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Future for State-Backed Brazilian Token Issuance Unclear as Bank Sees Leadership Reshuffle

Turmoil over the leadership of the Brazilian Development Bank may pose challenges to cryptocurrency trials.

On June 18, Brazil’s National Bank for Economic and Social Development (BNDES) announced the election of Finance Director José Flavio Ferreira Ramos as its interim president. 

Ramos will serve as the BNDES head until the inauguration of 38-year-old Gustavo Henrique Moreira Montezano, a former economist and the current deputy secretary of privatization and disinvestment. 

Montezano’s appointment followed two meetings on June 17 between Brazilian President Jair Bolsonaro and the country’s minister of the economy and former economic advisor to Bolsonaro’s presidential campaign, Paulo Guedes. The meetings were held in response to the sudden departure of the bank’s now-former president, Joaquim Levy. 

Levy submitted his letter of resignation on June 16 amid perceived tension between himself and President Bolsonaro. 

Montezano closely tied to Bolsonaro government

Montezano embarked on a 17-year career in the finance industry prior to joining the Ministry of Economy. He is a former partner of BTG Pactual and the former chief operating officer at Engelhart Commodities Trading Partners.

Montezano is the son of the economist Roberto Montezano, who worked as a professor at the Instituto Brasileiro de Mercado de Capitais (IBMEC) for more than 30 years. Notably, during his tenure at IBMEC, Roberto Montezano had worked alongside Guedes.

Moreira Montezano has also known both President Bolsnaro and his family personally since childhood, having grown up in the same condominium as the president in Tijuca, Rio.

Tension between Levy and Bolsonaro

Levy’s resignation was prompted by Bolsonaro’s anger with the former president’s appointment of Marcos Barbosa Pinto to the position of director of BNDES Capital Markets — an entity that is responsible for managing a portfolio valued at more than 100 billion Brazilian real (roughly $26 billion). 

Both Levy and Pinto had worked for the BNDES during the governments of Brazil’s former ruling party, the Workers’ Party (PT), which drew ire from the president. Pinto previously served as the chief of staff to Demian Fiocca during Luiz Inácio Lula da Silva’s government, while Levy served as finance minister during the second term of Dilma Rousseff’s presidency.

Brazilian media reported that Bolsonaro stated, “I’m already here with Levy. I told him, ‘Quit this guy on Monday or I’ll fire you without going through Paulo Guedes,’” adding that “suspicious people” could not hold office in his administration. Barbosa Pinto also delivered his letter of resignation on June 16. 

Upon resignation, Levy offered praise to his former BNDES colleagues, commending those “who have collaborated with energy and seriousness to transform the bank, allowing it to respond fully to the new challenges of financing development, meeting the many needs of our population and confirming their vocation and long tradition of excellence and responsibility.” Levy added his thanks to Guedes for his “invitation to serve the country” and wished him “success” in the government’s reforms.

The sudden resignations drew the criticism of the president of the Chamber of Deputies of Brazil, Rodrigo Maia. Maia described the government as coming to comprise a “crisis plant,” adding:

“This lawyer who was dismissed from the BNDES is one of the most understood cadres of social policy in Brazil. It is a shame that Brazil lost two quality paintings of Joaquim Levy and Marcos Pinto in the way they were removed.”

BNDES to finance documentary using crypto

On June 3, Brazilian publication State of Sao Paulo reported that film producer Elo Company had participated in a proof of concept for the BNDESToken initiative. Elo Company is known for its involvement in the production of Alê Abreu’s Oscar-nominated “Boy and the World.”

BNDESToken is slated to comprise an ether-based stablecoin backed by the Brazilian real that the BNDES plans to use to finance the production of a documentary produced alongside Elo Company. 

The project will see the development bank issue the tokens to fund purchases necessitated by the film, with the BNDES also facilitating the exchange of said tokens for fiat currency. The token will not be promoted and can only be issued or exchanged by the bank. The BNDES has been developing its cryptocurrency since 2018. Gladstone Arantes Jr., an IT manager who is working on the token’s development, recently stated:

“Instead of releasing the money to the client, the proposal is that we will release the token that can be used for all purchases provided for in the financing agreement.”

Vanessa da Rocha Santos Almeida, another developer working on BNDESToken, has described the project as allowing “society to look at the transactions” made by the national development bank.

BNDES trials token issuance

The proof of concept saw Elo Company simulate the payment of four screenwriters, with Brazil’s National Cinema Agency (ANCINE) also participating in the project. 

Sabrina Nudeliman, the president of Elo Company, stated that “when the accounts are questioned and more transparency is requested, the blockchain responds to this demand.” Nudeliman added, “With the blockchain platform, my vendor provides real-time accountability.” 

Daniel Tonacci, an adviser to the board of ANCINE, also emphasized the efficiency savings made possible through the adoption of distributed ledger technology, stating:

“It’s the Waze of public money, where we can track where it goes, where it fits, how fast it is.”

Brazilian institutions explore blockchain

On May 30, BNDES systems analyst Fabiano Mattos published an opinion piece praising the BNDES’ adoption of distributed ledger technology (DLT). Matto emphasized the security and transparency benefits of digital currencies, asserting that “blockchain would be the ideal solution to support BNDES disbursement.” He continued:

 “This system would allow the whole operational track to be followed — including the financial details — from disbursement of the financing, to the client’s suppliers and other counterparties. Finally, those suppliers could exchange the token for fiat currency at BNDES. It is thus publicly and irrefutably possible for a citizen, and society as a whole, to monitor the disbursements of public money made by the BNDES — and also to see the impact of this action on the various actors of the Brazilian economy. BNDESToken would vastly improve the way we can measure effectiveness of BNDES funding.”

Mattos also noted that a number of Brazilian institutions are actively collaborating to explore potential applications for DLT, including the Institute of Technology and Society and the Government Blockchain Association. The BNDES analyst indicated that the management of land registries, intellectual property rights and centralized identity are among the governance processes for which blockchain technology is being explored.

Brazil reconsiders regulations

The increasing penetration of cryptocurrency into Brazilian society has prompted moves to develop a clear regulatory apparatus governing the country’s crypto sectors.

On May 30, Maia requested that a special commission be created to consider the current legislative framework pertaining to digital currencies in Brazil. Several weeks beforehand, the Brazilian Internal Revenue Service also published new tax guidance mandating that cryptocurrency transactions valued in excess of BRL$30,000 (approximately $7,600) be reported each month.

In March, the BNDES chose five blockchain startups to participate in its BNDES Garagem incubator program alongside 74 other emerging companies.

Related: As Brazil’s Economy Risks Recession, Regulators and Banks Implement Blockchain

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Microsoft and Ethereum Foundation Swell the Hyperledger Ranks Amid Growing Cross-Industry Blockchain Collaboration

Microsoft, the Ethereum Foundation and Salesforce join Hyperledger as new members, seeking to create open-source enterprise blockchain solutions.

United States tech giant Microsoft and the Ethereum Foundation are among the latest companies to join the ranks of the Hyperledger greenhouse hosted by the Linux Foundation. Many notable names in the tech and wider business fields today are developing enterprise-grade solutions based on the expanding set of tools built on Hyperledger.

These institutional blockchain projects cut across both financial and nonfinancial distributed ledger technology (DLT) utilization. Presently, there are pilot projects geared toward identification systems, supply chain management (SCM) and provenance, to mention a few.

On the whole, members of Hyperledger appear to be at the forefront of a renaissance in open-source project development, facilitating a more decentralized approach to project building. Such a trend evinces a return to a more decentralized internet with blockchain technology living up to the hype of being a disruptor of the global business process.

There are, however, some drawbacks to the emerging open-source project building trend, especially for startups that have yet to earn significant pedigree within the industry. Also, while DLT constitutes a technological breakthrough, kinks such as scaling need to be worked out before DLT-based systems can realistically upstage their mainstream centralized counterparts.

New members join Hyperledger

Microsoft, Salesforce and the Ethereum Foundation are among eight new members of Hyperledger, as announced on June 18. These companies already have a history of blockchain adoption, with several DLT-based projects across diverse business processes.

There are now more than 270 members of Hyperledger developing their own enterprise-grade blockchain solutions. Commenting on the collaboration with Hyperledger, Marley Gray, Microsoft’s principal blockchain engineering architect, declared:

“Our journey in the blockchain ecosystem has brought us a long way, and now is the time for us to join the Hyperledger community. We are proud of our contributions to such a diverse blockchain ecosystem, from our Azure service offerings and developer toolkits to our leadership in driving open specifications.”

Microsoft is by no means a new entrant to the blockchain arena, with the company already developing an ecosystem for blockchain as a service (BaaS) on the Azure cloud computing service.

In the BaaS arena, Azure competes with other offerings by the likes of Oracle and AWS. These platforms allow businesses to create bespoke DLT-frameworks to fit their operating purposes without having to navigate the skill, knowledge and cost barriers associated with building decentralized apps (DApps) from scratch.

Related: Decentralized Identity: How Microsoft (and Others) Plan to Empower Users to Own and Control Personal Data

Teams working on the Azure BaaS infrastructure get access to preconfigured modular networks that simplify the process from conception to deployment of their DLT-based solutions. By joining Hyperledger, Microsoft Azure now offers three different enterprise blockchain development environments, with the other two being Corda and Ethereum.

The Ethereum Foundation joins the Ethereum Enterprise Alliance (EEA) as a partner of Hyperledger. For Hyperledger CEO Brian Behlendorf, the decision of the Ethereum Foundation to join the expanding Hyperledger enterprise blockchain greenhouse will be a positive one for blockchain developers in the industry.

Data from StateOfTheDApps — a platform that tracks decentralized apps — shows that Ethereum hosts the highest number of DApps. Of the total 2,667 DApps tracked by the platform, 2,505 run on the Ethereum blockchain.

Apart from the newly announced members, others include notable tech giants like IBM and Oracle. IBM, Walmart and Alibaba are among the companies with a significantly high number of blockchain-based patents, which is indicative of their activity in research and development (R&D) efforts in DLT-related enterprises.

Hyperledger projects supporting enterprise blockchain development

Hyperledger, for its part, is a collaboration between enterprises and the open-source community facilitated by the Linux Foundation. The Hyperledger greenhouse acts as a bridge that connects developers, nonprofit organizations, academia and all other stakeholders interested in developing and implementing enterprise-grade blockchain technology solutions.

Cointelegraph spoke with Marta Piekarska, director of the Hyperledger ecosystem at the Linux Foundation, about how the partnership works. According to Piekarska, Hyperledger doesn’t develop code or provide consulting services. Explaining further, Piekarska said:

“We support them in terms of PR and marketing for their projects. Not all of the developers creating solutions using Hyperledger tools are members of Hyperledger. You don’t have to be a Hyperledger member to use our technology, participate in our special interest groups, or to download and use the code. There is no technological barrier to using Hyperledger frameworks and tools.”

There are numerous projects around the world based on specific Hyperledger frameworks, such as Hyperledger Fabric and Hyperledger Iroha, to mention a few. Back in May 2019, Cointelegraph reported on the partnership between Iran’s central bank and Tehran-based blockchain firm Areatak to create a DLT platform for the country’s banking and finance markets using Hyperledger Fabric. According to the report, the Borna blockchain platform, when fully realized, should help revamp Iran’s outdated banking sector.

Matt Milligan of Milligan Partners — a blockchain-based startup focusing on toll interoperability and one of the newest members of Hyperledger — highlighted the benefits of joining a vast collaborative effort like Hyperledger. Milligan, the managing partner at the company, said:

“Joining Hyperledger is tremendously valuable to us as we develop blockchain solutions for Mobility as a Service. By working in this diverse open source community, we can be more creative and more innovative than we could ever be on our own.”

The fact that Hyperledger is open-source, means developers can learn from one another, trading ideas in an environment increasingly being populated by teams working on cutting-edge DLT protocols. This collaboration serves to achieve Hyperledger’s aim of fostering cross-industry blockchain development.

By so doing, stakeholders at Hyperledger are hoping that blockchain technology can move away from the realm of being a marketing buzzword to more tangible utility cases. In an interview during the Brainstorm 2019 conference organized by Fortune, Ripple CEO Brad Garlinghouse drew attention to the existence of too many economically inviable projects with the term “blockchain” slapped on them. According to Garlinghouse, “There is a lot of noise in the blockchain industry.”

Focus on nonfinancial DLT utilization

Apart from financial products, many of the blockchain protocols being built using Hyperledger tools involve nonfinancial use cases. This trend reinforces the narrative that DLT is a disruptive technology capable of affecting several facets of the global business process.

From a nonfinancial perspective, blockchain technology seems to be getting a great deal of adoption in protocols that require trust networks and provenance. Together, these two broad application cases cover much of the mainstream business arena — from SCM to health care and identity management.

Cointelegraph asked Piekarska about the major nonfinancial enterprise blockchain solutions being developed using the different Hyperledger framework tools, to which the director responded:

“There are quite a few markets that we are seeing as very big and potential markets. We are currently seeing a lot of interest in blockchain technology from stakeholders in supply chain management. We have the food trust project for IBM and Maersk. We have Everledger which is a blockchain project based on Hyperledger Fabric to track the provenance of diamonds and now also wine. There are at least 200 live networks based on Hyperledger Fabric alone. Digital identity is another space where we see a lot of interest. This is mostly as a result of Hyperledger Indy which is our framework for building digital identity solutions using zero-knowledge proofs. One of the main contributors here is Sovereign Foundation. They have the largest running network that is based on Hyperledger Indy.”

Right here for the taking

The combination of immutable data record-keeping and the ability to create trustless networks that do not require expensive third-party authenticators continues to be a pivotal aspect of the blockchain appeal. However, these projects still need to scale for them to be able to provide robust functionality on enterprise-level protocols.

Blockchain technology also seems to be having a material impact on open-source project development for both notable tech firms and smaller startups. According to Piekarska, there has been a noticeable increase in the number of projects listed on GitHub since the emergence of blockchain technology.

It isn’t inconceivable to imagine that DLT is creating easier avenues for open-source collaboration among development teams across the globe. Piekarska said:

“I think the coming of blockchain has caused a renaissance in open source project development especially for enterprise-grade software. It is changing the way enterprises see open-source project development which is reflected in the influx of notable tech giants like IBM and Microsoft into the Hyperledger environment. All projects in Hyperledger are under Apache license. It also lowers the barriers for small companies that can now take the code and build useful protocols.”

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What to Expect From the Telegram Open Network: A Developer’s Perspective

How TON could disrupt the blockchain landscape.

Recently, new materials surfaced about the lite client for the Telegram Open Network (TON) blockchain, powered by encrypted instant messaging service Telegram. Based on the content of these documents, it is possible to make a lot of assumptions about its future, especially in regard to comparing TON with competitors — such as the Cosmos network, Polkadot and Ethereum 2.0 — as well as the overall impact of the blockchain ecosystem.

Polkadot, Cosmos and TON will definitely compete for users and developers. Moreover, in 2019, every blockchain really needs to have a lot of use cases built on it in order to attract users and potential investors, as the era of the initial coin offering (ICO) and new blockchains may now be over. Requirements for blockchain projects are currently high and about to be even higher after the release of TON. It is important to explain to users which problems are solved by this project. It is possible to compare projects by the amount of potential users. TON is probably the leader because of existing Telegram user base (300M+).

TON lite client CLI

Neither Ethereum nor any other cryptocurrency or blockchain company currently has 300 million users — but Telegram does. One of the largest problems of current blockchain development is handling the scalability for such an amount of users, which is why Polkadot, Ethereum 2.0 and others exist in the first place. These blockchains attempt to address larger volume and faster speed. Currently, Ethereum and Bitcoin can process about 15 and 7 transactions per second (TPS) respectively — much less than Visa’s almost 45,000 TPS. Thus, TON needs to process more than Visa to facilitate its millions of users.

Scalability issues

The main challenge for modern blockchains is being able to scale enough to process such a large amount of transactions that it’s suitable for mass adoption, which would mean it could bear millions or even billions of potential users.

TON claims to be fast in terms of processing transactions between users. However, not a single blockchain project is capable of achieving the goal of processing millions of transactions per second.

Transaction Speed of Various Blockchains

There are different approaches to scaling a blockchain system while having the same security and decentralization as Bitcoin — or at least close to it.

The first way is to use centralized hubs controlled by smart contracts. A user can deposit funds into the smart contract and will retain the same funds on this hub. However, if something unforeseen happens, users can get their funds back from a smart contract without any interaction with the hub. An example of this is Plasma, which was proposed on Aug. 11, 2017 by Ethereum co-founder Vitalik Buterin and Joseph Poon, the creator of Lighting Network, in order to scale Ethereum. During the development, a number of issues appeared that made Plasma quite complicated to implement. The main difficulty was the exit from Plasma. To exit, the user needed to wait seven days. During this period, anybody could provide proof that the user cheated. A smart contract needs to verify that the user has the right to exit. The main challenge is to make the least possible calculations and to have the smallest possible proof size on the Ethereum side, because you need to pay for any calculation or for any data on Ethereum. During Plasma discussions 1 2 3 4 5 6 7 8 9 10 and implementations 1 2 3 4 5 6 7, an issue with the history of exit proofs caused Plasma to become unstable after a couple of months. Because of that problem, there is no fully production-ready Plasma with smart contracts on it right now.

Plasma architecture

The second way to scale blockchain is to use a proof-of-stake (PoS) consensus algorithm instead of proof-of-work (PoW). The main difference between these approaches is that PoS allows for the validation of blocks by one’s stake — the amount of coins that the validator owns. PoS is more efficient than PoW according to its creators’ (Sunny King and Scott Nadal) research. An example of proof-of-stake blockchains right now are Stellar, EOS (which uses a delegated proof-of-stake of DPoS), Binance Chain, Cosmos and Polkadot.

Proof-of-Work & Proof-of-Stake

The third approach to solving scalability problem is sharding.

What is sharding?

Sharding is a way to split the entire state of the network into a bunch of partitions (called shards) that contain their own independent piece of state and transaction history.

The main principle is to execute transactions parallelly and to separate all the data into different small blockchains that can interact with each other.

To think of it in a metaphor, imagine Ethereum was split into thousands of pieces. Each piece can function on its own and can have its own features known to each respective piece. If the pieces want to talk to one another, they will have to use some sort of protocol. Sharding creates a way for each shard to maintain individual transaction receipts that are cryptographically secure. They can be brought back together to be a larger piece at any time.

Sharding, together with PoS, is one of the best ways to scale current systems. However, there are a couple of security issues with it that are still unresolved.

TON is a PoS blockchain that actively uses sharding to scale. It has a masterchain and workchains that are also connected, with both having their own shardchains. Thus, the TON description document conclusion reads:

“To achieve the necessary scalability, we proposed the TON Blockchain, a ‘tightly-coupled’ multi-blockchain system […] with bottom-up approach to sharding (cf. 2.8.12 and 2.1.2).”

TON will be scalable because it will combine several approaches, such as sharding and PoS consensus. With sharding, the data is stored in different places so less information is being sent through the network — making it faster. The benefit of PoS is that you don’t need to do a lot of calculations to validate the block. By using both of these, they create much faster transaction validations than proof-of-work.

TON vs. Ethereum 2.0, Polkadot and Cosmos

Polkadot is a blockchain that allows for the connection to other blockchains, which was built by Gavin Wood, a co-founder of Etherium. Cosmos is similar to Polkadot — however, the Cosmos team developed a PoS consensus algorithm that is the leader in speed and security.

TON’s main advantage over its competitors is its user base of 300 million. But there are other parameters that can be compared.

Summary of some notable blockchain projects

Summary of some notable blockchain projects

Developers community:
 Without a developers community, there could be no future for any blockchain systems. Right now, there are still not a lot of use cases of blockchain in the general population. It is obvious that without developers, there would not be any apps based on a given blockchain, so there would not be any users either.

Polkadot and Ethereum are the leaders here. Ethereum has been growing its community for six years. There are many companies and enthusiasts from the best technological universities that have built and continue to build apps on the Ethereum blockchain. The main reason for this is that the Ethereum and Polkadot approach is to develop everything open-source and allow anybody to participate in it by proposing ideas through EIP (Ethereum Improvement Protocols) and getting research grants.

The main problem with TON here is that it is not public: There is no way to participate in the development process. The TON team is well known as a team of talented and smart people, but are very closed off from the public. There is no large, open developer community for TON and, therefore, there might not be many apps and protocols built on TON — at least, not until it operates more publicly. For mass adoption for any blockchain, there needs to be many developers building mass use cases — so, this is an issue for TON’s growth, at least for now.

Smart contract language:

Right now, there is only one language on TON, which allows for smart contracts. However, TON is still under active development, and everything could be significantly different in future. We will analyze only the current situation now.

TON’s smart contract language, called Fift, is quite unusual. It was inspired by the programming language Forth that first appeared about 50 years ago. This language could be unfriendly to new developers. Most JavaScript or Python developers will maybe never understand how to code with it. However, it is somewhat similar to the language Lisp in terms of syntax.

This means that the TON team decided to have dev quality over quantity. Only well-experienced developers can work with Fift, which also means that there will be fewer mistakes in the production of smart contracts. However, that also means there will be fewer developers. It could be a good approach to use Fift, but it is still risky for TON.
TON's Fift language syntax

It is pretty much the opposite approach to Ethereum’s strategy with the Solidity language, which was designed to be similar with JavaScript to allow a lot of new developers and JavaScript developers to start working with Solidity quickly.

Both Polkadot and Ethereum 2.0 allow for developing decentralized applications (DApps) using classical languages like C#, Java, C++, JS, Go, Rust and others. The main idea is to use the WebAssembly virtual machine, which suits perfectly for blockchain systems. WebAssembly was originally designed for web applications. Thus, developers can use one language while completing different tasks with it. Cosmos also allows developers to use classical languages.

TON could potentially have a lot of problems with Fift. Polkadot, Cosmos and Ethereum use classical languages and there is no simple solution for TON now about how to compete with this. However, TON Labs is working on optimization the Fift for other coding languages, such as C++, that are more widely used. However, it is possible that other languages will have the possibility to be converted to Fift. Ton Labs is working to do that in future. With support for languages like C++ and C#, Ton will solve all the issues connected with the difficulties of understanding Fift and will have the same level of adoption of developers as Polkadot — or maybe even better. The Telegram team always has had a good API and documentation for its API, such as Telegram Bots.

Polkadot has one mainchain called the relay chain, with many sidechains connected to it called parachains. Parachains do not have their own consensus, so all the blocks are verified on the relay chain by a group of about 1,000 validators. It is more scalable than most current solutions because blocks in the parachains are executed parallelly.

Polkadot architecture visualization. All chains have shared validators

Cosmos also has one mainchain called Cosmos Hub. Other sidechains are connected to the hub and called zones. Every zone has its own validators, so blocks are executed independently. The problem here is that, with such a small amount of validators (100), zones can be hacked. In Polkadot, all chains have common validators to solve this issue. Cosmos’ approach is to have only useful zones, so there will be enough validators to stay safe. You could have your own blockchain for specific reasons, in this case.

Cosmos abstract architecture. Each zone has its own validators and blocks

TON’s architecture, as detailed in section 2.1 of the TON Description Document, is completely different. Its defining characteristic is that it has a masterchain and a large number of workchains — independent blockchains that can interact with each other and be governed by the masterchain. Every workchain consists of shardchains — small chains responsible for specific data in a blockchain stored in blocks.

Each workchain is subdivided into up to 260 sharded blockchains, having the same rules and block format as the workchain itself but responsible only for a subset of accounts, depending on several (the most significant) bits of the account address.

TON masterchain and workchains abstract visualization

Each shardchain block is a group of cells — the specific type of data in TON. A shardchain block itself can also be described by an algebraic formula and is stored as a “bag of cells,” according to the TON Description Document (section 2.5.6).

Each TON workchain consists of shardchains

The most interesting architectural approach is TON’s sharding. However, there are a lot of issues concerning the implementation and security of that solution right now. Sharding in this case can be insecure and has some exposure to hacking.

Use cases of blockchain and what’s possible now

There are a certain number of use cases that can be implemented on TON and other new generation blockchains.

Telegram bots + blockchain:
 Telegram already has bots. It is one of the best ways to build an app with a human interface directly in messenger. It is much easier to use when you don’t need to install any new app, but can just tap your favorite bot in search. With TON’s API for bots, it could be possible to build simple, user-friendly DApps for users that will be available to them in seconds. There are already some bots on Telegram now that allow you to use bitcoin and ether, and even exchange, buy or sell them. 
With TON payments, Telegram can build its own marketplace of apps directly within the messenger, which could end up being the Apple App Store killer. With the first phone banking beginning in 1983 by the Bank of Scotland, then the first online banking by Stanford Credit Union, followed by banking apps in 2007 and banking bots in 2015, now we see bots becoming commonplace. By 2020, it is estimated that 85% of banking customer service will be done bots. Businesses should find the messenger “home” of their users — Discord for gamers, Telegram for crypto enthusiasts, WeChat for China and Slack for enterprise business — to align with where their target user currently resides.

Micropayments in messenger: Micropayments in messengers are one of the most promising blockchain applications in everyday life.

For example, WeChat payments: one of the main reasons WeChat is unsuccessful in Europe and in the United States is that WeChat is too centralized and affiliated with the Chinese government. The West prefers more slightly agnostic platforms, on which people are free to select services and payments from a variety of options.

 A decentralized cryptocurrency exchange (DEX) is another possible use case of the TON blockchain that can also work for Telegram bots. With the potential of TON to process millions of transactions, it is possible to build an exchange to trade.

Bridges between other chains: A bridge is a connection between the blockchains, which is the main goal of Cosmos, Polkadot and TON. Bridges allow sending transactions to another blockchain with one point of failure, as bridges work with validators that could be attacked. When we use a bridge, we need a group of trusted validators who listen to events from one blockchain and will transfer them to another. The main problem is that validators can be attacked or malfunction on their own. To prevent such cases, validators need to stake assets on both chains. They will be punished by losing the staked amount for any malfunction or misconduct. However, that also means that amount of crypto that can be transferred through a bridge must be less than the amount staked by the validators. This is important because bridges could make exchanging more decentralized than just using current exchanges.

Influence on the blockchain landscape

The TON team’s strategy differs quite a bit from the main strategy of current leaders like Polkadot, Ethereum and Cosmos. The current way TON is being developed is much more complicated for developers than the aforementioned blockchains. However, if the TON team finds out how to attract developers, this could completely change the way developers work with all blockchains. TON could illustrate that it’s possible to release a product without any public discussions and still attract a robust community. TON could attract professional, well-experienced C++ developers instead of JavaScript developers, which can definitely change the quality of DApps. This could impact customers who hire developers in a positive way by eliminating lower-quality developers in outsourcing organizations.

TON could become a powerhouse blockchain — as upon its release, 300 million people will instantly possess gram wallets, which will make it the world’s most adopted cryptocurrency. In seconds it’s very probable that TON will move to the forefront as being the most-used blockchain within the whole ecosystem, with the best developers in the world building on it.

The team behind TON declares that it will maintain its own infrastructure, and the company will have a voting capacity twice as powerful as the rest of the community. The question is why it would advocate for such a centralized system. It claims to make a distributed blockchain system, but in fact, it is not distributed, but centralized. Other than the fact that it has a public ledger, it is no different from other processing systems. It has created some services on the blockchain, but so far it is unclear how it will work and what it needs (DHT, proxies, DNS).

If we consider the network, blockchain, services and payment — then this results in a completely centralized system that will be serviced by the organization (TON). Technically, it has a very detailed and well-implemented white paper. The understandable purpose of the services, the clear connection between them, and that there are no technological issues all make for a potentially great platform that can withstand a large load.

With all due respect to world-class technology, it could cause one to ponder: Why be agnostic and private if you’re in fact really just centralized? Perhaps it’s a message for both centralized and decentralized systems to maintain the integrity that was so meticulously built.

The article is co-authored by Nick Kozlov and Dmitry Gorilovsky.

Nick Kozlov is software developer, nominated as Microsoft MVP in blockchain, winner of 10+ international hackathons, CTO of Button Wallet.

Dmitry Gorilovsky is a product creator and innovator with a proven track of record in hardware/software development, 10+ years of experience in IoT product and business development, six+ years in blockchain industry, the creator of YotaPhone, the founder and CEO of Woodenshark — the company behind multiple IoT and hardware products — and the founder and CEO of Moeco — a global connectivity platform.

Related reading: Exclusive: New Report Reveals Details of Telegram’s TON Blockchain

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Ethereum Has More Than Twice as Many Core Devs per Month as Bitcoin: Report

Ethereum has the most developers working on its base protocol of all cryptocurrencies, not counting community project developers.

Ethereum (ETH) has the most developers working on its base protocol of all cryptocurrencies, not counting community project developers, according to a report by crypto asset management firm Electric Capital. The report was published in a Medium post on March 7.

Per the post, the company fingerprinted over 20,000 code repositories and 16 million commits to obtain data, which reveals that on average 216 developers contribute code to ETH repositories every month. The company also specifies that this data “is undercounting the number of Ethereum developers since we do not include ecosystem projects like Truffle.”

Bitcoin (BTC), the largest of all cryptocurrencies by market capitalization, has a healthy developer base as well, averaging over 50 developers per month. The report specifies that this data does not include ecosystem projects.

An even more restrictive data set, which only considers contributions to core protocol, reveals that:

“Ethereum is by far the most active at 99 monthly developers on average.”

Bitcoin, on the other hand, has an average of 47 core protocol developers every month, making it the second most active.

The data also reveals that big platforms such as Eos (EOS), Tron (TRX) and Cardano (ADA) all have over 25 monthly core protocol developers on average.

Another point made in the report is that while the market lost about 80 percent since its peak, data shows that the monthly active developer base has fallen by only 4 percent. Moreover, according to the report, the number of developers working on public coin repositories has doubled over the last two years.

According to the company’s global data, over 4,000 developers per month contribute code to over 2,800 public coins. As the study notes, this data does not consider private, not yet launched or non-coin projects, such as the Lightning Network.

The report also points out that “many projects who [sic] are being abandoned by developers are forks of high network value coins.” For instance, Dogecoin (DOGE) hasn’t had developers for months while the Litecoin (LTC) developer base has fallen from 40 developers per month to just three over the last year.

The report also notes that both Bitcoin Diamond (BCD) and Bitcoin Gold (BTG) have had code contributions from under five developers since October 2018.

As Cointelegraph recently reported, Ethereum co-founder Vitalik Buterin has stated he was trying to solve Bitcoin’s limited functionality with the creation of Ethereum.

On the other hand, Twitter and Square CEO Jack Dorsey alluded to spending $10,000 per week on Bitcoin during a recent podcast.

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Job Opportunities in Blockchain in 2018

It is no secret that Blockchain technologies are on the rise. Businesses across a variety of industries are aware that Blockchain technologies have the ability to mitigate transfer and operational costs, increase transaction speed, and eliminate the need for parties to put their trust in an intermediary. Blockchain technologies also have a number of use cases in industries  where the Blockchain can provide businesses with a more secure method of record keeping.

Each day, more and more businesses have been inquiring with professionals on how to incorporate Blockchain technologies into their business model.  Concurrently, the demand for employees in the Blockchain industry has been on the rise and is expected to thrive in the new year.

In 2018, there will be many opportunities for individuals to work in the Blockchain industry. Here are a few careers in the Blockchain industry that will be in high demand in 2018.

Project manager

Businesses are interested in incorporating Blockchain solutions to optimize their businesses. That being said, Businesses will need to communicate their ideas to a Blockchain company who is able to meet their demands. To do this, there will need to be an individual to facilitate the projects that arise as the Blockchain company takes on more clients. A project manager in the blockchain industry will need to be able to convert the businessman’s english to a developer’s technical language, and from developers technical language back to the businessman’s english, so that the fintech company and the business interested in incorporating Blockchain technology can successfully do so.

A project manager is often the first person in a company who is contacted when a business looking to incorporate Blockchain technologies into their platform reaches out to a Blockchain company that can make that possible. It is the project manager’s responsibility to plan and supervise the execution of a project.

Community support

Blockchain technologies have been all over the media lately. Recently, there has been a large influx of people investing in cryptocurrencies, interested in incorporating Blockchain models into their businesses, and users of decentralized applications.

It just so happens that a majority of these people have never dealt with the Blockchain or cryptocurrencies ever before in their life–which is no surprise, Blockchain technology is not even 10 years old yet!

Therefore, there will need to be individuals who can troubleshoot the problems that users are likely to have at some point in their experience on the new Blockchain related applications and platforms

At this point in time, the knowledge regarding Blockchain technology is rather esoteric, so there is going to be a large demand for individuals who understand Blockchain technologies and cryptocurrencies and can troubleshoot and solve the problems that at least some individuals in the Blockchain community are bound to have.


Developers may have the most career opportunities in the Blockchain industry at this point in time. Banks, financial institutions, government agencies, insurance companies, and tech companies, are interested in running Blockchain platforms to better service their clients and users and to optimize the efficiency of their own businesses. But before businesses are able to accomplish their goal of Blockchain implementation and increased efficiency. The programs and platforms these businesses are interested in providing will need to be created.

As the phones at Blockchain technology companies continue to ring off the hooks due to businesses interested in incorporating Blockchain technologies calling at all hours of the business day, there is a dire need for individuals who develop and write the code that runs the program and platforms businesses are interested in providing.


As the number of businesses interested in incorporating blockchain technologies increases, the demand for law services in the Blockchain and digital asset space will continue to grow. At the “Working in the Blockchain Ecosystems in 2018” event, lawyers said they have been receiving an increasing number of phone calls from clients and potential clients inquiring about the structuring and governance of ICO’s and looking for advice on issues that they may run into on their Blockchain/fintech endeavors.

A number of new businesses have emerged with the creation of Blockchain technologies, and practically all of these businesses are going to need legal guidance throughout their launch process.


All of the new Blockchain related start-ups and businesses interested in hosting token sales will need to have a web-page to inform clients, customers, platform users and  potential investors, of what their company offers, what the company’s mission is, who the team members are and what their backgrounds are, etc.  

These companies will need to have a web-designer who can create the web pages that new Blockchain related companies will find are necessary to have.

In 2018 there is going to be several career opportunities in the Blockchain industry. With the rise in demand for Blockchain services, recruiting services like Johnathan Perkins and John Crain’s,  BlockchainJobs.Co  make the employment process easier by connecting companies looking for employees, with individuals looking for work.

At this point in time, a lot of individuals may feel as if they are not knowledgeable enough about Blockchain technologies and are not fit to apply for a position in that space. However,  individuals should keep in mind that employers are going to have to be reasonable when hiring, Blockchain technologies are not even ten years old–therefore businesses cannot search for a Blockchain guru with 20 years of Blockchain experience… that individual does not exist.  

Knowledge regarding Blockchain technologies is rather esoteric at this point in time. As long as an individual is skilled and has experience or experiences that make them fit or capable of completing the duties for a position, then that individual will be able to capitalize on the job opportunities in the Blockchain industry in 2018.

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With Development and Price, Where Does Ethereum Go Long-Term?

At a Blockchain conference hosted in Taipei, Ethereum Co-founder Vitalik Buterin outlined the long-term roadmap of Ethereum development.

According to Buterin, most of the underlying issues of the Ethereum Blockchain network fall under the following categories: scalability, smart contract safety, consensus protocol and privacy. Several network updates including the most recent Byzantium hard fork provided solutions in the four major areas. But, as Buterin noted during an interview with South Korean mainstream media outlet Joong Ang, it may take at least two to five years to truly solve scalability within the Ethereum network. Buterin said:

“I would say two to five, with early prototypes in one year. The various scaling solutions, including sharding, plasma and various state channel systems such as Raiden and Perun, are already quite well thought out, and development has already started. Raiden is the earliest, and its developer preview release is out already.”

Development roadmap

In regards to scalability, the Ethereum Foundation and the open-source development community of Ethereum made significant progress with the upcoming launch of the Casper testnet and the introduction of Plasma, a second-layer scaling solution developed by Buterin and Bitcoin’s Lightning Co-author Joseph Poon.

Casper is a long-term scaling solution that employs a hybrid proof-of-work (PoW) and proof-of-stake (PoS) consensus protocol onto the Ethereum network. Currently, similar to Bitcoin, the Ethereum network solely relies on the PoW consensus protocol to maintain the network and to verify transactions.

As Christian Reitwiessner, the team lead for Ethereum’s Solidity and Ethereum C++ implementation, explained in a recent paper, solutions like PoS is necessary to eliminate the workload of users, nodes, and dependence on miners. Reitwiessner wrote:

“Scalability does not come from the fact that Blockchains are relieved from their load by creating a big number of smaller chains and moving the transactions there. Scalability is only achieved once a user does not have to verify every single transaction that is sent to the system.”

Structurally, Ethereum is different from Bitcoin because it operates as a platform for decentralized applications (dapps). Hence, Ethereum urgently needs a scalable network which can handle dapps with millions of users through PoS solutions like Plasma.

To improve privacy measures of the Ethereum network, developers of Ethereum integrated Zcash’s implementation of zk-SNARKs, to potentially settle anonymous and private transactions. The image below demonstrates a zk-SNARKs transaction processed on the Ethereum testnet. The transaction does not show the amount of the payment, recipient, and the sender.


Long-term price trend of Ether

JP Vergne, a professor at Ivey Business School, noted in a study that developer activity is the most accurate predictor of the price of a cryptocurrency. Vergne said:

“We found that the best predictor of a cryptocurrency’s exchange rate is the amount of developer activity around it.”

Ethereum is the only public Blockchain network and cryptocurrency in the market which comes close to Bitcoin in terms of developer activity and hence, given the introduction of innovative solutions such as Casper, Plasma, sharding, and zk-SNARKs on Ethereum, Ether price will likely surge throughout 2018.

Mike Novogratz, the billionaire hedge fund legend, stated that he sees the price of Ether growing by three-fold by the end of 2018.

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SMEs Dismissed by the Banks, Beginning of the Era of P2P Finance

Karma means your deeds. What you do to create value for yourself in this life and beyond. The real economy is comprised of the deeds of the people who constitute it. Somewhere along the line we’ve forgotten what the economy is all about. We’re lost in a maze of big banks, lawyers, accountants and governmental regulations.

What we need today is a global disruption that would allow all participants in the economic system to get their fair share. According to the International Labour Organization (ILO), global youth unemployment is expected to reach 13.1 percent in 2017; it has already risen from 12.9 percent in 2015. Many of these youth are in developing nations.  

Challenges Worldwide quoted the World Bank in saying that there are 25-30 mln SMEs in emerging economies, which contribute 45 percent of the total employment and 33 percent of the GDP. They estimate that if each SME gave an opportunity to two young people, we could eradicate youth unemployment.

Lack of balance

The problem is who will fund these SMEs in the developing world? The present day system is mired with problems of our own making. Top management salaries are outrageously high. Lucas Chancel, renowned economist, recently brought to light the case of India where the top one percent of earners take up to 22 percent of the total income. The Hindu quoted him as saying that income inequality in the world’s second most populous country is now at its highest level since 1922.

Then there is the issue of banks, which are supposed to lend to make the economy grow but are saddled with huge operational costs, overstaffing and overbearing corporate structures. Banks have been slow to rise to the challenges of the 21st century and are exhorbitantly expensive for ordinary people to use. A large part of the global wealth is also locked away in richer countries with extremely low interest rates or even negative interest rates, while where capital is required is in developing nations with interest rates as high as 20-30 percent.

Developed countries have extremely low deposit rates

Source: World Bank

Source: World Bank

It is time to unlock credit and potential

Karma is planning to use the power of peer2peer (p2p) technology to provide credit globally. They want to create an ‘economy of trust’. They plan to provide an opportunity for people in developing countries to secure access to credit, and at the same time free up capital stuck in developed countries at low interest rates. In a way, Karma is about creating an economic ecosystem, one in which everyone can work with each other and develop diverse relationships as well as focus on interactions that are mutually beneficial.

Karma will be based on Blockchain and its alpha version will be ready to test by November 2017. The roles that will exist in the Karma ecosystem are those of investors, lenders, guarantors, scoring agents, analysts, sellers, collectors and insurers. Participants can be both individuals as well as legal entities. Participants will be assigned ratings and these would be valuable so as to ensure that the system remains transparent and effective.

What’s interesting about the Karma ecosystem is that unlike traditional lenders, which decide what loan products they will create or support, in Karma that power rests within the community of participants. These participants can support investments on any terms – even request loans on any terms. It will be the market that ultimately decides which loan products are the most successful.

Crowdsale to fuel Karma’s plans

After having held a successful presale and reached a hard cap of $500,000, Karma will be conducting a token sale between 27-29 Nov. 2017. Between Nov. 27 and 28, the sale is only for investors who have passed the know your customer (KYC) process and have been added to the white list.

The tokens on sale are called Karma tokens. If tokens are left over from this sale, they would be available for an open sale on Nov. 29, 2017. The crowdsale is legal in all jurisdictions including United States and China. It should be noted however that only qualified US investors can participate. The basic token price is $0,01 and discounts are available for early investors. A 50 percent discount will be offered till $1 mln is collected, 30 percent until $3 mln and 15 percent until $8 mln. A hard cap of $10 mln is placed on the ICO. Up to 59 percent of the tokens are for investors who participate in the pre-sale and token sale.

Karma tokens will fuel the ecosystem

Karma tokens are central to the eco system that will be created. These tokens will be used to pay all commissions for tasks such as scoring, transaction processing, insurance, collections etc. In order to conduct transactions, participants will be purchasing Karma tokens on exchanges post listing.

Since the supply of the tokens will remain fixed and as the demand for the tokens rises, it’s expected that market dynamics will push the price of the token higher. There are other benefits surrounding the tokens, like priority access to new applications from investors and borrowers for holders of more than 100,000 tokens, and up to 50 percent discount on conducting transactions on the platform.

Karma is putting people front and centre

It’s difficult for people to translate their dreams into reality without the means to do so. If Karma is successful in creating an ecosystem where people can gain access to credit at the parameters that they find comfortable, they will have revitalised and revolutionised the way the global finance system works.

The opportunities for all the stakeholders are immense, whether they be individuals, enterprises like pawn shops, non banking finance companies, lawyers, financial experts or insurers. Karma can free up the flow of credit that is stuck like sludge in the global pipelines.

However, what Karma will do, if successful, will be to build a network of trusted relationships around the world, all fueled by Blockchain technology. One thing is for certain, getting credit should not depend on your fate, but on your deeds and Karma.

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Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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ICOs Are Biggest Scam Ever, Will Lead to Disaster Says Infamous ‘Wolf of Wall Street’

Infamous penny-stockbroker Jordan Belfort, better known as the ‘Wolf of Wall Street,’ has reaffirmed his claim that initial coin offerings (ICOs) are “the biggest scam ever.” Earlier this year, he claimed that Bitcoin is a fraud.

ICOs have become popular to investors worldwide over the past year due to their high returns for early investors. Recently, signs have emerged that some ICOs might just be too good to be true.

Belfort claimed that a small minority of ICOs are total scams.

“Promoters [of ICOs] are perpetuating a massive scam of the highest order on everyone. Probably 85 percent of people out there don’t have bad intentions, but the problem is, if five or 10 percent are trying to scam you, it’s a f**king disaster. It is the biggest scam ever, such a huge gigantic scam that’s going to blow up in so many people’s faces. It’s far worse than anything I was ever doing.”

Despite Belfort’s claim, however, several digital currency community members think that the ICOs may be the future of venture capitalism and fundraising.

Are ICOs really scams?

Despite the claims by some members of the virtual currency community that many ICOs are “fraudulent,” the ICO fundraising model has been very successful as a method of raising new capital. Based on data from CoinSchedule, the 202 ICOs which were conducted in 2017 managed to raise more than $3 billion. The majority of the projects financed by ICOs have focused on the development of technological solutions for such industries as finance, entertainment, and data storage.

ICOs are also widely credited for the phenomenal growth rate posted by the entire cryptocurrency market in 2017. Just recently, the total digital currency market capitalization reached a record high of $172 bln, up from just $12 bln in 2016.

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Litecoin Increased for 1,500% this Year Even With the Major Declining Happening: LTC Price Analysis

Like Ethereum, Litecoin even more follows the cryptocurrency dominator by market cap – Bitcoin when it comes to price developments and for the near term it is not looking very good.

With the recent market changes that happened due to ICO ban reports from China and the rumors spread that the same country will be banning Bitcoin exchanges had a huge impact which resulted with this week being a price massacre compared to the previous experienced gains.

Litecoin only in the last 24 hours declined for negative 12.04%, third after IOTA and ETC. On a weekly basis on the same row “The Silver Coin” has lost in value against the US Dollar for 23.02% third in place again.

crypto price

According to Coinmarketcap

As the correction did continue all-together with the selling pressure being made on the LTC/USD pair, it dived below the $60 major support – specifically $58.40 which mark has not been touched for over two weeks now so more declining could go on for now at least.

ltc price prediction

However, if viewed on a wider range of market history, since last year September time, Litecoin has almost surged for 1,500% (1,478.94%) in price against the US Dollar, which for a longer term in-wallet holder of the LTC investor is happiness in numbers. From the low of $3.80 to around $60.00 trading ground now.

For Litecoin in particular price development, what brings positive change is its network upgrades and improvements to make it stand out of the market giant Bitcoin, keeping in mind that the original idea was inspired by Bitcoin as its known “The Silver to the Golden Coin” – Litecoin as silver to be used more of a transaction and exchange unit while Bitcoin as a storing value (gold).

Despite of that LTC price is majorly affected by Bitcoin’s market influence as it can be easily concluded from this and past weeks alone. It proportionally follows BTC in many changes so to understand LTC market one has to study even Bitcoin and its roots.

Co-founder and CEO of cryptocurrency platform Charles Hayter did put this correlation like:

“Litecoin is seen as Bitcoin’s little brother, while there are many other alternative cryptocurrencies out there, Litecoin has withstood the test of time and has accompanied Bitcoin through its ups and downs.”

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How Blockchain Can Change The Way Science Works, Explained


The platform utilizes Blockchain technology and virtual reality.

Matryx utilizes smart contract systems (via Blockchain) to create bounties and incentivize solutions. Problems are posted, along with a bounty for a verified solution, so that users can collaborate to solve problems, share results, and earn a reward for contributing. All submissions are then added to the library and marketplace for future purchase via MTX tokens. By using a token, Matryx can support ongoing upgrades, and platform features and improvements, as user demands dictate.

Smart contracts also reduce the friction of tracking and compensating contributors. In each round of a bounty competition, as winners are rewarded, an iteration of a given solution is managed by tournament contracts. The provenance of an idea or work can be easily tracked, and can be rewarded fairly and publicly.