NEO Co-Founder Banks On Blockchain To Build A Smart Economy

NEO Co-Founder Banks On Blockchain To Build A Smart Economy

The financial world, ecommerce, and other industries that witness millions of transactions each day, should prepare for fast-moving changes in order to stay ahead of competition and facilitate the rise of new solutions as well as accommodate the growing needs of businesses and consumers alike.

Today, ecommerce and the financial sector are being thoroughly shaken up by blockchain – a distributed ledger technology built to power bitcoin. It’s changing the financial services sector with banks scrambling to claim their piece of the pie. The technology itself has introduced new payment methods, smart contracts, and even new ways to verify digital identity. I spoke with Da Hongfei, co-founder of blockchain group NEO – formerly AntShares – who views blockchain as the key to a new “smart economy” where a comprehensive blockchain ecosystem could create better ways of managing financial transactions. The emergence of these new technologies is set to change every industry.

          

Da Hongfei, co-founder of blockchain group "NEO"

– formerly known as AntShares, which made headlines as a top 10 Cryptocurrency by market cap, on August 8th, 2017.Let’s look at a number of examples to illustrate the pace and nature of this ongoing disruption.

Smart contracts

New blockchain platforms are now able to handle smart contracts. Smart contracts are software that can track and automate the fulfillment of agreements over the blockchain. Certain actions can be triggered if a term in the contract is met. This allows developers to create a variety of blockchain-powered services. NEO is one of the platforms that offers smart contracts. It dubs its smart contracts “Smart Contracts 2.0.” These smart contracts can be built using a variety of programming languages in order to lower

the barriers to developer adoption.

“NEO developers can write smart contract code in .NET and Java/Kotlinm, and we are currently testing integration with Go, JS, and Python for a rollout in the future. This will allow a great number of developers globally to build smart contracts on NEO,” Da mentions.

The technology offers interesting opportunities for business-to-business (B2B) enterprises. B2B agreements can be made and fulfilled over the blockchain. For example, businesses could leverage smart contracts for use with suppliers and distributors in automating supply chain. This even promises consumers the possibility of making big-ticket purchases such as real estate and automobiles over the blockchain.

Cryptocurrencies

Blockchain has brought us cryptocurrencies. Bitcoin, the most popular cryptocurrency, is now worth almost three times the price of gold. It’s also gaining acceptance in more markets as countries have started to put up regulations for its use. Japan, in a bold move, declared bitcoin a legal payment method which compelled retailers to adopt solutions to be able to accept bitcoin even for brick-and-mortar establishments. As for ecommerce, accepting cryptocurrencies such as bitcoin is relatively simpler. Bitcoin wallet services such as BitPay allow users to accept bitcoin through buttons and, for more advanced users, APIs. For instance, bitcoin services now provide merchant services to enable ecommerce companies to accept bitcoin. Through such a service, merchants would also be able to exchange it for fiat currency and vice versa giving them flexibility in which currency to use.

New blockchain platforms have also allowed the creation of more cryptocurrencies. Ether (from the Ethereum blockchain) and bitcoin cash (the new fork of the bitcoin blockchain) are the next two top cryptocurrencies priced at $300 and $320 as of writing. NEO’s own token is now among the top 10 cryptocurrencies with a market cap of more than $1.4 billion thanks to the company introducing new products, as well as its rebranding efforts.This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. I have no positions in any of the securities mentioned above.

Cross-border transactions

Blockchain and cryptocurrencies are now widely used in payments and remittance. Since transactions occur in the blockchain, cross-border payments still have cheaper rates than other solutions. In contrast, traditional payments and remittances often have to be routed through several institutions and can undergo several clearing processes for transactions to complete. Newer blockchain platforms can offer quicker confirmations of transactions. Payments and remittances done even when done cross-border over blockchain can be completed in real-time. Because of this, cryptocurrencies are finding increased use for remittances in developing countries. If cryptocurrencies become preferred modes of payment in these markets then ecommerce companies would have little choice but to provide support for such payment methods much like how cash on delivery became an in-demand service for emergent markets.

Fraud prevention

Fraud continues to be a major concern for businesses. US retailers lost $32 billion from fraud in 2014. Because of this, fraud prevention has become a segment on its own with payment gateways and card processors offering transaction filters and identity verification services to merchants. Blockchain actually has applications in security and fraud prevention as well. For example, blockchain startup Civic combines blockchain and cryptographic hashing to create an encrypted digital fingerprint for users while leveraging decentralization and avoiding storing personal information anywhere.

In a similar effort, NEO is also incorporating digital identity in its platform.

“We believe blockchain usage will eventually integrate real world applications, such as digital assets based on digital identity. This would allow for better anti-money laundering and know your customer capabilities in blockchain, of which there is a paucity in the modern blockchain ecosystem,” Da said.

Such mechanisms offer the potential for more accurate means to prove identity in ecommerce transactions. For merchants, this means less instances of chargebacks or rejected transactions since users are properly verified.

Ecommerce in a “smart economy”

Much like how mobile changed the way people behave, blockchain has the potential to redefine how commerce is done. For ecommerce, the potential effects of these new developments are multifaceted. The increasing acceptance of cryptocurrencies may give rise to new preferred payment methods. Developments in smart contracts would also allow businesses to automate fulfillment of agreements thus speeding up transactions. Enhanced security would also inspire increased confidence among businesses and consumers.

For businesses, it helps keep a watchful eye to these developments in blockchain. As behaviors shift, ecommerce must be ready to adapt and offer better experiences that create a faster, more secure, and convenient ways to do business. It pays to be ready to participate as the world moves towards a smart economy.This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. I have no positions in any of the securities mentioned above.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.

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

Crypto Asset Firm Launches Investable Index for Top 30 Cryptocurrencies

Crypto Asset Firm Launches Investable Index for Top 30 Cryptocurrencies

Crypto Asset Firm Launches Investable Index for Top 30 Cryptocurrencies

One of the cryptocurrency world's more tenured fund managers is launching two new products aimed at bringing the emerging asset class mainstream.

Revealed exclusively to CoinDesk, Tim Enneking's Crypto Asset Management is today releasing a new product called CAMCrypto30 – a cryptocurrency index designed to mirror the 30 largest cryptocurrencies by market capitalization. In addition, the firm also announced a new, investable share class for the fund, which will track the cryptocurrencies listed in the index.

If successful, the index could one day be used as a shorthand for discussing cryptocurrency market movements, providing a reference point akin to an equity index. As indices are standard for traditional asset classes, this would allow investors to better analyze and track performance relative to other asset classes in their portfolios.

Index tracking products, such as the new share class, are designed to allow investors to gain broad exposure to an asset class while diversifying their holdings within it.

CAMCrypto30, which was constructed to resemble the Russell 2000 and FTSE 100 indices, is weighted by market cap.

Enneking told CoinDesk:

"We've used those two indices as our model because they are the closest to what seems to be appropriate in the crypto space. Not only is there no real index – there is certainly no investable index."

Unpacking the product

So, what's available today? For one, the index itself, which is separate from the investment vehicle, now has its own website.

An embeddable widget has also been made public for third-party websites to track CAMCrypto30 index data. (Notably, the index will be rebalanced monthly to better track the fast-moving cryptocurrency world, instead of being rebalanced quarterly, as is more typical with equity indices).

Otherwise, investors in the Crypto Asset Management fund are now able to participate in three separate fund classes, each of which provides exposure to a different type of investment.

The new index-tracking I-Class joins two other existing cryptocurrency fund classes: an L-Class, which is used to generate exposure to short-term lending rates, and a T-Class, which is a trading class.

All three classes are issued by two open-ended funds: a U.S.-based master fund, which is structured as a Delaware LLC, and a Cayman Islands-based feeder fund, primarily for international investors. The former, called Crypto Asset Management LLC, is open to accredited investors in the U.S., and is subject to a $25,000 minimum investment.

All Class-I shares, which track CAMCrypto30, have a fee structure of 2.5 percent on funds committed, but fees are not charged on returns, since there is no discretionary management involved in tracking the index.

 

David Ogden
Entrpreneur

David Ogden Cryptocurrency Entrepreneur

 

Author: Ash Bennington

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

What is BitShares and is it a Good Investment?

What is BitShares
and is it a Good Investment?

The recent exuberant rally in the cryptocurrency market

has brought altcoins such as ether, litecoin, and ripple into the limelight. However, there are dozens of other promising digital currencies and assets that have not only gained in substantial value in the last six months but have the potential to continue to do so over the years to come. One of these digital tokens is bitshares (BTS). In this guide, you will learn what the BitShares Project is and whether its native cryptocurrency, bitshares (BTS), could potentially make a good investment or not.

What is BitShares?

BitShares leverages blockchain technology to create “free market solutions by leveraging the power of globally decentralized consensus and decision making.” According to its founder, Daniel Larimer, however, it is more than that. In a blog post, Larimer explains that BitShares is a software, a network, a ledger, a bank, an exchange, and a currency.  

BitShares is a software that provides “a distributed multi-user database with update permissions managed by a predefined set of rules as well as public key cryptography.” BitShares is also a decentralized network run by users around the world, which keep their databases synchronized as per the rules defined by the BitShares software. This allows the BitShares network to run as long as there are at least two participants in the network communicating with each other over the Internet. Finally, a distributed ledger that records all transactions that take place on the BitShares blockchain, and it is the company behind the BitShares project.

Larimer also explains the analogy of a bank as it can fulfill the role of a bank by maintaining a distributed ledger that tracks debt collateralized by other assets. In the case of BitShares, dollar denominated debt is collateralized by BitShares’ cryptocurrency BTS. “This dollar denominated debt is a BitAsset known as BitUSD. BitShares supports any number of BitAssets including BitGold, BitSilver, BitOil, etc. Whereas normal banks practice the unsustainable business of fractional reserve banking, BitShares uses at least 200 percent reserve and is often over 300 percent reserve. Whereas normal banks use illiquid assets to back (collateralize) debt payable on demand, BitShares uses highly liquid BTS as collateral.”

Despite its broad definition and multi-faceted features, BitShares is most known for being a decentralized exchange for “smart assets” that are backed by BitShares’ cryptocurrency and can be pegged against traditional assets such as the USD or gold. The smart assets platform also allows for the creation of user-issued assets (UIA) so anyone can create digital assets on the BitShares blockchain. These digital assets can be specified to be used for a wide variety of things including crowdfunding with equity, for property rights, or as tickets for events.

BitShares’ Blockchain and Cryptocurrency

BitShares’ native cryptocurrency is also called bitshares and carries the ticket BTS. It is currently in the top 20 largest digital assets and has a market capitalization of around $400 million. The BitShares blockchain uses a Delegated Proof-of-Stake consensus mechanism, which means that voting on consensus issues can be done democratically by stakeholders. “All network parameters, from fee schedules to block intervals and transaction sizes, can be tuned via elected delegates,” the company states on its website. There are 101 elected delegates in the BitShares network who secure the network and, therefore, receive transaction fees as rewards. DPoS allows for ten transactions per second, making the BitShares network one of the fastest in the industry.

New bitshares are created in each block, and the maximum number of new shares per block decreases over time as it is the case with Bitcoin. New shares are given to BitShares’ workers who have been elected by the shareholders to run the company. The current circulating supply of bitshares is just under 2.6 billion BTS, and there is a 1 billion BTS reserve fund held by BitShares. The BitShares reserve pool is used to pay workers and receives an income from transaction fees. The total supply of BTS will not exceed 3.6 billion. Since its launch in October 2014, bitshares’ price was trading in the range from below one cent to under 4 cents and did not bring significant gains for investors. However, when the digital assets rally of spring 2017 started, the value of bitshares increased substantially along with the rest of the altcoin market to peak at its all-time high of $0.45 on June 10. At the time of writing this article, the value of bitshares stood at $0.15 per coin.

The weekly chart for BTS-BTC on the Bittrex exchange is shown below. For the week beginning July 31, BTS-BTC hit a fresh low at 0.00003977 and a bullish Doji candlestick was formed, suggesting that the downward trend may be over. A fractal buy level will form at 0.00003977; as long as the price of BitShares remains above this level until August 21. Once confirmed, we look to buy BTS-BTC, as the base line (red) indicates equilibrium at 0.00008690. Moreover, we see that the Ichimoku cloud remains green in color and the price remains above the cloud, suggesting the long-term uptrend is intact. The green part of the cloud indicates a long-term equilibrium zone around 0.00008600-0.00009400 for early 2018, suggesting BTS-BTC will revisit this area over the long run. However, a weekly close below 0.00004530 will point to further losses and suggest that a test of the support provided by the Ichimoku cloud 0.00001300 to 0.0000700 may occur. The altcoin's volume is also an attractive factor for investors, as it enjoys high interest from crypto traders and speculators, regularly in the top ten cryptoassets according to daily volume.

BitShares Crowdsales

According to Smith&Crown, BitShares ran two crowdsale campaigns to fund the development of its platform, one using protoshares and one using angelshares. Protoshares was a new cryptocurrency that used Proof of Work and was sold with the promise to give token holders a share of future products created by Invictus Innovation, the predecessor company of BitShares. The second fundraising took place in 2014 and was in the form of donations in bitcoin and protoshares to Invictus Innovation. During the crowdsale, the company managed to raise between $7 million to $15 million in exchange for angelshares to further its development. Protoshares (PTS) later turned into the cryptocurrency bitshares (BTS) while angelshares holders were also able to claim their bitshares. Both protoshares and angelshares now no longer exist.

Should You Invest in BitShares?

Like with most cryptocurrency projects, the investment story for bitshares focuses on the success or failure of its platform. BitShares has been around since 2014 developing its platform that allows users to digitize “real world” assets and trade them on the blockchain in a decentralized manner. If the digitization of traditional assets and securities becomes industry standard in the financial industry and if BitShares manages to become the go-to platform for this, then the value of bitshares (BTS) will skyrocket.

An emerging platform of interest is the OpenLedger Decentralized Conglomerate, the world’s first blockchain powered conglomerate, which is based on BitShares technology. OpenLedger hosts several projects, such as GetGame, eDEV.one, and Apptrade; GetGame is based on game-related ideas with a focus on VR, AR and blockchain-based creations, while eDEV.one is a freelancing platform based on blockchain technology.

Having said that, the competition from established international exchanges who are working on a similar blockchain-based solution could become a threat to BitShares success story. There are also other competitors in the blockchain space who are working on similar solutions such as the Waves platform, which has gained substantial momentum in the past six to twelve months and is positioning itself as a tough competitor for BitShares. If BitShares does not manage to outcompete other market participants, then it will be unlikely for its native cryptocurrency to “go to the moon.”

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.

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

Fidelity now allows clients to see digital currencies on its website

Fidelity now allows clients to see digital currencies on its website

Fidelity now allows clients to see digital currencies on its website

Fidelity Investments has started allowing clients to use its website to view their holdings of bitcoin and other cryptocurrencies held through digital wallet provider Coinbase.

Fidelity Investments has started allowing clients to use its website to view their holdings of bitcoin and other cryptocurrencies held through digital wallet provider Coinbase, the company said on Wednesday.

The initiative, previously tested with the Boston-based money manager's employees, is a rare example of an established financial services company warming up to cryptocurrencies.

Starting Wednesday, most Fidelity clients will be able to authorize Coinbase, one of the largest crypto-currency exchanges in the United States, to provide the fund manager with data on their holdings.

Through the experiment, the company said it aims to learn more about digital currencies, which have been proliferating since the creation of Bitcoin, the oldest and most valuable of these assets.

Coinbase enables users to buy and trade Bitcoin as well as competitor virtual currencies Ethereum and Litecoin.

"This is an experiment in the spirit of learning what these crypto assets are like and how our customers may want to interact with them," Hadley Stern, senior vice president and managing director at Fidelity Labs, the company's innovation unit, said in an interview.

Bitcoin hit a record high on Tuesday, with one unit of bitcoin trading at above $3,400 on Coinbase.

The currency's rise in value is not a driving force behind the initiative, Stern said, noting that the integration is part of Fidelity's wider efforts around cryptocurrencies and their underlying technology blockchain.

Many large financial institutions around the world have been investing in blockchain over the past two years, in the hopes that it can help them slash costs and simplify some processes. Blockchain is a shared ledger of transactions maintained by a network of computers on the internet rather than a central authority.

However, most established financial firms have shied away from associating themselves with bitcoin and cryptocurrencies, because the sector remains largely unregulated.

Fidelity's Chief Executive Officer Abigail Johnson announced the company's intention to launch the Coinbase integration at an industry conference in May.

At the time Johnson also revealed that Fidelity had been accepting bitcoin payments in its cafeteria, but said the experiment had highlighted the technology's flaws as a means of payments.

"But I am still a believer – and it's no accident that I'm one of the few standing before you today from a large financial services firm that hasn't given up on digital currencies," Johnson said at the time.

 

David Ogden
Entrepreneur

David Ogden Cryptocurrency Entrepreneur

 

Source: Reuters

 

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

How Blockchain Technology Will Disrupt Financial Services Firms

How Blockchain Technology Will Disrupt Financial Services Firms

 

 

Creating Value through Platforms, People and Technology,”

authors Barry Libert, Megan Beck and Jerry (Yoram) Wind look at how blockchain technology will prove to be a major disruptor to the public and private sectors, starting with the financial services industry. Libert is CEO of OpenMatters and Beck is the chief insights officer. Wind is a Wharton marketing professor and director of Wharton’s SEI Center for Advanced Studies in Management. They also wrote a book called The Network Imperative: How to Survive and Grow in the Age of Digital Business Models. The authors would like to thank LiquidHub for sponsoring the research for this series.

“There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking.” — Jamie Dimon, JPMorgan Chase

The basic rules of the game for creating and capturing economic value were once fixed in place. For years, or even decades, companies pursued the same old business models (usually selling goods or services, building and renting assets and land, and offering people’s time as services) and tried to execute better than their competitors did. But now, business model disruption is changing the very nature of economic returns and industry definitions. All industries are seeing rapid displacement, disruption, and, in extreme cases, outright destruction. The financial services industry, with its large commercial and investment banks and money managers, is no exception.

“Silicon Valley is coming,” JPMorgan Chase CEO Jamie Dimon warned in his annual letter to shareholders. He said startups are coming for Wall Street, innovating and creating efficiency in areas that are important to companies such as JPMorgan, particularly in the lending and payments space. The payments startup Stripe has a multibillion-dollar valuation and a partnership with Apple Pay. Bitcoin companies and exchanges such as 21 and Coinbase are attracting tens of millions of dollars from venture capitalists. Peer-to-peer lending is booming in the small loan market with many players, including Upstart, Prosper, Funding Circle, and more. And the financial-planning startup LearnVest just got acquired for more than $250 million.

Many of these organizations are in the lending business, but are using big data and cloud technologies rather than tellers and branches to speed lending and customer acquisition. Others are leveraging network business models, such as peer-to-peer lending, to bring together would-be lenders and borrowers. According to Dimon, “We are going to work hard to make our services as seamless and competitive as theirs.” His underlying thought is this: If his company doesn’t keep pace with today’s well-capitalized upstarts, they will begin to lose relevance in a platform-centric world.

“In lots of areas, it looks like the blockchain will replace the current centralized business model of the financial services industry.”

There are many innovative, network business models that are coming after traditional financial services and banking organizations, and big banks are beginning to realize they must evolve in response if they want to remain viable in a digitally centric world — whether it comes by acquiring, partnering or developing leading-edge technologies. But what’s less clear is why, exactly, these new entrants are so disruptive and powerful. What enables them to skirt perceived constraints of these once ‘too large to fail’ incumbents and exploit unseen possibilities? In short, it is network-centered thinking with platform-based business models.

Control Shifting Away from Central Banks

In London’s Canary Wharf, a team of technologists and executives are trying to understand how to use blockchain technology to change the future of banking globally. Their leader is Blythe Masters, an ex-Wall Street commodities trader turned digital entrepreneur focused on turning the mental model and business model of the massive financial services industry and all its related parties (consumers, lawyers, accountants) on its head.

Bank executives worldwide are trying to figure out what this evolution in technology will mean for their firms. “We could go the way that file transfer technology changed music, allowing new businesses like iTunes to emerge. That is why there is such feverish activity at the moment,” said Michael Harte, chief operations and technology officer at Barclays, according to a recent article in The Financial Times. For the massive financial services sector, blockchain technology (the software behind the digital currency, Bitcoin) offers an opportunity to overhaul its existing business model, including its banking infrastructure, approach to settlements and customer interactions. But acting on this opportunity, and making the most of the blockchain, is no easy task given the core beliefs and reinforcing systems that are embedded in the industry.

Networks Are Taking Over

What is the blockchain? It is a distributed database of computers that maintains records and manages transactions. Rather than having a central authority (such as a bank), blockchain uses the network to approve “blocks,” or transactions, which are then added to the “chain” of computer code.  Cryptography is used to keep transactions secure, and the distributed nature of transaction approval makes the system harder to tamper with.

“It is only a matter of time before the broader financial services and banking industries shift to blockchain and network-based approaches.”

Blockchain technology has been hailed by its VC supporters as having revolutionary promise for all involved. “You should be taking this technology as seriously as you should have been taking the development of the Internet in the early 1990’s. It’s analogous to email for money,” said Masters, according to The Financial Times. And blockchain enthusiasts believe that the application possibilities are endless — improving the way we hold and transfer secure goods from money to deeds to music to intellectual property. In fact, blockchain, as a pure platform technology, may be able to cut out the middlemen (or middle companies) everywhere, even disrupting other disruptors like Airbnb or Uber.

In the present financial services business model, a central ledger most often acts as the custodian of that information (such as the Federal Reserve and its member banks). But in a blockchain world, the information regarding each transaction is transparently held in a digitally shared database in the cloud, without a single central body acting as the middleman. This lack of central authority is the very feature that is turning the current mental and business models of traditional financial institutions on their heads.

In a lot of areas, it looks like the blockchain will replace the current centralized business model of the financial services industry and it is easy to see how it could revolutionize all of Wall Street. The ability of the technology to provide an unforgeable record of identity, including the history of an individual’s transactions, is one area being eagerly explored. David Grace, head of global finance at PwC, said that “if you have a secure distributed ledger, it could be used to store validated ‘know your customer’ data on individuals or companies. … It’s a potentially global application that could provide more security over identity data and where that data are stored.”

It seems that the code can perform better than a real middleman in most cases.”

Clearly, we are entering a period of rapid evolution, as the financial services industry determines blockchain and what it means for their business models. Or, another scenario: A slew of startups identifies the possibilities and pulls the rug out from under big institutions. Traditional perceptions about the roles of financial players are already under attack — as it seems that the code can perform better than a real middleman in most cases. Old business models will soon fall prey to the quickly evolving technology and mental models. The network is about to do its magic: Grow and evolve without central control.

Network Business Models Will Dominate

Blockchain is already seeing use outside of the financial services sector, where it got its start. Technology and services giant IBM is adapting the blockchain methodology to develop a currency-less system that could be used for any purpose — for example, executing contracts upon delivery.

Arvind Krishna, senior vice president of IBM Research, believes that in the long run, this technology could facilitate transactions between banks or international businesses. “I want to extend banking to the 3.2 billion people who are going to come into the middle class over the next 15 years,” he said. “So I need a much lower cost of keeping a ledger. Blockchain offers some intriguing possibilities there.” A firm-centered or centrally controlled banking system clearly will not get him there, and the blockchain will allow him to leverage a digitally-enabled network as the way forward.

Join the Network Revolution

With companies such as IBM and JPMorgan Chase, as well as preeminent venture capitalist firm Andreessen Horowitz, backing this new way of facilitating financial transactions, it is only a matter of time before the broader financial services and banking industries shift to blockchain and network-based approaches Twitter  to complement, or replace, the current centralized approach. The question is not whether network business models supported by blockchain technology will disrupt these organizations, but when. So if you are a member of the current financial services industry elite — or a local bank or credit union — it’s time to become part of the digital revolution and join the network and platform-emerging world.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.

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

What is Siacoin and is it a Good Investment?

What is Siacoin and is it a
Good Investment?

Sia is a platform for decentralized cloud storage.

By allowing the formation of storage contracts with peers, Sia permits its users to store data across a wide network of participants in a secure, private, reliable and fault-tolerant manner. Contracts define the conditions under which a storage provider keeps user data, and require the provider to periodically submit proof of storage to reassure the client that their data is in safe hands. These contracts are stored on the blockchain such that they are publicly auditable. Sia is considered a Bitcoin derivative that includes specialized contract support. Sia’s settlement currency is aptly named Siacoin, and in the future a two-way peg will be implemented in order to financially connect the Bitcoin and Siacoin blockchains.

Sia’s Objective

Sia aims to break into the cloud storage market. The team believe this multi-billion dollar endeavour can be facilitated through blockchain technology. Offering a cheap, reliable and highly redundant cloud storage solution may prove itself worthy of competing with extortionate storage providers at both the individual and enterprise level. Sia’s primary objective is to introduce storage into the sharing economy. As the old adage goes, ‘unused memory is wasted memory;’ the team believes it is possible to liberate the unused storage of the world and unite it into a free market. Under this configuration, data is distributed across a vast network in a highly redundant manner.

This new paradigm for the cloud, where a decentralized network of ad-hoc data centers comprise a global storage solution, is extremely promising. Data remains secure through strong cryptography, storage is far more affordable, and any single point of failure is eliminated through a network of redundant nodes, ensuring the highest possible uptimes. Sia’s affordability and innovation engages competition with even the most venerable service providers.

The Mechanics

Transactions

Sia transactions are somewhat a simplification of Bitcoin’s. They strip away the pay to script mechanism, opting for the multisignature M-of-N scheme for all transactions, the motive being to reduce complexity and therefore attack surface. Some extensions are made to the transaction format to allow for the enforcement of storage contracts, as detailed in the Sia whitepaper. Fundamentally, the concepts are similar to Bitcoin’s; outputs comprise some volume of coins, and inputs are used to reference coin origins.

Proof of Storage

File storage with Sia involves dividing files down into segments of constant size, then hashing them into a Merkle tree. The Merkle tree, along with the size of the file, is used to verify storage proofs. Hosts prove that they have a file in their possession by reporting hashes from that file’s Merkle tree, along with a randomly selected segment of the file itself. The random number generator used to select which segment to send as proof is seeded by the hashed concatenation of the contract ID and the previous block header.

It is assumed that, if a host consistently produces valid proofs, they are storing the whole file. The mathematics here is simple — a ‘cheating’ node storing only 50 percent of a large file will fail to produce a storage proof in 50 percent of cases, meaning that it will take an average of 13 storage proofs until you can be 99.99 percent sure the node is dishonest. The more successful storage proofs, the more confident we are that the node is honest. Nodes are financially deterred from cheating the system because, as we will learn in the next section, if the contract terminates unsuccessfully the node loses its deposit.

Contracts

Contracts are formed between storage providers (otherwise referred to as hosts) and clients. This contract defines the conditions for the storage of data — specifically, the regularity with which the host is required to submit a proof of their continued storage of client data. These proofs must be continually submitted until the contract expires. Contracts are facilitated through a blockchain similar to Bitcoin, but with a few modifications. Hosts are compensated for submitting correct proofs and penalized for incorrect or missing proofs. These proofs are publicly verifiable and present on the blockchain, so network consensus can automatically enforce these contracts. This is significant, since it means that clients do not need to verify their own proofs; the network can do it for them.

Contracts are supplied with some initial funding from both the renter and the host. The money supplied from the renter is to subsidize the host for storing their files, whereas the money supplied from the host is a deposit, that the host will be forced to forfeit if the contract does not complete successfully.

As well as specifying the frequency of proof submission, file contracts define a duration, valid proof reward, invalid proof penalty, and a maximum number of proofs that can be missed. If this number is exceeded, the contract is terminated. The contracts create ‘challenge windows,’ in which hosts are obliged to submit their proofs of storage. These challenge windows work like this; if the host is able to supply a valid proof in the allotted time, an automatic payment is triggered to their ‘valid proof’ address. If they submit an invalid or late proof, the payment instead directs funds to a provably unspendable address, where the coins cannot be recovered. This mechanism is in place to prevent denial of service attacks on Sia nodes.

Feasibility of Attacking the Network

Two attack vectors in particular are mentioned in the Sia whitepaper. These are the so-called “block withholding attacks” and “closed window attacks.” The first of the two attacks, named “block withholding,” exploits the deterministic nature of random numbers on the blockchain. In short, since the execution of file contracts have to be deterministic, miners need to be able to reproduce random numbers with the same seed. Often, previous block header hashes are used as this seed. The idea with a block withholding attack is that an attacker could withhold blocks until they find one whose hash produces a favourable random number, allowing cheating nodes to produce valid proofs without having to store the entire file. This attack is unlikely, due to the fact that over 50 percent of the network needs to withhold blocks to manipulate 50 percent of the challenges.

Fundamentally, this kind of attack is financially unfavourable so they are uncommon in practice. Nevertheless, clients are able to avoid victimization in such a manner by specifying a high proof frequency in their storage contracts. The second, and perhaps more formidable, attack against the network is the “closed window attack.” Consider the scenario where miners decide to maliciously exclude valid storage proofs, resulting in the unnecessary burning of funds. Additionally, where malicious miners dominate the network, it would be possible for them to charge inordinate transaction fees for proofs to be included in blocks. These attacks are called “closed window attacks,” since the window in which clients are required to submit a proof of storage is artificially closed by malicious actors.

This attack is remedied by using a large window size, giving hosts a longer time to have their proofs acknowledged. Hosts can reasonably assume that the majority of the network acts in good faith, and therefore given enough time somebody will include their valid proof in a block. Not only this, but ultimately hosts are free to reject and deny storage contracts as they see fit — if they believe a contract opens them to closed window attacks, they are free to reject it.

Economics of Siacoin

Sia’s settlement currency is Siacoin. Siacoin is an inflationary currency, where supply will increase permanently. Sia uses, and will continue to use, a proof of work scheme. Like Bitcoin, newly minted Siacoins are awarded exclusively to miners as an incentive to keep the network secure. The target block time is approximately 10 minutes, congruent with Bitcoin. The genesis block reward was 300,000 Siacoin, and the network is configured such that this reward decrements until the reward reaches its absolute minimum of 30,000 coins per block.

A post regarding the coin supply from Sia's forum explains:

"By March of 2021, the inflation is about 3.4 percent. by March of 2026, the inflation will be about 2.9 percent. by March of 2036 it will be about 2.2 percent. In the long run, the inflation will be about 2 percent for long time. So in the long run, the inflation rate will probably be lower than the Sia network growth rate besides the lost coins.

In v1.2.x, Sia will implement a host Proof of Burn mechanism in which hosts have to burn certain siacoins to show that they are real and sincere for business to counter the sybil attack. When Sia network is getting mature, the estimate annual burned siacoins can be 0.1 to 0.5 percent of total available siacoins. The burned siacoins will offset the inflation in the long run. At some point, it could result in a deflation of siacoins."

The authors of the Siacoin whitepaper warn of its volatility, with particular reference to its early adoption phase. The volatility in the coin’s value might result in more expensive storage contracts being formed, where hosts hedge against potential losses by increasing their pricing in response to price fluctuations. It is expected that this unpredictability will be tamed once Siacoin and Bitcoin are connected via a two-way peg.

There are two avenues through which somebody can contribute to the Sia network and earn coins. The first, and perhaps the most obvious, is to mine them. Mining coins keeps the network secure by validating transactions. The second method is to become a host. By renting out spare storage, you will be subsidized in Siacoin in accordance to the contracts you agree to. Sia is developed by Nebulous Incorporated, a for-profit organization. The company have expressed their intent to make Sia their primary source of income, which concerns some members of the community. That said, the Sia platform is entirely open-source under the MIT license. The MIT license is renowned for being particularly lenient when it comes to forking and modifying the source code, so perhaps these concerns are unwarranted.

Siacoin and Siafunds

An important distinction between Siacoin and Siafunds needs to be made. Siacoin refers to the coin used, earned and mined by contributors to the Sia platform. On the other hand, Siafunds refers to a different premined coin. This coin represents a stake in the Sia platform as a business venture, rather than an internal currency used by the Sia network. Siafunds are how the Nebulous Corporation aim to generate revenue from Sia’s success as a platform.

Siafunds are used to generate profit proportional to the value of Sia as a platform. Specifically, this is done by imposing a contract creation fee of 4.9 percent. This fee is redistributed to Siafund holders. Siafunds are premined, where approximately 88 percent are held by Nebulous Corporation and the remaining 12 percent by early crowdfund backers of the project. Siafunds are a transferable asset, like Siacoin, but they cannot be used to finance storage contracts or miner fees. In a sense, Siafunds encapsulate a quantity of Siacoin. When Siafunds are transferred from one address to another, a transaction output is generated which contains the number of Siacoin generated from that particular Siafund since its previous movement. So, Siafunds can be thought of as an entitlement to some growing quantity of Siacoin.

The Outlook for SC-BTC

The ticker for Siacoin is SC, and with most of the traded volume coming from the Bisq, Bittrex, Cryptopia, HitBTC, Poloniex, and Yunbi exchanges. The weekly price action is displayed below for SC-BTC on the Poloniex exchange. At the time of writing, SC-BTC traded very close to an important fractal support at 0.00000253, around 0.00000321. The most recent fractal resistance lies at 0.00000838, and given a fractal support just recently formed, we expect SC-BTC begin to trend toward this level. Stronger bullish confirmation will be given if there is a weekly close higher than the base line (red), which lies around 0.00000433. Alternatively, a weekly close below the fractal support at 0.00000253 will point to a long-term bearish outlook for SC-BTC and we recommend to wait for a new floor to be established before committing to a long-term buy in this case.

Conclusion

Sia offers a scalable solution to cloud storage which introduces free memory into the sharing economy. By allowing its users to financially benefit from their spare computer memory, Sia offers unprecedented opportunities for the future of data storage. Blockchain technology has proven to be proliferating in industries where centralized solutions are withering under their deficiencies. Sia has genuine potential to democratize cloud storage, similar to how BitTorrent liberated file sharing. With its high redundancy, infrangible privacy and financial incentivisation, Sia presents an new model for the safekeeping of information where the customer has complete control of their data.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.

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

Mastercard Eyes Cryptocurrency Refunds in New Patent Application

Mastercard Eyes Cryptocurrency Refunds in New Patent Application

Mastercard Eyes Cryptocurrency Refunds in New Patent Application

A new patent application from Mastercard suggests that the global credit card issuer is exploring ways to build refund services for cryptocurrency users.
 

The application, titled "Information Transaction Infrastructure", was published by the the U.S. Patent and Trademark Office (USPTO) on August 3, having been submitted in late January. Vladimir Goloshchuk, who according to LinkedIn previously worked as a senior analyst at Mastercard, is listed as the sole inventor.

 

The application details an infrastructure through which users could verify their identities, which would then be linked to cryptocurrency addresses they elect to disclose.
 

The text of the application points to this being most relevant for situations in which users are submitting payments to merchants from accounts on exchanges, or other services, in which their funds may be held alongside those belonging to others.

 

In the event that a merchant has to send the money back for a refund, they would send it back to an address linked to that user's account – a situation in which the exchange or custody holder might then need to know where those funds are being sourced from and why.
 

To counter this, Mastercard proposes a way for users, through a shared service, to have two kinds of wallets.
 

"The basic principle of the arrangement … is that a user of the shared wallet service has two types of wallet. Firstly, they have a 'public' wallet for on-the-chain publicly visible and verified transactions. The user will make and receive cryptocurrency payments external to the shared wallet service using a public wallet," the application explains, adding:
 

"Using this approach, the refund problem can be addressed – a payment received from the public wallet can be refunded by an equal payment back to the public wallet."
 

The application is the latest from Mastercard, which has filed several patents in the past few years. The company has also developed projects focused on blockchain tech, releasing a set of dedicated APIs last fall.

David Ogden
Entrepreneur

David Ogden Cryptocurrency Entrepreneur

 

 

Author: Stan Higgings

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

The Blockchain: What It Is and Why It Matters

The Blockchain:
What It Is and Why It Matters

Chances are that you’ve heard of bitcoin, the digital currency

that many predict will revolutionize payments – or prove to be a massive fraud – depending on what you read. Bitcoin is an application that runs on the Blockchain, which is ultimately a more interesting and profound innovation. The Blockchain is a secure transaction ledger database that is shared by all parties participating in an established, distributed network of computers. It records and stores every transaction that occurs in the network, essentially eliminating the need for “trusted” third parties such as payment processors. Blockchain proponents often describe the innovation as a “transfer of trust in a trustless world,” referring to the fact that the entities participating in a transaction are not necessarily known to each other yet they exchange value with surety and no third-party validation. For this reason, the Blockchain is a potential game changer.

In 2008, Satoshi Nakamoto, the pseudonymous person or group of people credited with developing bitcoin, released a whitepaper describing the software protocol. Since then, the network has grown and bitcoin has become a recognized unit of value around the globe. Bitcoin is extremely important because it provides a mechanism for accessing the Blockchain – but it’s not the only application that can leverage the platform. Bitcoin has also been on the receiving end of some bad press, such as around the collapse of the Mt. Gox bitcoin exchange earlier last year. The Mt. Gox story is not necessarily an indictment of bitcoin. For the purposes of this post, simply remember this: bitcoin is just a mechanism for transacting on the Blockchain and the Blockchain is the key innovation.

The Blockchain: Trustworthy Transactions in a Trustless World

The Blockchain enables the anonymous exchange of digital assets, such as bitcoin, but it is not technically dependent on bitcoin. The elegance of the Blockchain is that it obviates the need for a central authority to verify trust and the transfer of value. It transfers power and control from large entities to the many, enabling safe, fast, cheaper transactions despite the fact that we may not know the entities we are dealing with.The mechanics of the Blockchain are novel and highly disruptive. As people transact in a Blockchain ecosystem, a public record of all transactions is automatically created. Computers verify each transaction with sophisticated algorithms to confirm the transfer of value and create a historical ledger of all activity. The computers that form the network that are processing the transactions are located throughout the world and importantly are not owned or controlled by any single entity. The process is real-time, and much more secure than relying on a central authority to verify a transaction.

There are many analogous concepts both ancient and modern. Technology has and will continue to transfer power and control from central authorities and distribute them to the masses. For example, time used to be determined and communicated by large clock towers that were expensive to build and maintain. Engineering innovations ultimately decentralized the quantification of time to the individual. Likewise, WhatsApp, a popular cross platform messaging app, cut the transaction cost of sending messages globally – and cut profits for the carriers. The central authority (phone carriers) lost to the application (WhatsApp) built on a decentralized network (i.e. the Internet).

Similarly, third parties that currently verify transactions (the central authority) stand to lose against the Blockchain (the decentralized network). As such, the Blockchain essentially disintermediates these third-party transaction verifiers: auditors, legal services, payment processors, brokerages and other similar organizations. While you may not be convinced that exchanging bitcoin is an invaluable service, there are many other examples of value transfer that are critical – and currently very slow and expensive. Consider the exchange of property: numerous intermediaries are currently involved in this process, such as a third-party escrow service that works for both parties to ensure a smooth transfer. The escrow service, like other services built solely on trust and verification, collect fees that would be mitigated by performing the transaction on the Blockchain – as would wire transfer fees, third party financial auditing, contract execution, etc.

The use case of the Blockchain enabling a decentralized currency exchange – such as bitcoin – is well defined and will likely be the dominant use case near term, however there are a multitude of innovative and disruptive use cases. Companies are already building their own Blockchains for various applications such as Gridcoin that leverages the Blockchain to crowdsource scientific computing projects. Gridcoin uses its own protocols that require much less computing power and electricity to manage than traditional bitcoin networks.

The Blockchain: and Why it Matters (Let’s Not Mess it Up)

The Blockchain is a foundational technology, like TCP/IP, which enables the Internet. And much like the Internet in the late 1990s, we don’t know exactly how the Blockchain will evolve, but evolve it will. Similar to the Internet, the Blockchain must also be allowed to grow unencumbered. This will require careful handling that recognizes the difference between the platform and the applications that run on it. TCP/IP empowers numerous financial applications that are regulated, but TCP/IP is not regulated as a financial instrument. The Blockchain should receive similar consideration. While the predominant use case for the Blockchain today is bitcoin currency exchange that may require regulation, this will change over time.

Had we over-regulated the Internet early on, we would have missed out on many innovations that we can’t imagine living without today. The same is true for the Blockchain. Disruptive technologies rarely fit neatly into existing regulatory considerations, but rigid regulatory frameworks have repeatedly stifled innovation. It’s likely that innovations in the Blockchain will outpace policy, let’s not slow it down.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.

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

Top Cryptocurrencies Price Weekly Prediction – Next Days Will Be Rough For The Crypto Market

Top Cryptocurrencies Price Weekly Prediction – Next Days Will Be Rough For The Crypto Market

Top Cryptocurrencies Price Weekly Prediction – Next Days Will Be Rough For The Crypto Market

Not much has changed for most cryptocurrencies over the past few hours. Bitcoin is, together with Monero, the only currency in the top 10 noting a small loss, whereas most other coins have stabilized or regained some losses. Considering how the weekend is often a dreadful period for cryptocurrency trading this overall trend is rather positive. The total cryptocurrency market cap is heading toward US$90bn as well, which is a positive sign for the future.

CRYPTOCURRENCIES PREPARE FOR A STRONG WEEK

It seems evident most of the top 10 cryptocurrencies are in a good position for some notable gains over the next seven days. Even though we will see one Bitcoin hard fork materialize on August 1st, it is doubtful this will harm the price in a negative manner. Do not be mistaken in thinking Bitcoin Cash tokens come free of charge, though, as they may effectively subtract value from the actual Bitcoin price until the market stabilize.

That being said, we do see the Bitcoin price has dipped a whopping 0.19% over the past 24 hours. That in itself means very little as far as the world’s leading cryptocurrency is concerned. In fact, as long as Bitcoin doesn’t move by 5% or more over the course of 24 hours, there is absolutely nothing to be concerned about. A minuscule change such as this one means absolutely nothing.

lastest prices july

Despite the Bitcoin price “dip”, most altcoins are doing quite well. Ethereum is finally showing some life signs after weeks of declines. The 5.67% gain in the past 24 hours is quite substantial, as the price seems to be heading toward US$200 once again. It is still a far cry from US$400, though, and the currency is not out of the woods just yet. Future declines in value may still be a big part of Ethereum as there is still some funds in circulation which may be dumped across exchanges in the near future.

Other top currencies are showing small gains as well. Litecoin is up by 189%, whereas NEM, Dash, and IOTA all report gains below 1%. The big winners are XRP – up by 3.47% – as well as Stratis – up by 2.99% – and Ethereum Classic, which increased by 1.45%. The bigger question is when people will realize Ethereum Classic is the true, immutable Ethereum chain without SEC scrutiny, highly controversial ICOs, and a blockchain which can be rolled back when founders’ money is stake. Only time will tell if the ETH/ETC correlation will ever see proper momentum, as for now, all the hype and focus is still in Ethereum’s camp.

What is rather surprising is how Monero is the only top 10 currencies to note any losses, other than Bitcoin Monero lost6.41% of its value overnight, which is quite substantial. There is no real reason for this sudden downturn other than people speculating on the other currencies and trying to make a profit. Monero is still a very powerful cryptocurrency with honest developers who aim to provide anonymity to all users. Then again, a price of US$40.65 per XMR is still more than fair, all things considered.

Looking at the individual cryptocurrency market caps, it is pretty obvious Bitcoin remains the undisputed leader for some time to come. This also results in the Bitcoin Dominance Index going back above 50%, as it currently sits at 50.5%. Not too long ago, that percentage was heading toward 40% and lower, but it seems the market has finally come to its senses once again. There is no other currency capable of rivaling Bitcoin right now, that much is evident.

 

David Ogden
Entrepreneur

David Ogden Cryptocurrency Entrepreneur
 

Author: Oliver Wood

 

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

Philippine Government Yet to Approve Cryptocurrency Exchange Applicants

Philippine Government Yet to Approve Cryprocurrwncy Exchange Applicants

Philippine Government Yet to Approve Cryptocurrency Exchange Applicants

Philippine business press, Businessmirror, has reported that the government has been yet to approve a single virtual currency exchange application. The Philippine central bank, Bangko Sentral ng Pilipinas, introduced regulations for virtual currencies earlier this year – which focussed heavily on creating guidelines for the operations of cryptocurrency exchanges.

The Philippine Central Bank Has Received Less Than 10 Applications For Virtual Currency Exchange Registration

The Philippine Central Bank’s Supervision and Examination Sector told Businessmirror that it has not approved any applications for entities seeking to register and establish cryptocurrency exchanges. It has also been revealed that the Bangko Sentral ng Pilipinas (BSP) has so far received less than 10 applications.

BSP representative, Chuchi Fonacier stated that increased Filipino bitcoin adoption had prompted the development of cryptocurrency regulations. “We have observed acceleration in transaction volume based on our survey of top industry players last year, prompting us to institute a regulatory framework. We have no updated statistics to date, as these will come from the regular reports that registered entities will submit to the BSP.”

The Philipines’ bitcoin regulations focus upon articulating a juridical framework for the operation of cryptocurrency exchanges, in addition to providing an inclusive regulatory apparatus for cryptocurrency-based remittance services.“We want to maximize the benefits from this technological innovation, while adequately managing the risks that come with it. Virtual currencies can help accelerate the delivery of financial services [e.g., payments and remittance] and lower the cost of transactions, which is consistent with our broader financial-inclusion agenda,” Fonacier said.

 

In Practice, the Philippines’ Cryptocurrency Regulations Appear to Be Very Limited in Scope

Officials have consistently iterated the Philippines’ government’s intention to simultaneously foster growth and innovation in the cryptocurrency industries, whilst restricting the risk of bitcoin being used for money-laundering or terrorist financing activities. “We are particularly keen on addressing money-laundering risk, that is why part of the responsibilities of a virtual-currency exchange is to comply with established anti-money laundering rules, such as know-your-client procedures, as well as proper reporting to the AMLC [Anti-Money Laundering Council].”

Despite local press describing the Philippines’ stance toward bitcoin as “a first of its kind in Asia”, the regulatory apparatus developed by the BSP appears to be limited in its scope. The regulations focus heavily on providing guidelines for the operation of virtual currency exchanges, yet have largely neglected to develop regulatory or taxation frameworks for general cryptocurrency use or mining. There has also been little effort made to promote and educate Filipino citizens about cryptocurrency, which will be vital for greater Filipino bitcoin adoption as only one in three Filipino citizens is reported to have access to the internet. Furthermore, the BSP has designed regulations so as to monitor the Filipino bitcoin economy through mandatory reporting submitted by virtual currency-based businesses – of which the BSP is yet to approve a single application.

 

David Ogden
Entrepreneur

David Ogden Cryptocurrency Entrepreneur

 

Author: Samuel Haig

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