Showing posts with label tokens. Show all posts
Showing posts with label tokens. Show all posts

November 29, 2017

Ripple Splash - TechCrunch Founder launches $100 Million XRP Hedge Fund

By Josiah Wilmoth - November, 29, 2017 (www.cryptocoinsnews.com)


TechCrunch founder Michael Arrington has announced the creation of a $100 million hedge fund that will be denominated in XRP, the native token of Ripple.

Arrington made the announcement at the Consensus: Invest conference in New York, revealing that the fund will be called Arrington XRP Capital. Significantly, investors will buy shares of the fund and receive distributions in XRP, the native currency of the Ripple Consensus Ledger (RCL) and the fourth largest cryptocurrency by total market cap.

“A year ago I was just a crypto enthusiast,” Arrington wrote in a blog post that accompanied the announcement. “Now I’ve altered my career path to focus entirely on cryptocurrencies and related technologies. And this isn’t just a short term focus. With this new fund I’m signaling my intent to spend the rest of my career on cryptocurrencies. There will be dramatic ups and downs along the way, but we’re in this for the long haul.”

The CrunchFund founder wrote that he and the other founding partners of Arrington XRP Capital chose to denominate the fund in cryptocurrency rather than fiat to make it easier for cryptocurrency holders and foreign investors to participate in the fund. They chose XRP due to its “super-fast and secure settlement infrastructure,” which has also been adopted by financial services heavyweights such as American Express.

Arrington said that this feature is not a mere gimmick but will be an integral component of the fund’s operations:

“We’ll pay our own fees and salaries out in XRP as well. We want to “eat our own dog food” and be active users of crypto currencies in as many parts of our fund operations as possible, not just investors. This will make us better investors,” he wrote.

According to Fortune, the fund — which has raised approximately half of its $100 million target — will invest primarily in cryptocurrencies and initial coin offerings (ICOs), although it may obtain small equity stakes in blockchain startups.

XRP traded up on the news, briefly cracking the $0.30 barrier for the first time since June. At present, XRP is trading at $0.286, which represents a 24-hour increase of six percent and gives the cryptocurrency a market cap of $11.1 billion.

Featured image from Shutterstock.

November 23, 2017

The Top 9 Counterparty Projects, By consensus

By Jon Southurst - July 26, 2016 (news.bitcoin.com)


For everyone confused by the drama surrounding certain blockchain projects this week, it might be time to take a break and look at some alternative platforms – starting with Counterparty.

As examples of what the platform can do, Bitcoin.com asked Trevor Altpeter and other members of the Counterparty Foundation to name their favorite projects built using Counterparty or using its tokens. The top not-quite-ten list is below.

An Explanation


First, some explanation of Counterparty and the way its tokens work is necessary, as it works differently to other blockchain projects.

Counterparty was started as a means to create new digital assets and other decentralized financial while using the Bitcoin blockchain. Counterparty also has its own blockchain, which receives instructions from bitcoin’s chain via a process known as “embedded consensus.”

It interacts via its native “currency” XCP, which is not a competitor to bitcoin – and cannot exist without it. XCP value was created in January-February 2014 by sending bitcoins to unspendable addresses.

This “proof of burn” method was intended to avoid pre-mines and token sales, which are often used to raise funds for other projects, but remain controversial with some users and could raise regulators’ eyebrows.

A total 2100 BTC was “burned” in that period and the resulting amount of XCP was permanently fixed. XCP itself is burned as fuel for smart contracts, and the amount required is continually adjusted so it cannot reach zero.

Custom Tokens


Any Counterparty wallet holding XCP can be used to create a custom token (i.e. a new cryptocurrency). The user chooses the amount (in XCP) to spend, the total number of tokens and the name. These tokens can then be sent and received using Counterparty-compatible wallets (more about those below) and if popular, even traded on some exchanges.

Counterparty addresses look the same as Bitcoin addresses and transaction information is encoded on the Bitcoin blockchain. The tokens can be used in games, for voting and crowdfunding, authentication, decentralized applications, or simply for vanity or fun.

Top 9 Projects


1. Storj
Storj is a decentralized cloud storage technology. Storj created a cryptocurrency known as SJCX that exists as a Counterparty asset. Storj is working with Counterparty developers to implement payment channel technology to enable Storj micropayments to participants on the Storj network. Storj is one of the most successful cryptocurrency projects in terms of enterprise interest – it is now a part of Microsoft Azure and generating consistent interest from corporate entities.  

2. Spells of Genesis
Spells of Genesis is a mobile game developed by Moonga and a leading innovator in the concept of in-game assets. Using Counterparty, Spells of Genesis has created an in-game medium of exchange known as BitCrystals. Spells of Genesis also makes use of in-game items in the form of trading cards (also launched via Counterparty). A full list of SOG assets can be viewed here.

3. IndieSquare Wallet
IndieSquare is a mobile Bitcoin and Counterparty wallet with “a great interface and a number of unique features.” IndieSquare Wallet facilitates uses of the Counterparty Decentralized Exchange (DEx) allowing users to buy and sell Bitcoin, XCP, and Counterparty assets with no middleman. Users can also create and manage assets/tokens directly from the IndieSquare Wallet, assuming they have XCP and BTC stored there.

IndieSquare looks to offer easy-to-use APIs for web and mobile services in the near future, allowing third party devs to develop powerful and creative Counterparty token integrated services beyond financial applications – such as gaming and content creation.

4. GetGems
GetGems is a messaging app and wallet built on top of Telegram that has created a cryptocurrency on Counterparty known as GEMZ. GetGems’ biggest technological innovation to date is a patented keyboard payment solution known as “Paykey.”

5. Let’s Talk Bitcoin/LTBcoin
Let’s Talk Bitcoin is one of cryptocurrency’s oldest and most popular podcasts, and for many provided an initial Bitcoin education. Hosts Adam B. Levine, Andreas Antonopoulos and Stephanie Murphy have been regulars for over three years. LTBcoin, created as a reward for podcast listeners and content creators, is the asset with the most transactions on the Counterparty network to date.

6. CoinDaddy
CoinDaddy is a site created and run by Counterparty community director Jeremy Johnson (J-Dog). It is an all-purpose Counterparty enhancement site – a cryptocurrency version of GoDaddy.com. CoinDaddy and Tokenly are expected to be increasingly important as Counterparty gains popularity and utility.

7. Tokenly
Tokenly is created by former Counterparty community director Devon Weller and Adam B. Levine. The goal of Tokenly is to add tools that make use of Counterparty technology. Two highly successful tools offered by Tokenly are the Tokenly swapbot and token-controlled access using Counterparty tokens.

8. FoldingCoin
FoldingCoin is a rewards program that distributes tokens called FLDC to participants to the global Folding@home network. Folding@home is a program developed by Stanford University that “donates” users’ computer power to help find cures for diseases. Several projects that have launched on the Counterparty network have used merged folding as a fair distribution method.

9. Topcoin
Topcoin is a reward system focused on domain registrars and online service providers such as VPS (virtual private server) companies. Topcoin has been functioning for quite a while under the radar, and users can spend Topcoin on Uniregistry.com today with ChunkHost – other domain registrars are expected to be added in future.

Note: the above list is as suggested by the Counterparty Foundation, and is not an official review or endorsement by Bitcoin.com of the projects included. The writer of this article does not currently hold any XCP.

Images courtesy of counterparty.io, meed.com


Jon Southurst

Jon Southurst has been interested in bitcoin since reading Neal Stephenson's 'Cryptonomicon' in 2012. A long-time tech writer, he has been a regular contributor at CoinDesk and has written for Kaiko.com, DeepDotWeb and ancient print publications. He lives on an artificial island in Tokyo.

November 20, 2017

How Blockchain can help creators and consumers monetize data

By Jon Buck - September 25, 2017 (cointelegraph.com)


Data is rapidly becoming the most valuable commodity around. Enterprise-level companies have embraced data analytics for sales, market analysis and customer retention, among other things.

But with the rush to big data, a deeper philosophical question arises. Who owns the data that companies access and use for monetizing industries? Do the consumers who create the data own the data or do the platforms used for the data own the data?

Data creators like photographers, writers and 3D image developers are seeking new and helpful ways to monetize data. At the same time, consumers want some control over what data is made public and getting a stake in what their public data is selling for.

Blockchain for creators


Blockchain technology is a distributed ledger database, meaning that information can be placed on the database and stored or distributed to all those within the database as well.

This distributed system contains a series of profound benefits for the financial security, as well as for data sharing. Some companies have felt the underlying push by creators to be able to share and sell their content to other users freely, without the control of centralized hubs.

Companies like Facebook, Twitter, Instagram and Google take the work that is uploaded to them and use it to increase membership, and therefore increase profit. Creators are left with a pittance, only able to monetize content through ad schemes on the respective sites, or through difficult data channels.

However, Blockchain technology creates a system where creators of content are able to sell that content directly to buyers without the intervention of a centralized corporation. Rather than hubs taking the bulk of the funds because of the service they provide, the creator is able to receive the full value of their content. Effectively, the managerial hub is being outsourced to Blockchain technology.

The power of this system should be evident. Companies like Cappasity, for example, are able to create databases of 3D images useful for VR and online retailers. Rather than having to pay Google or a corporate conglomerate who set their own prices and can refuse certain users, platform members are free to set prices and sell to whomever they like.

While the opportunity to monetize creative content has generally been out of the reach of creators, the distributed ledger system of Blockchain technology brings just such a system into the mainstream.

Blockchain for consumers


Beyond simply data for creators, Blockchain is also providing new and intriguing ways to monetize content for consumers. Data is incredibly valuable to businesses who are seeking to attract new customers or keep old ones.

The data that users produce every day, from social media to Internet of Things (IoT), and even data from wearable devices all have value. In fact, some analysts argue that the .7GB of data you potentially produce every day has value in the hundreds of dollars.  

Of course, there is absolutely no way to monetize that data on traditional platforms, since the centralized corporations are already seeking to monetize the content for their own bottom line.

However, Blockchain technology allows both consumers and buyers to interact over personal data in a monetized way. The peer-to-peer network system of Blockchain technology provides a platform where data can be sold and bought privately.

Many companies are already building this style of data control mechanism, creating a system where users can funnel all personal data into a single decentralized ledger, and from there, choose which data to sell to data buyers within the platform. Roger Haenni, cofounder and CEO at Datum, a personal data marketplace, said:

“Blockchain technology allows for secure storage of data in a trustless and decentralized manner, where individuals own the keys to their own data, outside the control of any large entity…this allows, for the first time, to create a decentralized data storage network that allows anyone to monetize their data without being controlled by one single actor.”

While at first glance, this would seem to run contrary to demand among buyers, it is important to remember that buyers are already paying for data - and paying a lot. Platforms like this would allow them to continue to buy, but to do so with consumers directly, and probably for far less overall.

Just a foot in the door


While these solutions seem cutting edge, the reality is that we have only just begun to learn about ways that the genius of Blockchain technology can be put to use for data control and monetization. Unquestionably, new applications and systems will continue to arise, creating more and better ways for individuals to take control of the data they create and produce.

November 16, 2017

10 keys for evaluating Initial Coin Offering (ICO) investments

By Michiel Mulders - July 22, 2017 (cryptopotato.com)

An initial coin offering (ICO) is a fundraising method that trades future crypto coins for cryptocurrencies which have an immediate, liquid value. Usually, a percentage of the tokens is sold to ICO participants and a percentage kept for the company’s needs (private investors, etc. Terms differ from one ICO to another). An ICO allows both big and small investors to fund the projects they like. The recent year carried thousands of successful ICO stories. The motivation for the project is obvious. The motivation for the investors of the ICO is that the price of the token would be higher (or much higher) than the token’s price during the ICO.

The highest value raised by an ICO is Tezos, which raised a record breaking $232 million in less than a month! Many factors influence the chances for a successful ICO and they can predict whether it will be valuable for its investors.

At this point it is right to mention less successful stories like the Mycelium ICO. Its team members just disappeared after raising the money, and later it was reported they used the funds to pay for their own vacation. The lack of regulation might be one of the reasons it happened. Just days ago, $7 millions were stolen as CoinDash’s ICO started. Right before the start of the token sale, their website was hacked and the ICO wallet address was changed to the hacker’s address.

This article will discuss the main keys to pay focus on when evaluating an ICO investment.

* Important warning before we start: ICOs are a high-risk way of fundraising. Never invest anything you can’t completely afford to lose. Keep in mind that due to a lack of regulation, you will have difficulty getting back your lost money in case of any failures.

1 – Team Composition


Find out everything you can about the team, especially the development team and the advisory board. Look up each team member for relevant experience. Google their names. Visit their LinkedIn profiles. Look for famous  names among the advisory board of the project. Find out if the team has any crypto experience and more importantly – in which projects, or ICOs, they were involved with and the impact they had. 

2 – Bitcointalk.org Thread


A good starting point is the project’s announcement (ANN) thread on BitcoinTalk.org, as Bitcointalk is the biggest forum for Bitcoin and crypto related issues. It is strongly recommended that you read the messages carefully. Investor’s concerns will be answered (or may be unanswered) in this thread. It is a bad sign when the developers avoid answering certain questions or aren’t collaborating. Sending devs a personal message to see how responsive they are is also a good idea.

Each message on Bitcointalk contains the rank and activity degree (number of past messages) of the sender. Be aware of newbies and low-ranking writers. Reputation has become very important and significant.

Be aware of experienced writers comments, and also look for negative messages, sometimes it could be a warning sign. Use Select [All] to see all comments in the thread and use CTRL + F (Windows) to search for red flag words like ‘scam’, ‘con’, ‘MLM’. See the relation between the search results and the total number of replies as can be seen in the following live example:

Source: Kibo announcement thread with 287 replies and 75 hits on the word ‘scam’ (https://bitcointalk.org/index.php?topic=1572491.0;all)


3 – Stage of the project and VC investments


Evaluate the stage of the project. Does it only have  a whitepaper? A beta version? Is there a launched product with limited functionality? Prefer projects which have “some lines” of working code, however, many ICOs have proven they can become success stories without any code written.

VCs (venture capital) tend to invest and support projects from early stages. Look for this information usually on the main page of the project’s website. It’s likely to be considerable if a well-known crypto VC is involved, like Blockchain Capital or Fenbushi (belongs to Vitalik Buterin – founder of Ethereum).

4 – Community and Media

It is crucial to have a wide open supporting community like a public Slack for all investors. Openness is as crucial in gaining our trust as the Github code. Try to grasp the atmosphere within the community. Look at the size of the community and its activity.

Source: Slack community QRL – #trading channel

Other sources like Reddit, Twitter or Facebook can be relevant when evaluating the project. Be aware of bounty posts. It is a common practice to launch a bounty thread to reward users for spreading positive information about the project to increase media coverage, or to help out with translations. These bounty threads can stimulate the hype around the project but they are not very objective. On the other hand some investors participate only for some tokens.

Source: ABAB Twitter Bounty Rules (https://bitcointalk.org/index.php?topic=2004773.0)





5 – What do they need the token for? Is the blockchain necessary?


ICOs mean the creation of a new dedicated token for the project. One of the most important questions each project needs to answer is what is the token for? Why isn’t Bitcoin or Ethereum enough to serve as the project’s token? Yes, many projects just make up a scammy story. Hey, an ICO can’t be an ICO without a dedicated token. The same question needs to be asked regarding the use of the blockchain technology behind the project.

6 – Unlimited / Hard cap


In the early days of crypto ICOs, the difference between open and hard cap didn’t have the same impact as today’s ICOs. An open cap allows investors to send unlimited funding to the project’s ICO wallet. The more coins are circulating, the less unique your tokens become for the trading afterwards – through less demand.

As ICOs become mainstream within crypto land, enormous amounts are collected. Take a look at Bancor, this project raised an astonishing $150 million in just three hours. This resulted in no percentage gain for the investors. Keep that in mind when participating in ICOs with no cap.

On the other hand, you don’t want to be the only one investing in the project. Exchange’s have much less interest in projects that raise very little, which makes it harder to sell these tokens after release.

7 – Token distribution – when and how


Greed can be defined by a high token distribution to the team members, let’s say, more than 50% of the tokens is suspicious. A good project will link its token distribution to the roadmap. Because each phase or milestone of the project requires a certain amount of funding.

Watch for the token distribution stage. Some projects just release their tokens hours after the ICO has ended. Some projects need to develop a beta version before sending out the tokens. If you look at the percentage gain of Etherium (one year between ICO and token distribution, around 500% gain), Augur (1+ years, 1500%) and Decent (8 month, 350%), sometimes this break creates a very positive hype around the project.

Source: Augur token distribution – Only info available about the usage of fundings. Roadmap is poorly described without link to this chart.


8 – Evaluating the Whitepaper


Most typical investors actually don’t read through the whitepaper, even though it contains all the necessary information about the upcoming project and the ICO.

Don’t hesitate to read it, or at least the majority of it. Note the strong and negative aspects and add in some of your own research. In the end, the whitepaper is the silver platter to potential investors. After reading it you should be able to answer a simple question – what kind of value does this project bring to our world? You’ll also learn what you’re investing in.

9 – Quality of the code – Meet Githhub


If you have a little bit of programming experience, you should be using it here. The quality of a developer can be understood by analyzing some of their code. As a non-techie, it is still possible to evaluate their quality by looking at the consistency of the code. Another good indicator, is the usage of proper commenting. Avoid messy developers. A piece of code reflects the attitude of a developer.

Next, the length of a function is another indicator. A function containing more than 50 lines of code should raise a red flag. Modularity is important and makes the code more readable and maintainable.

Source: Piece of readable code by editor with proper commenting



Crypto projects tend to have open-source code. This creates trust among the project’s community, encouraging devs from the community to make suggestions or improvements. An open-source project provides the opportunity to look at the commit logs. A commit is essentially developer slang for pushing a piece of code to the Github code repository.

Source: Github Code repository of QRL project (https://github.com/theQRL/QRL)


 You can see each commit by clicking on the text saying “366 commits”. This allows you to investigate each change. The “Insights” tab gives you a more general summary of the developers activity. This tab shows a graph with the amount of commits daily. Beneath the graph, you can see the activity of each developer individually. This information is key for investigating the development team.

Source: QRL Insights (Graph) Github (https://github.com/theQRL/QRL/graphs/contributors)


It is even possible to see how popular the project is by looking at the amount of stars it receives.

Source: Github (stars)


Bonus: Ask yourself why the project chose to run on the specific blockchain. Whether it’s on the Bitcoin’s blockchain, Ethereum’s (smart contract), Waves, and more. Recent months have shown the rising popularity among the ERC-20 Ethereum based smart-contract’s ICOs. These tokens can be stored easily on Ether’s based wallets (like MEW – Myetherwallet), sometimes they don’t require exchanges to be traded, and they usually have high liquidity.

10 – The Bottom Line


ICOs will become more and more ‘mainstream’ as a method for raising funds. There will be plenty of projects to choose from, hence it will become even harder to assess these projects.

It is key to investigate and read as much information as possible and write down all the important aspects, positive and negative, before making an investment decision.

November 15, 2017

Damian Merlak, Founder of Bitstamp becomes Slovenia’s 6th richest person

By Coin Joker - November 15, 2017 (coinjoker.com)


Damian Merlak, who together with his business partner co-founded Bitstamp in 2011, has just became the 6th richest businessman in Slovenia. The list was published last week by the leading financial magazine and we had a chance today to have a quick chat with him. This is what he said.


What is your background and how did you get involved in cryptocurrencies?

I developed passion for software development very early, at the age of 13. During the college years I started professionally working as a software developer for different companies and in 2011 my co-worker told me to take a look at something called “Bitcoin”. At first I wasn’t very interested, but after a few months as I watched the price go up it caught my attention. I bought some Bitcoins at first.

As I explored the technology behind Bitcoin I created a small mining rig in my basement. Back then you mined Bitcoins using GPUs and the software was full of bugs, so you really had to fix things all the time.

That was also the time when Mt.Gox was the only real exchange to buy or sell Bitcoins in the world, so me and my business partner Nejc Kodric had an idea. We did some math and predicted that Mt.Gox must be making $10.000 daily. All we had to do was to be as good as they were, and we could take home $10.000 every single day. A few months later we had a working exchange which we launched under the name Bitstamp. Later, Bitstamp became the largest Bitcoin exchange in the world and the rest is history.

Did you do most of the development?

At the beginning, yes. I did all the development as we didn’t have the money to hire people at that time. Funny, last week I had a dinner with our CTO and we pointed out that the core trading engine is still 90% intact, just as I developed it in 2011. I guess that is a sign of something done right.

Do you still write code?

Yes, I am always working on new projects. Currently I am doing an ICO for Tokens.net. After we finish collecting funds I will design the system and develop the core infrastructure for it. I would like to do more development as I really enjoy it, but unfortunately a day only has 24 hours.

What is Tokens.net?

It is going to be a platform for trading ERC20 tokens and other crypto currencies against each other. We are raising $15 million to fund the operation. More information on the project is available on www.tokens.net.



You must be a big believer in ICOs then.

I think there will be great projects to come out of this ICO era. But we must not fool ourselves, there will be many that will fail. In fact, most will fail. Just like startups, so choose wisely!

You also created Quantum Project not so long ago. How is that going?

True. When I developed the Quantum Project I was already planning to create a trading platform, so Quantum was the first step towards that goal. Unfortunately the QAU price is suffering right now, as many people want to participate in Tokens.net crowdsale and they are selling QAU to get the money for the Tokens crowdsale. It is important to know that both Quantum and Tokens.net will benefit greatly from each other. Tokens.net will act as the platform and Quantum will be the market market. Natural co-existence. At the moment I see QAU as a great buying opportunity. When Tokens.net ICO closes, the pressure on the price will stop and the reversal will come.

You come from Slovenia, a country that is taking a lot of steps to become a blockchain/cryptocurrency friendly destination. Did you see this coming many years ago or does it come to you as a surprise?

I did not see that coming. Cryptocurrencies are a big thing in Slovenia. When I come to Slovenia I usually go mountain hiking and the last time people on the top were talking about Bitcoin. It’s crazy and funny at the same time. I doubt there is any other country in the world that is so crypto aware.

You are considered a pioneer in cryptocurrency world. What would you say were the biggest obstacles you had to cross to get to the point where you are today, a true pioneer that keeps on building this ecosytem.

Banks. People can not imagine how difficult it is to get and maintain a bank account if you are dealing with Bitcoin. I hope this will change at some point.

November 10, 2017

Bitcoin reaches end of an era - Expert Blog

By Rhett Creighton - November 10, 2017 (cointelegraph.com)


Expert Blog is Cointelegraph’s new series of articles by crypto industry leaders. It covers everything from Blockchain technology and cryptocurrencies to ICO regulation and investment analysis. If you want to become our guest author and get published on Cointelegraph, please send us an email at mike@cointelegraph.com.

Calling off 2MB blocks marks the end of a 3-year effort between different political groups inside Bitcoin trying to come to a compromise. Core developers may feel like they have won the battle, but a silent majority will leave quietly, selling their coins and driving down price over time.

At the same time, it marks the beginning of a new age in human history. One where individuals have a freedom of choice, and a freedom of exit.

”New York Agreement” called off


I was fully expecting Nov 16th to be an apocalypse for Bitcoin. Over 80% of miners were signaling support for 2MB blocks, and several hundred of the largest Bitcoin exchanges and companies had signed an agreement to support the block size increase. Despite businesses planning for 2MB blocks, much of the Bitcoin user community and core development team was prepared to reject the software change, which would split the Bitcoin network in a most disruptive way.

The split would have been a disaster for Bitcoin. However, the price of Bitcoin has been reaching new all-time-highs because uninformed investors have been conditioned to think that a fork in Bitcoin means that you get free coins. That was the case with Bitcoin Cash, but the chain split planned for Nov 16th would have been very different.

Under the SegWit2x split scenario, I don’t think it would have been possible for anyone to agree which was the “real” Bitcoin chain anymore. Large companies like Coinbase had agreed to support both chains. The 2MB chain planned to launch with no replay protection for users, which would have caused massive confusion and loss of funds. As the first clean fork of Bitcoin, with a clear plan and goal of being business-friendly, I expected Bitcoin Cash to be a big winner. The price of Bitcoin Cash has gone up nearly 100% in the past two weeks with many investors speculating on a “Cashening.”

Bitcoin will lose market share


Joseph Poon, inventor of Bitcoin’s still-in-development lightning network, said recently:

“When a party starts to suck, you leave. You can try to fix it, but the cleanest solution is to just get out… A lot of Blockchain is increasing the freedom for individuals, and part of that is having the flexibility to leave, and to make the choices that you want to, at any point in time.”

 Two large factions of the Bitcoin ecosystem reached an impasse. For individuals and corporations who no longer find the transaction fees and scalability acceptable in Bitcoin, the simplest solution is to leave. Those individuals will dump their $7,500 (down to $6,600 at press time) Bitcoin on first time buyers as they slowly get out.

“Dumb Money” pouring into Bitcoin


People are exuberant about the price of Bitcoin increasing to nearly 7x the price it was at the beginning of the year. Real-life meetups are full of new faces and first-time investors. The Bitcoin subreddit is full of people cheering each other on about buying their first 0.1 BTC and expecting a 10x annual ROI.

One of the bullish pieces of news driving the mania is that the CME Group plans to add Bitcoin futures this year, potentially making Bitcoin available to billions of dollars worth of new investors. However, Wall Street hedge fund investors are not suckers. Even if a hedge fund wants to buy into Bitcoin, they might try to short it first to drive the price down and shake out weak holders. If they can cause a few billion in losses from the people who bought the top by shorting it all the way down to $3000 (where it was a few months ago), they will.

Blockchains: New kind of entity


Blockchains are a new kind of entity, much in the same way that corporations with shareholders were a new kind of entity invented 400 years ago. Today, corporations are able to lobby Congress and have many of the same rights as humans. We will see Blockchains also gain access to these rights in the near future.

I fully expect the market cap of all crypto tokens to increase exponentially over the next few years, but this is not a winner-take-all scenario. Today, mainstream media financial advisors are touting Bitcoin as “the new gold,” but it can’t ever be that. To get a sense of how it’s different, imagine a universe where anyone could create a new kind of metal with essentially the same properties of gold.

Expecting Bitcoin to have the majority market share of Blockchains in the future is about as ridiculous as expecting the East India Company to be more valuable than all other corporations combined today.

Demand for Bitcoin and rise of crypto-ruble


Through much of 2014–2015, the price of Bitcoin declined. However, in 2016–2017, we started to see some larger demand for Bitcoin driven by ransomware, Ponzi schemes like “MMM,” Chinese citizens evading capital controls, and a means of transferring value into other Blockchain tokens (“ICOs”).

Russia has recently announced that they are looking into developing their own “crypto-ruble.” The crypto-ruble will feature a 13% tax into and out of paper fiat if the redeemer is unable to provide documentation of the transaction history.

Because Russia will be much more centralized and efficient than Bitcoin at processing transactions, I expect the crypto-ruble to be an attractive alternative to Bitcoin for ransomware, people escaping hyper-inflation, and Chinese citizens circumventing capital controls (especially in the event of a Bitcoin bear market).

The Chinese government shut down the BTCC exchange last month with rumors that they may pursue a crypto-yuan as well. It’s clear that some very big players are ready to enter this market, and they aren’t interested in sharing their money with Mr. Nakamoto.

Disclaimer: The views and interpretations in this article are those of the author and do not necessarily represent the views of Cointelegraph.

Rhett Creighton
helped create the Zclassic and Zen forks of Zcash (Over $50M market cap) and more recently, Whalecoin. He contributed to the Bitcoin Core test suite and is an MIT alum.

November 09, 2017

U.S. SEC still fuzzy on whether Tokens are Securities; but clearer on ICO requirements

By Tedra DeSue - November 09, 2017 (cryptovest.com)

The SEC may not have a clear answer on how to treat tokens, but it is continuing to search for ways to keep bad actors from ruining the unregulated, but booming ICO market.


U.S. Securities and Exchange Commission chair Jay Clayton continues to ring the warning bell over initial coin offerings.

During a speech before the Practising Law Institute Wednesday, he spoke about how to create a “thoughtful” approach to transparency that could enhance both governance and investor protection. Included in this topic were ICOs.

Let’s go over some of Clayton’s talking points.

Where’s the info?


In discussing the topic, Clayton said that he was committed to increasing transparency about SEC operations. He said the commission was also focused on transparency efforts that further the long-term interests of retail investors.

Clayton is concerned that there is a distinct lack of information about many online platforms that list and trade virtual coins, or tokens, offered and sold in ICOs. He pointed out that through these platforms, individual investors can buy and sell tokens in the secondary market using virtual or fiat currencies. 

“But investors often do not appreciate that ICO insiders and management have access to immediate liquidity, as do larger investors, who may purchase tokens at favorable prices. Trading of tokens on these platforms is susceptible to price manipulation and other fraudulent trading practices.”

To be, or not be, a security


The SEC recently warned that instruments, such as tokens, offered and sold in ICOs may be securities, and those who offer and sell securities in the U.S. must comply with federal securities laws. 

While it hasn’t provided any more clarity on that, the SEC has cautioned cryptocurrency exchanges must register as a national securities exchange, or operate pursuant to an exemption from registration.

In addition to requiring platforms that are crypto exchanges to either register as national securities exchanges or seek an exemption from registration, the SEC says it will keep on trying to provide clarity for investors about how to treat tokens.

Specifically, the SEC wants to provide clarity to investors on:

  • how tokens are listed on these exchanges and the standards for listing; 
  • how tokens are valued; and
  • what protections are in place for market integrity and investor protection.

October 26, 2017

The Genesis System wants to record cleaned fracking water on the Blockchain

By Rebecca Campbell - October 26, 2017 (bitcoinmagazine.com)


There are more than 900,000 active gas and oil wells in the United States, according to Drillinginfo. Unfortunately, recycling and cleaning the contaminated water has not been an option, with companies typically transporting the produced and flowback water in barrels to underground disposal well facilities.

That is until now.

U.S.-based Genesis Research & Technology Group has developed, tested and patented a new water purification technology system that can be utilized for multiple applications, including oil and gas, industrial, food and agriculture, humanitarian efforts, and emergency and disaster relief. And in partnership with blockchain development company MVP Asia Pacific Inc., they are creating an Internet of Things (IoT) water quality sensor to permanently store tamper-proof water quality records on the Ethereum blockchain.

The IoT sensor system has safeguards in place to ensure that the readings aren’t manipulated. Genesis will also operate under an independent auditing system enabling third-party-approved access to make sure no one alters the sensors. The IoT sensor aims to reduce the carbon footprint associated with unnecessary transportation, and to enable unusable water to become usable again. Over a three-year period, Genesis has shown proven results that up to 2,000 barrels of fracking water can be treated on-site without chemicals into clean water.

“A Genesis water recycling system will allow oil producers to be friendlier to the earth’s environment, conserving water, not exposing the roads and countryside to the millions of trucking miles necessary to transport water, and not dispos[ing] of millions of gallons of contaminated water in the ground,” said Ron Price, CEO of Genesis Research & Technology Group, to Bitcoin Magazine.

By combining the Genesis water treatment system with the blockchain via the IoT solution, the United States Environmental Protection Agency (EPA) and communities around the world can have confidence that the information they see is real, readily accessible and verifiable, said Price. This in turn will make the fracking industry more transparent, discouraging wasteful and environmentally unfriendly practices. It’s also hoped that this will provide an incentive to companies who may be rewarded by consumers and governments to promote excellence.

According to Darren McVean, CEO of MVP Asia Pacific, blockchain technology presents huge potential for the environmental and land rehabilitation sectors.
“In the past, governments and community groups have had limited to no access to land, water and air quality records,” McVean said. “As a result, few have confidence in the records and this has stifled investment in environmentally friendly technology.”

Genesis will be launching their ICO on October 27, where there will be a maximum of 40,000,000 Water Tokens available. Genesis hopes to have their first system operational and generating revenue within six months after the closing of the ICO. They plan to have 12 systems up and running within nine months after the ICO.

October 25, 2017

90% of ICO Tokens lack use cases months after their crowdsales

By J P Buntinx - October 25, 2017 (themerkle.com)


There have been several dozen cryptocurrency ICOs this past summer alone. This new craze is attracting a lot of attention, although very few of these projects will ever realize their full potential. A new article on Bloomberg explains that only 20 out of 226 tokens tracked are currently being used. All the rest simply derive value from expectation and speculation. These numbers are pretty sobering, although no one should have expected anything else.

ICO Tokens are speculation and hype

With hundreds of projects trying to raise millions of dollars through initial coin offerings, the industry has seen significant growth. While there are plenty of projects to genuinely get excited about, it remains to be seen how many of them will actually create something worthwhile. A fair few ICOs have only become successful due to heavy marketing, as it covered up the fact that there was no minimally viable product in place to begin with.

Indeed, that is what most ICOs are these days. All the typical team does is write up a whitepaper to get people excited about an idea. More often than not, there isn’t even one single line of code in place to warrant any value attributed to the new venture. That doesn’t matter to most ICO investors, though, as they will gladly trust complete strangers with their money. As a result, we see a vast abundance of ICO projects which are still not using their own token for any specific purpose months later.

Granted, it takes time to build a proper product or platform before the associated tokens gain any fundamental value. However, ICOs should have these things in place before begging for money from investors. This leads to a very disturbing situation in which only one in ten ICO tokens is used for a specific purpose right now. All others simply derive value from the associated hype and manipulation across supporting cryptocurrency exchanges.

Indeed, there is very little reason to use ICO tokens other than for speculative purposes. Most people purchase these tokens for the sole purpose of selling them at a higher price. This is how people make money in the “real world”, but it remains to be seen if such a situation is sustainable in cryptocurrency. For this to work long-term, once people offload their tokens at the desired value, there need to be others willing to buy them.

If there is no viable reason to own or use such tokens in the first place, it will become very difficult to sell them for profit in the future. Considering that 90% of ICO tokens serve no purpose right now, it is evident a big collapse will happen sooner or later. A lot of projects are still working to put together an alpha version of their platforms, for crying out loud.

Some teams already have alpha versions in place and are currently collecting feedback to take things to the next level. Any project without a use case for its tokens six months after raising money will have to take a hard look in the mirror and contemplate refunding investors, though it is doubtful that will happen. Rest assured the ICO industry will face a day of reckoning eventually, and a lot of people will lose money in the process.

Jdebunt
JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

October 18, 2017

Connecting the luxury fine art industry with the modern digital economy

By Rebecca Campbell - October 18, 2017 (bitcoinmagazine.com)

Latest figures from the Tetaf art market report, released by the European Fine Art Foundation, show that in 2016 global art market sales amounted to an estimated $45 billion, up 1.7 percent from 2015. The U.S. remains the largest country in the world art market, with 29.5 percent of the market share, followed by the U.K. and China with 24 percent and 18 percent, respectively.

Yet, while the industry remains a profitable one, it is slowly changing. One that is considered difficult to enter and resistant to change, a few sector players are aiming to bridge the modern digital world with the luxury arts sector.


Two art galleries are taking a blockchain and cryptocurrency approach. Eleesa Dadiani, is the founder and owner of Dadiani Fine Art in Mayfair, London. Marcelo Garcia Casil is the co-founder and CEO of Maecenas, a decentralized art gallery that aims to democratize access to fine art investment.

Dadiani & Partners


In July 2017, Dadiani’s modern fine art gallery became the first in the U.K. to accept seven different cryptocurrencies as payment: bitcoin, ethereum, ethereum classic, litecoin, ripple, dash and NEM.

Dadiani told Bitcoin Magazine that the decision to introduce cryptocurrencies wasn’t an instinctively demand-driven decision; rather, it stemmed from a desire to encourage demand and merge the two markets together.

“On a practical level, introducing cryptocurrency will broaden the market, bringing a new type of buyer to art and luxury,” she said.

Through her recently launched Dadiani & Partners — the U.K.’s first and only luxury asset and commodity exchange for cryptocurrencies — Dadiani is hoping to unlock the potential of the digital currency market for high net-worth (HNW) investors and consumers. Acting as an intermediary, Dadiani & Partners will enable HNWs a platform to purchase luxury goods in digital currency. Dadiani says that there has been an increase in demand with the number of people seeking the purchase of assets in cryptocurrency.

“Many bitcoin millionaires are unable to cash in their digital currency as the banks won’t convert large amounts of cryptocurrency for cash,” she added.

Passionate about cryptocurrencies, and the blockchain that underpins them, Dadiani believes that they will have a profound impact in every sphere of business and our everyday lives.

“The technology will allow us to reclaim power, paving the way for decentralized, peer-to-peer transactions without the intervention of an intermediary,” she added. “This is a revolution that goes far beyond the art market.”

Since introducing the acceptance of digital currencies the art gallery has sold a number of pieces. Going forward, all of the art, across all the exhibitions, will be available to purchase in the available digital currencies. Dadiani says that the artists are onboard and keen for their pieces to be sold this way.

“Any of the pieces we sell can still be purchased via conventional fiat currency, but purchasing via cryptocurrency enables buyers to purchase peer-to-peer, person-to-person, without the intervention of a centralized authority,” Dadiani said.

It’s hoped that by further globalizing the business and broadening their customer base, Dadiani Fine Art will appeal to bitcoin millionaires who are looking to purchase assets via cryptocurrencies.

“Digital currency is being embraced by people of all ages, creed and class, and as it’s happening in other sectors, there is no reason why the gap between the modern digital world with the luxury sector cannot be bridged.”


Maecenas


Investment in the art world can be an expensive proposition. Named after Gaius Maecenas, an ancient Roman patron of the arts, Maecenas, is attempting to remove this barrier by letting anyone buy shares of fine art. Through its blockchain-driven platform, Maecenas divides artwork ownership into fragments and connects art owners with investors where shares are bought and sold.

“By turning masterpieces into tokenized tradable assets, Maecenas democratizes access to fine art by letting a much wider audience invest in multi-million dollar artworks which would otherwise be out of reach,” Casil said to Bitcoin Magazine.

Buying access to the artwork’s investment value does not mean buying access to the actual artwork itself, however. According to Maecenas, art pieces are not put on display; rather, they are held in purpose-built art storage facilities, ensuring the work is safe and looked after. If there is a demand in the future, then they may introduce an art-leasing facility where art lovers can temporarily hold the piece of art for a fee. The fee would then be distributed among the shareholders as income.

By injecting liquidity and transparency into the fine art market, the platform claims to be adding aspects to the sector that have been missing. Determining a fair price of an illiquid asset is now made possible via the blockchain through the conversion of small and liquid tradable financial units, creating tamper-proof, digital certificates denoting ownership. These are similar to shares of a company and can be traded on an open exchange.

Through the implementation of a Dutch auction process, Maecenas permits investors to submit private bids stating how many shares of the artwork they want to own and what price they’re willing to pay for them.

“The Dutch auction smart contract then handles all the bids and uses a well-known algorithm to determine the optimal price for the artwork shares,” Casil added. “This process is transparent and discourages price manipulation.”

Maecenas’ ART utility token functions as a clearing and settlement mechanism for all transactions of artwork on the Maecenas ecosystem. Participating in Dutch auctions, leasing artwork or performing any other sensitive platform operation is handled via smart contracts that require ART tokens to operate, says Casil.

“In the case of the auctions themselves, the token represents the investor bid and commitment, and a dollar value equivalent of the tokens is escrowed in the contract for the duration of the auction.”

For instance, if an investor wants to bid $50,000 for an artwork, and ART is worth $2, then 25,000 ART tokens must be submitted to the smart contract to reflect the bid.

To ensure the work is authentic, Maecenas has an internal team that checks the full provenance of the artwork including certificates of authenticity, condition reports, insurance policies, certificates of storage and valuation reports. Independent reputable experts will also assess and appraise the artwork. The documents produced during the due-diligence process are then protected and stored securely on the blockchain.

Maecenas recently completed their token crowdsale which raised 50,744 ETH. They are aiming to launch their platform in the first quarter of 2018.