$150 Billion: Total Cryptocurrency Market Cap Hits New All-Time High

$150 Billion:
Total Cryptocurrency Market Cap
Hits New All-Time High

The combined value of all publicly traded cryptocurrencies

has set a new record, surpassing $150 billion for the first time today. At press time, the value of ether, bitcoin and more than 800 other blockchain-based assets had reached a high of around $154 billion, according to CoinMarketCap. Overall, the figure indicates that the cryptocurrency market continues to grow at a steady pace. At $154 billion, the market is up 13 percent over the last seven days, 67 percent over the last month and an astounding 1,240 percent year-over-year. What might be most notable, however, is that the new high came during a trading session in which there were no individual all-time highs for major cryptocurrencies.

At $4,275 and $324, bitcoin and ether were edging up at press time, though still short of their highs above $4,500 and $400, respectively. Further, the new combined record came in spite of the fact there were no big gains in litecoin, monero or dash, some of the more popular alternative cryptocurrencies among traders. The lone breakout, in fact, was Ripple's XRP token – a cryptographic asset issued by a San Francisco startup seeking to build enterprise blockchain solutions. On the day's trading, XRP was up more than 50% to $0.28, a movement that built on impressive gains yesterday as well.

Bitcoin Prices Are Up Over $100 Already Today

The average price of bitcoin across global exchanges in trending up, having already climbed over $100 during today's trading. At press time, bitcoin prices were trading around $4,265, a figure that was up nearly $130 from the day's open of $4,137. The uptick, while slight in comparison to the cryptocurrency's 300% appreciation in 2017, nonetheless comes during a period in which bitcoin has had difficulty building support above $4,000. Over the last seven days, bitcoin has dipped below $4,000 several times, most recently during August 22's trading session.

Overall, bitcoin appears to be settling into a period of sideways trading after rising 55% over the last month and nearly 90% over the last three months, according to data provider CoinMarketCap. By contrast, this week, bitcoin is up only 2.3%. As such, it remains to be seen whether the market lull is merely a pause in the rally, or a broader sign of potential fatigue in the nascent asset class. Suggesting the former is that the increase also coincided with a broader movement of capital into alternative cryptocurrencies, with the value of the entire asset class reaching an all-time high of more than $150 billion earlier today.

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Mark Cuban Backs Former Coinbase Employee’s $20 Million Token Fund

Mark Cuban Backs Former Coinbase Employee's $20 Million Token Fund

A former employee of bitcoin's best-funded startup

is seeking to raise $20 million for a fund that will invest exclusively in cryptographic assets. Headed by one-time Coinbase product manager and Runa Capital principal, Nick Tomaino, the fund, called 1confirmation and launched officially today, already boasts impressive early backers. This includes celebrity investor Mark Cuban, who went so far as to praise the fund and its mission. "I think Nick is one of the sharpest minds in the space, and I'm a big believer that there will be transformational apps built on blockchain," Cuban told CoinDesk.

In interview, Tomaino provided more details about the fund's strategy, including its emphasis on moving computer networks from a centralized state to a distributed architecture so as to make them more robust and resilient against attack.

Or, as Tomaino frames it:

"The most interesting and useful thing about blockchains is their ability to empower people in new ways. Blockchains put power in the hands of people, and take it away from large institutions."

According to documents reviewed by CoinDesk, 1confirmation will make initial investments in the $100,000 to $500,000 range in SAFTs and SAFEs, legal vehicles designed to help investors pre-purchase tokens or equity prior to an ICO. 1confirmation will then seek to provide support similar to a traditional venture capital firm, including business development, legal and engineering assistence.

Philosophy of decentralization

Tomaino's fund follows a broader trend now underway in the space: early advocates starting funds to invest institutional money to cryptocurrency. Already, just shy of $2 billion has been invested in token sales, with recent months setting a string of records, according to the CoinDesk ICO Tracker. Yet, institutional investors have acknowledged the high signal-to-noise ratio in the market that makes it difficult to sort out the best ideas. When asked what specific implementations interesting him the most, Tomaino cited the concept of a "work token" – the idea that blockchain tokens can give users the right to contribute to a decentralized organization.

"I'm looking for projects that use tokens to create new organizational structures and behavioral models," he added When asked for some examples, Tomaino began by framing where he believes the industry is today. "The shift right now is around money. So, the biggest example is bitcoin. Fundamentally, what's interesting about bitcoin is the ability to shift the control of money from centralized institutions to people," he said.

Toward tomorrow

Tomaino also provided a few examples of where blockchain technology may be heading. One type of work that seems a likely candidate for tokens, according to Tomaino, is governance functions. "If token holders can act as governors in organizations they can vote on decisions," he said. Prediction markets, where the work that needs to be done is reporting on the outcomes of events, is another area he believes is ripe for decentralization.

"To do that in a decentralized way you can't use an API, because then you are just relying on centralization. You need tokens. To create a model where you're not relying on a centralized source of truth makes a lot of sense," he said. Taken in total, the recurring theme Tomaino stressed is that blockchains create new organizational structure – and that by financially backing founders who understand how cryptography, he's enabling a reinvention of the way that individuals interact with each other and the organizations that they are connected to. In this way, Tomaino sees 1confirmation as transcending the initial coin offering model and its focus on fundraising,

concluding:

"I'm not interested at all in projects that use tokens as a fundraising mechanism."

Blockchain ID Startup ShoCard Raises $4 Million in New Funding

Blockchain startup ShoCard has raised $4 million in new funding from a range of investors.Co-led by AME Cloud Ventures and Morado Venture Partners, two of the company's existing stakeholders, the round also saw participation from Storm Ventures, Danhua Capital and Correlation Ventures, as well as Recruit Strategic Partners and investor Robert Tinker.The completed round brings ShoCard's total venture funding so far to $5.5 million. In July 2015, the startup raised $1.5m in funding from a group of investors that included AME, Digital Currency Group, Enspire Capital and Morado.

Along with the funding, the startup unveiled a new enterprise-facing product, dubbed ShoBadge. The idea, according to the startup, is to eliminate the use of passwords and usernames by using mobile-based encryption, with blockchain technology being used to preserve an immutable record of who has permission to access accounts.

"ShoBadge will use the ShoCard verification, enrollment and authentication tools that leverage mobile devices along with the blockchain as the next generation of identity management, offering CIOs and CISOs a consolidated approach and more secure identity management for their enterprise," Armin Ebrahimi, the firm's founder and CEO, said in a statement.

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US Lawmakers Draft Bill Protecting Cryptocurrencies from Gov Interference

Several members of the US Congress are drafting legislation

that is intended to recognize certain digital currencies and protect them against interference from the federal government. The bill, which will provide protection to cryptocurrencies that comply with certain minimum requirements to prevent them from being used by those engaged in illegal business practices like drug traffickers and terrorists, is expected to be filed in September 2017, according to DailyCaller. ased on a reliable source, at least one Republican senator and two Republican congressmen are working on the draft legislation. The legislators, however, have requested that should not be identified due to the sensitivity of the issue and the complexity of the proposed solution.

Basic features of the bill

According to the source, the bill will focus on how to make the digital currencies as part of the mainstream form of payments being used in the country like the dollar. Among the proposals are to protect the virtual currencies against harassment from the federal government, prevent the currencies from being considered as a form of security or investment and to protect the transactions using the currencies against taxation.

Latest developments in the cryptocurrency market

During trading on Aug. 18, 2017, the price of the new digital currency Bitcoin Cash has increased by 40 percent in the past days. The most popular cryptocurrency, Bitcoin, meanwhile, sustained its phenomenal performance and is now valued at nearly $4,400. The leading virtual currency has already posted an increase of more than 300 percent in 2017.

However, the popularity of Bitcoin has been tainted with some controversies including a claim that a young British model was kidnapped and auctioned off on the underground web market as a “sex slave,” with the criminals asking payment in the form of Bitcoin because the digital currency is allegedly untraceable. Various other cyber crimes have been linked to Bitcoin in the past years, making it extremely important for lawmakers to establish policies and regulations in place for cryptocurrency.

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Reasons Why Central Banks Will Miss the Next Currency Renaissance

Eugéne Etsebeth is an ex-central banker who was employed as a technologist

at the South African Reserve Bank from 2013 to 2017. During his time at the reserve bank, he notably chaired the virtual currency and distributed ledger working group. In this opinion piece, Etsebeth outlines why he believes central banks won't be able to adapt to innovations in cryptocurrency, arguing they simply aren't set up to compete with sea changes in technology.

It's a familiar trend, one that happened in communications (internet), and that is now playing out in energy (solar), manufacturing (3D printing) and finance (cryptocurrency) – power and control are moving into the hands of the individual and away from nation states. This has huge implications for central banks, which today enable nation states to maintain their monopolies over the issuance of notes, coins and sovereign bonds. While communications and manufacturing are not their focus, cryptocurrencies and initial coin offerings (ICOs) fall predominantly in the realm of central banks.

In these systems, central banks don't issue legal tender. Rather, miners and algorithms now control the issuance of tokens – effectively, the money supply. Whereas previously banks were licensed to store, send and spend currency, now wallet providers and exchanges allow the same features. The currency renaissance has arrived and central banks are studying cryptocurrencies, though some central banks are more open to change than others. Singapore has been investigating the notion of using distributed ledger technologies to settle cross-border transactions in real time, and the Bank of England has experimented with Ripple. Central banks are even looking to build their own versions of central bank-issued digital currency (CBDC).

Even still, central banks are not well equipped to deal with the cryptocurrency renaissance. In fact, there are 10 good reasons why most central banks will find cryptocurrencies insurmountable. Sure, a small number of forward-thinking (and acting) central banks will maintain monetary competiveness with the burgeoning cryptocurrencies and ICOs that have reared their decentralized heads. Still, most will succumb to a mix of the following issues:

Workforce of the past

Central banks will need to attract and retain fresh talent that will enable them to deal with the new openness and transparency demands, as well as digital transformation and the increasingly complex global world.

Slow decision-making

Decision-making in central banks is like wading through treacle – decisions take months because of numerous layers of hierarchy. Working groups need to compile voluminous and detailed documents that need to be reviewed and signed by all parties before they can proceed to the heads of departments or the deputy governors.

Too few technologists and innovators

Academics, economists and big-picture thinkers excel in central banks. The academics ponder on conceptual issues and the economists make interpretations from data, whereas the policy makers and regulators mull over the cause and effect of promulgating laws. However, technologists are generally not part of the discussion when it comes to policy and economic decisions for currency.

Fear of experimentation

Although some central banks are engaging in experimentation, there is a fear of going from proof-of-concept to pilot phase. This is natural, should a central bank make an error, it may turn out to be a reputation buster – and reputation is the cornerstone of central banks. There is also some trepidation that the early regulation of cryptocurrencies, and associated new technologies, may legitimize their adoption.

Territorial and siloed thinking

Central banks are similar to conglomerates in that they have a number of different and distinct departments that require diverse skills and outputs. These differences make it difficult to approach a new technology and economic tour de force like cryptocurrency, because it doesn’t fit neatly into any one of the industrial-style conglomerate domains. To highlight the conglomerate type nature of central banks, the core departments and skill sets are listed below:

Bank supervision: mainly supervisors and regulators who manage banking licenses and audit
Currency management: manufacturing and logistical planners
Financial markets: front, middle and back office currency and bond traders
National payments: a combination of regulators for payments and technical resources running the RTGS system
Research: mainly economists who produce statistics based reports and input into repo-rate decisions.

Buy versus build approach

Most central banks do not have substantial software development capability. Therefore any new project will have to buy its technology. There is an acute shortage of central bankers who can explain or use Merkle trees.

Stuck in the status quo

A large portion of central bankers are career central bankers, so the desire and ability to change are not incentivised. Change is often considered a threat to staff, and threats are met with jelly-like stickiness to the status quo.

Incumbent relationships

Banks are licensed to operate by central banks, giving them the ability to create money from customer deposits. The central bank asks the banks to protect depositor's hard-earned money and to serve as many customers as it can: i.e. maximizing financial inclusion. The task of banks is therefore to service a nation's citizens at the behest of the central bank. These relationships and licenses are expensive to buy and will not easily be changed to include new members.

Inter-governmental coordination

Just as the departments within central banks tend to be siloed, so too are the intergovernmental departments that look at currency matters. They cover treasury, financial intelligence (KYC), financial services conduct authority, central bank, tax revenue and secret service units. Each of these units may have different acts and regulations that overlap cryptocurrencies and ICOs.

International coordination

Internationally the nation-state must get guidance from a multitude of organisations like the G20 or G7, International Monetary Fund (IMF), Bank of International Settlements (BIS), Financial Action Task Force (FATF) and INTERPOL. International coordination often requires prolonged diplomacy and mismatched agendas.

Chuck Reynolds

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Cryptocurrency

What is a 'Cryptocurrency'

A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.

BREAKING DOWN 'Cryptocurrency'

The anonymous nature of cryptocurrency transactions makes them well-suited for a host of nefarious activities, such as money laundering and tax evasion.The first cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009 by an individual or group known under the pseudonym Satoshi Nakamoto. As of September 2015, there were over 14.6 million bitcoins in circulation with a total market value of $3.4 billion. Bitcoin's success has spawned a number of competing cryptocurrencies, such as Litecoin, Namecoin and PPCoin.

Cryptocurrency Benefits and Drawbacks

Cryptocurrencies make it easier to transfer funds between two parties in a transaction; these transfers are facilitated through the use of public and private keys for security purposes. These fund transfers are done with minimal processing fees, allowing users to avoid the steep fees charged by most banks and financial institutions for wire transfers.

Central to the genius of Bitcoin is the block chain it uses to store an online ledger of all the transactions that have ever been conducted using bitcoins, providing a data structure for this ledger that is exposed to a limited threat from hackers and can be copied across all computers running Bitcoin software. Many experts see this block chain as having important uses in technologies, such as online voting and crowdfunding, and major financial institutions such as JP Morgan Chase see potential in cryptocurrencies to lower transaction costs by making payment processing more efficient. However, because cryptocurrencies are virtual and do not have a central repository, a digital cryptocurrency balance can be wiped out by a computer crash if a backup copy of the holdings does not exist. Since prices are based on supply and demand, the rate at which a cryptocurrency can be exchanged for another currency can fluctuate widely.

Cryptocurrencies are not immune to the threat of hacking. In Bitcoin's short history, the company has been subject to over 40 thefts, including a few that exceeded $1 million in value. Still, many observers look at cryptocurrencies as hope that a currency can exist that preserves value, facilitates exchange, is more transportable than hard metals, and is outside the influence of central banks and governments. The smallest unit of the bitcoin cryptocurrency. Satoshi is named after Satoshi Nakamoto, the creator of the protocol used in block chains and the bitcoin cryptocurrency.

BREAKING DOWN 'Satoshi'

Unlike the physical versions of global currencies, such as the British pound or U.S. dollar, cryptocurrencies predominately exist in the digital world. Despite this difference, a cryptocurrency can be divided into smaller units, just as the pound is broken into pence and the dollar into cents. In the case of bitcoins, the smallest unit available is called the satoshi.

Digital Copy

A duplicate record of every confirmed Bitcoin transaction that has taken place over a peer-to-peer network. Digital copy is one of the security features of the Bitcoin platform that was implemented in order to tackle the problem of double spending.

BREAKING DOWN 'Digital Copy'

The rise of cryptocurrencies became prominent in 2009 with the introduction of Bitcoin. One of the catalysts behind the creation of Bitcoin was the desire to operate in a currency that could not be controlled by any central authority. Unlike the U.S. dollar, which can have its value adjusted for inflationary measures by the Federal Reserve, the Bitcoin is independent of any controlling body. In fact, no one controls the Bitcoin. The Bitcoin operates through a decentralized system which means a network of independent computers worldwide communicate and transmit Bitcoin transactions and data to each other. However, transacting in digital currency using a decentralized system brought about a problem known as double spending.

Bitcoin Exchange

A bitcoin exchange is a digital marketplace where traders can buy and sell bitcoins using different fiat currencies or altcoins. A bitcoin currency exchange is an online platform that acts as an intermediary between buyers and sellers of the cryptocurrency. The currency ticker used for bitcoin is either BTC or XBT.

BREAKING DOWN 'Bitcoin Exchange'

Bitcoin exchange platforms match buyers with sellers. Like a traditional stock exchange, traders can opt to buy and sell bitcoin by inputting either a market order or a limit order. When a market order is selected, the trader is authorizing the exchange to trade his coins for the best available price in the online marketplace. With a limit order set, the trader directs the exchange to trade coins for a price below the current ask or above the current bid, depending on whether s/he is buying or selling.

Bitcoin Unlimited

A proposed upgrade to Bitcoin Core that allows larger block sizes. Bitcoin Unlimited is designed to improve transaction speed through scale.

BREAKING DOWN 'Bitcoin Unlimited'

The development of bitcoin was jumpstarted by Satoshi Nakamoto, who published a paper in 2008 called “Bitcoin: A Peer-to-Peer Electronic Cash System”. The paper described the use of a peer-to-peer network as a solution to the problem of double-spending. The problem – that a digital currency or token can used in more than one transaction – is not found in physical currencies, as a physical bill or coin can, by its nature, only exist in one place at a single time. Since a digital currency does not exist in the physical space, using it in a transaction does not remove it from someone’s possession.

Bitcoin Classic

A fork from Bitcoin Core that proposed increasing the size of blocks. Despite early successes, Bitcoin Classic failed to be adopted by the wider bitcoin community.

BREAKING DOWN 'Bitcoin Classic'

Bitcoin was jumpstarted by Satoshi Nakamoto, who published a paper in 2008 called “Bitcoin: A Peer-to-Peer Electronic Cash System”. The paper described the use of a peer-to-peer network as a solution to the problem of bitcoin for more than one transaction), with transaction details added to the end of block chains. Because of the computational power needed to attack and decode a block chain, bitcoin is able to retain a high level of security. This limited the need for transactions to go through trusted third-parties, such as financial institutions.

Litecoin

Launched in the year 2011, Litecoin is an alternative cryptocurrency based on the model of Bitcoin. Charlie Lee, a MIT graduate and former Google engineer, is Litecoin's creator. Litecoin is based on an open source global payment network that is not controlled by any central authority. Litecoin differs from Bitcoins in aspects like faster block generation rate and use of scrypt as a proof of work scheme.

BREAKING DOWN 'Litecoin'

Litecoins were launched with the aim of being the "silver" to Bitcoin's "gold," and have gained much popularity since the time of inception. Litecoin is a peer-to-peer internet currency. It is a fully decentralized open source, global payment network. Litecoin was developed with the aim to improve on Bitcoin's shortcomings, and has earned industry support along with high trade volume and liquidity over the years. The broader differences between the two cryptocurrencies are listed in the table below.

Altcoin

coins are the alternative cryptocurrencies launched after the success of Bitcoin. Generally, they project themselves as better substitutes to Bitcoin. The success of Bitcoin as the first peer-to-peer digital currency paved the way for many to follow. Many altcoins are trying to target any perceived limitations that Bitcoin has and come up with newer versions with competitive advantages. There is a great variety of altcoins.

BREAKING DOWN 'Altcoin'

"Altcoin" is a combination of two words: "alt" and "coin"; alt is short for alternative and coin signifies currency. Thus together they imply a category of cryptocurrency that is alternative to the digital currency Bitcoin. After the success story of Bitcoin, many other peer-to-peer digital currencies have emerged in an attempt to imitate that success.

Bitcoin XT

A fork from Bitcoin Core that proposed increasing the size of blocks from one megabyte to eight megabytes. Bitcoin XT gained first attention in 2015.

BREAKING DOWN 'Bitcoin XT'

Bitcoin was started by Satoshi Nakamoto in the 2008 paper “Bitcoin: A Peer-to-Peer Electronic Cash System.” The paper described the use of a peer-to-peer network as a solution to the problem of double-spending, with transaction details added to the end of blockchains. Managing the blockchains required substantial computational power in order to maintain security.

Coinjoin

An anonymization strategy that protects the privacy of Bitcoin users when they conduct transactions with each other. Coinjoin requires multiple parties to jointly sign on an agreement to mix their coins when engaging in separate Bitcoin transactions. Also known as Coin Mixing.

BREAKING DOWN 'Coinjoin'

Advancements in technology are introducing digital tools that companies can use to better interact with their customers. A rising shift from traditional platforms to digital platforms has also brought about an abundant supply in data from sources like social media, mobile devices, online retail platforms, etc. Due to technology advancements in the areas of gathering, storing, and sharing data, large sets of data are easily shared among companies in every sector and country for little to no costs. The widespread accessibility of data has also brought about concerns over data privacy of individuals and their online transactions. Because every transaction or activity carried out online leaves a digital trail, individuals are opting for more anonymous ways to use the internet and conduct online transactions. The Bitcoin cryptocurrency was introduced to address the issue of privacy concern.

Chuck Reynolds

Marketing Dept
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Blockchain May Give Rise To Even Smarter B2B Marketplaces

Blockchain May Give Rise To Even Smarter B2B Marketplaces

Does blockchain mean boom or bust for existing B2B networks? On one hand, blockchain — a series of open and global distributed ledgers — promises to smooth and validate the interactions that take place between organizations and their customers, partners and suppliers. On the other, blockchain's value proposition is that it takes out the middlemen in transactions, enabling more autonomous type of engagements.

Moving up step by step, with blockchain

As the dot-com boom crested a couple of decades back, we saw a plethora of online B2B exchanges emerge across key industries, promising electronically delivered communications and trading between hubs, suppliers, customers and other involved parties. Some of these key exchanges have become prominent players within their industries. Now, blockchain is entering the enterprise mainstream. Recently, some major tech players including Microsoft and Intel have come together to form what they call the "Coco Framework," which offers enterprises the performance, confidentiality, governance, and required processing power they would seek before trusting their assets and data to an unseen, commonly shared platform.

Blockchain promises to eliminate the middlemen in transactions, thanks to its transparent and immutable “smart contracts” embedded within its worldwide code. I recently had the opportunity to sit down with Marco De Vries, senior director of product marketing for the OpenText Business Network, which now oversees such longstanding industry B2B networks as Covisint and ANX. For his part, De Vries does not see blockchain as a threat to existing B2B networks, just as previous technology revolutions such as XML have often resulted in more complexity, not less. “We’ve seen the stories of the end of EDI and B2B for a long time,” he points out. “Even if blockchain takes off, for certain industries, it probably isn’t right for every part of the supply chain,” De Vries. “Many predicted AS2 standards would replace B2B networks. What we found with AS2 standards is that organizations actually faced more and more complexity. It’s difficult to keep up with all the changes. There are 50 different XML standards, and if I’m in a lot of different industries, how am I going to keep track? I can’t foresee the world managing their own blockchains.”

Blockchains can’t exist entirely in some virtual space, De Vries says. “Even with blockchain, we need to understand where systems of record reside,” he says. “It still has to be hosted somewhere. If you want to send an order, if you want to kick off an alert, how is that done? I can’t honestly see the world with its own blocks — there will be millions, billions of them. And securing them is another matter.”

At the same time, blockchain offers potential for easing and speeding up transactions between trading partners. “It certainly enhances the traceability of high-value items or highly regulated items such as meat, poultry and pharmaceuticals.” While the first application of blockchain has been digital money, “the physical supply chain takes it to a different level,” he continues. “If I’m in retail and I order high-value china — easily breakable stuff – with the Internet of Things, it becomes more relevant, with demand signals along the supply chain, with impact sensors, for example, in different providers, trucks, trains boats. Or, in another example if a certain item has to be kept at a certain temperature, it’s about monitoring the conditions of goods as they move through the supply chain." In current chains of custody for spoiled goods, "you really don’t have insight to what happened along the way,” he adds.

A report from IBM, issued earlier this year, agrees that there is an upside for digital marketplaces. “A blockchain-enabled digital marketplace is the one area where organizations anticipate significant disruption,” the report's authors observe. Two-thirds of executives in digitally advanced companies expect new blockchain-enabled marketplaces to spark significant disruption. "As more organizations anticipate a higher percentage of their revenues shifting into services, digital marketplaces that support blockchain-based peer-to-peer messaging and transactions could be more widely used. Smart contracts could automatically track consumption."

Corporate supply chain executives are seeing the possibilities in blockchain. A recent survey of 42 supply chain managers from Chain Business Insights finds that 43% intend to introduce blockchain into their supply chains over the coming year, and another 20% within the next two years. Advantages seen include improving supply chain visibility and transparency (cited by 46%), while 24% see potential to reduce transaction costs. 80% of respondents indicate that blockchain will play a role in tracking products moving through the supply chain. Another 60% see it as a way to share information with suppliers. A similar number see it as a way to share payment information such as purchase orders.

Adoption hurdles include lack of awareness and understanding, cited by 28%, along with lack of standards an interoperability concerns, also cited by 28%. “There is still a long way to go before the technology gains widespread acceptance,” said Sherree DeCovny, co-founder and principal of Chain Business Insights. “Still, key capabilities such as product tracing and verifying product chain of custody will likely drive to higher levels of awareness in the near to medium term.”

Chuck Reynolds

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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

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

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