Regulated Cryptocurrency Custody Will Bring in Big Money: Hedge Fund Manager

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Anyone who stays in the crypto-space long enough begins to recognize the familiar mantras.

“Don’t invest more than you can afford to lose.”

“We’re in the early days of the internet.”

“Adoption is coming.”

They’re all valid points, and currently the latter is being held back by lack of regulation and typical financial services, keeping cryptocurrency on the sidelines of the global financial markets as a fringe space, a risky investment with no guarantees and no oversight or protective measures.

Hedge fund managerKyle Samani told Bloomberg in a phone interview:

“There are a lot of investors where custodianship was the final barrier. Over the next year, the market will come to recognize that custodianship is a solved problem. This will unlock a big wave of capital.”

Samani has been testing Coinbase Inc’s new custody service, one of many being launched throughout the ecosystem. The Korean authorities recently admitted to delaying crypto-regulation simply to avoid further legitimizing the movement, but regulation is on the way and the financial services and so too are the protections and safety mechanisms enjoyed by those in the traditional banking system.

Global financial services group Nomura recently launched institutional-grade custody services for cryptocurrency assets, and earlier this year BitGo acquired Kingdom Trust, a $12 billion asset manager to act as custodian for their assets with talks of BitGo even becoming an independent custodian in future.

While these services may be seen by some as centralized and/or requiring trust, the kind of phenomena many turn to the crypto-space to avoid, these optional safeguards are necessary for increasing the level of institutional investment.

Bringing in the Whales

Regulated custody services allow institutional traders to open huge positions on the stock market without having to take personal responsibility over the custody of the funds. This allows hedge funds to give their traders millions of dollars without risking them flying to the Bahamas with it, and it helps prevent outside theft and accidental losses as well, essentially acting as an insurance policy for the millions and billions being traded every day.

Similar options are currently limited in the cryptocurrency space and institutions wishing to send their traders into the fray have to accept major risks in doing so. It’s difficult to track crypto assets, even more difficult to return them, and sending funds to the wrong address will usually result in their permanent loss, all of which is new and unfamiliar territory for some. Traders from major firms operating in the crypto markets are currently in personal control of huge amounts of money in a space rife with hacking and phishing scams with little to no regulatory oversight to protect investors.

With high levels of security come high fees – Coinbase charges $100,000 for setting up custody services at the moment along with 10 basis points per month and a minimum balance of $10 million. The funds are held in cold storage and require up to two days to remove due to the various security protocols that need to be bypassed, a far sight from simply storing funds on a paper wallet. However, once major firms begin to trust the new and secure infrastructure being developed, major investments will follow.

The cryptocurrency market cap is currently $275 billion compared to a global stock market cap of approximately $100 trillion. In order to grow the cryptocurrency space, institutional investment is needed. With crypto-startups exploring custodianship along with existing Wall Street custodians like Jp Morgan, Northern Trust, and Bank of New York considering expanding their services to the world of crypto, it seems like a matter of time before the level of investment in the space changes dramatically.

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Bancor Launches Community Token Network to Combat Poverty in Kenya

Bancor is launching a network of blockchain-based community currencies in Kenya aimed at combating poverty, according to a press release shared with Cointelegraph June 18.

Bancor, self-described as a “decentralized liquidity network,” secured a then-unprecedented $153 million in under three hours in an Initial Coin Offering (ICO) June 2017. As of press time, it is the world’s largest decentralized crypto exchange with almost $1.6 million in trade volume, according to data from CoinMarketCap.

The company’s new project seeks to stimulate local and regional commerce and peer-to-peer activity by enabling Kenyan communities to create and manage their own digital tokens.

To oversee the launch, Bancor has partnered with a non-profit foundation, Grassroots Economics, which currently runs community currency programs in six locations across Kenya, and serves over 20 schools and 1,000 local businesses.

Grassroots will use the Bancor Protocol to expand its existing paper currency system into a blockchain-based network. The new tokens will be tradable using fiat or crypto on the Bancor platform, which the organization hopes will allow global users to support local communities from afar.

User-generated cryptocurrencies will be interchangeable for one another with no counterparty involvement. A balance in a stabilized “parent” token is under development and will be initially pegged to the Kenyan Shilling to enable convertibility between the network of local currencies.

The first pilots from the project are planned to launch in two economically disenfranchised regions of Kenya, Kawangware and Kibera.

Decentralized exchanges such as Bancor exclude a middleman and the need to rely on a third party service to hold customers’ funds. Their trading mechanisms are based on smart contracts and atomic swaps.

In Bancor’s case, its protocol is implemented using multiple contracts involving a token converter and an ERC-20 compliant SmartToken. SmartToken users can hold one or more tokens or cryptocurrencies in reserve, using a smart contract to automate their transactions.

Bancor is seeding the initial currencies by contributing capital generated from its $153 mln token sale in June 2017.

Blockchain’s potential to underpin a fairer and more equitable society has been recognized by leading world organizations, including the United Nations, who used the Ethereum network to distribute aid to Syrian refugees in 2017.

The World Bank’s Findex 2018 report indicates that 3 bln people globally are underbanked, showing that in the developing world over the past three years, savings have declined, credit has gone flat, and resilience has gone down.

As of press time, Bancor (BNT) is trading at $3.27, slightly down from the time of its ICO sale price of $3.92.

Bitcoin Miners in China’s Remote Regions are Undeterred By Restrictions

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Though Chinese authorities have previously taken various measures aimed at curtailing the trading of cryptocurrencies, the mining of Bitcoin has continued unabated in some of China’s remote parts according to a Nikkei Asian Review report.

These regions enjoy excess electricity supply capacity and are considered poor relative to the economic powerhouses of Beijing and Shanghai. They include Sichuan Province, which is fondly known as the capital of Bitcoin mining, and Qinghai Province.

In China’s Qinghai Province one of the large-scale mines is owned by the ‘fuerdai’, a term used to describe the rich kids of the country’s military and Communist Party officials and other elite. While both Sichuan and Qinghai provinces enjoy abundant and cheap electricity, the two neighboring regions are relatively poor due to their heavy reliance on tourism and the mining of ground resources. Qinghai, for instance, plans to develop cryptocurrency as an industry in the hopes of creating jobs and generating revenues for the local government.

Geopolitical Purposes

While there were reports earlier in the year that Chinese authorities were putting in place measures aimed at severely curtailing the mining of cryptocurrencies this has not materialized. According to Nikkei Asian Review, one of the reasons why a complete obliteration of the sector has not happened is because China is keen on influencing the international flow of money. The United States already enjoys this power through the U.S. dollar and cryptocurrencies could do the same for China.

“Xi [the President of China] desires this power for China, similarly to how the U.S. seeks to retain the dollar’s key-currency status through its network of transactions worldwide,” observes the Japanese publication.

Currently, it is estimated that China’s share of the globe’s cryptocurrency mining capacity is around 70%. The chief executive officer of Ripple, Brad Garlinghouse, was even recently quoted as saying that ‘Bitcoin is really controlled by China’.

Economic Boost to Poor Regions

The dominance of the world’s most populous country in Bitcoin mining is partly due to the fact that cheap electricity is abundant in the country. Besides Sichuan and Qinghai, regions such as Inner Mongolia and Xinjiang possess huge coal resources and the mining of cryptocurrencies is an opportunity to transform their less-sophisticated economies.

The world’s second-largest economy is also home to some of the leading manufacturers of crypto mining hardware and this includes Bitmain Technologies. The Bitcoin mining giant Technologies, for instance, has put up some of the world’s biggest mining facilities in Inner Mongolia. As an illustration, the Inner Mongolia city of Ordos sells electricity to Bitmain at only $0.04 per kWh, well below the prices in other parts of the world.

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Crypto Not Scalable Enough to Be Money, Says Bank of International Settlements

The Bank of International Settlements (BIS) has said that cryptocurrencies cannot scale to function as money, in a 24-page article published yesterday, June 17, as part of its annual economic report.

According to the BIS – an organization based in Switzerland made up of 60 of the world’s central banks – cryptocurrencies will not be able to scale to become a medium of exchange in a global economy. The BIS report outlines three key “shortcomings” that will prevent crypto from replacing money – these being “scalability, stability of value and trust in the finality of payments.”

BIS criticizes the decentralization of cryptocurrencies as a flaw rather than a strength, alleging that “trust can evaporate at any time because of the fragility of the decentralised consensus through which transactions are recorded.”

BIS makes the case most blockchains can at best only offer “probabilistic” transaction finality by privileging the longest chain on the ledger to negotiate conflicting transaction validations.

In this vein the report raises alarms over the “forking” of blockchains that can cause cryptocurrencies to split entails the risk of “the complete loss of value.” The report cites an erroneous Bitcoin (BTC) software update in March 2013 that caused the blockchain to temporarily split and the price of BTC to drop “almost a third,” – though BIS fails to mention that the coin regained most of its losses within a few hours.

The BIS also raises concerns that as the shared ledger grows, processing transactions demands electricity and computing resources that exceed even the most powerful facilities.

The “communication volumes” and storage demands associated with mass crypto adoption, the bank argues, could “bring the Internet to a halt.” Less drastically, congestion of the blockchain simply risks that “the more people use a cryptocurrency, the more cumbersome payments become.”

The bank also raises concern over the concentration of power across “all” cryptocurrencies, citing the problem of “manipulation,” with mineable cryptocurrencies being controlled by a small pool of miners who have high-powered processing resources able to keep up competition.

The report is notably focused only on cryptocurrencies that use proof-of-work, permissionless blockchains, although it acknowledges the existence of alternative consensus mechanisms such as proof-of-stake, as well as scaling solutions such as the Lightning Network, maintaining that they “have yet to be proved in practice.”

A March report released by the BIS refuted the effectiveness of so-called central bank digital currencies (CBDCs), warning of their potentially “adverse” consequences, and calling for further research into their possible effects on global financial stability.

Korean Authorities Admit to Postponing Cryptocurrency Regulation Because it Legitimizes Market

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Authorities have admitted that the South Korean government had postponed the regulation of the cryptocurrency sector because it feared consumers will acknowledge it as the government legitimizing the cryptocurrency market.

Government is Aware Regulation Will Legitimize Market

Last week, CCN reported that the government of South Korea and its financial agencies including the Korea Financial Intelligence Unit (KFIU) are set to regulate cryptocurrency exchanges like banks, with strict policies and regulations.

On June 8, at a Policy Advisory Council meeting, KFIU director Kim Geun-ik confirmed that the government has at last agreed to regulate the cryptocurrency market to prevent cryptocurrencies from being used by criminals to launder money and to limit hacking attacks.

“Under current regulations, there are clear limitations in preventing money laundering on crypto exchanges because the only way authorities can spot suspicious transactions is through banks. If the bill of lawmaker Jae Yoon-kyung from the Democratic Party of Korea passes, local authorities will be able to impose identical regulations on crypto exchanges that are implemented on commercial banks,” a KFIU spokesperson said.

South Korea cryptocurrencies AccountingKorean authorities have confessed to delaying the regulation of the cryptocurrency sector. Pictured: Seoul, South Korea (Shutterstock)

Last year, in September, a member of the National Assembly Committee told local financial journalists that financial authorities have requested the government to regulate the cryptocurrency market to protect investors and lessen security breaches in the space.

“We are frustrated as well. We fully understand that the government is reluctant towards regulating the cryptocurrency market because it will inevitably lead investors to consider it as the government’s way of legitimizing the market. But, if the government leaves the cryptocurrency market unregulated, it is simply leaving it vulnerable to variou issues,” said Park yong-jin, National Assembly Committee member.

Hani, a major mainstream media outlet in South Korea, reported that government officials like Park have encouraged the government to properly regulate the cryptocurrency market because current policies, which absurdly regulates cryptocurrency exchanges as communication vendors, allow businesses to operate digital asset platforms with a $30 fee and no license requirement.

So What Triggered Korea to Regulate the Market?

A report from Hani claimed that Coinrail played a vital role in convincing the government that proper regulations in the local cryptocurrency market are necessary. Additional investigations in the aftermath of the Coinrail hack revealed that the majority of cryptocurrency exchanges in South Korea outside of the big three–UPbit, Bithumb, and Korbit–were operating without proper security measures and IT infrastructures.

More importantly, an extensive investigation into Coinrail revealed several suspicious business activities, including the fact that Coinrail was created by a company with a budget of merely $10,000. But, it was later revealed that a company called Tobesoft was behind Coinrail, as it purchased stake in the company at a valuation of $24 million.

Even at the time of the investment of Tobesoft into Coinrail, it was reported that the company did not have solid infrastructure in place and as of current, it remains uncertain whether Coinrail had a budget of $10,000 and desperately tried to expand its business without investing in its security or a multi-million dollar company was behind it after all and it operated opaquely, deceiving investors.

These suspicious circumstances revolving around Coinrail and other hacking attacks that have occurred throughout the past two years, led the government to regulate cryptocurrency exchanges as legitimate financial institutions, even though it is aware that it may trigger investors to perceive the cryptocurrency market as a legitimate financial market.

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Two Major Russian Banks to Offer Crypto-Based Fund for Retail Investors

Two of Russia’s largest banks are testing cryptocurrency-based investment options for retail investors, local news media out Kommersant reported June 15.

As part of the Russian central bank’s ‘regulatory sandbox,’ Sberbank and Alfa-Bank opted to begin experimenting with products based on so-called “digital financial assets” at a meeting last Wednesday, according to the publication.

Those assets will in fact take the form of six cryptocurrencies – including Bitcoin, Bitcoin Cash, Ethereum and Litecoin – which will form an investment portfolio.

The move comes as Russia prepares to enact binding laws governing cryptocurrencies and blockchain technology, which will see crypto become formally defined, legalized investment assets under Russian law.

Kommersant quotes Sberbank’s deputy head of private banking Anna Ivanchuk as saying:

“We want to offer our clients a completely transparent entry point for digital assets, fully in compliance with regulatory requirements and which allows investment within Russia in a product that interests them.”

The new investment product will reportedly allow the client to withdraw to fiat at will, with crypto assets being under the control of partner Group IB through bespoke “custody solutions.”

“The client in actual fact receives a share of the fund,” Alexey Prokofiev of AddCapital, another partner in the scheme, summarized.

Russia’s slow and at times unpredictable official stance on cryptocurrency has led banks to remain hawkish on integration of related technologies beyond blockchain experimentation until this year. In late January, Sberbank announced that it was opening a crypto exchange option for institutional investors via its Swiss branch.

Herman Gref, Sberbank’s outspoken, generally pro-crypto president, continued the tone on cryptocurrencies themselves this month, telling Kommersant June 8:

“I don’t buy cryptocurrency anymore, and I wouldn’t recommend doing so to anyone who does not like playing at a casino.”

The lender is nonetheless also pressing ahead with the country’s first official ICO as part of the sandbox.

Ripple Donates $2 Million to Texas University’s Blockchain Initiative

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One of 17 institutions chosen for Ripple’s $50 million academic pledge, the University of Texas at Austin will receive $2 million from San Francisco-based industry giant Ripple.

The McCombs School of Business at UT will receive $2 million from Ripple over the next five years to fund research at the institution’s Blockchain Initiative program, a report by university student newspaper The Daily Texan has revealed.

McCombs hosted its first blockchain conference in April 2018 to much interest among faculty and students from different universities including its own, the report suggested, pointing to an increasing demand and appetite to explore the decentralized technology commonly associated with cryptocurrencies like bitcoin. The conference was attended by 300 people, including Ripple executives, students and staff. Notable attendees included Goldman Sachs’ senior FinTech equity researcher Jim Schneider and Walmart vice president of food safety Frank Yiannas who delivered keynotes alongside other panelists from USAA, the SEC, ICE and IBM.

“That [conference] was the catalyst for really seeing that there was a lot of demand from students and industries and companies for having a central focus inside the business school to basically harness the demand for blockchain technology,” program director Cesare Fracassi said.

The initiative lays out three main objectives behind its foundation, namely supporting faculty and graduate students on blockchain research “across colleges” at UT, teach students “the main concepts related to blockchain, cryptocurrency and digital payments”, and be “the hub of knowledge for external relations” with the industry, policymakers and media.

While relatively new, McCombs’ Blockchain Initiative will use the funding from Ripple to finance projects, research and outreach programs that connect students to companies in the city, Fracassi added.

He stated:

Austin is a pretty large hub (for) blockchain technology companies, so I see the initiative as a way to link faculty and students to those companies.

The subject of blockchain technology is also being taught “in several classes” at McCombs with students learning about the “technological, legal and business opportunities and challenges” faced in the rollout of blockchain-powered solutions.

The funding is part of Ripple’s broader $50 million pledge to fund academic blockchain research in seventeen universities around the world. As reported by CCN, the University Blockchain Research Initiative (UBRI) includes universities in Australia, Brazil, Canada, Cyprus, India, Luxembourg, the United Kingdom, Netherlands, Korea and the United States.

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Indian State Kerala to Put Milk and Fish Supply Chains on a Blockchain

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The government of Kerala, a state in South India, is turning to blockchain tech to organize the supply chain process of everyday groceries.

The new project will specifically look to streamline the supply chain networks – including distribution – of milk, vegetables, and fish in the state using blockchain technology, the Press Trust of India reports. The Kerala Development and Innovation Strategic Council (K-DISC), the state’s think tank, will spearhead the project that will include RFID tags and the use of Internet of Things (IoT) devices to monitor transportation.

With its implementation in the dairy sector, K-DISC chairman K M Abraham explained the blockchain will continuously monitor production, procurement, and distribution of milk to ensure speedy delivery to millions of people on a daily basis. In addition, the transportation of milk within specific temperatures in refrigerated trucks will also be monitored through RFID tags and IoT equipment.

Specifically, every single component of the supply chain network will have a separate ID that will be recorded on the blockchain, enabling real-time monitoring of the quality of the product at its source at every step of the chain.

Fish-landing spots and farmlands will also be linked using geo-coded images, enabling real-time monitoring and verification of goods at every single step of the delivery process from warehouses and retail centers through to their point-of-sale locations of the customer.

The Kerala government is also considering the use of blockchain technology for its crop insurance scheme afforded to farmers. The entire process will be ‘smarter and fool-proof’ to enable quicker processing and settlement of farmers’ claims due to crop losses from natural disasters including flood and famine, the think tank added.

Elaborating further, the authority explained blockchain technology will help ascertain if crop losses were indeed due to natural causes and will help negate disputes between insurance providers and farmers, alongside eliminating the need for middlemen altogether.

Kerala is already home to a blockchain ‘academy’ in its capital city of Thiruvananthapuram wherein students are educated on blockchain solutions with a particular focus on the banking and healthcare sectors.

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How to Scale Bitcoin? You’re Asking The Wrong Question

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Hi there folks, hope you’re doing well. I know the market is kinda down and we’re all sad and remembering the good old days in December. It has been a pain to watch the charts these past couple of weeks, but lucky enough I’ve been busy reading about the early discussions around Bitcoin to take my mind out of it.

Why is the market crashing? What’s bringing it down? Who’s responsible for this calamity? When will it recover?

I, too, get haunted by all these questions as some of my personal investments are in cryptocurrency. Because I understand these ups and downs are not only expected, but a delicate part of the never-ending cycle of speculation, I try not to worry too much about price.

I’m sure it will eventually…

rise

What will be the trigger which causes exponential adoption?

Will it be a killer app?

Will it be institutional investors?

–this article shouldn’t be taken as financial advisement as it represents my personal opinion and views. I have savings invested in cryptocurrency so take whatever I write with a grain of salt. Do not invest what you cannot afford to lose and always read as much as possible about a project before investing. Never forget: with great power, comes great responsibility. Being your own bank means you’re always responsible for your own money–

The key to increasing adoption

Maybe it will be people realizing Bitcoin is a great store of value. Sure it does bottom down (like any asset, commodity, currency, etc) except its value is intrinsically connected to the network of users, energy spent and difficulty algorithm.

Meaning, it’s a digital way to store value without a central party. That’s already an achievement, if you ask me.

The way I see it, the overall discussion around technology and ways to scale bitcoin, isn’t that important for general adoption. Not that it wouldn’t make it easier for companies and institutions to transact, as scalability means faster transactions times and (hopefully) lower fees for the bitcoin ecosystem, but because that’s not the core question we ought to answer.

The struggle is not technological, rather philosophical.

It’s not a fight we can battle with gifted engineers, but one that must be fought around core-values.

At this point in time, it doesn’t matter at all how the technology develops if we don’t get the core principles right, people. The absolute purpose of bitcoin is to decentralize currency, not leaving any room for the few to rule over the many.

The connection between physical and digital

The next time someone says “Bitcoin has no value because there is no underlying asset” remind them of the energy spent to mine it. The beauty of Proof-of-Work is that it requires an underlying asset outside the digital realm to be spent (energy = money), in order for consensus to be reached.

Thanks to the laws of physics, we still do not have a way to convert back the totality of the energy spent output into the same energy input – so when miners spend electricity to mine bitcoin and reach consensus, there is no way to get back the raw input: energy.

The stake, in Bitcoin, is energy spent which cannot be redeemable or refunded in any way.

I know Proof-of-Stake algorithms and protocols like Ethereum’s casper work similarly, in the sense miners would lose their stake if they tried to attack the network. However, the problem is that there is no input outside the digital realm being spent in a great enough quantity, to increase the probability of good behaviour from miners.

Energy becomes part of the entire ecosystem connecting the digital world to the physical, giving it an intrinsic value.

If you’re wondering how we can make sure there aren’t too many miners mining Bitcoin, creating a humongous energy spend, think of supply and demand.

What happens in Bitcoin is that, the more miners (validating nodes) who join the network, the harder it gets to mine Bitcoin, thus adjusting the difficulty level of the hashing algorithm.

As the network becomes more secure, you need less nodes validating so you can afford to make it harder for miners to get a reward.

This is, miners need to spend more energy to get a bitcoin block reward.

How is any of this related to the initial adoption logic?

When we consider all of the above points, we realize the most important discussion is still around the core-values of Bitcoin. Everything in the Bitcoin network works in a way to avoid the absolute centralization of money and ways to control its supply – even though human nature tries to circumvent those features, for the sake of efficiency.

Scalability will happen, just a bit differently than you might expect.

We already have the unique piece that allows for scalability to happen: an underlying asset people can use a store of value.

Whatever is built on top doesn’t really matter if the underlying layer, bitcoin’s blockchain, is still used as the settlement layer.

From batching and Shnorr signatures, to the Lightning Network and atomic swaps, there are as many ways to improve transaction throughput, as far as our imaginations reach out. You could potentially have digital fiat-currencies redeemable for Bitcoin. You can have other side-chains that interface with a single wallet app, meaning if it’s easy to exchange your tokens and other cryptocurrencies for Bitcoin, you will still use it as a base-layer to store your “gains”.

The point is: let’s not focus too much on something that will eventually happen. Everyone (myself included, full disclosure) has been focused on technology and price so much, we forgot to take a couple of steps back and re-visit some core debates, crucial for the overall Bitcoin acceptance.

Why Decentralization matters

Do not go away just yet. If you’re tired of this discussion, I promise I’m aiming at bringing a fresh view. I won’t bluntly say that we need decentralization to over-come the current power struggles humanity faces or that we need to have a better distribution of money and to allow everyone to participate, to a certain degree, equally in the financial system.

It is indeed a beautiful state of mind with a powerful message behind it, but honestly, who the fuck cares?

We are selfish beings with one goal in our thick skulls.

Game theory acknowledges that; just consider the basic prisoners’ dilemma. As the first mover has most advantage, the probability is that the first prisoner will snitch on the second, although it deviates from the optimal move for both, which would be to just be quiet.

Except competition and cooperation come hand-to-hand in cryptocurrency: look at mining pools, look at bounty programs, look at how any network grows.

Money is always better distributed when it is viewed as a reward for participating in said network, but to participate you are indeed competing with other agents. The optimal form of money distribution would be a way to allow for all participating agents to also be validators.

Imagine a Bitcoin where all users must be miners.

It doesn’t make sense, right?!

I agree, some people do not want to have the burden of validating transactions so they use the network to simply store their value or to transact, believing miners to be honest and will behave in the best interest of the network – because of the reward system in place.

Anyone can become a validator and be rewarded for it, even with a raspberry phone.

Our goal should be to maintain that level of openness on the main-network; if to scale it means having second-layer solutions or other cryptocurrencies to serve different purposes interacting with Bitcoin as a base-settlement layer, that’s fine. The base layer is the one that needs to be fully decentralized and self-regulated.

BitcoinCash will probably work, as it doesn’t need to be as secure as Bitcoin. Because it won’t, for the time being, replace Bitcoin.

Its purpose is to be cash and Bitcoin’s purpose is to be a safe and decentralized store of value.

Who cares if money is centralized? We can just switch from money X to money Y and use the same base layer to store our assets.

This is, I could potentially use Bcash to send and receive payments and Bitcoin as my base layer to store the rest of my money. Do we really need hundreds of tight-ass secure networks, much as bitcoin?

No, I don’t think we do.

Decentralization means options. We’re fighting to avoid the “One Coin” to rule them all.

If bitcoin is just one of the layers, this means we can easily switch to and from it, as well as create interactions and side-chains with different cryptocurrencies. I truly believe there are many ways to look at this question and there is no single answer to the decentralization dilemma.

How can we scale and be efficient, while avoiding centralization?

Whatever great new cryptocurrency you think will replace Bitcoin, never forget it’s easier to cooperate with it, than to replace it. The amounts of hashing power needed to secure any network, as much as Bitcoin is secure, will always be the bottleneck of any other cryptocurrency to get massively adopted.

No matter how great PoS, DPoS, DAGs, Hashgraphs and etc are, none has the single property that makes Bitcoin unique: an underlying asset of the physical world associated to it, that cannot be unspent after is spent.

All these other proof-of-consensus mechanics will most likely (one day) be valid, yet none will truly replace the one that gives people a more secure way to store their value.

What about fees?

In the long-term fees won’t matter as they’re needed to keep the entire system alive.

Would you mind paying a “high” fee, when compared to ethereum or litecoin transaction fees, to guarantee the safety of your transaction and storage of your assets?

I personally wouldn’t.

If Bitcoin is the best bank in the world, why wouldn’t I pay the premium to use it? Miners need to have an incentive to spend energy and validate transactions, granting fees the task of being the economic incentive to behave.

How to scale cryptocurrency?

I really don’t think to answer this we need to go too deep into technology capabilities. There are many solutions out there that are proving different consensus implementations might work, so the real challenge is creating an ecosystem where any user gets rewarded for participating.

Simple, right?

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‘Selling Crypto Now Is Like Selling Apple in 2001’: eToro CEO

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Ever since the arrival of Bitcoin, many people have predicted that “soon” all of the cryptocurrencies will crash. The trends in cryptocurrencies have been compared to global events such as tulipmania, the 1929 stock market crash and the dotcom bubble. However, even after the recent fall in crypto prices, the industry continues to attract new investors.

This time, Yoni Assia, CEO of trading platform eToro, has picked up the dotcom bubble analogy. However, instead of speaking against the technology, Assia has chosen a different path. In an interview with Bloomberg, Assia said that 90% of the crypto startups will “end as nothing” but he believes that these startups have a bigger platform than the ones in the dotcom bubble.

From 1995 to 2000, people invested heavily in “.com” companies which were often formed without proper business models. Nowadays, people can come up with new ideas that can be recorded on a whitepaper for the entire world to read. Since these inventions are creative, millionaires invest in initial coin offerings (ICOs). Even if 1,000 of them contribute $10,000 individually, the entire project can raise $10 million within a short amount of time. For instance, web browser Brave raised $35 million in under 30 seconds last year.

Assia further explained that blockchain appears to be as transformative as the internet was. “Tesla made 2,000%, Facebook made 1,000%, Google made 1,000%. This is the same thing but earlier in the cycle,” said Assia.

After introducing iPods, iBook and improving the Mac OS from 2001 to 2005, Apple’s stock started increasing gradually. Assia stated that currently investing in crypto is a decision people have to make on their own.

“My long-term view is selling crypto now is like selling Apple in 2001,” said Assia, “You do it if you have to do it, you don’t do it if you don’t have to do it”.

Assia concluded by pointing out that once someone learns about blockchain technology, they want the entire world to use it. Rightfully so, blockchain provides transparency and decentralization, which when implemented in medical and engineering industries and electoral systems, can solve many problems. Blockchain advocates are working day and night to improve this technology to turn these ideas into reality somewhere in the near future. Until then, we have to wait and see which crypto companies will be worth the investment.

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