Tag: Smart contracts

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Crypto Guides

What Should You Know About The ‘Concordium’ Blockchain Platform

Introduction

Introduction

Introduction

Business payments have to be made secure and transparent. It is true that blockchain and its products have always helped businesses in providing the right efficiency. Yet again, a blockchain-powered product has made its inception into the industry, offering better privacy and accountability of the payments. Concordium platform is a reformed open-source and permissionless blockchain product made with business applications. In this article, we are going to talk about the Concordium articles and everything you need to know about it.

What is Concordium?

It is a proof-of-stake blockchain that has been created with business applications. Concordium is also the first blockchain that comes with identification embedded in the protocol that helps in meeting the requirements facilitating a user-friendly platform. It is primarily designed to be cost-effective, secure, and fast. The identity layer offers on-chain identity compliance centric payments and better privacy for the users.

What About Its Structure?

The two-layer consensus protocol comprises Nakamoto-style blockchain, and the finality layer is meant for faster transaction confirmation. The sharing design facilitates high transaction throughput and enhanced privacy for the business’s sensitive data. Another feather in the cap is designing two new languages for the smart contract code, making the development much easier. The platform also has a transparent incentive structure with predictable fees and cost-effective transactions.

What Are The Best Features of Concordium?

Now that you have understood the platform, let’s take a peek into the feature that will give you a better understanding.

Regulatory Compliance By Design: It is primarily designed to make business transactions faster, secure, and cost-effective. Concordium is designed in a way to integrate the financial system with the user’s identity. It helps the developers, businesses, and individuals to build blockchain products that comply with regulations.

Privacy and Verification of Users: The identity layer of Concordium offers a compliance-centric balance in accountability and anonymity. The user’s identity will remain anonymous, but it can be revoked against a valid request from the government or legal channels.

Fast Transactions: The most important takeaway of this platform is its fast transactions. It has set a benchmark by making the transactions fast enough in accordance with transactions per second. Concordium is made to meet the ever-evolving needs of businesses on a global scale. The platform has taken a major leap compared to other blockchain technology.

Consistent Uptime: The platform is designed for dynamic business use cases with a focus on the uptime requirements. The two-layer consensus is designed to ensure that the platform is secure and available for the changing conditions. So far, the platform has achieved speedups and efficiency.

The Bottom Line

Concordium is created to bring innovation and efficiency to the business transaction. The platform vision to unlock blockchain’s potential and put it to best use for the future economy. The community of Concordium currently involves developers, investors, business leaders, and technologists who are advocating it throughout the world. If you are also willing to enter the arena, you can connect via attending the event, joining the online communities, or entering the ambassador program.

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Crypto Daily Topic

How Blockchain Can Transform the Tourism Industry 

Since the introduction of online flight booking, the global tourism industry has grown exponentially – thanks to the convenience of making flight reservations from a mobile device. Despite the efficiency brought by such technologies, the travel industry is populated by a myriad of intermediary companies that make traveling quite a hassle. From flight companies, travel agents, tour operators, to destination management companies, all of which defeat the purpose of using travel solutions for convenience. Additionally, throughout the travel, customers’ data is exchanged numerous times, which ends up compromising their privacy, especially if the systems used aren’t secure enough. 

Since the introduction of online flight booking, the global tourism industry has grown exponentially – thanks to the convenience of making flight reservations from a mobile device. Despite the efficiency brought by such technologies, the travel industry is populated by a myriad of intermediary companies that make traveling quite a hassle. From flight companies, travel agents, tour operators, to destination management companies, all of which defeat the purpose of using travel solutions for convenience. Additionally, throughout the travel, customers’ data is exchanged numerous times, which ends up compromising their privacy, especially if the systems used aren’t secure enough. 

Since the introduction of online flight booking, the global tourism industry has grown exponentially – thanks to the convenience of making flight reservations from a mobile device. Despite the efficiency brought by such technologies, the travel industry is populated by a myriad of intermediary companies that make traveling quite a hassle. From flight companies, travel agents, tour operators, to destination management companies, all of which defeat the purpose of using travel solutions for convenience. Additionally, throughout the travel, customers’ data is exchanged numerous times, which ends up compromising their privacy, especially if the systems used aren’t secure enough. 

Just as Bitcoin was conceived as a method of bypassing financial intermediaries, its underlying technology – blockchain, can also be used in the tourism industry. The technology will enable customers to interact directly with service providers making traveling less of a hassle while also safeguarding their privacy. 

Potential use cases of blockchain in travel 

Blockchain technology is lauded for its high data security, immutability, and decentralization. These are the fundamental properties most industries seek to leverage. Here’s how the tourism industry can make use of this revolutionary technology: 

1. Decentralized booking marketplaces

Although intermediaries in the tourism industry aim to make traveling less hectic, their services make traveling expensive. For instance, online travel agencies (OTAs), despite helping customers book flights and accommodation, usually charge a service fee, which adds to the overall cost of traveling. 

With the employment of blockchain technology, a decentralized booking marketplace is created where intermediaries become obsolete. Travelers are connected directly to flight companies, hotels, and other service providers, making traveling more affordable. Moreover, without intermediaries, customers’ experience is enhanced as they can make seamless transactions with minimal delays. 

Smart contracts could serve as automated intermediaries that utilize data oracles to source a range of relevant services like traditional OTAs. Smart contracts will hold funds in escrow as remotely executable agreements and release them when and if services are properly offered. 

2. Secure payment systems

The traveling process is characterized by numerous payments right from flight booking to accommodation and everything in between. Unfortunately, customers’ privacy of their financial details isn’t guaranteed, which means they are at risk of identity theft or even losing their funds to hackers. Also, to make these payments, travelers must carry debit cards or fiat cash, which can be cumbersome, not to mention the risk of theft. 

If the tourism industry was to integrate blockchain technology into their payment model, all transactions would be done using cryptocurrencies. As such, travelers’ financial details will be secured, protecting their privacy while minimizing fraud. What’s even better is that paying using cryptocurrencies eliminates the need to carry cash or use third-party payment processors such as Visa and MasterCard. With the intermediaries out of the way, payment transactions become more affordable, especially cross-border payments. 

Since blockchain technology can create a seamless inventory tracking mechanism, it can also be used to track payments. This will ensure flights are booked to a maximum capacity only, preventing overbooking, which can ruin an airline’s publicity. 

3. Identity management

Identification services play a crucial role in the tourism industry as it helps promote security. Immigration officials are always keen when verifying travelers’ identities in compliance with national security guidelines. However, identity verifications tend to be time-consuming and repetitive, resulting in long queues at airports and hotel check-ins. 

Blockchain can transform the current identity verification process by creating an immutable database containing the necessary details of a traveler. This way, identity verification will be reduced to a simple fingerprint or iris scan instead of the traditional document verification. As a result, there will be fewer check-in times and shorter or no queues in airports, facilitating a time-efficient experience. 

Relevant authorities can also share the necessary data required for identity verification without compromising travelers’ privacy. This is enabled by blockchain’s zero-knowledge protocol that allows parties in a peer-to-peer network to verify specific data’s accuracy without revealing it to each other. 

Also, if all governments were to use blockchain in identity verification, passports would be rendered obsolete. This would, in turn, reduce verification time and unite all nations in providing digital passports for efficient traveling experience. 

4. Baggage management

It is estimated that airlines lose about two bags for every 1,000 passengers. While the odds may seem almost negligible, it’s disappointing to lose your luggage, especially if it contains essential business documents or other valuables. In most cases, baggage mishandling and loss is as a result of human error since multiple parties are involved in the handling process throughout one’s journey.

Moreover, each of the involved entities in the baggage handling process, from the airline, security personnel to ground staff, all have different baggage tracking infrastructures that operate in isolation. As such, when reconciling their databases, discrepancies may occur, resulting in loss of luggage. 

In collaboration with AI and sensor technologies, blockchain can be used to monitor and track travelers’ luggage. Also, tracking data is recorded on a distributed database that can be shared among entities responsible for handling baggage, eliminating the baggage loss menace facing the tourism industry. 

5. Customer reward system

Airlines, travel agencies, and even hotels offer customer reward systems to win new customers and incentivize loyal ones. However, there have been complaints that these programs are too restrictive and limited to a small set of rewards. 

Moving the reward system to a blockchain network means that rewards will be issued in the form of digital tokens. This enhances transparency in the way rewards are issued, which then improves customers’ trust. The tokens can be exchanged or rather redeemed for a variety of products from different providers, unlike traditional loyalty programs, where the rewards are restricted to specific rewards. Various entities within the travel industry can also collaborate in offering digital token as rewards. This way, the tokens can be exchanged easily between the entities, allowing customers to compare the relative value of schemes and rewards they offer. 

6. Transparent business rating

Before traveling to new destinations, it’s common for one to read reviews of either the hotel or airline one will be using. There are even dedicated platforms where users share their experiences and rate destinations, airlines, and accommodation hotels. Although some of the reviews may be genuine, others are outright fake and fabricated by the service providers to attract more customers. These fraudulent activities have become rampant due to increased competition among service providers. If a user’s experience is different from what they read in online reviews, it breeds mistrust and ruins the reputation of the service provider. 

The transparency offered by blockchain technology could go a long way into ensuring that online reviews are genuine, therefore, restoring consumer trust. In this case, the reviews of customers are made public in a secure blockchain platform, ensuring everyone sees and verifies its accuracy. 

7. Travel insurance

Blockchain is best suited for application in travel insurance to ensure data integrity for fair compensation of claims. For instance, say, an insured customer loses their bag and makes a claim to the insurance company. A smart contract using data oracles within a decentralized network could validate a claim and ascertain if the agreed thresholds have been met. Upon verification, the claim is automatically settled through cash deposits or refunds in delayed flights. 

Conclusion 

The travel industry is a fertile ground for blockchain technology to thrive, given the wide network of intermediaries that create a tangled web of interaction in a travelers’ journey. That said, only the established industry players can lead to the adoption of blockchain in tourism. This is because they hold the resources needed to materialize proof of concept of blockchain solutions and advocate for their use. 

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Crypto Daily Topic

What does Blockchain technology have in store for the Insurance Industry 

The insurance industry has had a tough time trying to adapt to maturing markets, economic turbulence, and dynamic customer preferences. This has forced insurers to seek a “winning formula” that will ensure profitability and sustainable long-term growth in an industry overwhelmed by constant disruptions. Part of the ‘winning formula’ for most insurance firms is integrating newer technologies and business-model innovations into their legacy environments. 

The insurance industry has had a tough time trying to adapt to maturing markets, economic turbulence, and dynamic customer preferences. This has forced insurers to seek a “winning formula” that will ensure profitability and sustainable long-term growth in an industry overwhelmed by constant disruptions. Part of the ‘winning formula’ for most insurance firms is integrating newer technologies and business-model innovations into their legacy environments. 

The insurance industry has had a tough time trying to adapt to maturing markets, economic turbulence, and dynamic customer preferences. This has forced insurers to seek a “winning formula” that will ensure profitability and sustainable long-term growth in an industry overwhelmed by constant disruptions. Part of the ‘winning formula’ for most insurance firms is integrating newer technologies and business-model innovations into their legacy environments. 

Blockchain technology can potentially disrupt the insurance industry by improving operational efficiency and mitigating the obstacles facing the insurance sector. As such, insurers are becoming increasingly open to embracing this disruptive technology. Here is how Blockchain is being used in the insurance industry.

1. Fraud detection and claim processing

Insurance firms have for long grappled with fraudulent claims, which accounts for $80 billion in losses per year. Even after investing in anti-fraud technologies, insurers have not been successful in curbing fraud, which eventually robs them off. What’s worse is that consumers are equally affected by fraudulent claims as they are forced to pay more for insurance premiums. 

Most of the fraud cases stem from data fragmentation in the insurance industry. It’s, therefore, possible for fraudulent claims to slip through traditional anti-fraud technologies leading to losses. Besides, claims processing is mainly paper-dependent, which creates room for criminals to modify information and hence make fraudulent claims. 

Blockchain helps insurers solve the fraud problem by providing a transparent and decentralized platform on which data is recorded. In turn, this eliminates the paperwork required in claim processing, meaning that the data can’t be modified. Most importantly, the data can be shared among the involved parties, making it easy to validate a claim.

For example, in travel insurance, an airline company can share flight cancellation data with an insurance firm to ascertain that indeed the flight has been canceled. The insurers will then compensate the consumer who is insured against flight cancellation. Moreover, blockchain is tamper-proof, meaning fraudsters can’t modify the recorded data. 

2. Data management

In the insurance industry, data is essential in the formulation of more customer-based insurance policies rather than just mere products. For example, the automotive insurance sector can draw valuable insights from such data as driving time, behavioral statistics, acceleration, distance covered, and breaking patterns. With these insights, an insurance firm can develop accurate actuarial models and user-based insurance policies. 

For most insurance firms, collecting this type of data has been easy, especially with the advent of the Internet of Things (IoT) devices. However, the problem comes with managing the collected data and storing it in an accessible fashion. With the existing infrastructure, insurance firms store their data in centralized data centers, making them prone to breaches. Even worse, these databases work in isolation, which jeopardizes the collaboration of different departments within a firm. 

Blockchain can be used to manage the large volumes of data collected by insurance firms. Instead of expensive data centers, the technology offers a decentralized and secure network to store and process data. In turn, this promotes collaboration within a firm and even with other entities such as police departments, which also results in efficient claim processing. 

3. Streamlining reinsurance

Reinsurance is a cover for insurers. Simply put, it is when an insurance firm buys an insurance policy from another firm to protect itself against certain risks. For example, a firm can take an insurance cover from another firm to protect itself against the increased cost of claim settlements resulting from mass health epidemics or natural disasters. 

Inefficiencies plague the current model used in reinsurance. First off, the operations are manually processed and determined by a one-off contract. As such, a single contract is explicitly written to cover a  specific event. This results in a single policy being divided between numerous insurers creating data silos that take lots of time to process. Also, an insurer doesn’t just negotiate with one reinsurer but with several of them, which further complicates the whole process. Each of these involved parties uses different data infrastructure resulting in slow data exchange, making the process costly and time-consuming. 

Price Waterhouse Coopers estimates that if the reinsurance industry improves operational efficiency, then they can save up to $10 billion. The primary way to achieve this is by using a blockchain consortium network, which will allow the insurers and reinsurers to communicate and efficiently share data about policies. Besides, considering the fragmentation of a single policy, unified record-keeping in reinsurance is particularly essential. 

4. On-demand insurance

As the name suggests, This is a flexible insurance model where policyholders easily turn their insurance policies on and off. Currently, the on-demand insurance market requires humans to pass a policy from quote, underwriting, to eventually issuance, which costs significant amounts of time and money while also exposing a policy buyer to risk. 

On-demand insurance providers can trade blockchain technology for structured record-keeping from the policy’s inception to disposal. This would eliminate the clerical errors experienced in the current manual model. Built-in Smart contracts can also be deployed to initiate and terminate policies based on predetermined criteria automatically. This would mean fast policy formulation as well as quicker claim processing. 

5. Micro-insurance

Micro-insurance is a policy that covers specific risks for regular premiums. The policy is designed for low-income families and individuals who, in most cases, are unbanked. As such, insurers rely on third-parties such as banks to link them with the policy clientele base.

To make reasonable profits from micro-insurance policies, an insurer needs high volumes of policies. However, the increased distribution cost may sometimes beat the low-profit margin despite a ready market for the policy. 

Blockchain can be used to link insurers directly to the market, thereby eliminating the third-parties, thus reducing the cost of distribution. Digital tokens can be used to make insurance payments, making the policy even more affordable due to the reduced cost of transactions that come with digital assets. 

Achieving widespread adoption of blockchain technology in the insurance industry 

Like any other technology, it will take time before the insurance industry fully integrates blockchain into its systems. But, it doesn’t mean the industry can’t achieve widespread adoption of the technology. For that to happen, the following criteria must be met:

Internal proof of concept

The first step towards adoption is for insurance firms to start in-house projects experimenting with blockchain. This will help them first solve their unique problems affecting efficiency in the firm before trying to solve the challenges facing the wider insurance industry. At the same time, experimenting with blockchain allows firms to learn how blockchain works, which then opens their understanding of how this technology can be applied in the industry. 

Design customer-centric solutions

Blockchain solutions in the insurance industry should be designed with the needs of the customers in mind. Designing solutions-focused entirely on helping a firm may lock out customers since their needs are not met, or rather they are sidelined. 

Conclusion 

The need for blockchain is becoming more apparent in industries seeking to improve operational efficiencies for sustainable long-term growth. With this in mind, the insurance industry needs to embrace blockchain technology to solve the industry’s challenges and, consequently, improve customers’ experience. 

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Crypto Daily Topic

6 Blockchain can Transform Human Resources Management 

In a world where the talent pool is in a constant influx of professionals, hiring the right person for an open position is quite overwhelming for any human resources (HR) department. Recruiters often have to go through numerous résumés, conduct interviews, and chase down references to find the right candidate for a job position. Even with the advent of career networking sites such as LinkedIn and Google jobs, finding qualified professionals is far from seamless. 

In a world where the talent pool is in a constant influx of professionals, hiring the right person for an open position is quite overwhelming for any human resources (HR) department. Recruiters often have to go through numerous résumés, conduct interviews, and chase down references to find the right candidate for a job position. Even with the advent of career networking sites such as LinkedIn and Google jobs, finding qualified professionals is far from seamless. 

In a world where the talent pool is in a constant influx of professionals, hiring the right person for an open position is quite overwhelming for any human resources (HR) department. Recruiters often have to go through numerous résumés, conduct interviews, and chase down references to find the right candidate for a job position. Even with the advent of career networking sites such as LinkedIn and Google jobs, finding qualified professionals is far from seamless. 

It gets even worse considering that millennials, who make up the largest percentage of the job market, are constantly changing their employers after every 2.8 years. In recent years, career paths have evolved in such a way that professionals rarely work their way up to retire as CEOs. Career ladders have become career webs fuelled by globalization, which has empowered professionals to change jobs quite often. 

Given the tedious hiring process and the detrimental consequences of hiring an ill-fitting candidate, HR departments need to upgrade their existing framework by leveraging newer technologies. Blockchain is one such technology though known for disrupting the financial industry; it has the power to transform the way HR interacts with the growing talent pool. 

Most promising Blockchain use cases in HR 

The HR departments being the storage of loads of employees data, blockchain finds various use cases in helping recruiters manage this data. These includes: 

1. Verification of employees

It is estimated that more than 60% of job seekers misrepresent themselves on their résumés. This lack of honesty has breached the trust between job seekers and HR departments, promoting the latter to rely on third-parties such as recruitment agencies who conduct background checks on potential candidates. Unfortunately, traditional verification processes used by these third parties aren’t effective and often resource-draining in terms of time and money. 

Blockchain has the power to transform employees’ verification process by creating a distributed database containing a candidate’s credentials and background data. Universities and colleges can publish an employee’s academic credentials, which are then shared with future employers. The database can also contain an employee’s previous position in another company with additional details such as performance indicators and general workplace conduct, which can be used to determine if a candidate is a good fit. 

All the data logged in this blockchain system is immutable, meaning that job seekers can’t alter nor falsify their credentials. As a result, résumés will become obsolete as recruitment agencies’ role diminishes, saving organizations time and money spent verifying employees’ data. 

2. Enhance data security

Human resources management involves dealing with voluminous data from financial transactions of an organization to sensitive employees’ data related to pay, healthcare, disciplinary records, and banking. This places HR departments at risk of data breaches in the face of rising cybercrimes. 

By implementing a blockchain-based database, HR data is secured, making it almost impossible for cybercriminals to gains access to employees’ and organizations’ records. Moreover, access to data on a blockchain network is limited and controlled, meaning that even those with access can’t arbitrarily make changes to the records. This protects organizations from both internal and external data breaches. 

Adding to its high-security standards, blockchain effectively decentralizes data as a key defense strategy against hacks. Unlike storing data in centralized silos, decentralization of data spreads across a large network of computer nodes, mitigating the risk of data being wiped in a single hacking event. 

3. Streamline payrolls and contractor payments

Most HR’s payment processing is done manually, resulting in time lags as invoices have to be reviewed. Also, banks that process an employee’s payment tend to charge extra fees cumulatively, eating into the overall salary. 

Blockchain payment systems can replace many manual processes, thereby eliminating time lags within the current payroll systems. As such, payments will be reconciled faster with less paperwork ensuring employees get their salary in time. Unlike bank transactions that charge expensive transaction fees, payment processed through blockchain systems charge almost zero transaction fees. This makes them ideal for sending cross-border payments in organizations that hire a remote workforce. 

The introduction of smart contracts can further improve blockchain payment systems by automating payouts ensuring employees are paid quickly without delays. For instance, say, a company hires a contractor and pays them on an hourly basis. Once an agreed number of work hours has been completed, the smart contracts automatically pay the contractor by executing the agreed terms of payment. 

For seamless transactions, smart contracts are linked to the company’s bank account and that of a contractor. As such, the HR department doesn’t need to regularly do a payment run since transactions are recorded in real-time, keeping track of invoices. 

4. Automate taxes and mitigate audit bottlenecks

HR is constantly grappling with evolving tax laws, which are further complicated by other factors such as bonuses, commissions, overtime pay, accumulated paid leaves, and other additional payments. Accounting for all these payments when filing taxes has proven to be daunting, given that the current systems are majorly paper-dependent making them prone to clerical errors. 

Blockchain’s ability to accurately record payment transactions can be deployed to streamline the taxation processes for HR. Therefore, it will become easier for auditors to trace all cashflows within a shorter time, freeing up organizations to concentrate on core business goals. 

Additionally, an organization’s in-house auditors can securely share the cashflow records with the relevant authorities to maintain compliance with tax laws. In the spirit of promoting transparency, all data entries in the blockchain network are protected from manipulation. So, organizations can have peace of mind knowing that they won’t get in the wrong books of the law for fraud or any other accounts manipulation crimes. 

5. Record employee attendance

Along the same line of accurate record-keeping, blockchain offers an ideal way of keeping employees’ attendance data. This is necessary in processing payments based on the number of working hours where disputes may arise in case of inaccurate data. 

ID 2020 is already using blockchain technology to store and verify biometric data such as fingerprint and iris scan. Similarly, human resources can use blockchain solutions to record employees working hours with accurate details of the exact time an employee reported and left the workplace. This data can be used to track attendance and payment systems to ensure fair compensation for wages and claims. 

6. Monitor employees’ professional life

It is possible to record the entire professional life of an employee in a blockchain network. Right from internship to various roles, an employee was assigned, including promotions, which all form a clear picture of the nature of an employee, thus taking subjectivity out of the hiring process. 

Additional data like whether an employee was promoted or the reason they were fired/left a company can also be recorded to help document their successes and failures. This way, employees will be encouraged to embrace their failures and learn from them rather than acting oblivious to them. Most importantly, the data will help companies make better decisions and allow strong performers to rise to the top. Additionally, an employee’s professional data can be shared among employees for efficient referencing. 

Conclusion

Embracing blockchain in human resources management goes beyond streamlining an organization’s operations. Employees are the ones set to benefit immensely from the adoption of blockchain in HR, as it means an organization has the best interest of its workers at heart. This is evident from timely and fair payments, meritocratic hiring process, and other benefits of HR blockchain solutions. Therefore, it important for all organizations to consider experimenting with blockchain to promote a good relationship with their workforce.

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Cryptocurrencies

What’s Aave (LEND)? A Beginner Guide

With blockchain came the concept of finance that’s outside the control of the state and government. Cryptocurrencies have been the rage these past few years. But now a bolder and fresher idea is emerging, and it’s called decentralized finance (DeFi). DeFi is the notion that the people have the power, and they don’t have to trust traditional finance systems to make the calls. 

With blockchain came the concept of finance that’s outside the control of the state and government. Cryptocurrencies have been the rage these past few years. But now a bolder and fresher idea is emerging, and it’s called decentralized finance (DeFi). DeFi is the notion that the people have the power, and they don’t have to trust traditional finance systems to make the calls. 

With blockchain came the concept of finance that’s outside the control of the state and government. Cryptocurrencies have been the rage these past few years. But now a bolder and fresher idea is emerging, and it’s called decentralized finance (DeFi). DeFi is the notion that the people have the power, and they don’t have to trust traditional finance systems to make the calls. 

Aave is a DeFi project that allows users to borrow crypto without depositing collateral. Lenders can also deposit money and start earning interest right away without lifting a finger.

Describing itself as “an open-source and non-custodial protocol enabling the creation of money markets,” Aave introduced the idea of uncollateralized loans, carving out for itself an influential position in DeFi. 

With that, let’s find out more about the project!

What’s Aave?

Launched in 2018, London-based Aave is a DeFi platform running on the Ethereum blockchain that lets you lend and borrow a wide range of cryptocurrencies in a decentralized and peer-to-peer manner. Aave takes its name after the Finnish word for “ghost.” The team chose this name to reflect the constant evolvement and imaginative technology that intrigues users. 

The project brings distinguished features to the DeFi space, such as uncollateralized loans and “rate switching.” Aave utilizes the Aave Protocol to create various types of crypto markets where users can build an investment portfolio. 

Background of Aave

Aave was originally known as ETHLend, a crypto lending platform established in 2017 by Stani Kulechov. The company raised about $600,000 worth of Ether in exchange for 1 billion LEND tokens. 

ETHLend rebranded into 2018 in order to incorporate even more platform features, suiting the current cryptocurrency consumer.  

Aave’s Offerings

Aave offers quite an impressive range of unique collaterals for any DeFi lending protocol. 

#1. Flash Loans 

Flash loans are one of Aave’s biggest selling points, and that’s especially because you don’t need to deposit any collateral to use them. Instead of using collateral to ascertain payments, flash loans use the timing of the loan’s repayment. Flash loans were invented by Aave, and they work this way: 

  • Borrowed and repaid in the same transaction
  • No collateral needed
  • Borrow and return the borrowed amount plus a small interest
  • All this needs to happen at the same time, or the transaction will not be approved

Flash loans can be applied in the following kind of scenarios: 

  • To take advantage of crypto price differences in two or more exchanges without necessarily having the principal amount to do so
  • Debt refinancing, or swapping collateral long positions without having to pay the repay the debt of the loan position

#2. Flexible Rates 

Unlike most lending platforms that use either fixed or variable interest rates, Aave implements a “rate-switching” function that allows borrowers to switch between “stable” and “variable” rates, a very handy feature in the extremely volatile crypto market. For high-interest rates, a borrower can opt for the fixed-rate, but for volatile rates that might likely take a dip, they can go for the variable rate. 

Thanks to this new and exciting option, Aave has witnessed particularly strong growth for stable rates loans after their introduction in May 2020. Note that ‘stable’ here does not imply ‘fixed.’ Rather, Aave’s stable loans are more stable variable interest rates that are resilient against wild price swings. This ability to rate-switch gives users more control over their loans by allowing them to choose the best possible rates. 

How to Lend on Aave

Getting started on Save is fairly simple. Visit https://app.aave.com/ and connect using a web 3.0 wallet such as Walletconnect, Coinbase Wallet, or Fortmatic. You can also connect with the Ledger hardware wallet. 

Depositing is easy. Just select an asset and enter how much you wish to lend. Next, allow Aave to access the asset. Then, you’ll need to sign to approve the transaction. Your deposited funds will go to the lending pool, after which you start monitoring real-time how much interest you’re gaining on the Aave dashboard. 

Aave’s interest-earning tokens are known as aTokens, which are similar to Compound’s cTokens. However, unlike the cTokens, aTokens retain the value of the underlying asset and increase only in amount. On the other hand, cTokens appreciate in value with interest.

The LEND Token

LEND, an ERC20 standard token is the native token of the Aave ecosystem. LEND token holders get the right to make their voice heard on any proposals advanced by the Aave team. Such proposals include interest rates, the addition of new assets, liquid configurations, and so on. 

LEND also is burned so as to prevent inflation and increase its value over time. 80% of platform fees are regularly burned on the open market for this end. 

In the future, Aave plans to increase the staking ability of users who’ll then get to participate in protocol governance as well as have a claim in exchange fees in exchange for helping secure the Aave network against malicious borrowers. 

LEND’s distribution was as follows: 

  • 30% to core developers 
  • 20% reserved for user experience development
  • 20% reserved for management and legal
  • 20% reserved for promotions and marketing
  • 10% result for unexpected costs

Which Assets Does Aave Support?

Aave currently supports a variety of tokens, including but not limited to Basic Attention Token (BAT), Synthetix USD (SUSD), Chainlink (LINK), Synthetix (SNX), Decentraland (MANA), Kyber Network (KNC), Ethereum (ETH), Dai (DAI), Aave (LEND), TrueUSD (TUSD), Tether (USDT), Wrapped BTC (WBTC), 0x (ZRX), USD Coin (USDC), Maker (MKR) and Augur (REP).

Who is the Team Behind Aave?

Aave is the brainchild of CEO Stani Kulechov, who originally founded ETHLend. Jordan Lazaro Gustave is the COO, and Nolvia Serrano is the CMO. Both Gustave and Serrano bring over their experience from ETHLend. All in all, the team is made of 22 members with eclectic skills ranging from blockchain, fintech, Ethereum, smart contracts, lending, payments, custodial services, and gaming. 

Aave: Tokenomics 

As of July 30, 2020, Aave is trading at $0.0324118, and with a market cap of $421, 352, 978, it’s the 30th biggest cryptocurrency in the world. Aave has a 24-hour volume of $64, 663,115, and a circulating and total supply of 1, 299, 999, 942. The token’s all-time high was $0.442615 (Jan 07, 2018), and its all-time low was $0.003353 (Sep 06, 2019).

Where to Buy and Store LEND

You can grab some Aave from any of several exchanges, including Binance, MXC, Bilaxy, Bibox, Gate.io, Poloniex, Alterdice, Uniswap, dex.blue, Eterbase, Fatbtc, and Loopring. 

As an ERC20 token, LEND can be stored in any wallet that supports Ethereum. You will not go wrong with any of these choices: Atomic Wallet, Trust Wallet, and of course, the hardware wallets (and hence ultra-secure) Ledger and Trezor. 

Final Words

Given its constant re-invention, Aave’s ghost reference is fitting. Its uncollateralized loans and rate-switching features are two of its radical innovations to ever be seen in the world of finance. And that’s what DeFi is all about: disrupting norms to deliver real value. 

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Crypto Daily Topic Crypto Guides

Here’s What You Need To Know About ChainLink Cryptocurrency

Introduction

Introduction

Introduction

Blockchain has revolutionized the digital industry with its amazing benefits. It has secured the payment methods and has provided people with a brand-new way to trade digitally. There are plenty of crypto platforms that are working on blockchain right now. ChainLink is one such decentralized network that offers real-world data to smart contracts. Link is the cryptocurrency or the digital token of the ChainLink platform, which you can use to pay for the services they offer.

What’s The Issue With Smart Contracts?

Smart contracts are indeed an integral part of the blockchain system, which are basically agreements to evaluate the information entered and execute the conditions. These Smart contracts help in establishing a sense of trust among the traders. The only limitation that smart contracts have right now is the ability to connect with blockchain in a language that both can easily understand. If that limitation has been addressed, the use of smart contracts can be widely enhanced.

Oracle As The Much Needed Solution

Oracle is the ideal solution to all these problems. It is basically a middle software that works as a translator for converting data from the real world to smart contracts and vice versa. Oracles are the recent additions into the blockchain and crypto ecosystem with an aim to bring together off-chain data and on-chain smart contracts. However, there is a loophole that makes oracles less efficient. Centralized oracles will decrease the efficiency of on-chain smart contracts due to the faulty and untrustworthy nature.

How ChainLink Makes a Difference?

ChainLink emerges as a savior in the situation. It is a decentralized oracle network that sources data and information off blockchain and transfers it to blockchain smart contracts. The primary purpose of ChainLink is to minimize the reliability issue with oracles. In a nutshell, ChainLink has found a reliable way to take the information from and for the blockchain in the safest manner.

How Does It Work To Provide More Security?

The ChainLink works by providing data to the purchase in return of the data in a secure way. Purchasers have to select the data, and the providers have to bid on that data. Providers will make a stake of LINK tokens during the bid.

With a view to improving the oracles and data security, ChainLink bought a startup, i.e., TownCrier. The technology of TownCrier helped ChainLink to enhance security with a trusted execution environment.

The Bottom Line

Blockchains are a popular way of securing digital transactions because it uses cryptography to establish security and trust. It is important to understand that each set of blockchain is a universe that needs to be explored. The information transfer in and out of the blockchain can make it vulnerable. To restrict the blockchain from compromising, ChainLink entered the crypto ecosystem as a decentralized oracle network.

Bridging the gap between real-world data and on-chain smart contracts, ChainLink was able to address the pain point. It acts as the middleware between off-chain data and an on-chain smart contract. Today, ChainLink is the most successful and powerful blockchain network that still has the potential to outgrow itself.

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Crypto Daily Topic

Benefits and Drawbacks of Blockchain in Philanthropy

Donating to charity brings a heartwarming experience in knowing that you’ve helped improve someone else’s life. It could be a fundraiser to help settle a hospital bill, feed the homeless, or even raise money for environmental causes. But, have you ever stopped and considered where your donations end up?

Donating to charity brings a heartwarming experience in knowing that you’ve helped improve someone else’s life. It could be a fundraiser to help settle a hospital bill, feed the homeless, or even raise money for environmental causes. But, have you ever stopped and considered where your donations end up?

Donating to charity brings a heartwarming experience in knowing that you’ve helped improve someone else’s life. It could be a fundraiser to help settle a hospital bill, feed the homeless, or even raise money for environmental causes. But, have you ever stopped and considered where your donations end up?

Unfortunately, charitable giving is not as charitable as one would wish. A good number of fundraising organizations are overwhelmed with mismanagement and bad records, which results in lost funds. Others are outrightly fraudsters whose intentions are to siphon funds from unsuspecting donors. 

In a report from UK’s The Guardian news outlet, global development workers admitted that 2 to 5% of funds raised in charities are lost to fraud. This translates to losses of $276 million from a total of 7.46 billion intended for humanitarian aid in a single year. Some organizations have even agreed to dissolve after being found guilty of embezzlement of donors’ funds. 

As the public’s trust in charities declines due to numerous scandals, there’s a new player on the scene poised to change the face of charitable donations forever. This is blockchain technology. 

Where Blockchain can make a difference

Blockchain, a distributed ledger system, can resurrect the image of charities in the following ways: 

1. Promote transparency and accountability

One of the most attractive features of Blockchain for philanthropists is that it makes it possible to trace all the donated funds. All the donated funds are recorded in a distributed ledger, making it possible for donors to monitor the entire sequence of transactions. As such, a donor can be sure the funds will reach the intended recipient, which in turn promotes accountability from the organizations. 

Also, every transaction in the blockchain network is cryptographically encrypted, rendering it immutable. This means that entries cannot be modified but can only be updated by adding new transactions. Not only does this offers unparalleled transparency, but it also minimizes the wastage of funds, thereby building trust between donors and an organization.

An excellent example of a blockchain-based donation system is Charities on the Chain, designed by China’s e-commerce giant – Alibaba. The system accepts donations from customers and allows auditors, the media, and the donors themselves to track information on how the donations are used. 

2. Reduce administrative costs

Besides fraud, charities grapple with expensive administration costs that eventually eat into the total amount for money raised. Sure, some of these overhead costs are unavoidable, such as office supplies and employee salaries. However, expenses such as those incurred when transacting with financial intermediaries can be brought down. Through smart contracts, the intermediaries involved can be reduced, in turn lowering the administration costs. For example, when donating, funds are often sent to a financial institution, which later sends them to the charity organization after taking a cut off the raised amount. Smart contracts can facilitate direct transfer of funds from donors to an organization while also ensuring that the charity receives the funds once certain objectives have been achieved. 

3. Facilitate fast and affordable transactions

Sending donations via traditional banking channels is usually expensive, especially for cross-border transactions. Also, during the transaction, the funds are subjected to taxes in addition to other deductible expenses. However, Blockchain can be used to facilitate the transfer of funds from the donor to an organization at a reduced cost with minimal red tape delays. Moreover, every transaction is recorded on a public ledger in real-time. This, in turn, helps decrease the cost of annual reporting on a charitable organization’s budget, while increasing its overall transparency. 

The donation process becomes even more efficient if an organization uses a native cryptocurrency/token to raise funds. Cross-border transactions will be efficient without a minimal daily limit, as it is the case with conventional money transfers. On the downside, using cryptos to raise funds means that charity organizations will be subjected to capital tax gains. This is especially true in countries such as the United States, where they are treated as assets. Also, digital currencies are usually volatile, which can lead to loss of value. To mitigate this risk, charities can consider accepting stablecoins that are less volatile. 

Potential Risks of using Blockchain in philanthropy 

Despite the advantages, there are few concerns to be considered when adopting blockchain technology in charity organizations.  

i) Regulatory pressure

Although blockchain technology has been around for more than a decade, policymakers are still trying to understand the long-term implications of this technology. So, it’s uncertain how they’ll choose to regulate it. Additionally, for organizations looking to accept cryptocurrencies as donations, they’ll have to bear with unfair tax laws imposed on digital assets. 

ii) Ease of use

Blockchain solutions work differently from traditional systems and are more complex than the latter. As a result, charity organizations face an inevitable learning curve when exploring Blockchain’s potential. As such, besides the high cost of application of blockchain solutions, organizations will also have to spend more resources on training their staff on how to use these solutions. 

iii) Security

While blockchain technology is inherently secure, smart contracts are prone to bugs, which can create security loopholes. Hackers, therefore, can exploit bugs on the code resulting in loss of funds. 

Also, the loss of private keys can as well lead to the permanent loss of funds. Not to mention that the same keys could land in the wrong hands.

Conclusion

It is beyond doubt that blockchain technology has the potential to redefine philanthropy and bring in the much-needed transparency and accountability. But before implementing this technology, charities will need to evaluate the cost of implementation, in terms of finance and management, and then weigh these costs against their charitable objectives. It is crucial to note blockchain technology is not necessarily appropriate for all operations in an organization. There already exist traditional infrastructures that can process transactions efficiently or even better than blockchain solutions. 

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Crypto Guides

Plasma – The Perfect Solution to Ethereum Congestion?

Introduction

Introduction

Introduction

Plasma is an ongoing development of the Ethereum second-layer scaling solutions. After state channels, Plasma will be the second completely deployed scaling solution on the Ethereum mainnet.

What is Plasma?

Plasma is a structure that facilitates the development of child blockchains using the main Ethereum as an arbitration and trust layer. Plasma is primarily being created to meet the demand for specific uses cases that are unavailable on the current Ethereum network.

Understanding Child Chains

The underlying goal of both plasma and state channels is the same, where they try to divert as much transaction bloat off away from the main Ethereum chain as possible.

In case of disagreements, the child chain state update can be reverted to the Ethereum network. The same applied to cases if a user wants to pause transacting on the child blockchains.

On the features front, child blockchains can digest on varying complexity. They are given the ability to have their consensus algorithms, their block sizes, and confirmation times. Their design is relatively flexible for each application. Moreover, some developers are researching the possibilities of child chains within a child chain, and so on.

How secure is Plasma?

As mentioned, Plasma maximizes the use of the Ethereum network as an arbitration layer. In suspect of a malicious part, users can always regress to the main Ethereum chain as a trusted source.

Another feature is that the main Ethereum blockchain and the child chains are connected via ‘root contracts.’ Root contacts are simply smart contracts on the Ethereum network containing the rules guiding each child chain.

Root Contracts and its Necessity

The most important component in the plasma network is the existence of root contracts. Root contracts as a bridge allow users to seamlessly move between the main Ethereum chain and the child chains. As a matter of fact, all assets must be created through the main Ethereum.

Thus, no malicious activity on the child chain can ever be reverted to the main Ethereum chain. For instance, if a user moves some crypto-collectible tokens onto a child chain, they can anytime withdraw from the child chain and the asset on the main chain, only if the user proves they didn’t spend them.

Drawbacks of Plasma

The only considerable drawback of Plasma is the duration taken for the withdrawal of funds. Plasma users must wait for a predetermined arbitration window that typically lasts 7-14 days, while state channel users can instantly withdraw their assets.

The Prospects

The growing congestion in the Ethereum network leads to the creation of frameworks such as state channels and Plasma, which drastically eased the overcrowding in the network. Plasma will allow users to transact with lower fees and higher throughput and help developers scale their dApps. This, hence, can be an excellent opportunity for Ethereum to reach the masses.

Furthermore, the combination of plasma and state channels can help produce a leveraged product. In fact, the developers are already working on building state channels within the child chains. With this implementation, users will incur significantly less or no fee while transacting in the network. Cheers!

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Blockchain and DLT

Reinventing ERP Systems with Blockchain

An Enterprise resource planning (ERP) system is a software used by organizations to manage their operations. From accounting, procurement, project management, risk management, to supply chain operations, ERP systems are indeed the fiber holding all business operations. 

An Enterprise resource planning (ERP) system is a software used by organizations to manage their operations. From accounting, procurement, project management, risk management, to supply chain operations, ERP systems are indeed the fiber holding all business operations. 

An Enterprise resource planning (ERP) system is a software used by organizations to manage their operations. From accounting, procurement, project management, risk management, to supply chain operations, ERP systems are indeed the fiber holding all business operations. 

Usually, the software comes as a suite that includes performance analysis, budgeting, planning, and reporting tools to help boost a company’s performance. For industry-specific companies, ERP providers can design customized software to fit the specific needs of that particular company. 

But as business model dynamics keep evolving, the current ERP systems are struggling to maintain their functionality. An immediate solution would be to build new and improved systems to scale up existing ones. Although doable, building new systems will drain an organization’s resources in addition to compromising other key operational areas. Alternatively, amalgamating the current infrastructure with new-generation technologies is not only affordable but also an ideal way of keeping businesses up to date with technological trends. 

In this case, blockchain technology is the most compelling option, given its core record-keeping capabilities. To see the blockchain’s entry point into ERP systems, it helps to understand the inherent problems ailing the latter. 

ERP Systems Limitations 

First, it’s important to note that ERP systems function more like solutions and less like a product. So, it’s not a generic software that can be shopped right off the shelf and used immediately. That said, the systems come with a predefined functionality – meaning you can’t just add any feature when you need at will. This denies companies the flexibility of continually updating their systems to meet the dynamic needs of their business operations. If a business can’t upgrade its systems, it means that it can’t be competitive enough to offer a superior customer experience. 

Now, upgrading ERP systems isn’t entirely impossible. But as is always the case with updating in-house infrastructure, scaling ERP systems translates to extended downtimes in addition to the expensive costs of this undertaking. So, only large and well-endowed companies can afford to upgrade their ERP systems, which give them a competitive advantage over small and medium businesses. It becomes even more expensive when you factor in the regular maintenance costs required to keep the systems functional. 

On top of it all, ERP systems lack interoperability, meaning they can’t work in collaboration with other systems. This can be detrimental to an organization as it disintegrates its operations. For instance, an organization may have isolated systems for its supply chain operations, accounting process, and inventory management. Yet, these two operations need to work in harmony to minimize operational costs that go into maintaining these systems. Also, as they work in isolation, there is less transparency among the involved parties. In a supply chain, this would mean that the manufacturer, the wholesaler, and retailer operate on different software. Each stakeholder will have to trust the other party will maintain integrity. 

Why integrate blockchain into ERP systems? 

The benefits of integrating blockchain into ERP systems are derived from the fundamental properties of the technology; 

1. Strengthening data security and preventing authorized access 

ERP systems hold confidential data – which, if altered, may result in operational inefficiencies. For instance, ERP systems for accounting need to be secured from manipulation for auditing purposes. To safeguard all data entries, there is a need to integrate enterprise blockchain in ERP systems. 

Each record fed into the blockchain network will be validated and secured from third-party intrusion. The network generates digital signatures based on public-key cryptography. Only those who own these keys will access the data on the chain. 

2. Automation of processes 

Blockchain for ERP systems offers an opportunity for the implementation of smart contracts. The supply chain segment of an organization would benefit immensely from the use of smart contracts as it would mean less paperwork and more secure payments. The smart contracts can be programmed to initiate payments once goods are delivered and even track them throughout the shipping trail. Besides managing invoices, smart contracts can be used to verify inter-company, especially those involving a parent company and its subsidiaries. The transactions will be executed by smart contracts within the pre-set terms and conditions, which eliminate the need for third parties to oversee the transactions. 

3. Promote trust and transparency

Traditional ERP systems have failed to create a collaborative space within an organization or even between two related businesses. As such, when working together on a project, integrity is staked on the participants who, in most cases, fail to honor their end of the bargain. With blockchain ERP, integrity is shifted from the participants and placed on a tamper-proof system that makes it impossible for participants to be bad actors. 

In this case, blockchain works by removing the barriers between various ERP systems, bringing them together to form a single functional unit. For an organization, this would mean that different departments can work collaboratively, increasing the overall productivity of the company. Thanks to the newfound transparency, business owners can trust the credibility of the auditing reports. This is because all accounting data is recorded on an immutable network where any changes to the data are made public for all to verify. 

4. Freedom of customization 

As mentioned earlier, the current ERP systems are designed to function in a predetermined manner. For an ERP system to meet the emerging needs of a business, it has to be customized or designed entirely from scratch. Blockchain, on the other hand, is pretty customizable, especially now that there are a good number of platforms that support building decentralized applications. So, it’s easy to design new and improved blockchain solutions that meet the modern needs of a business. 

Integrating blockchain into ERP systems would, therefore, render them customizable as they are powered by dynamic technology. More so, blockchain is still in its maturation stages – meaning that there’s room for newer solutions as the business models change. As such, ERP systems that are powered by blockchain will not only give businesses a competitive edge but also improve their operations to meet customers’ needs. 

Conclusion 

ERP systems act as the backbone of any business and must process immense amounts of data transparently to guarantee streamlined operations. As businesses aim at increasing productivity, it becomes necessary to upgrade their ERP systems by pairing them with blockchain technology, which provides data security while enabling frictionless execution of business operations. 

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Crypto Daily Topic

Why Tokenization is The Future of Real Estate

The real estate market is one of the oldest markets characterized by slow, paper-dependent processes causing significant delays in the change of property ownership. The transactional friction can be blamed on the complex architecture of the market that involves multiple stakeholders, large amounts of money, and numerous regulations that are dependent on jurisdiction. On top of it all, each transaction has to go through myriad middlemen, from the listing agent to banks and everything in between – resulting in unprecedented transaction costs. 

The real estate market is one of the oldest markets characterized by slow, paper-dependent processes causing significant delays in the change of property ownership. The transactional friction can be blamed on the complex architecture of the market that involves multiple stakeholders, large amounts of money, and numerous regulations that are dependent on jurisdiction. On top of it all, each transaction has to go through myriad middlemen, from the listing agent to banks and everything in between – resulting in unprecedented transaction costs. 

The real estate market is one of the oldest markets characterized by slow, paper-dependent processes causing significant delays in the change of property ownership. The transactional friction can be blamed on the complex architecture of the market that involves multiple stakeholders, large amounts of money, and numerous regulations that are dependent on jurisdiction. On top of it all, each transaction has to go through myriad middlemen, from the listing agent to banks and everything in between – resulting in unprecedented transaction costs. 

Although the structure of the real estate market alone isn’t much of a big deal as every stakeholder has a vital role to play, the resultant dysfunctions it creates needs to be solved as the market keeps on growing. As blockchain technology finds use in almost every industry, the real estate market can also make use of this technology to solve the derailing dysfunctions. This can be done through asset tokenization. 

What is real estate tokenization? 

Tokenization is the conversion of a physical asset into its digital form, which in turn derives/acquires its value from the underlying asset. Once the assets are tokenized, they can easily be divided into smaller pieces and made accessible to a wider pool of investors as a way of raising capital. As such, depending on their investment amount, an investor gets a share of the larger token to act as a representation of ownership. Also, investors can trade their token shares freely on a secondary market based on the current value of the property. 

The issuing, management, and exchange of these tokens is done on a blockchain network, thereby promoting immutable documentation processes, transparency, and traceability. Most importantly, the token investors will have undisputed control over the asset since they own the private keys of the tokens – much in the same way virtual currencies allow users to take control over their finances. 

Benefits of real estate tokenization 

Like in most industries where blockchain has found use, the real estate market is also set to benefit immensely from this technology once realtors warm up to the idea of tokenizing property. Let’s explore some of these benefits: 

I) Improved liquidity

Despite being a safe investment, the real estate market is highly illiquid majorly due to the large amounts of money transacted between the buyer and sellers, as well as the third-parties such as lawyers and banks involved in the transaction. Moreover, due to the large initial investment amount required, potential property buyers are locked out from investing in real estate. 

Property tokenization injects liquidity into the real estate market by allowing assets to be divided into smaller units representing fractional ownership. For instance, a condo going for $1 million can be divided into tokens worth $200 or less, lowering the minimum investment for investors. The tokens can be traded at secondary markets at any time of the day, allowing investors to readily change their assets to cash when they need to. Higher liquidity can also positively influence the value of the asset by removing intermediaries such as the listing agent, bringing an asset’s price closer to its true value. 

The newfound liquidity has the potential to inspire monetization of other aspects of real estate, such as leasing, spurring further development of the entire market. 

II) Automated Processing 

To facilitate the buying and selling of tokenized property, smart contracts can be introduced in the transactions for a seamless and efficient exchange of property ownership. This means less paperwork and almost no intermediaries, which in turn lowers the additional transactional costs. This also speeds up settlements as the tokens contain built-in terms of the contract. 

Smart contracts can also be used to ensure compliance with the laws is maintained. This is especially true for the Know Your Customer (KYC) and anti-money laundering (AML) policies that must be observed in every transaction. Smart contracts will reduce the paperwork involved in these procedures, saving realtors time and money. 

III) Improved market security and transparency 

Property tokens transacted on the blockchain networks are cryptographically secured on the ledger system. Access to these tokens is only limited to the investors who are entrusted with the private keys. This goes a long way into ensuring that property is held only by the rightful owner, minimizing fraud. 

In a similar vein, the distributed ledger system maintains records of all transactions in an immutable and transparent manner, further eliminating the possibility of fraudulent activities. As such, before buying tokens, an investor can review all the past transactions to ascertain the true owner of the property token, whether or not the asking price is realistic or not. This way, there won’t be instances of double-selling nor room for under/overpaying. 

Also, smart contracts further enhance the transparency and traceability of token transactions. In addition to eliminating fraud, the increased transparency brought by smart contracts opens an opportunity for overseas investors to invest in the property market. This translates to more money being channeled into the market, boosting its liquidity. 

IV) Fractional Ownership

In addition to improving liquidity, fractional ownership of property introduces a new investment vehicle through which risk-averse investors can earn passive income. Similar to equities in a security market, tokens can represent multiple owners of a rental property who earn a portion of the rent as passive income. The smart investors can diversify their token portfolio to include land and commercial properties, reducing the overall risk while maximizing returns. 

In theory, tokenization of property offers a myriad of benefits to real estate investors while scaling up the entire market with respect to exponential growth. On the downside, however, tokenization won’t be as easy as many would wish – mainly due to the regulatory hurdles facing blockchain. For starters, many governments across the globe don’t have clear laws governing the issuance of blockchain tokens. Even for those that have already set up laws regulating digital assets view tokens as a type of security or a traditional investment vehicle. This brings in the complex aspect of digital asset taxation, which may scare away investors. 

The issuers of these tokens will also have to invest a substantial amount of time and money in maintaining regulatory compliance with the stringent policies governing digital assets. Even in jurisdictions where the regulations are lenient, marketing property tokens in another jurisdiction where there are different policies will be an uphill task requiring close scrutiny. 

Conclusion

The real estate market has a history of being slow to adapt to emerging technologies. But if the market is determined to do away with long paper processes and slow turnaround time, it has to invest in blockchain technology for the tokenization of property. This will not only solve its long-time problems but also give the market a driver’s seat in the face of modernity and dynamic technological advances. 

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Crypto Guides

Brief Introduction To The Revolutionary ‘Neo’ Blockchain

Introduction

Introduction

Introduction

Neo is an open-source, decentralized blockchain platform founded in 2014 by Da HongFei and Erik Zhang. These are the same duo who started Shanghai-based blockchain R&D company’ OnChain.’ Neo is often known as Ethereum of China due to its similarities, but the project has its own set of goals, which we will be looking further in this article.

Neo is formerly known as Antshares, and the rebranding happened in 2017. Since the rebranding, the company’s motive is to achieve a smart economy using blockchain technology and an essential feature of blockchain smart contracts to issue and manage digitized assets.

Neo wants to achieve a smart economy by giving digital identity to digitize assets and further use automation in the management of digital assets using smart contracts and henceforth achieving a smart economy using a distributed network.

Digital Assets + Digital Identity + Smart Contracts = Smart Economy.

Let us look into the three components that make up the smart economy in detail below:

Digital Assets

Digital Assets are anything that exists in a binary format and with a right to use. The right to use property is essential for a digital asset to exist. Any asset that can be stored digitally can be said as a digital asset. Some examples of digital assets include logos, images, illustrations, presentations, spreadsheets, etc. Assets can be easily digitized on the neo platform is a transparent, trustworthy, and auditable manner. The Neo platform allows the linking of a physical asset with a digital avatar using digital identity, which is valid by law. Thus, the platform protects the assets.

Two forms of digital assets

Global Assets: These are assets that are recognized by all smart contracts and clients.

Contract Assets: These are assets that are only recognized by specific smart contracts and cannot be used in other contracts

Digital Identity

Identity can be defined as a set of attributes that relate to an entity. Neo enables the creation of identity information of individuals, organizations, and entities in an electronic form, thus making it digital. It does this by verifying identity using fingerprints, facial recognition, voice recognition, and SMS. For the smooth functioning of digital assets, digital identity is essential. Neo uses X.509 digital identity standard, which is a widely accepted digital issuance model.

Smart Contracts

Smart contracts are any piece of self-execution code when a predefined specific set of instructions are met. Smart contracts are immutable and should be able to run on multiple nodes without compromising its integrity. Neo requires three essential features for smart contracts; they are deterministic, terminable, and isolated. Smart contracts can be codes in any mainstream coding language like C#, Java, Go.

Key Characteristics of Neo

🔗 Neo uses dBFT, Delegated Byzantine Fault tolerance model for consensus mechanism. In dBFT consensus, nodes are chosen by Neo holders to generate blocks and validate the transactions. In turn, they have to hold certain Neo tokens as a threshold and maintain some performance requirements.

🔗 Neo’s transaction speeds are considered to be one of the highest among the available with 1000 TPS. High transactions per second lead to centralization by only a few users mining and validating the transactions.

🔗 The platform supports all the mainstream coding languages for smart contracts, which helps prevent developers from learning new languages to work on the platform.

Neo has two local tokens, Neo and Gas. Neo is used to create blocks and manage the network while Gas is the fuel that powers transactions in the Neo system.

Many Governments across the world are trying to incorporate blockchain functionalities into the day to day activities of the running of the government to achieve a smart economy. Neo, with its faster transaction speeds and with its core fundamentals, enable the goal to accomplish in a much quicker fashion.

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Crypto Daily Topic

What are oracles in smart contracts

Ethereum brought to life the idea of smart contracts – which were initially proposed by Nick Szabo in the early 90s. After the introduction of blockchain, smart contracts were designed to run on this new technology, where they autonomously and transparently execute a function when specific conditions are met. Thanks to their fundamental trust-less feature, smart contracts have eliminated the need for third-parties, making transactions frictionless and more affordable.

Smart Contracts | Forex Academy

Ethereum brought to life the idea of smart contracts – which were initially proposed by Nick Szabo in the early 90s. After the introduction of blockchain, smart contracts were designed to run on this new technology, where they autonomously and transparently execute a function when specific conditions are met. Thanks to their fundamental trust-less feature, smart contracts have eliminated the need for third-parties, making transactions frictionless and more affordable.

Ethereum brought to life the idea of smart contracts – which were initially proposed by Nick Szabo in the early 90s. After the introduction of blockchain, smart contracts were designed to run on this new technology, where they autonomously and transparently execute a function when specific conditions are met. Thanks to their fundamental trust-less feature, smart contracts have eliminated the need for third-parties, making transactions frictionless and more affordable.

Even though they work automatically, smart contracts have to be fed an input so as to generate the desired output. This is where the concept of oracle comes into play. Essentially, an oracle in this context is a data feeder that provides smart contracts with inputs, consequently determining the output.

How it works

Think of a gamble between two people; Brad and Sam. Suppose they both place their wagers on the outcome of a basketball game. Brad bets on team A while Sam bets on team B. Both Sam and Brad agree on terms of the bet and lock their funds in a smart contract agreement.

For the bet to be settled and the funds released to the winner, the smart contract has to depend on a trusted oracle to feed it the necessary data – in this case, the results of the basketball game. At the end of the game, the oracle queries a reliable data source to find out the winning team, after which the data is relayed to the smart contract. The funds are then sent to either Brad or Sam, depending on the game’s outcome.

The Oracle Problem

From the cited instance above, smart contracts must have access to off-chain data – data that is stored outside the network – for them to be used in real-world cases. To bridge the gap between off-chain data and smart contracts, centralized oracles have been tasked with verifying and authenticating the external data, or rather the input that guides the execution of smart contracts agreements.

However, centralized oracles betray the decentralized tenet of the blockchain revolution. Even worse, they are vulnerable to manipulation, which ends up compromising the entire contract. This problem has incentivized blockchain developers to come up with decentralized oracle solutions in the spirit of maintaining data integrity. As such, decentralized oracles leverage the abilities of blockchain by acting as a layer that queries, authenticates, and protects external data from manipulation before it’s fed as input into a smart contracts agreement.

Types of Blockchain Oracles

Blockchain oracles come in various forms which include:

Software Oracles

Blockchain software oracles are the most common type of data authenticators. They verify information from such online sources as websites, online public databases, or any other data source connected to the internet.

These oracles are considered to be the most powerful type of blockchain oracle due to their inherent interconnectedness with the internet. This is especially true considering the proliferation of the internet in almost all spheres of life.

As such, software oracles are relied on to provide the most up-to-date information to smart contracts. Software oracles are, therefore, best suited for use in verifying asset exchange rates, digital asset prices, and flight information in real-time.

Hardware Oracles

Hardware oracles are tasked with translating real-world data into a digital form that can be interpreted by smart contracts. For this reason, hardware oracles rely on electronic data readers like barcode scanners, that translate information into verified digital values before being loaded as input into a smart contract.

A good example of their use is in the supply chain industry, particularly the tracking of goods. When sending goods to a certain location, they are tagged with an RFID tag whose data is read by a scanner and fed into the smart contract agreement.

Inbound and Outbound Oracles

Inbound oracles transmit information from external sources to a smart contract, whereby upon receiving the data, the contract initiates the path of execution. From the example above on the basketball game, the source of information providing the final results of the game can be classified as an inbound oracle.

Once the information is loaded into the smart contract, the terms of the bet are executed. As such, inbound oracles can be termed as “contract execution triggers.” They can be used in asset trading whereby if an asset reaches a specific price, the contract will then execute the buying or selling of the asset.

Outbound oracles are the direct opposite of inbound oracles in that they relay information to external sources. A good use case scenario of an outbound oracle can be found in a smart lock that is opened by depositing funds. Once it’s verified that the funds have been deposited in the designated address, the smart contract sends this information through an outbound oracle, which then relays the data to an external mechanism that eventually unlocks the smart lock.

Consensus-based Oracles

As the name suggests, consensus-based oracles work by collaborating data from multiple sources. For example, in the basketball game example cited above, a consensus-based oracle would work by verifying the game results from several sources. If all the sources provide the same data, it ascertains the accuracy and, therefore, the terms of the smart contract can be executed.

As far as data integrity is concerned, consensus-based oracles stand as a viable solution to data manipulation. Think of a smart contract agreement that relies on a single data source. Counterparties could alter the information – resulting in unfair settlement of the contract. However, when using consensus-based oracles, any discrepancies in the data due to manipulation can be noted and resolved.

For instance, if the compromised data source provides different information from the other verified sources, the smart contract can be programmed to the agreement based on the data from the other sources whose information is in sync and correct.

Conclusion

Oracles, whether centralized or decentralized, play a vital role in bringing blockchain into the real world. They widen the scope of blockchain’s access to information, bringing its capabilities to various use cases. Decentralized oracles, in particular, safeguard data integrity, eliminating the systematic risk from the blockchain ecosystem. This ensures contracts are executed securely and in a trust-less manner, facilitating the adoption and maturation of blockchain technology.

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Blockchain and DLT

Is it Game-over for Ethereum as we usher in Radix smart contracts?

Imagine a utopian world without lawyers. A world where two people can enter into an agreement with absolutely no worries that one party may breach it and get away with it. A world run by digital contracts written in computer code. Yes, it is possible, and it is already happening, thanks to the invention of smart contracts.

Imagine a utopian world without lawyers. A world where two people can enter into an agreement with absolutely no worries that one party may breach it and get away with it. A world run by digital contracts written in computer code. Yes, it is possible, and it is already happening, thanks to the invention of smart contracts.

Imagine a utopian world without lawyers. A world where two people can enter into an agreement with absolutely no worries that one party may breach it and get away with it. A world run by digital contracts written in computer code. Yes, it is possible, and it is already happening, thanks to the invention of smart contracts.

What is a smart contract?

A smart contract is a piece of technology that may eventually do away with intermediaries. This is because it is a trusted agreement between two people written in computer code. It does not need a third-party to ‘witness’ or even enforce.

The smart contracts you have heard of are probably those that run on Ethereum’s blockchain platform. After all, the platform that was developed especially for developers to write smart contracts on and run on them. While it is not the only decentralized ledger to implement a general-purpose smart contracts feature, it was among the first.

Some experts argue that new decentralized ledger platforms, in particular Radix, have come up with better ways to implement smart contracts. Smart contracts on such platforms offer both the developers and users more than the blockchain platforms have to offer.

History of smart contracts

The idea of a smart contract was first conceptualized by legal scholar and cryptographer Nick Szabo back in 1994. He discovered that a self-executing contract was a possibility if there was a way to implement a decentralized ledger. This idea was way ahead of its time, and the invention of blockchain, the first kind of distributed ledger technology or DLT, is what made its implementation possible. 

A smart contract is an agreement converted into computer code, run and stored on a distributed system, and supervised by a network of computers, also referred to as nodes. Such a contract is ‘smart’ for two main reasons:

☑️It contains ledger feedback that makes it practical for use in transferring funds and receiving products and services.

☑️The contract is trusted by both parties that enter into it. It is therefore executed transparently and without the need for a middleman to oversee it.

The problem with current smart contracts

Smart contracts are one of the most utilized applications of decentralized ledger technology. Bitcoin was the first DLT to support smart contracts. It used them in payment channels, time locks, multisig accounts, and escrows. However, the limitations of the underlying blockchain technology greatly hinder its application.

Ethereum was developed with smart contracts in mind. The developers understood the limitations of the Bitcoin platform and chose to design a new platform that replaces the restrictive Bitcoin’s script with another that is more versatile. This would allow developers to build their own applications that use the platform’s smart contracts capability.

Ethereum’s smart contracts application platform may be the most popular today, but it has glaring weaknesses that it may never be able to overcome. This is because of the limiting factors of the blockchain platform and not the platform design or development. The most notable are:

☑️Blockchain does not scale very well. The concept of a ‘chain of blocks’ is a very powerful one, not only because it guarantees data integrity and necessitates trust between parties in the contract, but also because it has proven to have the capability to disrupt industries.

However, blockchain-based systems are slow and get even more sluggish as the chain grows longer with more blocks of transactions added to the chain.

☑️The consensus protocols used by blockchain systems are at a high risk of centralization.  Blockchains use either Proof-of-Work (PoW) or Proof-of-Stake (PoS) consensus protocols which carry certain degrees of different potential dangers.

It would be justifiable to say that even today, no blockchain system is absolutely decentralized.

☑️Blockchain-based smart contracts place a lot of burden on the developer. Creating an app on the Ethereum platform, for instance, involves creating the basic rules for how the app should behave and implementing its security features in the code. Even building a simple token system on Ethereum is still a very complicated affair.

For a technology that is intended for transactional systems, blockchain-based smart contract platforms are very unappealing to developers.

The future of smart contracts

The world has had a taste of the benefits of smart contracts built and run on decentralized systems, and there is no going back. Since blockchain, and its consensus protocols will never allow for global scalability and 100% decentralization, the world will have to adopt something better for smart contracts. The good news is that it is already here!

The ideal decentralized ledger (DLT) would have all the benefits that blockchain has to offer, and without scalability and consensus problems plaguing blockchain. Radix is such a platform. It is highly efficient and fast, but most importantly, it is scalable.

Radix is designed to have two layers: the Radix Ledger, the base platform that implements DLT, and the Radix Engine, which is the application layer on which transactional rules of the DLT are enforced. The Radix Ledger combines a distributed database ledger (which rakes in all the benefits of blockchain) and a one-of-a-kind consensus called Tempo.

Unlike blockchain, Radix leverages the causal relationships of events in the distributed ledger to create an absolute order of events using logical clocks to partially order events and vector clocks. This design ensures that the distributed system is faster and more efficient than any other DLT in existence. It also detects and prevents protocol violations with greater accuracy.

Why is Radix the future of smart contracts?

Bitcoin was a huge success as digital cash for the simple reason that it was modeled after real-world money, and it enforces its contracts the way cash works. The developers of Radix, not wanting to reinvent the wheel, modeled their revolutionary DLT after real-world business assets and transactions to make it easier for developers to work on, but without compromising its two primary features: trust and security.

The Radix smart contract platform makes it easy for a developer to map out business assets on the already-built Radix components. The platform will offer a wide range of easily customizable components that developers can use to define the assets to meet their applications’ transactional requirements.

Since development is greatly simplified on Radix, the developer will get to invest more effort in modeling the behavior of the business processes to be enforced rather than wasting time creating it from scratch using a different language. This is so because Radix Engine Library comes with a ton of models to create almost any common asset transactional system. It also takes a shorter time and less effort even for new developers to learn and create smart contracts on the platform

Categories
Cryptocurrencies

Enjin Coin: How is Blockchain Impacting the Gaming Industry?

Blockchain was ideally developed to facilitate a rather simple purpose: to power a decentralized, peer-to-peer, and ultra-secure digital currency – Bitcoin. In the beginning, no one could have conceived the sheer power that the technology wielded, or predicted the technological revolution it would inspire a decade or two later. From healthcare to the food industry, banking finance to gaming, blockchain is impacting virtually every industry. 

Blockchain was ideally developed to facilitate a rather simple purpose: to power a decentralized, peer-to-peer, and ultra-secure digital currency – Bitcoin. In the beginning, no one could have conceived the sheer power that the technology wielded, or predicted the technological revolution it would inspire a decade or two later. From healthcare to the food industry, banking finance to gaming, blockchain is impacting virtually every industry. 

Blockchain was ideally developed to facilitate a rather simple purpose: to power a decentralized, peer-to-peer, and ultra-secure digital currency – Bitcoin. In the beginning, no one could have conceived the sheer power that the technology wielded, or predicted the technological revolution it would inspire a decade or two later. From healthcare to the food industry, banking finance to gaming, blockchain is impacting virtually every industry. 

Enjin Coin is a cryptocurrency project that is taking advantage of blockchain to offer gamers, developers, publishers, and other stakeholders in the gaming industry a fast and safe solution to manage virtual goods and realize real value.

In this piece, we’ll shine more light on this exciting project and discover its offerings to gaming communities.

What is Enjin Coin? 

Launched in November 2017, Enjin Coin (ENJ) is a cryptocurrency and Ethereum-based blockchain platform that allows game developers to integrate crypto features into games and apps without necessarily having blockchain skills. As stated in the project’s white paper, ENK is “a cryptocurrency (ERC20 Token) and smart contract platform that gives game developers, content creators, and gaming communities the required crypto-backed value and tools for implementing and managing virtual goods.”

Wat is ENJIN coin - Forex Academy

Enjin company was established in 2009 and has, for the past decade, been empowering game lovers to derive more value from the game industry. It is committed to helping game companies increase revenue and maintain a competitive edge in the industry. 

With ENJ, Enjin hopes to be an industry leader in what it sees as an inevitable transition into a blockchain way of doing things in the long run. The Enjin coin platform comprises a suite of software development kits (SDKs) that game developers can use to integrate blockchain-based solutions into gaming. The blockchain initiative will go a long way in reducing the high fees and reducing the lack of transparency that is so rife in the gaming industry.

The coin had its pre-sale in August and September 2017 and raised over $12 million worth of Ether (38,800 ETH). The pre-sale was closely followed by the public sale, in October 2017, where the project raised an additional $23 million. 

How Does Enjin Coin Work?

Enjin Coin is an ERC20 token that runs on the Ethereum blockchain. This makes the platform a cryptocurrency and a smart contract platform. The project is also looking to adopt the Raiden network – Ethereum’s version of the Lightning Network. Its key operational features include:

1. Virtual Goods

Thanks to Enjin Coin, game developers will be able to create tokens for different game communities – using Enjin Coin as the parent currency. This lends the tokens the benefits of crypto (speed, safety, security, and low fees) while maintaining the uniqueness of their respective platforms. These tokens can be exchanged for ENJ at any time. 

Virtual goods can be pretty much anything used in the gaming world, including entire planets, swords, guns, spaceships, cosmetic upgrades, castles, and gaming characters. These virtual goods have real-life value, thanks to Enjin Coin serving as their parent currency. The process by which users create virtual goods via Enjin Coin is referred to as minting. Users can mint goods with whichever quantity of ENJ. The more coins you use to mint an item, the more value it will possess. 

Gamers can acquire these virtual goods either by purchasing or during giveaways, promotions, or rewards. They can also trade/exchange them in a safe, secure, and fraud-free environment. For instance, you can exchange a gun for a planet, sell a spaceship for ENJ, buy a character with ENJ, etc. 

These goods are safely kept in a decentralized and uncensorable environment – and are thus not controlled by anyone. This means you get to own and control your virtual goods, as well as have the ability to prove ownership. This is important, especially if the game or server suffers a malfunction or your account gets hacked.

2. Payment Gateway

The Enjin Coin platform also features a payment gateway that allows users to create customized shopping carts, manage invoices, refunds, emails, and text notifications. It also includes a widget through which you can accept ENJ and any other type of coin payments. Transactions cost is low, and there are no hidden charges.

The platform’s Smart Wallet (more on that below) allows you to execute automatic payments for games from websites that you have listed as ‘Trusted Platforms.’ This feature injects more speed and trust in transactions.

3. Smart Wallet

Enjin Coin’s ‘Smart Wallet’ provides support for a lot of the platform’s functions. First off, it facilitates payments via Trusted Platforms and allows you to exchange currencies and virtual goods outside of your gaming account to any other Smart Wallet user. You can also initiate transactions through the ‘Transaction User,’ as well as create settings and thresholds that can automatically block illegitimate transactions.

Smart Wallet features a “top-of-the-line” security infrastructure complete with a 12-word recovery phrase that enables you to recover your funds in case you forget the password for your Wallet. Additionally, the Wallet has its own proprietary virtual keyboard that further guards against data sniffing. It also deletes any and all sensitive info after transactions, rendering it safe even if it were to be hacked.

4. Efinity

Enjin Coin plans to unveil Efinity – a technology like Bitcoin’s Lightning Network, which features multiple game channels that will allow games to handle infinite volumes of transactions blazingly-fast and with near-zero transaction fees. These transactions will be trustless, blockchain-verified, and support millions of players at any time. Other functionalities will be:

  • Token transfers and approvals
  • Melting tokens
  • Escrow capability
  • Metadata for game items
  • Token bundles
  • Non-fungible tokens
  • Whitelist feature for bound tokens

Can Enjin be Integrated with the Actual Game? 

Yes. The Enjin Content Management System supports plugins that can integrate with the majority of players’ favorite games. Some of the popular games supported today include Dissolution, Forgotten Artifacts, Shield of Shalwend, Age of Rust, Forest Knight, War of Crypto, Battlefield 1, World of Warcraft, Cats in Mech, Afterverse, The Six Dragons, Space Misfits, and Minecraft.

What’s Enjin Coin’s Future Prospects? 

Enjin Coin may be relatively new to the gaming industry, but several factors point to its future success as a cryptocurrency project.

These include:

  • An already existing marketplace trusted by millions of gamers across the globe.
  • ENJ is an ERC-20 token that enjoys multi-exchange and multi-wallet support. Apart from ERC-20, Enjin also supports ERC-1155 smart contracts that enable the tokenization of both fungible and non-fungible gaming industry assets.
  • It has secured a partnership with industry heavyweights such as Samsung, Unity, PC Gamer, Ubisoft, NRG, and other trusted sports brands. 

Tokenomics of Enjin Coin

As of May 26, 2020, Enjin Coin is trading at $0.194120, with a market cap of $159, 133, 893, while ranking at #44 in the overall crypto market, according to Coinmarketcap. It has a 24-hour volume of $36,370, 221 and a total supply of 1, 000, 000, 000 ENJ. The coin’s all-time high was $0.493384 ( Jan 07, 2018), with an all-time low of $0.015620 (Nov 02, 2017).

Where to Buy and Store Enjin Coin

ENJ is listed on several exchanges, including Binance, Coinswitch, Cointree, Changelly, and KuCoin. Popular exchange Coinbase does not list ENJ.

Being an ERC-20 token, you can store ENJ in any Ethereum-compatible wallet like MyEtherWallet, MetaMask, Mist, and Geth. You could also opt for hardware wallets like Ledger Nano and Trezor. 

Final Thoughts

Enjin Coin provides gamers from all around the world with the blockchain benefits of speed, security, and decentralization. It’s helping inject more transparency in the gaming industry and provide gamers with true and absolute ownership of their virtual goods.

The project already has a solid background of Enjin – a company that is trusted by millions of users across the world. Only time will tell if the project can continue with its streak of success.

Categories
Crypto Guides

Formal Verification – A Method That Makes Smart Contracts Extra Secure!

Introduction

Introduction

Introduction

The smart contracts are now used extensively in the crypto and blockchain space for various use cases, especially for transactions involving a very high volume of money. Hence, it has been more critical than ever to check out smart contracts for any vulnerabilities. These vulnerabilities are the reasons for hacking some of the cryptocurrency platforms, even though the blockchain network is very secure. Hence the timely audits and formal verifications are must both concerning hardware and software to ensure optimal security.

What is Formal Verification?

Formal verification is a method used to check whether the software of hardware systems matches the intended requirement. A particular type of mathematical technique is used to know the intended requirement matches or not. Using these mathematical techniques to check the level of the algorithm of correctness as per the requirement is known as formal verification.

Testing hardware or software with formal verification can be broken down into 2 phases, validation, and verification. Validation determines whether the product meets the user’s needs while verification is testing whether the product works as per the specifications provided.

While formal verification used to be done mostly for the hardware components, it is increasing the testing in software components as well. As there is no third-party involvement in vast transfers of the money, these are autonomous transfers. Hence, smart contracts should be robust enough without any faults.

Why is Formal Verification used for Smart Contracts?

Ethereum is a Turing complete machine, started utilizing the concept of smart contracts. Hence an analysis has been done on around one million smart contracts of Ethereum to check their robustness. It has been found that nearly around 32,000 contracts are faulty. The contracts are seen to be flawed because they were found to either lock the funds indefinitely or release the funds to arbitrary users, and anyone could kill the contract.

Given the nature of the immutability of smart contracts, if these problems aren’t detected before the deployment of the agreement, it will create serious issues once the code is deployed.

Platforms using formal verification

Many platforms that are using smart contracts robustly are trying to integrate formal verification into their platforms. Let us see some of them below:

Cardano

Cardano’s smart contract language is Plutus, which is based on Haskell. Cardano is basically written in Haskell. Cardano is designed with the Cardano computational layer, which by default consists of two layers while one allows formally specified languages used for checking the code of the smart contract, and the other is a defined officially virtual machine and language framework. The default layers’ goal is to check the smart contracts to avoid severe vulnerabilities in smart contracts without any additional requirements.

Ethereum

Ethereum has been trying to incorporate formal verification for a long time now since it has many smart contracts functioning on the platforms. They have even come up with a publication called “making smart contracts smarter.” This publication focuses on smart contracts bugs and mainly focuses on ways to mitigate them. This includes the change in operational semantics of Ethereum to inbuilt formal verification.

There are certain challenges in implementing formal verification in the Ethereum platform. One is gas limits, and the other one is its solidity programming language. To understand solidity, it should be compiled into bytecode. The compiler changes rapidly, so the verification tools should be in tandem with the speed of the compiler.

Conclusion

Measuring the positive impact of formal verification in the smart contracts will take some time since the adoption is slow. Many are realizing just yet the vulnerabilities of smart contracts, and given its substantial financial transactions, the weaknesses should be captured effectively and curtailed at the very beginning to restrict the losses.

Categories
Cryptocurrencies

Ethereum 101: Here Is Everything You Need to Know About Ethereum Blockchain

Any newcomer in the crypto sphere will soon notice the fuss around Ethereum – being one of the most talked and written about cryptocurrencies and the second most popular after Bitcoin. After breaking out in 2015, Ethereum has inspired not just crypto but the entire tech space for its novel offerings, which showed everyone that blockchain could be used for more than just digital money.

Ethreum_Forex Academy

Any newcomer in the crypto sphere will soon notice the fuss around Ethereum – being one of the most talked and written about cryptocurrencies and the second most popular after Bitcoin. After breaking out in 2015, Ethereum has inspired not just crypto but the entire tech space for its novel offerings, which showed everyone that blockchain could be used for more than just digital money.

Any newcomer in the crypto sphere will soon notice the fuss around Ethereum – being one of the most talked and written about cryptocurrencies and the second most popular after Bitcoin. After breaking out in 2015, Ethereum has inspired not just crypto but the entire tech space for its novel offerings, which showed everyone that blockchain could be used for more than just digital money.

This article shines a light on the most nagging questions about Ethereum for crypto veterans and novices alike. From “what is Ethereum?” to “how do I mine Ethereum?” to why you should care about Ethereum, we cover it all.

What is Ethereum?

Ethereum is a public, distributed, and blockchain-based platform that allows individuals to create smart contracts and decentralized applications (DApps). Smart contracts are just like traditional contracts involving two or more people who come to an agreement on something. Except, smart contracts are self-verifying and self-executing and hence do not need intermediaries. Decentralized applications are a new kind of application not owned or controlled by third parties and, for this reason, are uncensorable.

How is Ethereum Different from Bitcoin?

Bitcoin was the first blockchain. It originated the idea of a public, open-source, decentralized, and immutable ledger system to verify, secure, and replicate transaction data across thousands of computers around the globe.

Ethereum takes the concept of Bitcoin and expands it. While Bitcoin was created solely as a peer-to-peer electronic cash system through which users can transfer value, Ethereum allows developers from anywhere to run code atop the network and create amazing applications. Applications can be of any nature really: be it voting, games, health records, finance, prediction markets, and more.

How Does Ethereum Work?

Ethereum is a decentralized platform, meaning no one owns it, and no one can delete records or censor it. It is decentralized courtesy of being distributed. The distributed status of Ethereum means anyone can access, see, and download the Ethereum ledger.

Think of a ledger that’s operated by several people with equal access and control. Each maintains a list of all transactions, and all records must be pre-approved by all parties. In this way, no one can modify, steal, or manipulate the data. The Ethereum blockchain operates much the same way, except that it’s thousands of people involved this time.

Transactions are verified by ‘miners’ who check the authenticity of transactions before adding them to the blockchain. Once a transaction goes on the blockchain, it’s immutable, meaning it can’t be deleted or reversed – by anyone.

The Ethereum blockchain and others like it, such as Bitcoin, have one security flaw known as  a ‘51% attack.’ This is a scenario in which an entity takes control of more than 50% of the computing power of the network.

This would essentially be holding the network hostage – and it would allow the perpetrator to double-spend coins, prevent transactions, and stop miners. While a 51% attack is plausible, it’s extremely rare. This is because for one to control over 50% of the computing power of a blockchain network, they would require an enormous amount of resources that are too expensive. Even the most funded person would find this an extremely tall order.

What Is Ether?

Ether (ETH) is the native cryptocurrency of the Ethereum blockchain. Developers use Ether to pay for the execution of commands on the Ethereum network. It’s also a tradable cryptocurrency and a digital store of value.

Where does Ethereum Derive Value? 

Ethereum derives its value from its ability to support smart contracts and a variety of decentralized applications. Although multiple other blockchain projects are taking after its model and are its direct competitors, Ethereum has the headstart advantage – courtesy of being the pioneer smart contracts and DApps blockchain.

Ethereum enables fast, secure, and inviolable processes – from contracts to voting, to record-keeping, and more. Usually, these processes would take days and significant amounts of money. Ethereum proposes to change this.

How Can I Mine Ethereum?

Ethereum mining utilizes a proof-of-work (PoW) consensus mechanism for verifying and confirming transactions.

PoW involves miners generating a random string of numbers (running the ‘hashing script’) until one of them finds the correct one. When that happens, they will broadcast the proof to the rest of the network, which will then allow them to confirm the next block of transactions. The idea is to ensure that anyone who gets to verify blocks has invested significant computational power (proof of work).

The PoW process involves miners competing with each other to find the solution first. The more guesses your machine can make per second, the better your chances of finding the solution fast and earning a reward – known as ‘miners reward.’ Currently, the successful mining of a block on the Ethereum network gets a miner rewarded 2 ETH. The reward was 3 ETH up until the Constantinople upgrade in 2019.

Ethereum mining is a straightforward process as long as you have the right equipment. First, you need to install two software packages. One of these is an Ethereum client that connects you to the Ethereum network and synchronizes the whole ledger, allowing you to see real-time the activities of all other network participants. It also avails all the data you need to start mining.

Ethereum clients are written in Geth and Parity, which are the blockchain’s most popular programming languages. The client’s come equipped with comprehensive instructions for installation.

The next thing is to install the mining software. The mining software is responsible for handling the guesses, while the client is responsible for updating the ledger – in real-time.

Beginner miners may find it more profitable to join a mining pool rather than go solo. A mining pool is a group of miners who combine their hashing power so as to improve the chances of finding the correct guess faster and earn rewards. The rewards are then split in proportion to the computational power each contributed.

Ethereum will not rely on mining forever, though. The network plans to ditch proof-of-work and transition into proof-of-stake (PoS). Unlike proof-of-work, which relies on computational power, proof-of-stake relies on stakeholders to secure the network and achieve consensus. PoS is not only faster but also consumes far fewer resources than PoW.

How to Buy Ethereum

Ethereum is the second most popular cryptocurrency, and so grabbing some Ether for yourself should be pretty straightforward.

One of the most popular ways to buy any cryptocurrency is to do so via a crypto exchange. Exchanges are platforms where people can buy and sell all manner of crypto. As of now, there are countless crypto exchanges available. Always ensure to purchase your crypto from a trusted and verified exchange. Some options include Coinbase, Binance, Huobi, Kraken, CoinEx, eToro, Coinswitch, BitMex, Changelly, Kucoin, BitStamp, Poloniex, and so on.

Alternatively, you could use peer-to-peer services, such as LocalCryptos, which allows you to transact directly with a local person selling crypto.

Once you grab yourself some Ethereum, you’re going to want to guard it jealously. This means keeping it in a safe place where hackers cannot reach. The best option is a hardware or paper wallet – which is both offline and impossible to get hacked, fall prey to phishing scams, and so on. Storing your coins in an exchange is a complete no-no. Exchanges are notorious for getting hacked, and there is no guarantee that you will get your money back should this happen to your exchange.

How Much Does Ethereum Cost? 

Like any cryptocurrency, Ethereum is subject to volatile and unpredictable price changes, making it impossible to predict a definitive price for the currency at any given time.

As of May 19, 2020, Ethereum is trading at $210.16. This is a far cry from its all-time high of $1432.88 on Jan 13, 2018. But it’s a marked improvement from its all-time low of $0.420897 in 2015.

Buying Ethereum involves speculation, just like for any other crypto. If you have the money now, but it’s not enough to quite hit the mark, you can wait until the price fluctuates down and swoop in.

Fascinatingly, Ethereum is divisible up to 18 decimal places. This means you can buy as little as 0.000000000000000001 Ethereum. You can buy whichever amount you want, whether it’s 1%, 40%,50% and so on.

Why Should I Care about Ethereum?

You should care about Ethereum because it has the potential to revolutionize how we do things across industries. Ethereum is also one of the stalwart cryptocurrencies – not “making a splash today and gone tomorrow.” What’s more, organizations such as the Ethereum Enterprise Alliance are designed to drive the adoption of Ethereum blockchain technology across industries, pushing it closer to the mainstream.

For this reason, you can be assured the currency is a guaranteed, long-term store of value. Despite competitor projects emerging, Ethereum has the star and pioneer power to keep it ahead of the curve.

Categories
Cryptocurrencies

The Top 5 Smart Contracts Platforms

In its simplest form, a smart contract is a program that verifies and enforces the execution of a contract in a blockchain network. The concept was first proposed by an American computer scientist who is also credited for inventing the first-ever digital currency – Bit Gold. However, the digital coin was never implemented partly due to the ‘double-spending’ problem. 

In its simplest form, a smart contract is a program that verifies and enforces the execution of a contract in a blockchain network. The concept was first proposed by an American computer scientist who is also credited for inventing the first-ever digital currency – Bit Gold. However, the digital coin was never implemented partly due to the ‘double-spending’ problem. 

In its simplest form, a smart contract is a program that verifies and enforces the execution of a contract in a blockchain network. The concept was first proposed by an American computer scientist who is also credited for inventing the first-ever digital currency – Bit Gold. However, the digital coin was never implemented partly due to the ‘double-spending’ problem. 

With the advent of blockchain technology, smart contracts were given the ability to be immutable. This made it impossible for any party to copy or alter transactional data, thereby eliminating the double-spending problem as well as the need for intermediaries. As such, anonymous parties can engage in transparent and irreversible transactions without an external enforcement mechanism.

As the industry continues to mature, there have been multiple smart contract platforms available in the market, each with its own distinguishing features and functionalities. Although it provides diverse options to choose from, it can be overwhelming for new developers to choose the right platform on which to build their decentralized applications or exchanges.  

What Makes a Good Smart Contract Platform? 

Before we can look into some of the best smart contracts in the market right now, it helps to understand the criteria for choosing the right platform. 

To most developers and investors, the value of the underlying token is taken to be the ultimate indicator of a good smart contract platform. But considering the volatility of a token’s value, the price may not be a good indicator after all. If you are interested in a platform that is set to have a long-term future, consider the following factors: 

  • Number of Developers

For a smart contract platform to thrive, it needs to have a good number of active developers in its ecosystem. The number of developers can be equated to the public’s interest. This also helps enhance collaboration in the platform, which is beneficial to new developers joining the community.

  • User Experience 

When choosing a smart contract platform for your dApp, you want one that will make it easy for users to interact with the application easily. Some platforms require users to not only create an account but also hold a specific number of the underlying token. For dApp users who are already familiar with blockchain technology, these requirements may not be a problem. But for the average user, such requirements are an entry barrier. The idea here is to choose a platform with fewer technical requirements in order to attract a wide range of users. 

Best performing smart contract platforms.

1. Ethereum

Ethereum is one of the most popular smart contract platforms that allow developers to build decentralized apps through its Ether or ERC-20 tokens. The platform is powered by the Ethereum Virtual Machine (EVM), which is a software that executes all smart contracts. The platform functionality is further enhanced by its proprietary smart contract coding language, Solidity. This makes it easy for developers to not only set up contracts but also build blockchain apps. 

What makes Ethereum even better is that it has clearly published rules on how to develop smart contracts on the platform. This has made it the most preferred smart contract platform by reputable developers and even by a sizable number of fortune 500 companies. 

On the downside, however, Ethereum is vulnerable to security threats and bugs in its code. The platform has been quick to respond to these issues by designing new token iterations. But perhaps the biggest concern is the platform’s growing number of users. While this number has contributed to its large market cap, developers worry that it may work against the platform by slowing down the processing speed of contracts. 

2. EOS

EOS is gradually winning the attention of the crypto community thanks to its near-zero transaction fees topped by the ability to process numerous transactions within a second. To achieve this, the platform works on an ownership model whereby you are entitled to resources proportional to your stake. This also means that your total computational power is equivalent to the number of tokens you hold. The higher the number of tokens, the higher the computational power, translating to fast transaction speed. 

Contracts on the EOS platform are coded in the C++ language, which helps improve scalability. The contracts are then implemented into the blockchain in the form of a pre-compiled coding language known as WebAssembly (WASM), which promotes faster execution of contracts. 

Given its architecture and functionality, EOS is suited for building industry scale dApps. If you were to build such applications on a platform such as Ethereum, running it would be overly expensive owing to the transaction fees charged on each function. 

3. NEM

NEM is both a peer-to-peer cryptocurrency and a smart contract platform. It uses Java programming language, which makes it popular among many users as it is the most widely used language. 

The platform mainly focuses on scalability and security, as evident from its recent updates. The platform can handle about 100 transactions in a second, which is much higher than Ethereum, which only processes a maximum of 15 transactions per second.  

The only drawback of using NEM is that it employs smart contracts off the blockchain making it less decentralized. However, the platform offers better security, easier updates, and fast execution speed as a consolation prize. 

4. NEO

NEO is a relatively new smart contract platform based in China. The platform uses a Proof-of-Stake consensus mechanism alongside the Byzantine Fault Tolerance algorithm – which uses less computing power, making the platform more affordable than Ethereum. 

In terms of user-friendliness, NEO scores highly owing to its ability to execute contracts written in any programming language. So, a developer isn’t limited to writing contracts in one specific language, as is the case with other platforms. 

5. Stellar

For simple, smart contracts such as ICOs, Stellar is the ideal platform to use. It may not be as straightforward as NEM, but it’s more user-friendly than Ethereum. 

The platform has stood the test of time having been one of the oldest platforms in the industry designed to facilitate low-cost remittance transactions across borders. Its future was further cemented when the platform partnered with IBM and KlickEx, which have also contributed to its improved infrastructure. 

Stellar smart contracts can be written in all major programming languages, including those that the community provides an API for. The contracts are interconnected and executed using various constraints such as batching, multi-signatures, sequence, and time bounds. 

Conclusion

The success of your decentralized app depends largely on the platform it’s built on. While the above smart contract platforms are among the best in the market, your ultimate choice of a platform depends on the app you intend to build. Some platforms prioritize security over speed, so make sure the platform you choose is aligned to your goals. 

Categories
Crypto Guides

Blockchain & Internet Of Things – The Brilliant Combination!

Introduction

Introduction

Introduction

Blockchain alone can revolutionize many industries, as we have seen in our previous articles. But when blockchain applied together with the next generation innovative technologies such as IoT, Artificial intelligence, Machine Learning (to name a few) will do wonders. The combination of these technologies brings the best of each other. Especially in terms of security and authenticity of the data generated from millions of devices across the world on a daily basis.

What is IoT?

IoT stands for the Internet of things. It is a system of interrelated computing devices, mechanical and digital devices. These devices are provided with unique identifiers that can transfer data in the network without human-to-human or human-to-machine interaction. This is possible as the devices are extended with internet connectivity and sensors so that the transfer of data is possible.

With so much data being generated and transmitted without any human intervention, there are many concerns about the security and privacy of data. Blockchain comes to rescue to address the concerns of privacy and security in the world of IoT. Let us see how, with the help of some use cases below.

Smart Homes

The concept of IoT enables smart homes. Most of the devices we use at home can be embedded with sensors, and with the help of IoT, we can control them remotely using our smartphones. When at home, they can easily be controlled using Alexa, Google Home, with the help of voice recognition. To enable all these functionalities, sensitive data such as voice and facial recognition should be stored. This data can be stored securely in the blockchain, which allows strict access restrictions. It can be accessed by anyone else if required only through individual permissions using smart contracts.

HealthCare

IoT plays a very crucial role in health care these days. Remote health care can be achieved using IoT. Elderly care is essential to most of the countries these days as the elderly population is increasing in countries like China, Japan, and the US. Since there are fewer people to take care of the elderly, IoT can come to our rescue.

With the help of IoT, if the patients don’t take medicine on time, a message will be directly sent to their smartphones, reminding them to take medication (since the quantity isn’t reduced from the containers). Whenever a fall or sudden change in a heartbeat is detected, the nearest health care providers are automatically alerted with the help of IoT. These are only some examples of uses in health care, but since this is very sensitive data, blockchain can help in keeping them secure. Most importantly, tampering cannot be done if the data is stored in the blockchain, which is very crucial to achieve the desired outcome in these cases.

Agriculture

Agriculture can be widely improved by deploying IIOT (Industrial IOT) sensors and satellite imagery to monitor the millions of acres of land. With IoT used in the supply chain, provenance tracking can be enabled. Crops can be sold by using smart contracts even before harvesting them as all this data ensures the buyer of the quality of the product from the fields to their floor. This makes a profitable trade for all the parties involved.

There are ample opportunities for blockchain and IoT together in Industrial sectors when it comes to the maintenance of the machines. With the help of sensors continuously updating the performance of the devices, wear and tear can be restricted, thus decreasing the downtime. Automobile industries can use real-time data to get the vehicles serviced on time or replace a crucial part in time. Autonomous cars can be made more reliable and usable using IoT and blockchain. The combination of IoT and Blockchain is amazing, but it is important to remember that a lot of other potentials are yet to be achieved.

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Crypto Guides

The Fascinating Applications of Smart Contracts

Introduction

Introduction

Introduction

In the previous guide, we have understood what smart contracts are and what role they play in eliminating third parties. You can find that guide here if you didn’t get to read that yet. Smart Contracts have come out as one of the interesting applications of blockchain technology but it evolved so well that it has already been applied in most of the industries. Experts believe that these smart contracts do have significant applications in many other industries. Hence, in this article, let us see their usage in different industries.

Health Care and Medical Records

One primary application of smart contracts lies in the healthcare industry. Transferring and sharing patients’ electronic medical records (EMR) should be done in the most secure way. We are not saying that the current technology is not secure at all. We are just saying that using this technology will enhance the existing security.

Smart contracts enable multi-signature approval features enabling both patients and health care providers, allowing them to share the information securely as these are sensitive data. Patients can allow their data to be sent to research organizations for various studies and can be sent micropayments to the patients for participation using the same platform. We must not forget that a lot of infrastructure and technology should be built to achieve the same.

Banking

Banking systems have undergone a lot of changes proportional to technology adoption by the people. Smart contracts can play a crucial role in the mortgages provided by banks or any non-banking financial institutions. Banks spend a lot of money to check if the property that is being mortgaged currently is already mortgaged or not. To check if the property does indeed belong to the person applying for the mortgage or not. If the documents of the property are placed in blockchain with the help of smart contracts, this can be verified in a click. This saves a lot of money to both consumers and banking, reportedly in billions.

KYC

These days we have to provide our KYC documents at various places like to open a bank account, to take a sim card, driving license, registering property to name some. If the KYC documents are stored in a blockchain, with the help of smart contracts, the right people can be given proper authority to access them. Also, if any changes required from our side, we need to make a change at one single repository instead of making changes at every entity where we have given the documents.

Supply Chain

Supply Chain is one major area that can benefit hugely using blockchain adaptability and thereby using smart contracts. There are various documents throughout the supply chain cycle which can be misplaced and tough to authenticate at and every area required. If smart contracts are used to share and verify these documents, a lot of time and money can be saved to clear the goods at national highways, significant seaports, etc. Provenance tracking can also be done, thus increasing the bar of trust among consumers.

Voting

Voting can be achieved relatively and transparently using blockchain and smart contracts. With blockchain involved, no one can tamper with the election process, and with the smart contracts, it is possible to ensure the correct person is voting instead of the duplicity of votes.

Insurance

We all know it takes time for the insurance industries to clear the claims as it takes time to check the claims for its authenticity. With the adoption of smart contracts, the respective authorities can easily fact check the claims. For example, for travel insurance, we can easily verify whether the flight is a delay or canceled, thus passing the request.

However, all these industries can actively adapt and grow using blockchain only in the ideal world where blockchain is integrated throughout all sectors and government institutions. Active engagement and development are only possible when adoption is at a high rate. The blockchain technology is still growing, and a lot of innovation and growth is yet required to use the full potential of blockchain and thereby smart contracts as well.

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Crypto Guides

Smart Contracts – A Brief Introduction

What are Smart Contracts?

What are Smart Contracts?

What are Smart Contracts?

Smart contracts are nothing but deals that are digitally stored using digitization to enable digitalization of the business process. The smart contracts can be touted as one of the best applications of blockchain. Blockchain eliminates the middlemen in whichever industry the technology is leveraged, and smart contracts do the same. One doesn’t have to rely on a third-party player to authenticate the deal but pay some money to build the code which is suitable for all the parties involved and deploy the contract in the blockchain to make it active.

How do they work?

Smart contracts in real is a piece of code which can be written in any language that the blockchain platform may support. The code is written in such a way that when predefined parameters are met, the contract execution triggers automatically, and the conditions are met without any human intervention. This makes it very easy to handle and execute smart contracts.

Are they reliable?

Immutability is one of the essential characteristics of blockchain, as we have seen in our previous articles. Since the blockchain works on the concept of distributed ledgers, a copy of the contract will be available with every party involved. Smart contracts deployed in the blockchain network are immutable; once used, they cannot be changed. All the predefined terms should be met as agreed and signed by all the involved parties. Payments, if any concerned, will be done automatically as well without any human involvement. Thus, not delaying the cash, which makes all the parties happy about the work done. Hence the smart contracts are considered very reliable.

The real-life example of Smart Contracts

There are infinite real-life scenarios where smart contracts can be used. We all have booked tickets for our most awaited events, say concerts, movies, sports and so on. We always use a third-party website/app to book the tickets. Here the audience, as well as the event organizers, are trusting this third-party service provider with their money.

Instead of a third-party service provider, if one can deploy smart contracts in these scenarios, it would be easy to manage money. People buy their passes for the event, and this money is stored in the escrow linked to the contract. The money is not credited to the event organizers’ account unless the event is completed. If the event is completed, the funds will be automatically transferred to the organizers of the game. If not, the amount will be refunded to the audience account as per the terms and conditions of the event.

In this case, we do not depend on a third party for the refund of the amount, which may delay in case of any eventualities. We are also not paying any other extra fee to book the ticket as no third party is involved—this the best real-life example where once can use smart contracts.

Conclusion

The new technologies in our lives have come to make our life easy, and smart contracts come under such a category. We not only save money using them but also get rid of concept terminology of terms and conditions which lawyers use to cash the loopholes when something goes wrong. In this case, we use straightforward language to code the words and get them triggered as required, thus making them comfortable and very reliable to use.

Categories
Cryptocurrencies

What are DAOs and DACs? 

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

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

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

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

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

Decentralized Organizations 

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

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

Concepts underlying DAOs and DACs

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

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

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

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

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

Decentralized Autonomous Organizations (DAOs) 

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

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

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

Decentralized Autonomous Companies/Corporations (DACs) 

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

What Are The Benefits Of DAOs and DACS?  

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

i) A Borderless and Non-Jurisdictional Organization  

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

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

 ii) An Increased Sense of Ownership for Members

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

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

iii) Ability to Foster New Business Relationships 

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

iv) Early Preparation for the Future of Decentralized Organizations 

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

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

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

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

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

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

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

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

Final Thoughts 

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

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Cryptocurrencies

What are CryptoKitties?

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

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

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

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

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

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

The Team behind CryptoKitties

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

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

What is a Genetic Algorithm? 

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

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

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

The CryptoKitty Smart Contract 

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

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

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

Where Do New Kitties Come From? 

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

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

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

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

How to Buy and Store CryptoKitties?

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

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

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

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

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

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

Gas Consumption of CryptoKitties

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

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

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

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

Built on Ethereum 

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

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

Final Musings (Meowsings!)

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

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

Categories
Cryptocurrencies

Is Neo an Ethereum Killer? 

If you’re active in the crypto space, then you’ve definitely heard of Neo, a.k.a Ethereum Killer, a.k.a Ethereum of China. Ethereum seems the common denominator in both tags – probably because the two platforms have so much in common so much that China sees it as the challenger and the Asian equivalent of Ethereum. 

If you’re active in the crypto space, then you’ve definitely heard of Neo, a.k.a Ethereum Killer, a.k.a Ethereum of China. Ethereum seems the common denominator in both tags – probably because the two platforms have so much in common so much that China sees it as the challenger and the Asian equivalent of Ethereum. 

If you’re active in the crypto space, then you’ve definitely heard of Neo, a.k.a Ethereum Killer, a.k.a Ethereum of China. Ethereum seems the common denominator in both tags – probably because the two platforms have so much in common so much that China sees it as the challenger and the Asian equivalent of Ethereum. 

However, the platform has taken a different path from Ethereum in some ways, and it’s those ways that merit it some closer examination. 

The name Neo is Greek, and it means new, young, fresh, recent.

Is Neo really fresh? And is it worth the unofficial crown of Ethereum Killer? There is a lot of hype surrounding Neo, but when you lift the lid, you find there are actually some interesting things to discover.

What is Neo?

History of the Neo Blockchain

Neo is the brainchild of Da Hongfei and Erik Zhang. The two have extensive experience in blockchain, having previously formed Onchain, a successful blockchain research, and development company. The Neo project was funded by two ICOs, the first one which happened in a 10-days span in October 2015 and raised $555,000, while the second ICO raised $4. 5 million. 

Components of the NEO System

Neo has a few interesting technical features that make up the Neo ecosystem. These are:  

A Delegated Byzantine Fault Tolerance (DBFT) algorithm – Neo uses a DBFT consensus mechanism that enables the network to resist malicious attempts 

Neo Contract – A mechanism through which developers can create smart contracts in a safe, scalable and high-performance environment using a variety of programming languages 

NeoFS – A decentralized storage that utilizes distributed hash table technology  

NeoQ – a cryptographic mechanism that creates problems that are unsolvable by quantum computers, ensuring the Neo blockchain is quantum-proof. Quantum computing poses a real threat to the blockchain. Many experts agree that it could unravel the blockchain as we know it. NeoQ aims to prevent quantum computing from destroying the Neo ecosystem.   

The Neo Smart Contract System

Neo’s smart contract system comprises three parts: NeoVM (Neo Virtual Machine), IntereopService, and DevPack. Let’s take a closer look at each: 

  • NeoVM

NeoVM is a lightweight virtual machine that’s similar to a virtual CPU and executes smart contracts on the Neo platform. 

  • InteropService 

This is a function that helps smart contracts on the platform have more utility. It enables smart contracts to interact with data from outside the Neo blockchain without putting the system at security risks. This data couple be either transaction, asset, or contract information, and so on. InteropService also hosts smart contracts as storage.

  • DevPack 

This a language compiler that enables developers to create contracts in various languages. 

Neo: Tokenomics

As of March 6, 2020, Neo was trading at $12.28 and ranking at#19 with a market cap of $858, 998, 683. It had a 24-hour volume of $800, 365, 774, a circulating supply of 70, 538, 831, a total supply of 100m, and a maximum supply of the same value. Its all-time high was Jan 15, 2018 (Jan 2015), while its all-time low was $0. 072287 (Oct 21, 2016)

Neo’s Smart Economy

Neo wants to facilitate what it refers to as the “smart economy.” The smart economy comprises these components: 

  • Digital assets
  • Digital identity 
  • Smart contracts 

Digital Assets

A digital asset is anything that’s formatted in a binary form and comes with the right to use it. A digital asset must include the right to use, so it is considered as one. 

Blockchain has enabled a safer environment where individuals own digital assets. With technology, digital assets can be stored in a decentralized, secure, trusted, and third-party-free environment. 

There exists two forms of digital assets that an individual can utilize: 

  1. Global assets 
  2. Contract assets 

Global assets are recognizable by other smart contracts and clients in the system, while a contract asset is recognized only by the smart contract owner. 

Neo Blockchain and Digital Identity

IGI Global defines digital identity as “the data that uniquely describes a person or thing and contains information about the subject’s relationships.”

Digital identities are essential for the digitization of assets to work. 

The Neo platform utilizes the X.509 digital identity standard as well as the Web of Trust point-to-point certificate issuance models. 

Neo verifies identity-based on these features: 

  • Facial features
  • Fingerprints 
  • Voice activation 
  • SMS and others 

Smart Contracts 

Smart contacts that are contracts that take place on a blockchain – making them digital, trustless, and borderless. These contracts are coded so that they will self-execute when specific conditions are met. 

A smart contract must be immutable (unalterable) and be able to run on multiple computers without compromising the integrity of the network. As such, a smart contract needs to have the following qualities: 

  1. Deterministic
  2. Terminable
  3. Isolated  

What does each of these mean? Let’s get a closer look: 

Deterministic: This means that a program will always produce the same output to a given input. E.g., if 4+2=6, then 4+2 will be six every single time. Deterministic systems are designed to eliminate randomness out of a system.  

Terminable: This means that a contract should be able to come to completion after a set period so that it doesn’t go into an endless loop that will waste time and drain resources.    

Isolated: This means that individual contracts will be kept isolated in case of any bugs and malware that they may contain, knowingly or unknowingly. This is so to save the system from being affected by such bugs. 

Is Neo Similar to Ethereum?

Both Neo and Ethereum inevitably have several things in common, but they also differ in some key ways. 

Similarities 

  • Both blockchains provide a platform for developers all over the world to create smart contracts and decentralized applications
  • Both have native coins that power transactions: Ethereum has Ether, and Neo has GAS. 
  • Both have Turing complete, meaning any problem can be solved as long as the machine has enough memory space 

But what makes Neo interesting is not its similarities with Ethereum, but the differences. Neo is one of those projects that get branded “Ethereum Killer” since they do way better than Ethereum in regard to certain functionalities. 

For example, developers can use any codebase out of so many in the Neo platform, including C#, VB.Net, F#, Java, Kotlin, and more. Ethereum, on the other hand, only supports Solidity, its proprietary programming code that requires developers to master it before they can create applications on the platform. This is sort of a barrier to entry that could lock out many developers from the Ethereum ecosystem. 

The Two Tokens: Neo and Gas

The Neo ecosystem has two native tokens: Neo and GAS. These tokens serve different but complementary roles. 

Neo tokens are used to transfer value in the network. Having Neo tokens gives you a stake in the Neo blockchain. Users need to hold Neo tokens to be rewarded with GAS.

GAS tokens are used to enable seamless transactions in the Neo network. You pay GAS for using the Neo blockchain, e.g., subscription fees.  

Is Neo the Ethereum of China? 

Neo is often called the Ethereum of China due to its similarities with Ethereum. It is known in the crypto space that the Chinese government – which is well-known for its chilly attitude towards cryptocurrency – has warmed up to Neo and seeks to position it as the smart contract and DApps industry leader. Of course, this attitude could be a double-edged sword: it could legitimize the platform, but it could also alienate it from the rest of the world.  

How to Buy and Store Neo

You can buy or trade other cryptocurrencies such as Bitcoin and Ethereum in popular exchanges such as eToro, Coinswitch, Huobi, Changelly, Kucoin, Binance, Bitfinex, and so on. 

Some platforms allow you to purchase Neo with fiat money, while others only allow crypto.

Once you’ve bought Neo, it is recommended that you don’t let it sit on the exchange since exchanges are prone to hacking and other attacks. And since crypto transactions are irreversible, once your crypto is gone, it’s gone. 

We recommend storing your funds in tried-and-true wallets such as Guarda, Atomic wallet, NEON Gui – the official Neo wallet for desktop, and so on. Hardware wallets are always the safest option, though, and we recommend Ledger Nano X and Ledger Nano S. 

Neo: Final Thoughts

Neo is certainly ahead of other blockchain and cryptocurrency projects even if just by virtue of its unique Delegated Byzantine Fault Tolerance Mechanism or its getting ahead of the potentially harmful quantum computing. It excels yet again by allowing individuals to digitize assets and developers to build decentralized apps on its network using super-versatile tools. Perhaps Neo is ‘fresh’ after all. The question is, will it keep fresh? Its cheerleaders are banking on that. 

 

 

Categories
Crypto Daily Topic Cryptocurrencies

What is Bumo Blockchain?

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

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

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

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

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

What is Bumo?

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

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

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

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

Problems with the Blockchain

Scalability

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

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

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

Lack of Interoperability

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

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

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

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

The Team behind Bumo

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

Core Features of Bumo

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

A Multisig account

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

The Merkle Patricia Trie (MPT)

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

Trailer System for Off-Chain and On-Chain Data

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

Interoperability Feature of the Bumo Blockchain

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

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

BUMO and Smart Contracts

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

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

ii) Fast deployment 

iii) Flexible calls

iv) Reliable execution of smart contracts

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

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

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

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

Benefits of Bumo

☑️The ability to tokenize assets quickly, safely and reliably

☑️A friendly environment for developers to create decentralized applications

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

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

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

☑️It is user-friendly

☑️People can exchange smart contract values faster and safely

☑️It promotes the free flow of digital assets

Final Thoughts

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

Categories
Cryptocurrencies

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

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

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

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

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

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

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

What is Qtum?

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

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

The Best of Both Worlds

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

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

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

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

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

Who Is The Team Behind Qtum?

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

Qtum, the First Proof-of-Stake Blockchain

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

PoW, however, has various challenges, including:

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

Qtum and Mobile

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

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

How does Qtum achieve this?

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

Decentralized Governance Protocol

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

Tokenomics of Qtum

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

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

Last Thoughts

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

Categories
Cryptocurrencies

The Three Generations of Blockchain

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

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

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

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

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

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

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

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

The First Generation: Bitcoin and Cryptocurrencies

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

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

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

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

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

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

The Second Generation: Ethereum and Smart Contracts

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

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

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

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

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

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

The Third Generation, and the Future

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

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

The Bottom Line

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

Categories
Cryptocurrencies

Your Complete Guide to Cardano

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

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

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

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

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

What is Cardano?

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

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

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

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

Who is Behind Cardano?

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

What’s Special with Cardano?

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

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

How Does Cardano Work?

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

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

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

What is Ouroboros?

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

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

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

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

Statistics of Cardano (ADA)

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

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

Is Cardano an Ethereum Killer?

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

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

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

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

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

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

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

The Coinbase Effect

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

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

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

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

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

Conclusion

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

Categories
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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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.