0x has gained significant notoriety following its listing on leading crypto exchange Coinbase. 0x aims to facilitate the decentralised future of crypto providing an exchange that is frictionless whilst maintaining low fees and no central authority. The tokenisation of assets, stocks and money will enable any product to be seamlessly traded on the platform. The native token to the network is currently the 32nd largest cryptocurrency with a market cap of approx $179 million, we will unpack later how this token operates in the ecosystem.
The future success of 0x relies on the degree to which global assets are tokenised and how quickly this transition takes place. In order to sell a car today, in the UK, you are required to exchange papers and service history, most people opt to sell their car via a dealership as this process can be tricky for some people. Although peer-to-peer buying and selling of cars is widespread, it could be simplified if the car was tokenised. This token could then be transferred for cryptocurrencies through the 0x protocol, the token would encompass all of the paperwork required so peer-to-peer transactions would be considerably simplified and fees paid to a third party (car dealership) would be avoided.
There are two ways you can buy and sell tokens on the 0x platform. Firstly, you can issue a buy or sell order to the network. Say you want to buy 1 Bitcoin using Ethereum, you would put the order out and a relayer would match your bid to buy 1 Bitcoin with a respective order to sell the given quantity of Ethereum. As a reward for putting these orders together the relayer is paid a fee in the form of $ZRX. The fact the fee is paid in $ZRX is important as it provides utility for the token and keeps it in demand which means if the network grows the price of the token will also increase in price. This relationship between the performance of the network and the price of the native token is attractive as it is not always the case with other cryptocurrencies. The second way to buy and sell is to find your own bids. This is a less practical application and appears more useful for transferring value between friends and family, however, there is no fee when a relayer is not involved.
0x appears to be one of the most promising decentralised exchanges. There has been significant thought put into the user interface and the design and layout of everything 0x have produced looks good and is easy to use. One of the main pull factors of decentralised exchanges is that funds remain in users wallets and only leave in exchange for the other tokens, this means that your funds are not prone to largescale hacks whilst sitting in the exchanges. The most significant caveat with any decentralised exchange is that it must rival centralised exchanges in performance and usability. Simply put, if it isn’t a better user experience than centralised exchanges then people won’t move en masse from Coinbase, Binance, or other big exchanges. This being said, the ability to trade tokenised assets, something that Coinbase and Binance do not offer, is appealing. Finally, the success of 0x does rely on the assumption that assets will be tokenised, we believe that this will occur, although the timeframe is uncertain and we acknowledge that this prediction may not come to fruition, in which case 0x would struggle.
Basic Attention Token $BAT
The idea behind Basic Attention Token is to disrupt the advertisement and marketing industry by introducing blockchain technology. They aim to seamlessly connect users, advertisers and publishers in an ecosystem supported by the $BAT ERC20 (Ethereum) token. The removal of costly middlemen and monopolistic control of the portals to advertising (Google, Facebook etc.) would increase revenue for publishers, improve traffic for advertisers and provide more targeted content and greater security for users. Users attention will be measured based on how long they look at certain pages of a website, this provides much more detailed statistics for advertisers to be charged and publishers to be rewarded. Well, that is the idea anyway.
Today, publishers are faced with limited options for where to go to monetize online content, and advertisers limited by how they reach the publishers. Users are bombarded with an enormous amount of largely irrelevant ads and slow web loading times due to much of pages being taken up by adverts. Most will agree that the current situation has some problems, however, it does work, can $BAT overcome these problems and provide users, advertisers and publishers with an ecosystem that works.
The $BAT token will be the medium of exchange for advertisers to buy advertising and to pay publishers to sell advertising space. It will also give a small proportion to the users who are consuming the advertisement, this is to reward users for being part of the ecosystem. Users can then unlock premium content, use the tokens to advertise themselves, or sell the tokens for Ethereum. In this case, the token stands up to some of the shortcomings of other utility token systems as it has real value for all of the actors concerned.
It’s always important to remember that for crypto projects to succeed they must be better than their conventional alternative, just because it’s decentralised and on the blockchain, does not mean that people will use it. There are some attempts to re-couple the advertiser-publisher relationship and allow advertisers to buy advertising directly from the publisher. BuySellAds.com is a perfect example of this. Here we have a working model of business-to-business advertising, will $BAT be able to do this better?
Increasing numbers of people use ad blockers, one study by Statista found that in 2018 nearly 1/3rd of Americans use ad blockers. If the adoption of such technology continues at similar rates then traditional online advertising revenues will be further squeezed. Brave is a special browser used by the $BAT ecosystem, Brave is resilient to ad-blockers, so as ad blockers are used more, there is a greater value proposition for using $BAT. As users are integrated into the advertising dynamic as active actors, there is an additional incentive to not use ad blockers.
Basic Attention Token is a really exciting project. They have identified a market that is working inefficiently for all the actors excluding the middlemen (Google, Facebook etc). They have come up with a convincing model for how advertising can be introduced to the blockchain and payments resolved with smart contracts. We see a lot of potential in this project and will be keeping a close eye on it so we can keep you updated with any developments.
Set up in 2017 by Chinese-Canadian businessman and developer Changpeng Zhou. In roughly one year the exchange has grown to be the largest exchange by volume by April 2018. Binance is a centralised exchange that operates on a crypto-to-crypto system with no fiat to crypto option. This means that crypto must be purchased elsewhere, then used to trade on Binance. Binance operates in almost all jurisdictions offering English, Chinese language and another 7 languages. Binance has continued to increase the number of crypto projects that it offers on the exchange, whilst attempting to offer only value proven projects. As of September 2018, Binance remains the largest exchange with a daily volume of $931m
Zhao speaks often about his vision to make Binance a moral company that sides with its users and strictly abides to the legal framework of any given jurisdiction. Following the decision of the Chinese government to ban all ICO’s (Initial Coin Offerings) and the order that funds should be return to the investors, Binance announced that they offer a full refund on the ICO they supported. This cost the company $6 million when it was just starting out, Zhao suggests this is one of the decisions that Binance have made to help to create a consumer friendly culture (1). Zhao says that it is these sort of decisions that create the set of values that enables Binance employees to make decisions as independently as possible. Many other exchanges did not make the same decision and their reputation may have been hurt.
Binance has its own coin which has some use cases within the Binance exchange. The exchange offers low fees, 0.1% fee on all transactions, this is reduced by 50% if you use the Binance coin for transactions, however this will discount will decrease by half each year, until there is no discount in 5 years time. $BNB, the token issued in the Binance ICO and used on the exchange, has performed exceptionally well in 2018 when compared to other cryptocurrencies. One unique aspect of the Binance model is its decision to ‘burn’ 20% of its profits each financial quarter. This means that owning Binance coin can be lucrative as the supply of the coin falls each quarter which provides an upwards price pressure, however this is not to say that the price of $BNB is guaranteed to rise
Binance is currently a centralised exchange as it acts as a middleman between buyers and sellers, whereas a decentralised exchange offers a peer-to-peer service through a ‘trustless’ network, as no central body holds any of your fiat or crypto, the transactions are enacted from your wallet. Zhao has voiced aspirations to move Binance to a decentralised model but argues that technology needs to be smoothed out before a user-friendly decentralised system is the desired option for Binance.
Binance is certainly a promising project and it has weathered the waters of a difficult year for investors, offering a utility token that makes trading fees exceedingly favourable compared to other market rates, and a profit buyback scheme that adds upwards price pressure. As an exchange Binance can hedge its bets within the crypto market meaning that any growth in trading volume is translated into growth for Binance, this is the benefit of exchanges. However, Binance went from nothing to the largest crypto exchange in less than 12 months, so there is no guarantee a competitor won’t be able to do this to Binance.
1. https://soundcloud.com/epicenterbitcoin/eb-235 — Zhao discusses the ICO refund from 24 mins onwards, the whole episode gives a good impression of Zhao.
Chainlink are attempting to improve the usability and function of smart contracts by connecting internal and external data sources to the smart contracts.
When hearing this, the question many of us will have is: what exactly are ‘Smart Contracts’?
Smart Contracts are often considered one of the most valuable aspects of blockchain technology, but the infrastructure and awareness is not yet ready to bring it mainstream. A smart contract is a contract that is written in code and executes certain actions without the need for human action. One example of how they are already being used is in supply chains, where a contract is instantly and automatically paid out once a good has arrived in its intended location. However, there are some significant limitations to smart contracts that Chainlink are attempting to solve. To illustrate this point lets use an example. Let’s say Andy wants to implement a smart contract on the Ethereum blockchain, that will pay Steve once Steve has completed a certain task. Currently, the smart contract can do this and Steve could be paid in Ethereum; but what if Steve doesn’t use Ethereum and doesn’t have a crypto wallet? In this case, the Ethereum blockchain cannot access the external information needed to pay Steve through a bank transfer or PayPal. This is where Chainlink comes in.
Node operators would be needed to gather the required data from external sources. Users of the Chainlink protocol will pay for this service by using the $LINK token, which will be sent to the node operator. The node operators set the prices for the service they offer based on the demand for that information. The $LINK token is an ERC-20 token, which means it is based off of the Ethereum blockchain. Unlike most altcoin tokens that have very little real-life function other than as a speculative investment, $LINK has real world applications that should create real demand for the token.
An oracle gathers real world data and implements it onto the blockchain in order to be used by smart contracts. Smart contracts can achieve improved functionality with a single node, but in this scenario there is still a single point of failure: the individual node. Chainlink’s solution to this is to create a network of distributed oracles that can securely provide information to the blockchain, to ensure improved security and reliability. So, Steve can submit the task he was required to do in order to get paid to the oracle, and then the smart contract gathers the data and pays Steve through PayPal. The Chainlink protocol, through the use of Oracles, has enabled data to be input - from Steve, and data output - as Andy pays Steve. Traditional smart contracts do not have this function as the blockchain does not support the input and output of data in this manner.
Chainlink is a super exciting project. However, there are still some reservations. Chainlink is built on the premise that smart contracts will be widely used. At this point this cannot be taken as a certainty, as they can appear complex and unusual which may affect their ambitions of mass adoption. Additionally, they need to be trusted as a means to execute contracts. While they are very secure, in order to achieve widespread adoption, education is needed before they will become widely accepted as safe. Other than this speculation over the success in adoption of smart contracts, there is little negative to say about Chainlink. If they can successfully and globally implement ways for smart contracts to interact with things outside of the blockchain, the possibilities are endless.
You can check out Chainlink’s white paper here: https://link.smartcontract.com/whitepaper
Created by Billy Markus and Jackson Palmer, Dogecoin first came about as a joke in 2013 with the aim of appealing to a new audience. Doge the dog was an internet hit earlier in 2013 as people edited captions onto a picture of the dog. As with any meme, you have to see it to get it, so here is just one of the thousands of Doge memes that have been created:
Although this project certainly started out as a joke, its success over the last 4 years has made people think if there might be more than meets the eye with Doge. It is currently the 24th largest cryptocurrency with a market cap of around $230 million and that is 12 months into a Bear market, during the 2017 Bull run it exceeded $1 billion in market capitalization. Joke or no joke, Dogecoin has caught on and capture people’s minds and it is owed some respect for this.
Dogecoin is built on a variant of the Luckycoin chain which is in turn based on some of the Litecoin procedures, such as Scrypt Proof-of-Work protocol. This type of Proof of Work is designed to be ASIC resistant in order to prevent mining from being concentrated around powerful specialist computers. Dogecoin can be mined using regular laptops and PCs. There are currently 118 billion DOGE in circulation and this increases by around 5 billion per year for an indefinite period of time. As Dogecoin is not on either the Bitcoin or Ethereum network so it cannot be deposited on these wallets, it requires its own specialist ‘Multidoge’ wallet. This is free and can be downloaded from the Dogecoin website.
The team behind Dogecoin are advocates of charity work and have pursued this through the Doge Foundation. This included providing $50,000 to the Jamaican Bobsleigh team who had qualified for the 2014 Winter Olympics but lacked the funding to participate. In addition to this, they have sponsored NASCAR drivers and donated money to provide water to poverty-stricken areas in the developing world.
Dogecoin may have found some significant traction and has built an impressive community, but the fundamentals of the project are not on par with Bitcoin. The founders of Dogecoin lifted the cap on the production of new Doge which raises two concerns, inflationary pressure, and decentralization. Firstly, the 5 billion new Doge printed each year dilutes the current supply which will ultimately create inflation, similarly to how governments printing money creates inflationary pressure. Next, the fact that the founders changed the model and added the 5 billion per year supply, means that there are questions to be asked over how decentralized the network governance is.
Electroneum is a cryptocurrency with the aim to give people across the world easy access to digital money. The tokens are mined using a cloud mining system that can operate in the background on almost any smart phone, including Electroneum’s own $80 handset. Built on a unique blockchain with 21b max supply of coins and fast transactions.
Perhaps the most exciting aspect of the Electroneum network is the free $ETN given to users who run an app on their phone. The app can be downloaded on pretty much any smartphone and runs all the time, you need to update it once a week to run for another 7 days. In return for this, miners receive approximately $3 worth of $ETN each month. This doesn’t seem like much, but provides an incentive for people to run it and in the developing world where even those with smartphones can have incomes of $50-100 a month, this can make a significant difference to people’s lives. Our only concern with this strategy is that as transactions are very low, this $ETN being paid to miners appears to be coming from the approximately 12b $ETN that is held in reserve by Electroneum, this means that there is inflationary pressure as the tokens are released into circulation. Although this is called cloud mining it is actually more closely comparable to an airdrop, where people can receive free crypto in order to spread awareness and distribute coins, mining and block validation is still carried out by GPUs.
The native token to the Electroneum network is the $ETN coin, with 21b coins there is the benefit that coins are only divisible to two decimal places, as opposed to a Bitcoin which is made up of 100 million ‘Satoshis’. This is designed to give the $ETN token a feeling similar to traditional currencies which are generally only 2 decimal places, such as the $ which is made up of 100 cents. The largest exchange that lists $ETN by volume is currently Kucoin, it is also listed by Cryptopia, the subject of significant media attention earlier this year after their system was hacked and millions of dollars of crypto were stolen.
Top end smartphones can often be upwards of $1000 and are completely inaccessible to the developing world. Electroneum decided to take matters into their own hands and released a smartphone that operates on a stripped back android system developed by google and the price tag is only $80! Boasting all the essential smart phone features such as front and rear-facing camera, 4.5 inch touchscreen, 8gb of memory, and most importantly the ability to run Electroneum cloud mining system. Overall, reviews of this product have been positive, particularly considering the very affordable price tag.
We love the mission that Electroneum have embarked on and support the spread of crypto to the developing world to help those who don’t have access to financial institutions. The Electroneum smartphone is super interesting and great for spreading the Electroneum name and network. However, there are some concerns about the network. The Electroneum website is not particularly clear about some of the technical features of the network and their whitepaper is not particularly technical. The result of this is some mystery about:
· The rate at which the remaining tokens out of supply are released into the system
· The exact way in which block validation occurs
· To what extent Electroneum is open source/ community led
· Do nodes run on the network in addition to the cloud mining
Now, some of these factors may not concern everyone, but part of the crypto mission is to be open and transparent about these elements. If anyone who is knowledgeable about the network has either a link to the whitepaper, or can answer these questions themselves, we would appreciate some clarification on these questions. We’re currently working on bringing comments to the site, but for now, if you want to get in touch use the form on our about page or find us on twitter at @alt_500.
Enjin is an exciting project with the aim to bring the blockchain to gaming. It may not be immediately apparent how blockchains can be used in gaming, so hopefully this article will help explain. Based in Singapore, they have gained significant notoriety recently (March 2019), as rumours have begun to build about a working partnership with Samsung and potential Enjin crypto wallet built into Samsung’s new Galaxy S10.
Samsung aside for a moment, Enjin is building a platform where games can be created and in-game currencies use the Enjin coin. This allows some interesting features that can’t be achieved in traditional games, decentralised gaming platforms and true in-game item and currency ownership. Servers can be built and managed by a network of people rather than centralised systems. This allows users to develop their own worlds and add to others. For now, this is perhaps best demonstrated on the Enjin hosted Minecraft platforms, which you can find more about on their website. True ownership of items comes about because items can be created on the blockchain, meaning that similarly to Enjin coins, they can’t be destroyed or duplicated, and can only be held or traded, or minted by the game creators. If a game creates 1000 of x item, then there will only ever be 1000 and each person owns a unique version of it. Items can then be traded on marketplace or alternatively the items can be ‘melted’ down and transformed into Enjin. This allows a much more realistic and interesting system of trading in gaming.
Enjin also provide a mobile wallet compatible with both Android and iOS. The wallet supports Bitcoin, Ethereum and many other altcoins. Users can also exchange Bitcoin or Ethereum for Enjin coins on the platform through the Kyber Network, meaning you don’t have go through registering with an exchange and doing it separately. The wallet looks really sleek and has decent user interface. You can additionally use the wallet to store in-game items- at the moment this is just a novelty, but as more games are built on the platform this may change.
Rumours of a partnership with Samsung have been building recently as images emerged of the Enjin wallet being used on a Samsung Galaxy s10. Samsung are yet to confirm that the Enjin wallet will feature on their phones, but the Enjin team replied to a request by Coindesk asking them about the partnership, the VP of Marketing replied that “While I can confirm that we have an official partnership with Samsung, I’m not at liberty to disclose any other information at this point.” This is very exciting if true as it is partnerships like this that help to introduce crypto to the mainstream and achieve mass adoption.
At the moment, the games that have been built on the platform aren’t great. The graphics and engines are a long way off the quality on show in mainstream PC and console games, however, developers are working really hard to put out some cool ideas and it’s still early days, so by no means will this be the case in the long term future. The idea behind the project has great potential as gaming has always been a real life use case for blockchain technology. With Samsung in the picture, it’s hard not to think about the potential of this project, but as with any altcoin the developers need to prove themselves and live up to this potential.
Before we discuss Eos and it’s potential for the future of crypto, we have some points to clarify over D’apps and Smart Contracts. Both of these are still in their infancy and to an extent in experimental stages. Use cases and consistent user figures have been so far elusive for their creators. This is not to say that the future of D’apps and Smart Contracts will not be bright, there is certainly an appeal to these platforms if user experience can be significantly improved, however, it is important not to overestimate their role in the crypto space today.
The main aim of EOS is to establish a platform that is able to provide the hosting of decentralised applications for businesses across the world. D’apps are designed to be free, including transactions, and come with the added allure of very limited central authority. EOS is built on the Ethereum blockchain and the $EOS coin are ERC-20 token. Ethereum offers a strong and secure blockchain with a large community and developer following, however, it is interesting that EOS decided to opt for this instead of creating a native blockchain of their own.
PROOF OF STAKE
EOS will use a variant of the Proof of Stake method for validating blocks, an alternative approach to the Proof of Work used in Bitcoin and other cryptocurrencies. Proof of Stake relies on those holding the given token to stake it by placing it in storage. Stakers will receive small fees whilst they are staking their tokens, but as soon as they remove it this benefit is lost. There are some considerable concerns with Proof of Stake, not least that the network may be more prone to manipulation and become less secure. Proof of Work is based exclusively on computing power so it is much harder to manipulate the chain, however, there are concerns over fees and energy usage of Proof of Work. For now, Proof of Work holds the significant advantage as it has been stood the test of time for 10 years, efficient and secure Proof of Stake is yet to be shown to work.
A d’app is similar to an app that you may have on your phone or computer, however, it is run by a network of nodes rather than a centralised node (the company running the app). Decisions regarding the direction of the d’app are agreed upon via consensus mechanisms within the network. It is hoped that d’apps will be built on the network in a user-friendly way that can build some real user numbers, so far d’apps have lacked widespread adoption, with very few daily and weekly users. Until people use these d’apps because they are the best they can find, rather than an interesting fringe movement of decentralisation, there won’t be any widespread usage. They must be better than their centralised competition, this is important.
EOS shows some interesting features: low transactions fees, claims to be able to manage 1000s of transactions per second, and a dedicated platform for building decentralised applications. However, there are concerns, including the Proof of Stake being used and if this may be prone to manipulation and malpractice, lack of users for d’apps and no guarantee users will be attracted in the future. Decentralised applications are interesting and appeal to the crypto space, but they won’t find wider appeal on decentralisation alone until d’apps can prove themselves with good user experience and consistent user numbers, we will remain mixed on projects such as EOS.
Ethereum is well established as the second largest crypto platform with a current market capitalisation of around $30 billion (around 24% of the size of bitcoins market cap). There is so much to talk about with this project, so we will briefly discuss the basics, and then look in more detail at smart contracts and proof of stake consensus mechanism.
Ethereum was invented by Vitalik Buterin who used the inspiration of bitcoin to expand the blockchain into more diverse areas. Buterin is a great sauce of knowledge in the crypto space so be sure to check him out! Let’s look at what Ethereum offers. If the vision of Bitcoin is to disrupt and revolutionise the financial world, then Ethereum attempts to do the same for countless other industries. This would be achieved mainly through the dream of smart contracts which attempts to bring the trustless nature of the blockchain to industries such as energy, supply chain and social media. Ethereum is designed to be open-source, so anyone can use it and develop their own platform from this. Many crypto projects use the Ethereum ERC20 tokens, these are tokens that are based on the Ethereum network, but become unique to the project.
PROOF OF STAKE
Bitcoin’s energy consumption is thought to be similar to that of Columbia and this is only growing as adoption increases. Ethereum agreed upon a vision which did away with proof of work (the solving of complex problems to mine and validate blocks) in favour of a system that uses stakes to solve the problem. With the proof of state mechanism, stakes are put forward to validate each block, and whoever has the largest stake effectively wins that block and is given the reward. This is an interesting split between Ethereum and Bitcoin, it appears like it is too early fall down in favour of either PoS or PoW, however the energy consumption of PoW is certainly a factor of some concern.
This is a key feature of the Ethereum vision and looks to remove trust from contract agreements. This means that transfers can be made automatically upon the completion of some predetermined conditions. For example, musicians that are paid based upon the number of listens their songs get could be guaranteed to receive this automatically as people listen to their music. This programmability of the blockchain means that people can put their own creativity into the space and come up with some really interesting projects.
Ethereum was a groundbreaking project in expanding the horizons within the crypto space, this can’t be underestimated. Ethereum, for me, is essential to widespread adoption of cryptocurrency as it brings the blockchain to a much larger market. The main question mark of Ethereum’s future as second to Bitcoin depends on the preference of developers, will they stick with Ethereum or move onto newer platforms such as Neo or Tezos.
Take a look at my previous article on MWAT for more information on how Ethereum based tokens can work: https://email@example.com/alt500-2-restart-energy-dc27f7258aa8
Ethereum whitepaper: https://www.ethereum.org/
If you’re interested in a point of view that argues that Ethereum and smart contract capabilities might not work, have a listen to Jimmy Song on Laura Shin’s podcast: http://unchainedpodcast.co/jimmy-song-on-why-bitcoin-will-be-the-winning-cryptocurrency-ep69
If Bitcoin is electronic gold, then Litecoin is silver. The aim of Litecoin is subtle, but certainly needs to be respected as an important aspect of the crypto ecosystem. Created in 2011 by Charlie Lee it offers a secure and well established alternative to Bitcoin.
Litecoin can be seen as a faster and cheaper version of Bitcoin, this is for a few reasons. First, the Litecoin block confirmation time is around 2.5 minutes as opposed to around 10 minutes on the Bitcoin blockchain. In both cases transactions require 2 confirmations, this means that if your transaction is in block 1 it will be confirmed once the 3rd block has been created, block 2 acting as the buffer. This means that transactions using $LTC will be below 5 minutes whilst $BTC transactions can take up to 20 minutes. The total supply of $LTC is 84 million, 4 times the amount of Bitcoin that will be in circulation, this means that with equivalent market caps, Bitcoin would be worth 4x per coin. There is no inherent advantage or disadvantage to this, but as $LTC is likely to be a lower value per coin there is a feeling it is less valuable compared to Bitcoin which is where the comparison to silver and gold comes from.
Bitcoin’s Proof of Work system uses a highly parallelizable hash function which means that the problems that are solved can be solved in parallel, the Litecoin system requires more memory for hashes to be solved meaning it is harder to solve them at the same time . This creates an advantage for heavily specialised ASIC mining set ups to be used for Bitcoin. The Litecoin foundation argue that the Scrypt hash function protects the Litecoin network from this, however, ASICs can be used for Litecoin as well, although their advantage over less specialised GPUs is less than for Bitcoin. However, coincentral produced a piece that suggested it was no longer economical to mine Litecoin on anything but specialist ASIC hardware. So, if you are interested in mining be sure to research the details of what hardware will give the best returns, it may well be an ASIC despite Litecoin’s purported resistance to this.
Fees on the Litecoin network are significantly lower than those for Bitcoin. Currently average fees for Bitcoin per transaction are around $0.3 to $0.8 and they spiked in the 2017 bull run at $55! Conversely, Litecoin transactions are between $0.01 and $0.03 with a peak in the same period of $0.93. So, for everyday transactions Litecoin is faster and cheaper than Bitcoin, but is still prone to significant increases in fees when the network is busy. Both Bitcoin and Litecoin face the same problem, transaction fees become unaffordable as the network struggles with the capacity required during bull runs. If crypto is to become mainstream it will need to overcome the problem as scaling, despite Litecoin having cheaper transaction fees, if it was used in the volumes the US dollar is then fees would go even higher, making purchasing a cup of coffee with Litecoin uneconomical. Lightening networks are being built for both Bitcoin and Litecoin, but the momentum is with Bitcoin as it is larger and its dominance in the space has helped to push it ever closer to achieving a fully working lightening network that can handle micro-transactions.
If you love Bitcoin then Litecoin also deserves your attention. Litecoin is the very apt silver to Bitcoin’s gold and this isn’t said trivially! Litecoin deserves this status, offering lower fees, larger supply and faster transactions it provides a different utility set to Bitcoin. There is very good synergy between the two and they complement each other!
Monero is a cryptocurrency with a huge emphasis on privacy, that has seen it be championed by many in the crypto world, but also adopted for illicit uses such as transactions for illegal goods on the dark web.
With Bitcoin, users’ transactions and wealth can be observed on the blockchain which functions as a public ledger. Monero obfuscates its public ledger, so that anyone can send and receive Monero, but the source of funds, the amount and the destination cannot be uncovered by outside sources. By virtue of this, no one can tell how much Monero anyone else is holding. This is an important advantage over other cryptocurrencies in terms of privacy, useful (as one of many examples) for businesses wanting to keep their transactions confidential from competitors. But, it is clear that this privacy opens up the potential of Monero’s use for illegal activities, which may limit its global adoption if it becomes more heavily regulated in the future.
Monero achieves this by using ring signatures, to obscure the sender’s address. A signature is used in cryptocurrencies to verify transactions, and is what links a transaction to the buyer, or sender. Monero’s ring signatures are composed of the actual signer (the sender) and a group of non-signers (other Monero users). From an outside perspective, the signatures that make up the ring signature are all equally likely to belong to the user making the transaction.
To hide the receiver’s end, a stealth address is generated that is used once. The sender transfers their funds to the stealth address, which then transfers those funds to the receiver’s actual address.The amount being sent is obscured by Ring CT technology, which essentially reveals the minimum amount of information about the funds needed to allow the network to verify it and the participants in the transaction to see the amount of Monero being transferred.
Monero is also decentralised, with a worldwide network of computers- miners- verifying transactions and being rewarded with a small amount of the coin. This is the Proof of Work mechanism (explained here), similar to how Bitcoin is mined. However, the Bitcoin mining algorithm runs much faster on custom built mining computers, whereas the Monero algorithm was designed specifically so it could be successfully run on regular computers. While Bitcoin mining has become relatively concentrated in countries with cheaper electricity, using mining pools that control a majority of the Bitcoins being mined, Monero hopes its algorithm will allow it to stay decentralised, and its mining global.
Monero also emphasises the fungibility of its coins. Fungibility is the property of a good or currency where each individual unit is always equal to another individual unit. Think gold, where 1kg of gold is interchangeable with any other 1kg of gold. Whereas any BTC can be traced, and therefore rejected in transactions (perhaps if it were used for illegal transactions in the past), Monero’s privacy inherently means each unit is completely fungible, preventing any blacklisting by a vendor or an exchange due to its role in past transactions.
Monero’s privacy is simultaneously its greatest aspect and biggest obstacle. The technology used and its decentralised nature may be poised to revolutionise global monetary systems, given time. Monero is quite possibly the closest digital currency to actual physical cash, and like cash, is open to use in illegal activities. For this reason, as Monero grows it may well be clamped down on by governments and regulatory bodies. Monero is decentralised, so should be impossible to close down, but if laws are introduced preventing the transfer of fiat into Monero through large exchanges, its value would surely depreciate quickly and its network hugely diminish.
Whitepaper and other interesting documents: https://ww.getmonero.org/resources/research-lab/
First of all, it needs to be mentioned that in January 2018 there was a rebranding that changed the name from Railblocks to Nano, this was a purely commercial change and didn’t affect the concept of Nano. Personally, the rebranding is positive and creates a more marketable product. Nano is a cryptocurrency with no frills, this specialisation is appealing to me as it allows a focus on a single purpose.
Now let’s take a brief look at the team behind the coin. Colin LeMahieu and Russel Waters are the lead developers on this project, both of them have significant experience in coding and the crypto space. The team also covers the key areas including legal, communication and public relations.
Nano approaches the cryptocurrency space in a unique way, individual blockchains. This allows each user to use their own computing power to process their own transactions meaning that the entire blockchain doesn’t need to be updated in huge blocks, slowing down the block rate generation. One of Nano’s greatest accolade is that it boasts the fastest transaction speed out of all of the available cryptocurrencies at around 3 seconds. It is claimed that the Nano network can handle 7,000 transactions per second, so to put this in perspective, Visa can handle 40,000, so it’s on the on the right track to challenge the current fiat technology; but not quite there yet. Furthermore, Nano offers no transactions fees along with the speed of the network, this could be a really revolutionary advancement in financial technology.
Nano keeps to the crypto principle of decentralisation and prevents centralisation by keeping not validating transactions or initially distributing tokens via mining. Miners can gain large shares of the market potentially causing centralisation. However, due to the lack of proof of work or stake, there is no inherent value in Nano, its value is exclusively derived from the success of the network.
There are 135,250,000 Nano tokens in circulation with a market cap of $182m. Nano’s price peaked in $37.62 at the start of January 2018, the bear market has cut this price down to $1.37 (as of 09/08/2018). It’s interesting to consider that should Nano manage to surpass the market cap of Bitcoin (as of 09/08/2018) of approx $113 billion it would mean that the price of Nano would jump to around $850. This is by no means a price prediction, but if Nano’s network gains widespread adoption then it gives scope to consider the price movement that could be expected.
The main weakness of Nano is Spam attacks. First of all, Nano’s hallmark feature of no transaction fees means that it is possible that the network could be overloaded by spam transactions. The team have tried to counteract this by putting very small proof of work requirements on each transaction.
Origin Trail $TRAC
This article will look at Origin Trail, an attempt to bring the blockchain and traceability to the supply chain industry.
What is Origin Trail trying to achieve? Their aim is to allow products to be traceable along the supply chain through verification on the blockchain. Businesses at varying stages of production will input data onto the Origin Trail network and this will be placed on the blockchain, as the blockchain is immutable, so long as the data has been verified, then the information can be trusted. This will allow businesses and consumers alike to be sure of the product’s origin and the path taken. Finally, Origin aims to establish a network where a vast amount of information and data can be brought together to enable complex multi-industry supply chains to be more transparent and traceable.
One example that Origin outline on their website is food production, more specifically chicken. Each product can be accurately traced back to the farm that it was produced on as the path taken by the product has been verified by nodes (definition) and then immutably placed on the blockchain, meaning it can’t be changed or edited if someone wants to. This has several advantages. Firstly, the exact farm that the chicken has come from can be found and thus the consumer can ensure that the farm is animal-friendly. Secondly, should an outbreak of a disease be discovered in a particular farm, all chicken from this farm can be more easily recalled, saving the recall of all chicken that could potentially be contaminated.
When wading through the array of different crypto-projects, it is important to think very carefully about why a project needs a token, most do not. In this case, the application of a token is certainly plausible. The token is used to incentivise the network, those who run the nodes who validate the blockchain and store the data are rewarded with the $TRAC token. So, the producer inputs data onto the network, which is validated by the nodes, the producer then pays the network, and ultimately the node, for this work (time, computing power etc). From a speculative perspective, traders could benefit from the network growing as this could increase the demand for the token as a utility, which would push up the price.
Perhaps the biggest concern for Origin Trail is that supply chain and logistics companies will opt to create their own blockchain to do the same job, rather than go to Origin Trail. According to Bernard Marr in Forbes (Link) Walmart are already using blockchain to track their own products, as are Unilever and Nestle. Time will tell if Origin Trail has the edge in this market and will be able to attract large companies to use their network instead.
Origin Trail shows some really positive features. It has found a problem and come up with a workable solution, in the infancy of blockchain this is really important. However, it appears that this solution may be used more so by smaller players in the market as the larger companies opt to have their own blockchain. This being said, the network effect that Origin creates could be a significant pull factor for companies using complex supply chains.
We are really excited about this project and particularly the hardware involved which is quite unique for the crypto space. Pundi X are big supporters of Satoshi Nakamoto’s vision and they aim to continue this and bring crypto to the masses. They identify two main factors as to why crypto has thus far failed to achieve widespread adoption:
1. Too complicated: Cryptocurrencies are confusing and difficult for a lot of people to manage their private and public keys, and to understand the blockchain.
2. Not relevant: Most transactions in crypto are between traders who use it to buy other cryptocurrencies. Until consumers can rely on crypto to purchase everyday items, its audience will be limited to tech-lovers and investors.
Pundi X believe they can overcome these problems through ‘consumerizing cryptocurrencies by enabling their use in retail’(1). They hope that this can push crypto to mainstream retail markets and bring over 1 billion people to crypto. They will offer free crypto card readers and contactless payment cards to businesses, we will discuss this more later on. Certainly ambitious aims and one that everyone in the crypto space can get behind.
Pundi X aim to have complete fiat-to-crypto transactions on their app, meaning users don’t have to purchase the crypto elsewhere and transfer it to the app. They also offer contactless payment cards which simplify the process, working similarly to contactless credit cards, meaning users don’t have to use the app every time to make a payment. Multiple cards can be topped up from one app which is great for businesses and families.
PUNDI X TOKEN (NPXS)
The token does not have a massively unique function but is the native store and exchange of value on the Pundi X network. PXS can be used to buy and sell other cryptocurrencies, can be accepted for sales of goods and services, and used as gas to send transactions on the network. The team at Pundi X hope that this token will accrue value as the network work grows and more and more users begin to adopt the system. It is hoped that if they can build the 1 billion users that they’re aiming for, then there would be significant investment returns on Hodling the token. However, as always there is no guarantee that this is possible, there are too many unknowns in any market, but the foundations that Pundi X are laying down appear to be fundamentally strong.
Pundi offers a very different value proposition to other crypto projects by distributing the hardware to create the infrastructure for a decentralised crypto future. It is a very ambitious but well thought out vision and if it can achieve its goal of a billion users and if it can get to this then it may well be one of the most successful crypto projects. The network effect will be essential to their success and building users over the next 12–24 months will be essential to its long-term survival and ultimate success.
Ravencoin is an interesting project that may be difficult to immediately understand what it’s trying to achieve. Simply, RVN is attempting to move securities, stocks, shares etc. onto the blockchain. We will discuss three main reasons why this might be a good idea: speed, security, and trust.
SPEED, SECURITY and TRUST
The blockchain brings three key features with the tokenization of securities: Speed, Security and Trust. Firstly, the Ravencoin has one minute block times so transactions should be quick, certainly much quicker than the several business days that it may take in traditional markets. Next, the blockchain is secure, very secure. Bitcoin operates at an incredibly difficult hash rate, meaning it requires immense computing power to mine the next block as so many computers are competing for it. Finally, blockchain removes trust from the transaction of securities. If you want to invest with traditional methods then you will need to trust a third party to deal with your transaction and most likely for the custody of the investment. With Ravencoin you can purchase these securities simply and without the need for a third party.
Let’s have a look at a different use case, as with Ravencoin it can be difficult to understand its utility without examples of how it could work.
Say an entrepreneur wants to start a business, they can create a token, maybe 1000 tokens for $1 each, investors can then buy some of these to help the business raise the capital. These tokens can then be traded by investors as easily as transferring a token to another address. If the business does well and makes a profit, the entrepreneur can issue dividends on the blockchain to all that hold the token. It doesn’t matter if these have been traded, the dividend will go to whoever holds the token at that time. This is all on a form of the Bitcoin blockchain so the tokens are unable to be replicated or double transferred, making it safe and secure.
When shares are bought in the USA they are purchased under a postal address of the investors home or business, this means that communication between companies and their shareholders can be difficult. Say there is a vote that needs to take place. In order to post information to those homes, the company must purchase the postal information from another company that holds the addresses. Once it’s been sent out they must then return mail with their vote. This is expensive, time-consuming, and prone to mistakes and human error. With Ravencoin, a message can be sent out to those holding the shares and a voting token can be issued, the shareholders can then vote instantly by sending their token to the option they support.
Introducing stocks, shares and securities to the blockchain appears to be inevitable, whichever projects manage to get a good hold in this movement will likely be good investments. If Ravencoin is one of the ones that can do this, is another question, it has sound ideas but will need to see more widespread adoption in order to achieve this goal.
Restart Energy $MWAT
Through this article restart energy will be referred to as Mwatt so to be brief. Mwatt attempts to introduce the blockchain to the energy industry and despite the word decentralise being thrown about a lot in the crypto space, I think it’s applicable in this case. Mwatt is an EMR20 token based on the Ethereum blockchain and is a utility token for use within its own ecosystem. Mwatt is based in Romania as is coming out of a European market, but with a vision to expand globally.
Mwat’s vision is to create a decentralized network, enabling the virtual store of electricity so that people can buy and sell energy, freely, without a centralised grid. This is unique idea and a convincing use of blockchain technology. This will be driven by the creation of RED franchises which take advantage of energy deregulation if countries and form a network of smaller, predominantly renewable based, energy producers. Their website lays out plans to expand into the rest of europe and the USA by 2019, and into 38 countries by 2020.
You might be wondering how a token comes into all of this? The token is a combination of a fundraising for the running of the operation and as a utility for the transactions on the network. One token is equal to one unit of energy. Energy production is paid for by tokens, the producer can then chose to change this into ethereum and/or fiat. The model in place means that people are effectively selling to one another, without the middleman of a grid, therefore this creates improved efficiency. Efficiency means savings, Mwat suggest that producers will be able to sell energy at 30% higher than retail and consumers will purchase at 30% lower. This is a big claim if it can be achieved.
Personally, I believe that the greatest barrier to the success of Mwat is not any intrinsic issue with the technology or its vision, but rather the barriers to the growth and adoption that can be found in conventional business. Mwat will only succeed if it can achieve widespread adoption and create a strong network for the token to be used in. If you are investing in the token for speculative, rather than utility purposes, then bear this in mind, its not viable for the token to do well in the long run, without the business on the ground doing well. This being said, it is possible for short to medium term spikes in the price to be brought about from pure speculation on the altcoin market.
Mwat combine strong principles of decentralisation and democratisation to a critical industry. People will always need energy, this is one way to be invested in the space, that’s not centralised conventional industries, often seen as inefficient and responsible for unreliable and increasingly unaffordable energy. However, this is reliant on the speed of adoption across Europe and then the States. Certainly keep an eye on this project!
Ripple is an interesting hybrid between traditional financial institutions and new blockchain technology. This is a very different beast to a lot of the other projects we have covered, it is far more centralised than typical blockchain projects, as Ripple, unlike Bitcoin, is a corporation that promotes the Ripple network and the XRP token. Its aims is to operate as a low-cost banking alternative allowing for cross-currency transactions. Please bear in mind this is not Bitcoin, Bitcoin is, of course, great and at Alt500 we are big fans of Satoshi’s vision. However, try to look at Ripple with an open mind and come to your own decision. It is not our job to shill you different coins and projects, we try to give you the analysis so you can make your mind up independently. Anyway, let’s get into it.
The Ripple protocol provides a settlement network for an enormous range of currencies, from air miles to bitcoin, allowing individuals and businesses to instantly settle transactions across different stores of value. You could purchase a product in bitcoin through the ripple network, whilst the vendor receives the payment in their chosen currencies, for example, dollars or XRP. This can occur because of the settlement protocol, the transactions are settled live and instantly and the best route between the alternative currencies are found. So you place your payment in bitcoin, this is then translated into the preferred currency of the recipient by matching it to an order on the global log of pending transactions.
The ripple network can process transactions from any currency or token, but the $XRP token is native to the network. 100 billion XRP have been created, but approximately 60 billion are being held in cold storage by the Ripple corporation to be released over the coming years. Ripple is very transparent about this and the exact details of how much is held and how much will be realised and when can be found here. Some people have voiced concerns about the possibility that Ripple is able to ‘print’ more XRP which would dilute supply and is exactly what many crypto supports find attractive about decentralised currencies. The head Cryptographer at Ripple, David Schwartz, dismissed this claim arguing that the code has been put in place and the total supply of XRP is fixed.
The team at Ripple are one of the most impressive in the cyrpto space. CEO Brad Garlinghouse has spearheaded projects at AOL and was Vice President a Yahoo! The Senior Vice President of Xspring at Ripple is Ethan Beard who led the Facebook Developer Network and New Business Development at Google. The list of former Silicon Valley employees goes on and shows the strength of Ripple as a company. The full details of the team can be found here.
So, Ripple and XRP really seem to divide opinion. Bitcoin maximalists see it as a rehashing of the current financial system, whilst Ripple proponents see it as a low cost, secure and independent alternative that delivers all the benefits of bitcoin, but faster and cheaper. We will let you make up your mind on which is more appealing. Remember, they are very different projects and it is possible that both Bitcoin and Ripple/XRP can peacefully co-exist and potentially even complement each other.
Telcoin is probably one of the lowest market cap projects that we have covered so be sure to bear this in mind when reading this review. It looks to spread crypto by utilising pre-existing telecommunication networks. Its market cap is around $12 million meaning that bitcoin is approximately 5000 times larger. This feeds into the concept of network effects, where users benefit from the growth of a network that they participate in. It has some similarities to economies of scale and they are important in the crypto space particularly for projects such as Telcoin. As Telcoin has a relatively weak network it is essential that this grows in order to not only survive but to be successful.
Telcoin looks to create a network based on mobile phone networks. About 5 billion people have phones, far more than desktop computers or laptops, which means that if this pre-existing network can be tapped into, this should mean the growth of the project will be faster and more reliable. It is hoped that through a series of partnerships with telecom providers they will be able to distribute the tokens to users in a secure way and complying to the regulations they need to. Telcoin also outlines the huge global population of people who do not have access to financial institutions, their project could bring online banking to the 2 billion people who are estimated to not have a bank account. We can all see the good in trying to give the poorest people in the world the access to the tools that can help to alleviate their poverty.
Telcoin is spearheaded by the charismatic and experienced Claude Eguienta. Claude has over 10 years experience in tech start-ups and crypto projects, he is supported by Paul Neuner who comes from a background in telecoms, this combination is essential for Telcoin’s mission of integrating cryptocurrencies into the mainstream by relying on pre-existing telecommunication networks.
The first concern for us is the scale of the mission that Telcoin is embarking on. In order for Telcoin to be successful, it needs to be widely distributed to billions of people, it does not occupy a niche in the market that could bring more limited but more achievable rewards, instead, they have opted for high risk, high reward. Next, the distribution of Telcoin is challenging and not entirely clear how it will be carried out. They suggest that it will be distributed to the telecom providers and then they will sell this to users, however, it is unclear what the incentives are and there may be some legal issues in this approach.
There is no doubt that what Telcoin plan to do is admirable if they can bring online banking and financial services to even a few people who do not have access to traditional financial services then they must be congratulated on this. However, there are some significant roadblocks between Telcoin’s vision and reality. If the network can grow and legal issues are smoothed out then Telcoin could be pretty revolutionary, but this is a big if. Telcoin is a big gamble but an interesting and thought-provoking one at that.
This time we will be covering Tether, a project distinctly different from the other crypto projects we have covered. Tether is one attempt to create a solution to the problem of volatility in the crypto market.
Tether is the largest stable coin currently on the market and is supposedly pegged directly to the U.S. dollar. The reason for this is so that tether can be used to purchase products and services at a fixed rate. If you were to buy a $10,000 car using Bitcoin a year ago, it would cost approximately 0.5 Bitcoin, today that would cost around 2.5 bitcoin. This type of uncertainty is undesirable for businesses who are considering accepting cryptocurrencies. This is where a stable coin comes in as it allows crypto payments to be made with very low costs and the certainty and trust that the dollar brings. Another use case for Tether is international remittances. Currently, it is very expensive to send dollars across the world, but with Tether, $USDT can cheaply and be quickly transferred globally.
So, Tether is designed to be worth exactly $1, but this has not always been the case. There are certain factors that make it difficult to stabilise a currency exactly inline with another currency. Over the course of the past year, Tether has maintained a general level between $0.98 and $1.05, however, there was a flash drop to around $0.85. Now, how much does this matter? It is uncertain at the moment how much effect this will have on the long-term success of Tether, but the most important thing is that it can remain stable around the dollar mark well into the future.
Tether promise that for every Tether that is purchased they hold $1 in their reserves. Now, we are not suggesting that Tether is lying or being manipulative about the reserves and 1:1 holding of traditional currencies, however, the possibility is there and this may go some way to detract from the trust placed in Tether, and other stable coins. In fact, Tether goes quite a significant way to dispell this mistrust by publishing the holdings they have and when coins are added or removed from this on a daily basis.
The volatility of cryptocurrencies makes the idea of a stable coin incredibly appealing and it’s use cases are very clear. Is Tether the best stable coin? It is certainly the largest based on market capitalisation and for stable coins the larger the base of currency the more likely it is to remain stable, so from this perspective Tether is best. However, past price movements of $USDT do provide some concern on the stability of the project, which is worrying for a project whose sole aim is to achieve dollar parity. This being said, the range of $0.98-$1.05 is not the end of the world for Tether. Euros and Pounds are smoothly traded globally with the Dollar for goods and services and it is common for similar price discrepancies to be found between these currencies.
Whitepaper: Click here
Tezos is unlike other tokens that are built on an pre-existing platform such as Ethereum, because it is its own new and unique platform. This presents opportunity and challenges in equal measures, it will be very difficult to challenge big native platforms such as Ethereum and Neo; but if it manages to do so, the rewards could be substantial.
One of the defining characteristics of Tezos is its governance structure. Tezos aims to achieve a democratic system that allows those that hold the coin to vote on key decisions. This enables there to be consensus on the direction of the project and it is hoped that it would prevent issues such as those in Bitcoin where there is disagreement on the direction leading to a fork e.g. Bitcoin Cash. Tezos tries to strike a balance between decentralisation and achieving effective consensus.
This all sounds great, but there are some serious obstacles that will have to be overcome if the vision is to be accomplished. Firstly, Tezos operates using a different coding language to Ethereum or Neo, this presents barriers to entry as any developer looking to move on the Tezos platform will have to learn a new language. This will take time and will require Tezos to present a product that is appealing enough to persuade developers to move over from Ethereum or Neo. This leads onto the next problem that Tezos continues to face; an issue with its public perception. Tezos faced some legal challenges (see link below) and many expressed doubt regarding its potential to be inflationary in regards Baking (see below).
Baking is Tezos’ way to try and keep people invested in the network longer term. By giving people that lock away their coins a return on investment of around 5% per year, subject to change depending on decisions of governance, it keeps them from trading them and contributing to price decline and or fluctuation. This is an appealing option for the space as one key difference between conventional investments and crypto, is that there is rarely dividends paid on investment in crypto. However, the ROI may cause inflation because if everyone decides to bake their Tezos then the 5% return would be from new Tezos, thus cancelling out any benefit. This being said, if the price were to rise from increased demand then this would not occur, i would imagine this is the hope of the Tezos governance.
Personally, i don’t think that Tezos offers anything that isn’t already out there and there is big competition in this area that it needs to challenge, so for me this is unlikely.. However, there is a large community around Tezos and this could see it grow. The idea of baking is both appealing for investors, but also worrying for potential long term asset depreciation. Perhaps the most appealing element of Tezos is its governance structure, allowing for autonomous direction and decision making.
Tokenpay is attempting to establish itself as a ‘Bitcoin on Steroids’, based on some of the code from the Bitcoin blockchain, but with faster block confirmation, greater security, and a Proof of Stake consensus mechanism. The idea of TokenPay is to try and create a cryptocurrency that bridges the gap with consumer purchases. Bitcoin is slow and can be expensive for small transactions, but TokenPay attempts to make it easier, cheaper and faster for consumers to purchase products with crypto. TokenPay has additionally acquired a proportion of a German bank in order to warm relations in the banking sector and issue cards in a traditional fashion, but with crypto funds.
SECURITY & SPEED
TokenPay has relatively fast block confirmation times of around 60 seconds, however, 6 block confirmations are required for a transaction to be confirmed. This means the total transaction time is not particularly speedy and doesn’t convincingly beat Bitcoin. The CEO of TokenPay, Derek Capo, boasted on Twitter that there were zero fees on $TPAY transactions, there is a minimum transaction fee of 0.0001 $TPAY. This is exceptionally low and a positive feature of the TokenPay network. Security is one of the appealing aspects of TokenPay as they have made particular efforts to build on the security of the Bitcoin system. There are 6 main features that improve security:
· Ring Signature
· Secure Communications Interface
· Dual-Key Stealth Addresses
· Zero-Knowledge Proof
· Tor Network Integration
The Zero-Knowledge Proof means that transactions are not traceable to specific keys as they are jumbled up as the transactions are processed. This is similar to the security features on other privacy coins such as Monero and if you want to check out the technology behind these security measures, be sure to take a look at the TokenPay whitepaper.
PROOF OF STAKE
One key difference between TokenPay and Bitcoin is the process by which the blocks in the blockchain are validated. The proof of work system used in the Bitcoin protocol requires miners to solve problems using computing power, where any actor that attempts to double spend or carry out a hostile attack is prevented from doing this by the consensus of the other miners. The proof of stake system used in Tokenpay requires holders of the token to ‘stake’ it in an open wallet. Any funds that are staked and used for a hostile attack are then lost, while funds that are staked and used to confirm a block are rewarded with approximately a 5% annual return on their stake. The 5% return is if all the tokens in the network are staked, at current levels the ROI is closer to 13%. There are some distinct benefits of both systems of block validation, but the main advantage of PoS is that it is much more energy efficient as miners aren’t required to use energy to power computers. PoW, particularly in the Bitcoin network, has the benefit of the network effect as the number of miners means the network is particularly secure and can only be manipulated with over 51% of the computational power.
WEG BANK AG
One very unique aspect of the TokenPay business model is the acquisition of around 10% of German bank WEG Bank AG, with the option to increase this to majority shareholder with 80%+ if agreed with all parties involved. This is in partnership with the Litecoin foundation, who currently hold the shares in the German lender. The strategy behind this move was to market their own physical debit cards that would allow consumers to spend crypto as easily as they would do with a fiat debit card. The date that these cards will be released is yet to be announced. Hopefully, this move will help to improve the relationship and understanding between the banking sector and crypto companies.
TokenPay’s links with Litecoin and Verge show that this is a promising project with support in the crypto world. Its acquisition of a proportion of WEG Bank is interesting but has yet to show any real ground-breaking impact on the success of the company and it’s unclear whether it will do so. The privacy features are positive for those people who value anonymous transactions. The proof of stake block validation needs to prove itself as a real contender against proof of work. In terms of its vision to be a ‘Bitcoin on Steroids’ and test Bitcoin’s superiority, it’s a long way off. The network effect is essential to the long term success of this vision and so far TokenPay has not demonstrated that it is significantly better than Bitcoin to the extent that it can challenge it’s position as number 1 crypto, particularly if the Bitcoin lightning network goes to plan.
TomoChain’s main goal appears to be solving the scaling problem, both Ethereum and Bitcoin can only deal with a handful of transactions per second, TomoChain will try and solve this issue by using a network of 150 masternodes who validate and produce the blocks in the blockchain aiming for 1000s of transactions per second. The vision is that decentralised apps (dApps) will be built on the network allowing for better user experience, low fees, and greater scalability. Users will then use $TOMO within the ecosystem on dapps and other applications. Tomo looks toward the mainstream hoping to generate millions of regular users.
INTERNET OF VALUE
If the first wave of Internet was about a transfer of information, then the new developments of blockchain are creating a second wave, where value is transferred across the internet. This started with Bitcoin transferring a store of value, TomoChain are attempting to move this on by creating a transfer of value for media and applications. One example of this is BigBom Eco, a dApp that aims to decentralise and improve transparency in the advertising and publishing sector. They believe by using crypto and the TomoChain network they will be able to provide more for less, as they take advantage of low fees and the peer-to-peer network.
You need 50,000 $TOMO in order to become a masternode, as of today this would cost around $15,500, so a significant investment. However, it is not as simple as owning 50,000 $TOMO, you also must go through a voting system where people vote using $TOMO in a smart contract. Under performing masternodes, measured by their contribution to the network, can be voted out, users are incentivised to vote for more effective masternodes as they receive returns, in $TOMO, based on their ballot contribution to the masternode.There are only 150 masternodes, so this does create some significant centralisation, this seems to be a taboo word in the crypto space, however, if it is supported by a network of users who vote and participate keeping only the best masternodes in place, does it mean that centralisation is negative?
A dapp is similar to an app that you may have on your phone or computer, however it is run by a network of nodes rather than a centralised node (the company running the app). Decisions regarding the direction of the dapp are agreed upon via consensus mechanisms within the network, for a more detailed look at dapps click here. It is hoped that dApps will be built on the network in a user-friendly way that can build some real user numbers, so far dApps have lacked widespread adoption, with very few daily and weekly users. Until people use these dApps because they are the best they can find, rather than an interesting fringe movement of decentralisation, there won’t be any widespread usage. They must be better than their centralised competition, this is important.
TomoChain is a very interesting project with some real potential. There are a couple of things that may hold Tomo back from being a part of the crypto future. Firstly, the centralised model may cause some concerns, however, if it proves to be an efficient system where masternodes are elected and maintained fairly, then there doesn’t seem to be an inherent problem with this model. Secondly, the usage of dApps is essential to the longevity of Tomo, if adoption doesn’t pick up in the coming years then the TomoChain ecosystem has little chance of survival. However, these hurdles are not insurmountable and there is a real community support for Tomo that may help it in its vision.
The Tron Foundation was founded in Singapore, in September 2017, and since then has grown to open offices in Beijing and San Francisco. It is led by founder and CEO Justin Sun’s vision of a truly decentralised internet.
Tron seeks to create a decentralised internet where content creators are protected and rewarded for their content. To do this, a new infrastructure must be laid down.
WHY WOULD WE NEED TRON?
Problems with the current system lie with the necessity of a middleman. Huge companies like Facebook or Google are needed to host a creator’s content, but they take parts of the profit generated from users engagement with that content. What’s more, the monopoly they have over content sharing on the Internet as we know it means that, theoretically, they completely control how much a creator gets paid and could severely and disproportionately limit payment as they saw fit. This is a worrying precedent, and issues relating to it include censorship- we have already seen in the past couple of years Youtube demonetising videos they deem to be unsuitable to run adverts on. Despite public outcry, Youtube’s monopoly on video content does not seem to have lessened. There is also the issue of ownership. Content is often stolen and reshared across the Internet, with the creators going unrewarded.
The blockchain operating system Tron runs on should prevent both of these kind of things from happening, by cutting out the middleman between creators and users/audience, and allowing the tracing of web content to its original creators. It also tries to tackle the issues of data privacy. Whereas now, huge companies hold great swathes of their users data and sell them to advertisers to make money, TRON would support its own platform with Tronix, its own cryptocurrency.
The Tron Foundation’s cryptocurrency is ‘Tronix’ (TRX). This operates in the same way as Ethereum and Ether. Tronix is what creator’s would be proportionally rewarded with, the amount gained dependent on how successful the content is. While Tron supports many cryptocurrencies, they would be converted to and circulated on the platform as Tronix. Tronix is listen on many exchanges including Binance and gate.io. It boasts the capability for an impressive 2000 transactions per second, and claims to be scaling to over 5000. Earlier this month, TRX surged up 16%.
Despite being barely a year old, Tron has gained significant hype. The acquisition of peer to peer networking service BitTorrent is promising- this is a piece of software that is essentially decentralised, where Tron hopes to incentivise seeding (hosting parts of data for other users to download) with Tronix and thus increase download speeds. Partnerships with Baofeng (a Chinese video hosting service) and Peiwo (Justin Sun’s previous project, a large audio content sharing community app) make promises of a large userbase- but can they be fulfilled?
Justin Sun is a charismatic leader and his vision seems great, but we must be wary of getting sucked in by PR and hype. Although these are somewhat necessary for TRON to succeed- it needs huge exposure to get a whole industry to move across from a centralised platform to its own, there are many questions over Tron that still haven’t been answered. No one seems to truly understand how the platform will work with technological details slightly hard to come by, and there have been some allegations over Tron exaggerating the user numbers of its partners. That being said, Tron is an idealistic project looking to address significant problems in the current setup, so is definitely worth keeping an eye on.
Interview by TheCryptoLark with founder Justin Sun:
Tron Technical Documents:
Verge currency, previously known as DogeCoinDark, looks to carry out the key original goals of Bitcoin, those being: a secure, decentralised network; instant transactions; complete financial freedom and minimal transaction fees.
Verge is an open-source cryptocurrency, developed entirely by volunteers and funded by its community. They place strong emphasis on their community’s role and have taken efforts to steer clear of more corporatised actions such as offering an ICO or allowing any XVG to be premined.
Unlike most cryptocurrencies, Verge has an extremely high maximum supply of 16.5 billion XVG. Compare this to the approximately 21 million BTC cap that Bitcoin has. Verge lists their reason for this high cap as ‘to allow for convenient payment amounts in everyday use’ - indeed, it’s easier to imagine the average person buying a cup of coffee for a few XVG, rather than 0.0001 BTC, for example (scaleability problems both coins face aside).
Verge markets itself as a privacy coin, stating that they are a ‘secure and anonymous cryptocurrency’. Privacy flaws that restricted the complete financial freedom Bitcoin aimed for include its Public Ledger, where transaction information is public and can therefore be linked to a person.
Verge claims to avoid these issues by using its much touted ‘Wraith protocol’, which promises to allow users to toggle between transacting on the public ledger, or to stay completely private if so wished using a TOR network. The TOR network encrypts and hides the IP addresses of its users making transactions. It also allows users to receive funds to their wallets anonymously using stealth addresses, preventing third parties from being able to track receivers addresses.
You may ask- why ever bother using the public ledger? Well, there are a few reasons. For a user, think of it as you would a receipt for a transaction paid for in fiat. Some record of a transaction would be useful in the event of lost data or a failed payment. I believe that Verge also included this option so that if in the future governments or businesses ban private transactions, the coin can remain useful.
However, months and months of delays to the Wraith protocol’s launch, followed by its eventual launch in January 2018 breaking many people’s wallets and not allowing transactions led to many investors pulling their money out and claiming it a scam. Furthermore, since then it’s been alleged that the Wraith protocol doesn’t actually work as it claims to, and that user’s ID addresses were not being obfuscated by TOR at all.
2018 also saw repeated hacks of Verge. In April, a hacker got away with 20 million XVG after a time warp attack which allowed them to strike a block every second. After a failed fix from the developer’s, a similar attack occurred in May where 35 million XVG were generated. Some suggested Verge suffered a third attack shortly afterwards, but this was denied by the developers.
Verge’s aims and community are to be commended. It is always refreshing to see a project in the crypto space run by volunteers with seemingly great intentions, in line with the original goals of crypto - to be a free and global means of exchanging information and currency. It has marketed itself well, gathering many enthusiastic fans, and I believe its high market cap is one great and ostensibly simple way of facilitating wider adoption of cryptocurrency.
However, the disorganised nature of its development, the security concerns associated with its attacks, and the questions hanging over the viability of its technology have all understandably done huge damage to the reputation of Verge. Hopefully, they can address these issues going forward. If not, it is hard to imagine they’ll attract new users or that their current investors, traders, and miners will keep hodling.
You can find Verge’s white paper here: https://vergecurrency.com/static/blackpaper/verge-blackpaper-v5.0.pdf
The best crypto projects find a problem and find a solution. Maker are trying their luck at creating a decentralised stable coin. The most significant problem with more centralised stable coins, such as Tether, is that they have rather opaque governance and some people are sceptical about to what extent it is asset backed. In a centralised system the same problem occurs as with government based fiat currencies, a lack of transparency. Maker hope to resolve this issue by creating a stable coin called $DAI that is pegged to the US dollar through decentralised programming that maintains this level by buying and selling the $MKR token.
Stablecoins are designed to counter the volatility of regular cryptocurrencies compared to traditional fiat currencies, such as the US dollar, the idea that consumers are more likely to spend if they don’t think their crypto holding is going to increase in value relative to fiat. Maker is a smart contract platform on Ethereum that backs and stabilizes the value of Dai through a dynamic system of Collateralized Debt Positions (CDPs). When, due to changing market dynamics, the market price of Dai deviates from the Target Price in the short run, Maker Governance can mitigate this price instability by modifying the Dai Savings Rate. The Dai Savings Rate is a global system parameter that both affects how much Dai holders can earn in return on their holdings over time, as well as the base borrowing cost for generating Dai from CDPs. Anyone who has collateral assets can leverage them to generate Dai on the Maker Platform through Maker’s unique smart contracts known as Collateralized Debt Positions.
The principle of locking in your DAI can be tricky to get your head around to begin with, here is an extract from the MAKER whitepaper which explains it very clearly:
· ‘Example 2: Bob wishes to go margin long on the ETH/DAI pair, so he generates 100 USD worth of Dai by posting 150 USD worth of ETH to a CDP. He then buys another 100 USD worth of ETH with his newly generated Dai, giving him a net 1.66x ETH/USD exposure. He’s free to do whatever he wants with the 100 USD worth of ETH he obtained by selling the Dai. The original ETH collateral (150 USD worth) remains locked in the CDP until the debt plus the Stability Fee is covered.’ (MAKER WHITEPAPER)
With Tether you must trust them that they back each Tether purchased with a Dollar, this is not guaranteed and many in the crypto space are sceptical about the legitimacy of this claim. With DAI it is linked to the MKR token which is created or destroyed in order to keep the price of the DAI as close to $1 USD as possible. The other function of the MKR token is being used as a method of governance. Governance is done at the system level through election of an Active Proposal by MKR voters. The Active Proposal is the smart contract that has been empowered by MKR voting to gain administrative access to modify the internal governance variables of the Maker Platform. This ensures the network is sufficiently decentralised.
MAKER is a very interesting project, the way in which they have approached creating a stablecoin is commendable as they have kept close to the principles of crypto, decentralisation and transparency. For us, this is the most attractive model for a stablecoin, but the very idea of a stablecoin is based on the supremacy of fiat currencies, if the end goal is Bitcoin mass adoption then to have a cryptocurrency pegged to the $USD is not particularly useful; however, in the meantime removing volatility whilst preserving decentralisation and transparency is very impressive.