with no intention of letting the orders fill, but rather than just wanting to “guide” the market in a specific direction. After the market acknowledges the whale position, it moves the opposite way as it sees the order as a buy/sell wall. As soon as it impacts the market, the order is taken down, and the cycle can repeat. This strategy is very cunning, but it is also very effective. But, has order spoofing contributed to Bitcoin going up and down?

The answer is both “no” and “yes.” Yes, spoofing occurred and is currently happening in Bitcoin and altcoin trading. Spoofing is undoubtedly affecting the price to change directions regularly. However, it was never done in such an obvious way that we can undeniably say that spoofing caused a significant market trend to change direction. Spoofing might have impacted the lower time-frame market direction, but to say that it altered the market in a big way would be far-fetched.

Conclusion

Whales control the cryptocurrency market just as they control any other market. As cryptocurrencies are a rather new concept, institutions have not immersed themselves fully into crypto trading. However, the market manipulation that they use is far more effective in this market as traditional markets tend to be far more liquid and less susceptible to manipulation. Traders should consider this whenever they take a position.

On the other hand, not everything is bad. Traders can actually use the knowledge of how markets work and implement the possibility of market manipulation into their strategy. If done correctly, it may bring additional profits or mitigate losses.

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Crypto Daily Topic

Is Blockchain overrated?

Blockchain is a form of distributed ledger technology. It has very specific technological features that differentiate it from other forms of a distributed ledger. Every transaction that blockchain processes is

Blockchain is a form of distributed ledger technology. It has very specific technological features that differentiate it from other forms of a distributed ledger. Every transaction that blockchain processes is

Blockchain is a form of distributed ledger technology. It has very specific technological features that differentiate it from other forms of a distributed ledger. Every transaction that blockchain processes is linked into groups of records. This way, blockchain forms a chain of blocks of transactions, which is where it got the name from. Bitcoin is a true example of proper blockchain use. It is entirely open, and anyone can contribute to its code and give their opinion on how to improve it.

This article will hopefully provide insight into how blockchain is used, promoted, and what’s wrong with the marketing industry nowadays.

How is blockchain promoted?

Blockchain seems to have become a magic buzzword when it comes to crowdfunding as of lately.  Many companies proudly state that they have implemented blockchain technology in one of their aspects of business, or that they will extremely soon. Truth be told, this has brought an immense interest to these companies, especially the blue-chip companies that had nothing to do with cryptocurrencies before.

People have started associating blockchain with security, decentralization, immutability, etc. and they are not wrong. However, what many people don’t understand is that most of these companies did not even implement a true blockchain. Instead, they made a centralized version of it.

Pillars of an open blockchain

Andreas Antonopoulos has established that an open blockchain can be described by five attributes: open, borderless, neutral, censorship-resistant, and public. If a company implements anything other than a blockchain that doesn’t have these five attributes, it doesn’t really need a blockchain. It requires a boost in marketing, which it will get through parading the word blockchain.

Open blockchain

Open blockchain means that anyone can participate in it and that everyone can access it without authorization, vetting, or ID checks. An open blockchain does not know or care if you are even human. Both people and software can use blockchain without any restrictions.

Borderless blockchain

Just as the word says, blockchain has no borders. Blockchain is international and does not care where its users are from. It should be a truly international phenomenon.

Neutral blockchain

Neutral means that each part of the information on the blockchain is free. While cross-border money has to sometimes go through security checks, neutral blockchain does not care who the funds or information is traveling from or to, what matters is that they get to the destination.

Censorship-resistant blockchain

Censorship-resistant blockchain means that there is no personal, corporate, or government body that can stop a transaction from occurring. A true open blockchain does not require any authorization, but it also does not get affected by anyone wanting to stop or reverse transactions.

Public blockchain

Public blockchain means, simply put, that every transaction of information or funds through it is entirely transparent and verifiable. It ensures that no one can “cheat” the blockchain.

These five pillars build a truly open blockchain. Anything that does not have these five attributes is not an open blockchain.

What’s wrong with a non-open blockchain

Blockchain has been created as an improved ledger system that can solve many problems safely, quickly, and more transparent. However, most companies are not trying to implement an open blockchain system because they don’t want to. They want to remain centralized and have a closed blockchain governed by the company itself. So, is it so bad that they wish to remain centralized?

No, it is not wrong. Any entity can decide what it wants or does not want. However, using the word blockchain gives false expectations to people. Whenever blockchain implementation has been mentioned, people flock with their money and start buying shares of said company, with expectations of improvement towards decentralization. However, that does not happen.  Even if companies implement something that they call blockchain, it is not an open blockchain, rather a distributed ledger that does not have all of the characteristics of blockchain.

Conclusion

Using blockchain as a buzzword for generating funds is certainly a good marketing move, but it is borderline illegal. People are given false hope, which is allowed and accepted only because most people do not know what a true blockchain is. People associate blockchain with Bitcoin and all its aspects, which is why they decide to invest their money into a promising concept implementation into a big corporation.