Bitcoin Climbs Back Above $4,000 As Wild Ride Continues

Bitcoin Climbs Back Above $4,000
As Wild Ride Continues

 

The value of one Bitcoin went back above the $4,000

mark on Wednesday, continuing a wild ride over the last couple months. Bitcoin—which was only worth $1,000 at the start of the year—previously broke the $4,000 barrier in mid-August before briefly clearing $5,000, but then a series of events brought it crashing down to below $3,000 a month later. Those events included J.P. Morgan CEO Jamie Dimon calling Bitcoin a "fraud" and Chinese regulators making a series of anti-Bitcoin moves, including banning initial coin offerings (a way of funding new startups by issuing tokens rather than shares) and reportedly cracking down on bitcoin exchanges in the country.

Bitcoin briefly topped $4,000 at the start of last week, but since then it settled down to around the $3,500 mark. Now it's back up, with a value of $4,059 at the time of writing on Wednesday morning. So, what's prompted this latest rally? It could be the current speculation that China's exchange crackdown is only temporary—a show of force ahead of the Communist Party Convention in October. The crackdown has been widely reported but never formally announced, and one of its supposed rationales is that people in China have been using Bitcoin to bet against the value of the yuan, as well as to get round local capital controls.

It may be that the rumors were aimed at ensuring stability in the crucial period ahead of next month's big event—they have certainly had an effect, leading major exchanges such as BTCChina to shut down their Chinese operations. However, whether or not the Chinese exchange ban gets formalized, it does seem that Bitcoin has resistance to the actions of that one country—even if it remains a highly turbulent game to be playing.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

David https://markethive.com/david-ogden

Early bitcoin investor Palihapitiya declares ‘nobody can stop it’

Early bitcoin investor Palihapitiya declares 'nobody can stop it'

Early bitcoin investor Palihapitiya declares 'nobody can stop it'

  • Social Capital's Chamath Palihapitiya was early in both Facebook and bitcoin and continues to back both.
  • "The idea that the government can put curbs on this is actually pretty specious," he said in response to JPMorgan Chase CEO Jamie Dimon's criticism of bitcoin.

Investors who followed Social Capital's Chamath Palihapitiya into the early stages of two investments he advocated would have made an awful lot of money.

Palihapitiya was early in both Facebook, the ubiquitous social network, and bitcoin, the disruptive crypotcurrency that has sharply divided investors who continue to argue over its legitimacy.

Even with the major gains both have made, Palihapitiya remains hot on tech stocks in general, and bitcoin in particular. The digital currency, despite some volatile times, has soared nearly 300 percent this year.

That has come even though JPMorgan Chase CEO Jamie Dimon has called it a fraud that is doomed to fail.

"Nobody can stop it because nobody can control it," Palihapitiya said in an exclusive CNBC PRO interview at the Delivering Alpha conference on Sept. 12. "The idea that the government can put curbs on this is actually pretty specious."

Rather than debate its status as a currency or its use for nefarious purposes, he said there should be a broader discussion about how to put it to better use.

"As far as I'm concerned, the genie is out of the bottle," he said. "Now the real question is how can we productively use it to solve some of society's issues around the financial services infrastructure."

 

Jeff Cox | @JeffCoxCNBCcom

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency  entrepreneur

David https://markethive.com/david-ogden

Bitcoin is popping

Bitcoin is popping

 A Bitcoin sign can be seen on display at a bar

in central Sydney, Australia, September 29, 2015. REUTERS/David Gray/Files(A Bitcoin sign can be seen on display at a bar in central Sydney, AustraliaThomson Reuters)Bitcoin enjoyed a reat start to the week. The digital coin, which has been sliding the past couple days amid uncertainty about the future of cryptocurrencies in China, was trading up over 7% at $3,928 per coin Monday morning. 

Reports on September 14 that Chinese regulators would require exchanges to voluntary shut bitcoin trading triggered a sell-off of nearly $1,000, bringing the price of the cryptocurrency below $3,000 for the first time in over a month. Within hours, however, bitcoin recouped most of those losses. Since Friday, bitcoin has stayed within the range of $3,600 to $3,800 per coin. But traders appear bullish, despite the uncertainty underpinning the market. 

Josh Olszwicz, a bitcoin trader, for instance, told Business Insider the news out of China won't have a long-term impact on bitcoin because it doesn't affect the cryptocurrency's blockchain, the underpinning technology of the coin. "If it doesn't affect the protocol, then it's not a real problem," he told Business Insider."The bitcoin cash shakeup was much more worrisome from my perspective, but even then the core bitcoin protocol remained unaffected."

On August 1, bitcoin forked into two different cryptocurrencies: bitcoin and bitcoin cash. Technical analysis reported by CoinDesk, the cryptocurrency news site, suggested a break of $3,800 would open the door to $4,200 or higher. "Such a move would add credence to last week's bullish doji reversal and higher lows pattern, and may open the doors for $4,300," CoinDesk's Omkar Godbole wrote. Bitcoin is up about 550% over the last year. 

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

David https://markethive.com/david-ogden

Ethereum May Very Well Leave Bitcoin Eating Its Dust Over the Long Run

Ethereum May Very Well Leave Bitcoin Eating Its Dust Over the Long Run

Ethereum appears to have the preferred blockchain relative to bitcoin, but there's no guarantee either cryptocurrency has staying power.

 

Since the year began, there's been no hotter investment than cryptocurrencies.

Bitcoin and Ethereum, which are the one-two punch in terms of largest market cap among digital currencies, have returned about 300% and 3,200%, respectively, just since the year began. By comparison, it's taken the S&P 500 decades to return what Ethereum has for its investors in just under nine months.

Cryptocurrencies are skyrocketing for three reasons

Emotions have obviously played a critical role in pushing digital currency prices higher. Since financial institutions have either avoided cryptocurrencies like bitcoin and Ethereum, or are barred by management from trading them, it's left the price movement to the hands of retail investors. John and Jane Q. Investor are substantially more prone to having emotions sway their investment decisions than large investment institutions. Lately, the "don't miss the boat" mentality could very well be driving prices higher.

On a more fundamental basis, there's a lot of excitement surrounding the blockchain that underlies many of the top cryptocurrencies, including bitcoin and Ethereum. Blockchain is a digital decentralized network that records all transactions without the need for a financial intermediary, like a bank. Because these blockchains are often, to some degree, open-source networks, it makes altering data very difficult. Thus, blockchain could become the preferred peer-to-peer and business-to-business channel for transactions in the future for a variety of industries and sectors.

Even the U.S. dollar has given a boost to cryptocurrencies since the year began. The dollar recently hit a more than two-year low against the euro, and well over a one-year low against other major currencies. When the dollar weakens, it tends to lift U.S. exports, which is bound to make President Trump happy. On the other hand, it reduces the value of dollars being held by investors. Usually a falling dollar will send investors to seek a safe-haven store of value, like gold. Lately, though, they've been opting for the safety of bitcoin, the largest digital currency. However, bitcoin's tenure as the cryptocurrency of choice may not last much longer.

Bitcoin could wind up eating Ethereum's dust

With the full understanding that the cryptocurrency model itself has no guaranteed future, it's my suspicion that Ethereum has a better chance of long-term success than bitcoin. In fact, the early evidence suggests that Ethereum could leave bitcoin eating its dust in short order.

The major difference between the two digital-currency powerhouses comes down to their blockchain technology. Ethereum's blockchain has one key advantage over bitcoin's blockchain: its support of smart contract applications. Smart contracts, which, in their simplest form, are computer protocols that help to facilitate, verify, or enforce the negotiation of a contract, help to automate complex physical and financial supply-chain procedures and compliance processes. In plain English, it's a protocol within Ethereum's network geared at big businesses that should allow business-to-business and client-to-business deals to be done securely and efficiently. Ethereum already has a lot of interest in its blockchain, as evidenced by the more than 150 organizations that had joined the Enterprise Ethereum Alliance as of July 2017, including nine well-known brand-name companies. These organizations are testing out a version of Ethereum's blockchain in various pilot and small-scale programs. 

Comparatively, bitcoin is valued more as a payment platform than for its underlying blockchain technology. While there are some well-known businesses that have accepted bitcoin since 2014, its network has been at a distinct disadvantage to Ethereum's. Bitcoin has traditionally had higher transaction costs, long settlement times, and for a while, its capacity was challenged. A recent fork in bitcoin, which saw the digital currency split in two — bitcoin and bitcoin cash — may help close the gap a bit, but that remains to be seen. This fork involved bitcoin's engineers utilizing the SegWit2x upgrade, which lowered transaction costs and settlement times, while boosting capacity by removing some information from its blockchain. A majority of the bitcoin community was in favor of SegWit2x, especially since it would make bitcoin more attractive to big businesses.

However, bitcoin still didn't receive the required 80% support needed to keep it from fracturing into two separate currencies. The remaining minority, which became bitcoin cash, chose to expand capacity within the original blockchain framework. This minority would prefer bitcoin remain a Libertarian's dream currency. It's really as simple as this: Big business currently favors Ethereum's underlying blockchain more than bitcoin's, and that's likely where the long-term value of these cryptocurrencies lies.

Before you get too excited, remember this

However, this writer is still not very excited about the long-term prospects of cryptocurrencies, in general. To begin with, there's absolutely no way of knowing how much blockchain technology will be worth a year, three years, or 10 years from now. Though businesses are testing out the technology, there isn't a large-scale use of blockchain ongoing at the moment outside of digital currencies. Therefore, any valuation of cryptocurrencies based on their underlying blockchain is nothing more than a roll-the-dice guess at the moment.

We also can't overlook the terrifying role that retail investor emotions have played in bitcoin, Ethereum, and other cryptocurrencies. Without the stabilizing force that is Wall Street, emotions have the potential to whipsaw these currencies in the short term, possibly leading to quick and hefty losses for those who aren't prepared, or don't understand how digital currencies work. Building on that last point, the lack of a central trading exchange is another potential issue. While decentralization is critical to the success of cryptocurrencies so as to reduce the likelihood of a cyberattack being successful, it also makes it difficult to legitimize cryptocurrencies. And having around a dozen exchanges can increase price volatility.

Even regulating bitcoin and other cryptocurrencies could be worrisome. While regulation would, in one sense, signify the acceptance of digital currencies as legal tender, some countries, like China, could choose to crack down on digital currencies altogether. China recently barred initial coin offerings and announced that it'll soon be shutting down domestic bitcoin and cryptocurrency exchanges. Long story short, while Ethereum looks the best positioned to succeed over the long run, there's no guarantee that it, or bitcoin, will be around in a few years' time. My suggestion remains that investors steer clear of digital currencies until we have a better understanding of how they'll be regulated, and what their underlying technology is really worth.

Say Goodbye to the Old iPhone: This Could Be 40X Better

iPhone mania is back, and there's potentially billions up for grabs. But if you think Apple is the best way to play the pending iPhone tsunami, think again. One tiny company holds the patents to an invaluable, tiny component inside Apple's newest iPhone — and Apple has to pay up every time it puts this technology in its phones. Don't wait until the name of this company is on everyone's lips.

This Stock Could Be Like Buying Amazon in 1997

 

Imagine if you had bought Amazon in 1997… a $5,000 investment then would be worth almost $1 million today. You can't go back and buy Amazon 20 years ago… but we've uncovered what our analysts think is the next-best thing: A special stock with mind-boggling growth potential. With hundreds of thousands of business customers already signed up, this stock has been described as "strikingly similar to an early Amazon.com."

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

 

David https://markethive.com/david-ogden

Bitcoin’s price is spiking by 7 percent as traders shake off China fears

Bitcoin's price is spiking by 7 percent as traders shake off China fears

Bitcoin's price is spiking by 7 percent as traders shake off China fears

The price of bitcoin is up nearly 300 percent year to date.

Bitcoin is still under the $4,000 level, which it broke through after JPMorgan CEO Jamie Dimon said on Sept. 12 that the cryptocurrency is a "fraud" that will eventually blow up.

 

The price of bitcoin rose sharply on Monday with its price spiking up 7 percent midday, according to CoinDesk market data.

The price of the cryptocurrency is up nearly 300 percent year to date.

Bitcoin's price is spiking by 7 percent as traders shake off China fears

Bitcoin is still under the $4,000 level, which it broke through after JPMorgan CEO Jamie Dimon said on Sept. 12 that the cryptocurrency is a "fraud" that will eventually blow up.

In addition, recent reports said regulators in China have ordered bitcoin exchanges to close hurt the digital currency's price.

"In my opinion, the markets overreacted to the China news. In the short term, it was bad news, but long term the fundamentals are unchanged," William Mougayar, author of "The Business Blockchain," wrote in an email.

-CNBC's Evelyn Cheng contributed to this report

Author: Tae Kim |

 

Posted By David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

David https://markethive.com/david-ogden

Building Blockchains – Ripe Model for Principal- Agent Problem

Building Blockchains
– Ripe Model for Principal-
Agent Problem

 

Management theory, in broad terms, deals with the relationship

between managers and business entities. Inherent in this relationship is the principal-agent problem. This problem arises because the interests of a manager (agent) can — and often do — diverge from the interests of the owners of the business (principal) that he or she is managing.

Classic management incentivization: the carrot and the stick

Business organizations mitigate the principal-agent problem by use of incentive games that better align manager and business owner interests.

Example 1 (Reward-Based Game):

A manager is incentivized to generate revenues for a business because this is a performance metric that will influence his or her compensation. Revenues also benefit the business and its owners by increasing a company’s equity value (benefiting shareholders), enabling the company to pay down debt (benefiting creditors), allowing employees to be paid on time, etc.

Example 2 (Deterrent-Based Game):

A manager is deterred from acting in a manner that incurs excessive risk and liability for the business owners. One way this is achieved is through legal mechanisms such as vicarious liability or ‘piercing the corporate veil.’ The former may allow a manager to be held directly liable for the injury, or illegal conduct, of his or her employee; the latter may allow a manager to be held personally and solely liable in the context of fraud, etc.

I would hazard that the modern ‘business organization stack’ is built upon hundreds of different reward and deterrent incentive games, each playing a part in collectively establishing a Nash equilibrium between the ‘players’ within a business (i.e., managers and owners). These games are prevalent at all layers of the stack — e.g., compensation structures, human resources policies, governance policies, laws and regulations, etc. — and each game provides ‘checks and balances’ to the principal-agent problem that are fundamental to the viability of the organization.

Enter the ‘Cryptoeconomic Business Model’

With the advent of Blockchain-based assets — and the exponential influx of capital into the Blockchain industry over the past few years — we have witnessed the birth of a novel business model. This model enables companies to make money in new ways through the creation of open-source protocols and code (an invaluable service for which we once relied upon the altruism, rather than profit motive, of developers to provide).

I refer to this as the cryptoeconomic business model. This can be defined as any business model predicated on making profit by building a cryptoeconomic system, i.e., a peer-to-peer cryptographic network which functions on providing incentive payments to (assumed) adversarial nodes. Virtually all public/permissionless Blockchains today are ‘cryptoeconomic systems’ by this definition.

The cryptoeconomic business model upsets the classic principal-agent equilibrium that is often achieved by using reward and deterrent incentive games. This is done by introducing an entirely new class of stakeholder into the ecosystem — the Keepers of a Blockchain network (e.g. tokenholders and other participants who provide a form of ‘paid labor’ into the network, such as validators, miners, etc.)

If the traditional business has two classes of players (managers and owners), the cryptoeconomic business has three (managers, owners and Keepers). These new entrants complicate the game theory model because, now, instead of the acting only on behalf of owners, there are two sets of stakeholders (owners and Keepers) whose interests depend on the efforts of a manager. What happens when the interests of these different sets of stakeholders diverge? In whose interests would (or should) an agent be motivated to act?

Token offering events & the risk of divergence/dilution

Value creation in a traditional business model is different than value creation in a cryptoeconomic business model. In a traditional business, the final milestone of success is achieving profitability. Managers are incentivized to achieve profitability, and then to perpetually increase profitability, because the fruits of this labor accrue 100 percent to the business entity benefiting both owners and managers. Simple enough. This is not exactly the case for a cryptoeconomic business model. Early in the cryptoeconomic business life cycle, each milestone benefits managers and owners collectively — but upon a company’s token offering event milestone (note: because the term ‘ICO’ is a faux pas) there is a fundamental shift.

Value creation no longer accrues to the business entity, but directly to the product/output of that business (i.e., the cryptoeconomic system)

In a cryptoeconomic business model, the final milestone is not profitability per se, but in the value of the Blockchain network/token, which recent scholarship suggests may be measured as a token’s current utility value (“CUV”) and discounted expected utility value (“DEUV”). CUV/DEUV come into play immediately following the token offering event milestone, concurrently with the introduction of Keepers into the stakeholder set.

So how does this impact our thinking on managerial incentives?

The immediate observation is that managers and owners will only benefit from working to increase a network’s value to the extent that they retain some amount of that network’s native tokens. In practice this amount might be in the ~20–50 percent range for the business entity, which is sizable, but significantly less than the 100 percent value retention model of a traditional business.

In theory, managers have ‘skin in the game’ by virtue of these token holdings and should be motivated to drive growth in the token’s CUV/DEUV with the expectation of selling those retained tokens for a profit at some later date. This outcome would be ideal as it implies an alignment between manager-owner-Keeper interests. But the problem is that the dilution from 100% value retention (in a traditional business model) to ~20–50 percent value retention (in a cryptoeconomic business model) may also dilute a manager’s motivation to create long-term value for the network. Without sufficient reward/deterrent games in place, managers are prone to instances of moral hazard and myopic thinking.

It is plausible, for instance, that this may result in some degree of friction between the profit motive of managers, which incentivizes a manager to retain a significant portion of the tokens for the core business and the interests of the other Keepers/tokenholders who would benefit from those tokens being distributed more broadly thus creating network effects that could increase the CUV/DEUV of the token. This would be an example of misalignment between manager-owner-Keeper interests.

Other challenges in managerial motivation post-genesis block

Another challenge is due to the fact that revenue models (i.e. ‘rent-seeking’) may not be viable in cryptoeconomic systems. If a manager were to extract profit/revenue from a network by coding a centralized fee* into a protocol or dApp (i.e. any type of transaction fee that remits value back to the business), a likely outcome is that the protocol or dApp would either: (i) fail to gain adoption, or (ii) be hard forked by users (or duplicated by a competitor) to remove the fee from its code base thus making the network more cost-efficient.

*Note:

To clarify my point on centralized fees, certain platforms use sustainable fee models as a feature of the platform’s cryptoeconomic design (e.g,. Factom and Counter-Party, wherein a portion of fees are burned to increase the scarcity of the token). Also, as the use cases for dApps/protocols continue to proliferate, centralized fees may prove to be an accepted business model for certain applications of Blockchain technology.

Here are a few of the other ramifications of this challenge:

Profiting upfront; creating value later:

The creators of cryptoeconomic networks (currently) realize value for the business entity primarily via two streams: (i) the proceeds of token offering events, and (ii) the retention of some amount of the offered tokens. Both of these milestones occur relatively early in the life cycle of a business. Given that the majority of a manager’s compensation/profit is front-loaded, experience has shown that some managers will opt to simply complete a token offering event before ‘jumping ship’ to the next project, rather than working to generate value for their current project.

CUV/DEUV is a bad indicator of managerial competence:

We may not yet have the best tools to evaluate managerial performance in cryptoeconomic business models. CUV/DEUV are inherently different metrics than earnings per share, EBITDA, return on equity, etc. (the latter are some of the tools used to evaluate CEO performance in a traditional business). CUV/DEUV is driven by supply and demand; more fitting for valuing a commodity than equity. To evaluate a manager’s performance on the CUV/DEUV of a token is akin to evaluating a gold company CEO’s performance on the price of gold.

The lack of legal mechanisms to protect Keepers/token-holders:

There exists an elaborate body of corporate, securities and employment law designed to address the principal-agent problem between participants in traditional business structures (e.g., vicarious liability, ‘piercing the corporate veil,’ fiduciary duties owed by directors to shareholders, etc.) These protections do not (yet) exist for the Keepers/token-holders of cryptoeconomic systems. Granted, there is free market mechanism in play by virtue of the Keepers’ ability to hard fork a protocol in retaliation to mismanagement, but this overhaul should only be used as a last resort.

Singular token offering events: 

For traditional start-ups, the process of raising capital occurs in tranches (i.e. Seed, Series A, Series B, etc.) and each tranche is largely tied to a manager’s ability to demonstrate progress towards profitability since the previous tranche. Token offerings — on the other hand — are mostly structured as singular events. This structure alleviates the much needed external pressure on managers to deliver on building their products on time and on budget. It also fails to backstop losses for investors in the event that a manager fails to deliver.

These are just a few examples of how the principal-agent problem can manifest itself in the context of new, cryptoeconomic business models— each of which will eventually be solved by new incentive games designed for the tripartite (i.e., manager-owner-Keeper) environment.I suspect that the study of management theory in the context of cryptoeconomic business models will continue to be an evolving field — and a very relevant one at that.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

David https://markethive.com/david-ogden

Criticizing Bitcoin Could Backfire

Criticizing Bitcoin Could Backfire

 

JPMorgan CEO Jamie Dimon is facing market abuse reports

from algorithmic liquidity provider Blockswater, according to the UK’s biggest financial news publication CityAM. Earlier this month, at a banking conference hosted by Barclays, Dimon offered baseless condemnation on Bitcoin, claiming that the decentralized cryptocurrency is a fraud and that the government will soon close down the network of Bitcoin. Almost immediately after providing a non-factual and inaccurate assessment of Bitcoin, Dimon was heavily criticized by prominent venture capital investor and the owner of the Golden State Warriors, Chamath Palihapitiya. At the conference, in response to Dimon’s comments, Palihapitiya explained that governments are limited in what they can restrict and regulate within the global Bitcoin industry and market. He emphasized that government agencies and financial regulators can control trading activities around Bitcoin but cannot manipulate or censor the peer-to-peer protocol itself. To the Dimon’s labeling Bitcoin as fraud,

Palihapitiya answered:

“Absolutely not. It cannot be a fraud. What countries can constrain today is how it is effectively traded, but it cannot be controlled. It is a fundamentally distributed system that exists peer to peer. And so to the extent that you can basically eliminate the will and the actions of every single person in the world, you can eliminate it. But in the absence of that, the genie is fundamentally out of the bottle.”

Subsequent to the release of Dimon’s condemnation on Bitcoin, the price of the digital currency plunged from over $4,400 to $3,900. Many analysts have clarified that the price drop of Bitcoin most likely was not impacted by Dimon’s comments but rather by the Chinese government’s imposition of a nationwide ban on Bitcoin exchanges. Still, Blockswater pursued a market abuse report against Dimon for his statement that was evidently incorrect and because of the involvement of JPMorgan Securities Ltd. in various Bitcoin investments.

On Sep. 15, trusted sources including Bitcoin developer Andrew DeSantis and respected Bitcoin trader IamNomad published screenshots of four separate purchases of Bitcoin XBT shares by the bank accounts of JPMorgan Securities. Analysts as Tone Vays supposed they are custodian accounts that purchased the shares of XBT Provider, a Nordic Nasdaq-based Bitcoin exchange-traded note (ETN) on behalf of clients. It is highly unlikely that JPMorgan Securities as a company made the decision to invest in Bitcoin XBT. Instead, the clients of JPMorgan likely requested bank transfers to XBT Provider in Sweden in order to invest in Bitcoin through regulated channels.

Florian Schweitzer, managing partner at Blockswater said:

"Jamie Dimon's public assertions did not only affect the reputation of Bitcoin, they harmed the interests of some of his own clients and many young businesses that are working hard to create a better financial system.”

The complaint of Blockswater also noted that Dimon purposely released non-factual information in regards to the structure and legitimacy of Bitcoin with the intent of negatively impacting its price and value.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

 

David https://markethive.com/david-ogden

Why Most ICO’s Will Fail: A Cold Hard Truth

Why most ICO's fail

Why Most ICO’s Will Fail: A Cold Hard Truth

In this guide from Blockgeeks, you will learn why most ICO’s Will Fail.

On June 12, 2017, an Ethereum based called Bancor held its ICO. It raised $153 million in 3 hours. No, you are not reading it wrong, 153 million…..in 3 hours!!!

If that doesn’t get your brain melting, then how about this? The BAT ICO $35 million in 30 seconds!!! That’s near $1.2 million per second! And if that still doesn’t get your jaw dropping, then how about this? Have you heard of UET? UET had an ICO which raised $40,000 in just 3 days. Admirable if not particularly mind-blowing. Why do we bring it up after talking about Bancor and BAT?

Well, UET stands for “Useless Ethereum Token”, it is a “joke coin”.

Here is the sales pitch that they used, “UET is a standard ERC20 token, so you can hold it and transfer it. Other than that… nothing. Absolutely nothing.” And they raised $40,000 in 3 days! Welcome to the crazy world of ICOs! There is no doubt that ICOs have changes the financial landscape over the past 2 years. In the first half of 2017 alone they raised over $1 billion!

However, all these insane success stories tend to make us look at facts with rose-tinted glasses. The fact is, that around 99% of all ICOs out there will fail. And that’s not exaggerated doom and gloom, over the last few years, thousands of cryptocurrencies have been created and over 90% of them have failed. And the fact also remains that given the insane success of most ICO’s, scammers are flooding the market creating bogus dapps/coins to get their fill of the ICO pie and effectively create an “ICO bubble”.

So, keeping all this in mind let’s aim to answer this simple question: “Why are most of the ICOs going to fail?”

A quick disclaimer before we continue

Before we continue, we want to make something very clear. We don’t “hate” on ICOs. We believe that ICOs are truly revolutionary and will continue to evolve and will become an amazing vehicle for developers, entrepreneurs and investors who are looking to innovate and change the world by just showing their concept aka a whitepaper. (Well, we hope more than just a whitepaper) That’s truly brilliant. 🙂

With that being said, let’s start.

Why Most ICO’s Will Fail: A Cold Hard Truth

So, how does an ICO work?

Firstly, the developer issues a limited amount of tokens. By keeping a limited amount of tokens they are ensuring that the tokens itself have a value and the ICO has a goal to aim for. The tokens can either have a static pre-determined price or it may increase or decrease depending on how the crowd sale is going.

Tokens are basically native currencies that can be used in an environment (think of the arcade coins that you needed to play games in an arcade) or they give their owners various rights inside the native environment (Think of the wristbands that certain nightclubs use which entitles you to get a certain number of free drinks).

The transaction is a pretty simple one. If someone wants to buy the tokens they send a particular amount of ether to the crowd-sale address. When the contract acknowledges that this transaction is done, they receive their corresponding amount of tokens.

So, that’s a general idea on how ICOs works. But then why do most ICOs fail. The reason why most ICOs fail is that most developers/entrepreneurs do not pay any attention to the three pillars that make an ICO:

  • Cryptoeconomics.
  • Utility.
  • Security.

Pillar #1: Cryptoeconomics

It is funny how most developers forget the “cryptoeconomics” of their ICOs. There are two words that makeup cryptoeconomics: “cryptography” and “economics”. While most developers pay attention to the cryptography part, they hardly pay any attention to the “economics” part. As a result of which, it is very rare to find a token whose economic skeleton has been properly and thoroughly mapped out.

In order for the token to be decently valuable in the long run, there must be sufficient demand for it but that is not what is usually seen in the ICOs. What is seen is unsustainable token inflation which largely happens because of flawed economic models and the greater fool theory (more on that in a bit).

For these permanently inflationary tokens, their demand must always outpace their inflation for them to be valuable in the long run, which more often than not creates a Ponzi Scheme like scenario.

Before we go into all that, however, we need to understand where the fundamental problem of most ICO economic model lies.

One of the biggest advantages of ICOs is that anyone can come and raise money for their concept…not a finished product, a concept. There is still a long way to go before that concept can become a product and as with anything, there is a 90-95% chance that it will be a failure.

However, many of the early adopters of ICOs have made a killing because of the low entry and the high profit. As a result of this everyone else developed a massive case of FOMO (Fear Of Missing Out) and started pouring millions into concepts that didn’t even have an alpha version ready. Look at this, for instance, ICOs made nearly $800 million in the second quarter of 2017 alone! Compared to that, Venture capital made just $235 million:

These are people who have little to no idea about how the blockchain works, they are just putting in money to make a quick buck. Seeing this trend, the developers shifted their focus. Instead of making Dapps/currencies which added something new and unique to the ecosystem, they started making products for the ICO.

Their end goal became: “Build a flashy enough whitepaper to get good money in ICOs”. Because of this rampant speculation and very little due diligence, the “Greater Fool Theory” came into play.

What is the Greater Fool Theory?

The Greater Fool Theory is an economic theory which states that the price of an object increases not because of the value that it brings in but because of the irrational beliefs attached to it. Art is a great example of the greater fool theory.

So let’s apply the same to ICOs. You have a bunch of dapps and currencies coming up which are bringing in nothing new to the ecosystem. However, because they have been hyped up so much and there so many ignorant investors around, their value increases anyway, and as a result, the tokens face an inflation.

So, let’s recap what we have learned so far:

  • Investors are investing millions into concepts that don’t even have an alpha version of their product.
  • Investors are desperate to put their money in because they think that ICOs are a way to get rich quick.
  • In order to cash in on this, developers are creating products more aimed towards ICOs than to give actual value.
  • Because of the “Greater Fool Theory.” the value of the tokens gets inflated

If this sounds suspiciously like a bubble then yes, you are right and the thing is, we have been here before, we have seen this play out. The whole ICO situation is scarily reminiscent of another wave that swept us in the late 90’s. They say that those who are not aware of history are bound to repeat it. So let’s do a quick history lesson and turn back the clocks.

 

The Dot-Com Bubble

Around 1997, the internet became big and tech companies began to emerge everywhere. Investors started putting in their money and flipping their investments into huge sums. Eventually, everyone who saw this started getting major FOMO (fear of missing out) and they began giving away their money to companies without even having any idea as to whether the business had the potential to work or not.

Common sense went out of the window and every random internet business was making a killing in the IPOs. Warren Buffet noted that:

“The fact is that a bubble market has allowed the creation of bubble companies, entities designed more with an eye to making money off investors rather than for them. Too often, an IPO, not profits, was the primary goal of a company’s promoters.”

BOOM!

He hit the nail right on the head, most of the companies that got millions from their investors failed and some turned out to be nothing more than scams. Eventually, the bubble burst in 2002. Companies crashed and lost millions within a year. One of the most infamous examples of this is Pets.Com which lost $300 million in just 268 days!

The parallels between the ICO bubble and the dot-com bubble are a bit frightening. Much like dot-coms, the ICOs have attracted a lot of investors who don’t want to miss out on the gold rush. Much like the dot-coms ALL the investing is done purely from speculation. You have to realize that most of the companies that you are investing in, in ICOs barely have anything ready. Most of them don’t have the alpha version of their end result, it is all based on speculation and the potential of the project.

As with anything, most of these projects will fail to get the end results. The reason why the Ethereum ICO worked so wonderfully was that it had a dedicated and driven team of talented developers who were a day in and day out to make it a success, same with Golem.

The parallels are very apparent and it can get real scary thinking about it. But we are not market experts. All we can do is speculate. We don’t know whether we are living in the “ICO bubble” or not, nor do we know whether it is a bubble that is going to pop.

What we do know is that unless developers stop with their “get rich quick schemes” and actually pay attention to launching ICOs which bring in true value and has a concrete economical skeleton, then we will be seeing patterns which are depressingly similar.

 

Pillar #2: Utility

What is the definition of Utility? Utility means the total satisfaction that is received by the consumption of the goods or services. Most of the ICOs do not maximize their token utility. The tokens should be absolutely integral to the ICO and must increase the overall value of your final product.

If you are an ICO developer, then ask yourself this question: If you take away your token does your business fall apart? If the answer is no, then you don’t need a token. There are only a few cases that make sense to tokenize. Most people get tokens only so they can “HODL” it and buy more bitcoin and ethereum in the future! Is that all that your tokens are worth?

If you do use tokens for your business, then you need to completely understand its role and maximize its utility. You have to understand that tokens can be multi-purpose tools which can bring in a lot of “oomph” to your business. Your business model should be such that you are exploiting your tokens to the maximum possible limit.

(Before we continue, we would like to give shoutouts to the inimitable William Mougayar and Kyle Samani for their brilliant work and research.)

As William Mougayar points out in his Medium article, there are three tenets to token utility and they are:

  • Role.
  • Features.
  • Purpose.

These three are locked up in a triangle and they look like this:

Each token role has its own set of features and purpose which are detailed in the following table:

Let’s examine each of the roles that a token can take up:

  • Right

By taking possession of a particular token, the holder gets a certain amount of rights within the ecosystem. Eg. by having DAO coins in your possession, you could have had voting rights inside the DAO to decide which projects get funding and which don’t.

  • Value Exchange

The tokens create an internal economic system within the confines of the project itself. The tokens can help the buyers and sellers trade value within the ecosystem. This helps people gain rewards upon completion of particular tasks. This creation and maintenance of individual, internal economies is one of the most important tasks of Tokens.

  • Toll

It can also act as a toll gateway in order for you to use certain functionalities of a particular system. Eg. in Golem, you need to have GNT (golem tokens) to gain access to the benefits of the Golem supercomputer.

  • Function

The token can also enable the holders to enrich the user experience inside the confines of the particular environment. Eg. In Brave (a web browser), holders of BAT (tokens used in Brave) will get the rights to enrich customer experience by using their tokens to add advertisements or other attention based services on the Brave platform.

  • Currency

Can be used as a store of value which can be used to conduct transactions both inside and outside the given ecosystem.

  • Earnings

Helps in an equitable distribution of profits or other related financial benefits among investors in a particular project.

So, how does this all help in token utility?

If you want to maximize the amount of utility that your token can provide then you need to tick off more than one of these properties. The more properties you can tick off, the more utility and value your token brings into your ecosystem. If the role of your tokens cannot be clearly explained, or if it doesn’t really tick off more than one of the roles given above, then your token doesn’t have any utility and you can do without it.

Now, let’s move onto another interesting concept called “Token Velocity”.

Token velocity in simple terms means: Are people going to hold on to the tokens for long-term gain or sell it off immediately? This is a problem with most ICO and token structures because they are being treated more as a vehicle for liquidation than as a store of long-term value. In fact, regarding this, Willy Woo did an interesting case study.

He plotted the performances of 118 coins, from the first day of their inception to the day he made the graph. His only qualification was this; the coin should have reached a market cap of at least $250,000 in any one year of its existence. Let’s see what he came up with:

Image courtesy: WooBull

See that red line soaring triumphantly over everyone else? That is bitcoin. It is the only crypto that has performed consistently and grown from strength to strength. (The blue line above the bitcoin line is a statistical aberration according to Woo).

In fact, Woo’s research becomes more interesting when you break it down even further. Here he has grouped the coins together according to the year of their inception. Let’s see how well the coins from each year group performed:

Image courtesy: WooBull

Yikes! That does not look good at all!

What this shows is that every year the coins are performing worse and worse. And the reason for that is simple. More and more scam ICOs are coming in and developers are not making valuable enough projects. As a result of which, we have tokens, which perform no other utility than being a means of liquidation and that is exactly why Bitcoin and Ethereum are so far and above everyone else. People realize their potential as a proper long-term store of values.

This is exactly why developers need to pay attention to token velocity. The reason why Bitcoin and Ethereum have such high values is because, they are low-velocity coins. Let’s quantify token velocity (TV):

Let’s quantify token velocity (TV):

TV = Total Trading Volume / Average Network Value.

So, more the trading volume aka more that coin is traded more the velocity. Consequently, less the network value, more the velocity.

Now if you examine this from the perspective of bitcoin, then you will know exactly why its velocity is less.

  • No other crypto has as much network value as bitcoin.
  • No one wants to trade off bitcoin because they know that there is value in holding it.

So, what should developers do to ensure that they have less token velocity? They need to work and re-examine their tokens. They need to understand whether a token is being fully utilized or not. They need to answer several questions, some of which are:

Does my project really need a token?

  • Am I fully exploiting the token and getting as much token utility as possible.
  • Is my token useful only for initial liquidation purposes?
  • Is there any value in holding my token long term?
  • Is my token ticking off as many roles as possible?
  •  

It is only when developers work on the utility of their tokens will they be able to bring something which can contribute significantly to the ecosystem
 

Pillar #3: Security

And now we come to the third pillar… security

During your ICO and immediately after your ICO you have a big target on your back. If you haven’t paid attention to your security, hackers will attack you and they will rob you. In fact, this is what Chainanalysis had to say:

“More than 30,000 people have fallen prey to ethereum-related cyber crime, losing an average of $7,500 each, with ICOs amassing about $1.6 billion in proceeds in 2017.”

In fact, Chainanalysis claims that there is a 1 in 10 chance that you will end up a victim of the theft! That is staggering.

The crimes that happen largely fall into three categories:

  • Faulty code.
  • Phishing Schemes.
  • Mismanagement of keys.

Faulty Code

Perhaps the most infamous example of this is the DAO attack.

The DAO aka the Decentralized Autonomous Organization was a complex smart contract which was going to revolutionize Ethereum forever. It was a decentralized venture capital fund which was going to fund all future DAPPS made in the eco-system.

The way it worked was pretty straightforward. If you wanted to have any say in the kind of DAPPS that would get funded, then you would have to buy “DAO Tokens” for a certain amount of Ether. The DAO tokens were indicators that you are now officially part of the DAO system and gave you voting rights.

If in case, you and a group of other people were not happy with the DAO then you could split from it by using the “Split Function”. Using this function, you would get back the ether you have invested and, if you so desired, you could even create your own “Child DAO”. In fact, you could split off with multiple DAO token holders and create your own Child DAO and start accepting proposals.

There was one condition in the contract, however, after splitting off from the DAO you would have to hold on to your ether for 28 days before you could spend them. And this was where the loophole was created. People saw this in advance and brought it up but the DAO creators assured that this was not going to be a big issue. They couldn’t have been more wrong.
 

The DAO Attack

On 17th June 2016, someone exploited this very loophole in the DAO and siphoned away one-third of the DAO’s funds. That’s around $50 million dollars. The loophole that the hacker(s) discovered was pretty straightforward in the hindsight.

If one wished to exit the DAO, then they can do so by sending in a request. The splitting function will then follow the following two steps:

Give the user back his/her Ether in exchange of their DAO tokens.

Register the transaction in the ledger and update the internal token balance.

What the hacker did was they made a recursive function in the request, so this is how the splitting function went:

Take the DAO tokens from the user and give them the Ether requested.

Before they could register the transaction, the recursive function made the code go back and transfer even more Ether for the same DAO tokens.

This went on and on until $50 million worth of Ether were taken out and stored in a Child DAO and as you would expect, pandemonium went through the entire Ethereum community. The price of Ether dropped from $20 to $13 overnight. This still remains the worst ICO hack ever. The aftermath of the hack was so extreme that it split Ethereum into two different currencies: Ethereum and Ethereum Classic.
 

Phishing Schemes

Here is something truly scary for you to wrap your head around.

Phishing scams have stolen up to $225 million in Ethereum related cybercrimes. In fact, as we have mentioned before, more than 30,000 people have fallen prey to ethereum-related cyber crime, losing an average of $7,500 each.

So, before we continue, what is phishing?

Phishing is the process by which scammers get your sensitive information (like credit card details) by impersonating someone trustworthy and of notable repute. The scammers usually use email and in some cases, they use social media. In fact, someone has been trying to phish ICO developers by impersonating our very own Ameer Rosic!

As a developer, you need to be very very very careful of this. Imagine giving away your card details or, more importantly, your key details just before your ICO! Obviously, the investors get scammed more than the developers. One of the more popular ways of scamming investors is by creating a fake social media profile which somewhat resembles the real ICO page and then manipulating potential investors to send money to their address.
 

Mismanagement Of Keys

If you are a developer, then there are 3 questions that you need to ask yourself:

  • Where are you storing your private keys?
  • How are you protecting your wallets?
  • How are you protecting your customer’s tokens on your ecosystem?
  • Who are you sharing your multi-sig wallet keys with?

If you are a developer, then one of the many doubts and fears that you will face from your investors is what is stopping you from running away with all of their funds? Which is a very valid question. The way that you can allay these fears is by using a multi-signature wallet.
 

What is a multi-signature wallet?

The easiest way of understanding how a multi-signature (multi-sig) wallet works like is by thinking of a safe which needs multiple keys to operate. A multi-signature wallet is great for 2 purposes:

  • To create more security for your wallet and save yourself from human error.
  • To create a more democratic wallet which can be used by one or more people.

How does multi-signature wallet save you from human error?

Let’s take the example of BitGo, one of the premier multi-sig wallet service providers in the world. They issue 3 private keys. One is held by the company itself, one is held by the user and the third one is a backup that the user can keep for themselves or give to someone trustworthy for safe keeping.

To do any sort of transaction in a BitGo wallet you will need at least 2/3 keys to operate. So even if you have a hacker behind you, it will super difficult for them to get their hands on 2 private keys. And on top of that, even if you lose your private key for whatever reason, you still have that backup key that you had given to your friend.

Now, how does a multi-signature wallet create a more democratic environment? Imagine that you are working in a company with 10 people and you need 8 approvals in order to make a transaction.

Using a software like Electrum you can simply create a custom multi-sig wallet with 10 keys. This way you can make seamless democratic transactions in your company. And that is exactly how you will allay fears regarding the safety of the investor’s money. Suppose you publicly declare that 5 of those keys will be given to neutral parties who are reputable members in the crypto environment that will obviously create more trust among the investors.

However, despite all this, even a multi-sig wallet is prone to a hack attack. A wallet is only as secure as the code that makes it. On July 19th, a vulnerability in the Parity Multsig wallet was exploited and hackers made do with $30 million in ether.

So next time you are about to hold an ICO please make sure that you are taking care of your security. No one wants to see a tweet like this:

Conclusion

ICOs are the “in thing” now and the number of ICOs held per month is increasing exponentially:

Image Courtesy: Investopedia

 

If you are a developer then, and there is no easy way of saying it, you will most likely fail to create an end product. Does this mean that we hate ICOs? We don’t. Like we said, we really think that it is revolutionary. But, if you are a developer then it is your responsibility to you, your potential investors, and to the future of cryptocurrency itself to use the ICOs as a means of creating something truly meaningful rather a method of making a lot of cash.

  • Why are you doing your ICO?
  • Is your token something that will bring genuine value?
  • Are you sure you are not doing this just to make a quick buck?

If you cannot convincingly answer any of these questions then please, do not do your ICO. Don’t contribute to this “bubble”. Make something meaningful. Make something that will add to the environment, not exploit it.

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

 

David https://markethive.com/david-ogden

Is Blockchain Technology Really the Answer to Decentralized Storage?

Is Blockchain Technology Really the Answer to Decentralized Storage?

 

The Blockchain has become much more than a simple piece of technology.

It has become a symbol for freedom, transparency and fairness. With this being said, it’s no wonder we see projects leveraging Blockchain tech as a “one-size-fits-all” tool to solve all sorts of problems, many of which could not be further from the original purpose of the Blockchain. Nowadays, the words “Blockchain technology” are thrown around alot and sometimes the use of the technology itself is unnecessary. Tim Swanson, Director of Market Research at R3CEV has even coined the term "chain washing" to describe companies/startups that are using or trying to use Blockchain technology in certain areas when in fact, they could be using more advanced technology for the purpose at hand.

This becomes especially evident when it comes to file and data storage. Although the Bitcoin Blockchain is basically a decentralized database for transactions, accounts and balances, keeping that information on a decentralized ledger is already proving to be a challenge due to capacity issues. Nevertheless, several projects and companies insist on looking at Blockchain-based solutions for storage and, while there are clear cases of misguided enthusiasm when it comes to the use of Blockchain technology, there are some projects out there that are worth taking a look at.

Blockchain Technology as an Incentive Layer

When it comes to a mutualistic relation between Decentralized Ledger Technology (DLT) and data storage, the most common use case for the Blockchain is as an incentive layer. This means that data isn’t stored on the Blockchain itself, but the network at hand is able to leverage the Blockchain as a ledger for automatic payments and/or for value exchange, enabling users to pay for storage or access to files. In this case, the advantages for using the Blockchain over any other technology are clear. These include faster settling times, lower transaction fees (which enable microtransactions), higher privacy and the ability for transparent and immutable record keeping. While the Blockchain isn’t being used for data storage, it is providing the foundation on which the decentralized network is built, allowing it to run with no central authority whatsoever.

There are several projects leveraging the Blockchain in such a way. Storj, one of the first and most successful decentralized storage networks on the cryptosphere, comes to mind. The project started out using a Bitcoin-based asset but later moved to an ERC20 token on the  Ethereum Blockchain. This token, the Storj Coin (SCJX), is used by clients to pay for storage and acts as an incentive for nodes that keep part of the client’s files. These files have been previously shredded, encrypted, and distributed to multiple nodes in order to ensure their safety and availability.

Another popular example is Filecoin, a project developed by Protocol Labs, the creators of the InterPlanetary File System (IPFS). In case you aren’t familiar with IPFS, it is an alternative p2p hypermedia protocol that allows files to be stored in a permanent and decentralized fashion. This provides historic versioning for files, removes duplicates and even allows users to save on bandwidth since files are downloaded from multiple computers and not from a single server.

While IPFS provides a basis for the storage of files, Protocol Labs took this one step further with the development of Filecoin which, according to the whitepaper, “works as an incentive layer on top of IPFS.” The system is different from the one used by Storj on many levels. In Filecoin, miners are paid to store and retrieve files, while also receiving mining rewards from their “useful Proof of Work." There is also no set price for file storage. Instead, users and miners place buy and sell orders in a decentralized storage exchange, making Filecoin a competitive marketplace in which prices can adapt to outside conditions.

While Filecoin and Storj focus on providing affordable cloud storage services, a project named Decent is currently working on a decentralized content sharing platform which allows users to upload and monetize/share their work (videos, music, ebooks, etc) without the need to rely on a centralized third party. Users can access content in a much more affordable way by skipping these intermediaries while the nodes that host the content are rewarded with fees. Much like Storj, the files stored by the nodes on the Decent network are shredded and encrypted.

Blockchain for storage? Is it possible?

Storing data on a Blockchain like Bitcoin would be doable, in theory. However, Bitcoin’s current blocksize limit only allows for 1MB of data to be stored every 10 minutes. Even if you remove that limit, nodes will eventually stop being able to maintain a copy of the Blockchain due to its size, resulting in a centralized and easily-disruptable network. Of course, the scalability problem hasn’t deterred developers from trying to use the Blockchain as a storage solution and a project called Archain may just have found a solution. Archain is a cryptocurrency project that wants to address online censorship by creating a decentralized archive for the internet. To do so, Archain will leverage a new Blockchain-derivative data structure, the "blockweave" which according to the whitepaper, allows the network scale to an “arbitrary size."

Once a user submits a page for archiving on the Archain system, it is stored on the blockweave with the fees paid by the user being allocated to the miner that finds the block at hand. Since the  Archain requires miners to store both the current block and a previous block that has been randomly picked from the blockweave, miners have an incentive to store as much as the data as they can without being forced to store the entire blockweave. As such, Archain is able to ensure that content requested by users is always available without the need for it to be stored by every single node on the network. Archain is also able to address download speeds by incentivising users to propagate poorly-mirrored blocks.

Private Blockchains?

You cannot talk about chain washing for too long without talking about private Blockchains. The concept of a private Blockchain is, to a degree, paradoxical as there is really no use for a Blockchain if the network is closed. To put it simply: If a Blockchain network is not immutable, open or transparent, then a regular database will usually be far more efficient than a Blockchain. Yet there is a little known project leveraging a private Blockchain in combination with the public Waves Blockchain to provide clients with the “best of two worlds." We are talking about Sigwo Technologies LLC, a company that focuses on providing dApps and consulting services for legacy businesses that want to integrate Blockchain technology for data storage and disaster recovery.

Although Sigwo Technologies LLC provides a wide range of services, its use of the Jupiter Blockchain, the Mercury token and the Waves Platform caught my attention. Jupiter is a private Blockchain built specifically for encrypted information storage. Different networks are created for different companies, allowing authorized nodes to join in and download the data on the chain. So far, Jupiter is not much different from any other private Blockchain. What makes it stand out is how Jupiter is able to ensure transparency and immutability despite being a private Blockchain.

Once data is stored on Jupiter, the block hashes from the private Blockchain are stored permanently on the Waves Blockchain. This is done by adding the block hash to a Waves transaction. Since Waves transaction can be paid for with a custom token, the Mercury token is used which makes the process affordable.  Since block hashes are stored on the Waves Blockchain, any change made to the private Blockchain will be publically detected. This happens because the hash from a certain block will always vary according to the information contained in the block. What we’re left with is a Blockchain in which large amounts of data can be stored by specialized nodes (unlike public Blockchains) while remaining publicly verifiable.

Conclusion

As we have seen, there are no shortage of projects that are using Blockchain technology and cryptocurrencies to make decentralized storage possible. However, it is also worth noting that DLT is still in its early stages and it is possible that other, more advanced technologies can replace it with respect to specific use cases. In other words, Blockchain may not be the answer for everything.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

 

David https://markethive.com/david-ogden

Unverified Rumor Circulating That Amazon May Accept Bitcoin By October

Unverified Rumor Circulating That Amazon May Accept Bitcoin By October

 

Rumors are circulating that Amazon may begin accepting Bitcoin

as a payment method this October. The rumors appear to stem from a recent report on squawker.org, Some surveys have indicated that the company would have a financial reason to do so, but no official announcement has been made.  The squawker.org article references a mention in investor James Altucher’s newsletter. According to the source, Altucher is an experienced trader who many believe could have pre-announcement information.

The article comments:

“James Altucher has (co)founded more than 20 companies, authored 11 books, and has been a contributor to several major publications.He is a former hedge fund manager and venture capitalist turned activist blogger/podcaster and offers a subscription based mailing list – the source of the Amazon information.”

Such an announcement is a long shot, but isn’t inconceivable. As online retailers begin to embrace Bitcoin, Amazon will likely respond in kind, in order to maintain its dominance. Overstock CEO 

Patrick Byrne said:

“They have to follow suit. I’d be stunned if they don’t, because they can’t just cede that part of the market to us, if we’re the only main, large retail site accepting Bitcoin.”

Following suit

The move would also continue a trend that began with Overstock and has included other enterprise-level tech companies. A recent comment within a Google API tutorial has led many to believe that the online behemoth will also begin accepting Bitcoin within the Google Store, as PayPal and others already do. As recently as this summer, users were petitioning Jeff Bezos, CEO of Amazon, to begin accepting the cryptocurrency. The move may occur as early as October 26th, during the next earnings conference call. It should be reiterated that this is likely only a rumor at this point, and could be swiftly put to rest. Nonetheless, it is interesting to speculate on the possibilities if Amazon does one day integrate Bitcoin. As the adoption of Bitcoin and cryptocurrencies grow, retailers will need to join the progression toward acceptance in order to remain relevant.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

David https://markethive.com/david-ogden