Posted on

Apple Abruptly Orders Coinbase Wallet to Remove Crypto Collectible

It seems iPhone users won’t have access to the crypto collectible craze anytime soon.

The news comes after forthcoming video game War Riders was featured on the Coinbase Wallet iOS app and then quickly withdrawn. In War Riders, players drive around an apocalyptic wasteland, building up armies of vehicles – vehicles represented by non-fungible tokens, or NFTs, on a blockchain.

According to screenshots obtained by CoinDesk, a Coinbase staffer told Cartified, the company behind the game, via Discord:

“Quick heads up – we will be removing from the iOS version as we’re not able to highlight dapps that facilitate purchase of digital goods.”

The Coinbase spokesperson explained that War Riders was the only app listed within the wallet that sells NFTs.

Notably, CryptoKitties, the famous decentralized application (dapp) for buying and breeding digital cats, isn’t even featured. Although War Riders and others remain listed on the Android version of the Coinbase Wallet app.

Stepping back, Apple has long had a complicated relationship with crypto in its app store. Coinbase was itself removed for a time early on (but that was a long time back). Plus an early game that allowed users to earn bitcoin for playing was also removed.

Viktor Radchenko, CEO of Trust Wallet, tweeted about the same problem in June.

“Experience with Apple is just terrible,” he told CoinDesk via Telegram. “No communication from their on how to work with NFT’s or even with cryptocurrencies.”

Yet, within Apple’s app store review guidelines, there’s no specific language forbidding NFTs precisely. Radchenko said Apple has indicated they are forbidden under its “In-App Purchase” rules.

Neither Apple nor Coinbase have responded to repeated requests for comment.

Featured dapps

The controversy started Monday after Coinbase enabled native hosting of the dapp’s NFTs on its app.

That was the first day War Riders got native support for its NFT on Coinbase, meaning users could not only find the game by name, but also, should they purchase an NFT, it would show up in the Coinbase Wallet, according to Vlad Kartashov, CEO of Cartified.

By late Tuesday night, Kartashov informed CoinDesk that War Riders was no longer showing up as “featured dapp” within the Coinbase Wallet at all.

While Cartified is not officially describing the gameplay yet, it’s currently selling premium vehicles, of which there are only 30,000 premium vehicles of a maximum 1,180,000 vehicles throughout the whole game.

According to Kartashov, it’s not for a lack of interest that the game got removed.

“We have a very thriving community on Discord, and people have already been forming clans even though clans have not been announced officially,” he told CoinDesk. 

Plus, the game itself seems well suited to attract fans of post-apocalyptic games, even those that are tired of the same old, same old design.

“These vehicles will also be modernized and will not be from the 70s like it is in the most post-apocalyptic games,” he said.

Another token

Beside the NFT, War Riders’ players will also use an ERC-20 token called benzene (or BZN) within the game as money. BZN will be released to players through caches that will be algorithmically generated by the game within its world.

But there’s a twist here. BZN will function as a more traditional cryptocurrency outside the game, but players that acquire the token within the game must use their vehicles to safely get the BZN back to their garage in order to use it in the real world. Other players will be able to steal it on the way.

Its premium NFTs will also come with full “tanks” of BZN, so it will be on the market in small quantities before the game goes live.

Speaking to Cartified’s mission for BZN, Kartashov said, “No BZN will ever be for sale. There’s no ICO or anything like that. We are only selling non-fungible tokens.”

Cartified is only running an NFT pre-sale right now. Buyers are not yet receiving the actual tokens.

Kartashov has not been able to get any more clarity about the specific objection from Apple to his app, but concluded:

“I’m not sure what’s exactly bad with people wanting to play games.”

Image of War Riders premium vehicle, “The Lambo,” courtesy of Cartified

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on

Bitcoin Cash’s New Token Machine Gun: Inside Wormhole’s Quest to Dethrone ERC-20

Last week, Bitcoin.com CEO Roger Ver and lead developer Corbin Frasers unveiled a new tool which allows developers to issue tokens on the Bitcoin Cash blockchain, hosted on their publication.

“For better or worse, ICOs and CryptoKitties are probably coming to Bitcoin Cash in the near future,” Fraser said half-jokingly, to which Ver optimistically added that “they are probably coming to Bitcoin.com, too,” hinting that his publication might hold an ICO based on new tokens.

This became possible with the arrival of the Wormhole protocol, which might challenge the ERC-20 reign in the world of crypto tokens.

What are tokens and how are they issued?

The cryptocurrency market can be split into two parts: coins and tokens. The former are cryptocurrencies that have original blockchains supporting them — the two most obvious examples would be Bitcoin (BTC) and Ethereum (ETH). Tokens, in turn, are based on pre-existing blockchains to represent a particular asset or utility.

Tokens are essential components of Initial Coin Offerings (ICOs): Normally, a startup publishes a white paper for its decentralized app (DApp), holds fundraising rounds, collects investments in cryptocurrencies and then distributes its own tokens so that investors get their share based on their input.

The overwhelming majority of those tokens are built on the Ethereum network — they constitute nearly 83 percent of the whole token market, according to data obtained from ICOWatchList.

ERC-20: The ultimate token blueprint

The most popular protocol used for forging tokens on the ETH blockchain is ERC-20, which has been proclaimed as “the king of DApps” for that reason. ERC stands for Ethereum Request for Comments, and the number is the one that was assigned to this request. It was first published on GitHub back in November 2015 by DApp developer for the Ethereum Project Fabian Vogelsteller. Basically, ERC-20 outlines a common list of rules that an ETH token has to follow, giving developers the ability to program how new tokens will function within the Ethereum ecosystem — for instance, to determine the total amount of issued tokens.

ERC-20 has gained its reputation by employing user-friendly principles and a simplified structure, which doesn’t require advanced programming skills: YouTube is swamped with tutorials on ‘how to create a cryptocurrency in X minutes,’ and the bulk of those suggests doing it via ERC-20. Basically, you just have to copy-paste a template from GitHub, choose a total amount of tokens, their name and symbol, pump some gas and ETH in and a new token is born.

Currently, there are more than 110,000 of these, as per Etherscan database. The most notable examples are EOS and TRON (TRX), which currently rank fifth and 12th respectively in terms of their market cap. Although most ERC-20 tokens have not been applied for direct use, some of them, like Basic Attention (BAT) and 0x (ZRX) tokens, are still being reviewed to be listed by major, law-compliant exchanges like Coinbase, despite their unclear regulatory status. While Ethereum itself has finally been deemed as “not a security” by the U.S. Securities and Exchange Commission (SEC), ERC-20 tokens might potentially represent securities, depending on how they are marketed. Despite being within the Ethereum ecosystem, most of them simply represent one’s shares in a startup.

Consequently, ERC-20 played a crucial role in the 2017 ICO craze. Soon after the protocol was widely introduced, the number of ICO startups in the cryptocurrency market increased substantially. Prior to that, the industry had no unified programming standards: Coins were unique and, hence, interaction with exchanges, wallets and other applications was significantly hindered. To ensure compatibility, a token’s software had to be upgraded every time.

ERC-20’s flaws

However, ERC-20, being the first-adopted version of the Ethereum-based protocol, has shown a number of problems and shortcomings over time.

The most notable one is the batchOverflow bug. Basically, when users accidentally send ERC-20 tokens (instead of ETH) to the address of a smart contract, the funds remain trapped inside that contract. Albeit over $3 million have been lost by ICO participants due to that loophole so far, the ERC-20 developers continue to call it “a user error,” not a bug.

That issue has led to other serious consequences for ERC-20 tokens. In April 2018, a number of exchanges, including OKEX, Poloniex, HitBTC and Changelly, halted deposits and withdrawals of all Ethereum-based tokens, citing the aforementioned bug.

Nevertheless, a number of other ERC protocols are lining up to dethrone the ERC-20 by attempting to cover its flaws or offer new features. These include ERC-223 (designed to correct ERC-20 errors), ERC-721 (which introduces ‘collectible’ tokens, such as the famous CryptoKittens) and ERC-948 (which allows to implement the “subscription” model), among others. However, now an ERC-20 competitor arrived from a completely different blockchain.

Wormhole: Bitcoin Cash’s answer to ERC-20

Thus, Roger Ver’s plan mentioned above is to simplify token issuance on Bitcoin Cash’s (BCH) rails and host it on Bitcoin.com. It should be noted that Ver is a renowned adherent of BCH — Bitcoin’s hard fork that departed from the original blockchain in August 2017 with the aim to position itself as a transactional currency. Ver has been continuously declaring that “Bitcoin Cash is Bitcoin” via social media, citing the original white paper issued years prior to BCH’s release. Another prominent BCH believer, Dr. Craig Wright, recently labeled the ERC-20 concept as a “dead end,” adding that he was “looking forward to competition with Wormhole.”

Wormhole is a smart-contract protocol upgrade for the Bitcoin Cash blockchain proposed by a team of Chinese developers led by Jiazhi Jiang. Its white paper — available only in Chinese, at the moment — was presented in July. The development was initiated by crypto mining hardware giant Bitmain, the CEO of which is also a notable BCH advocate. Essentially, the Wormhole protocol allows users to implement a smart contract feature — just like ERC-20 does within Ethereum network — without changing the consensus rules of Bitcoin Cash’s blockchain. To achieve this, it employs OP_RETURN opcode based on the Omni Layer protocol.

It also supports native tokens called Wormhole Cash (WCH). Those tokens are the fuel for smart contracts on the BCH blockchain and are hence required for actions like creating new tokens or listing an ICO. WCH is generated through a proof-of-burn mechanism — to get 100 WCH, a user is required to send one BCH to the burn address. As of press time, more than 2,300 BCH (worth more than $1,200,000) have been burned this way. WCH has already been recognized by CoinEx, who listed the tokens on its platform on Aug. 1.

Politics behind Wormhole

Praising the alternative token-forging process based on BCH’s blockchain and moving it to Bitcoin.com seems like a logical step for Roger Ver. Earlier in August, developer Gabriel Cardona, who created the open-source BCH software developer’s kit (SDK) called Bitbox, introduced a Wormhole beginner’s guide on Bitcoin.com. There, it explains how people can utilize Bitcoin.com’s developer’s tools to create tokens and launch an ICO using the Wormhole protocol. There are three types of those tokens — namely, tokens with a fixed number (where the cap number of tokens is predetermined), tokens with a managed number (the total amount of those token is controlled through granting/revoking) and tokens for crowdsale/ICOs (tokens which are later sold for WCH during an ICO.)

For Bitmain, in turn, fortifying he BCH ecosystem appears to be a more constrained decision. Prior to holding its IPO, the mining behemoth reportedly converted most of its savings from BTC to BCH, while the coin has been having an overall unfortunate year in terms of its market value.

“According to the Bitmain pre-IPO investor deck, they sold most of their [Bitcoin] for [Bitcoin Cash]. At $900/BCH, they’ve bled half a billion in the last three months,” Blockstream CSO Samson Mow claimed on Twitter on Aug. 11.

In either way, ERC-20 has been challenged

At this point, it is unclear if Wormhole will manage to outperform the current staple of ICO economics — i.e., ERC-20 tokens. While WCH might not feature obvious bugs like the batchOverflow one, some shortcomings might be revealed over time.

Nevertheless, despite being a relatively new concept, Wormhole enjoys more support when compared to another prominent Ethereum-based “killer” of ERC-20 — i.e., the ERC-223, which was introduced much earlier, back in 2017, but still has not been widely adopted. While both are yet to receive massive backing from software and hardware wallets, Wormhole has now received a convenient interface platform, making it easier to experiment with new, BCH-based tokens. However, while ERC-223 is lagging behind, another ETH-based protocol, ERC-777, could be presented as soon as this month.

Posted on

Binance Buys Trust Wallet, Aims To Expand Operations

Despite posting losses of a couple of percent, development in the cryptocurrency industry has trudged forward, with Binance just announcing that they had acquired Trust Wallet in a recent deal.

Binance, the world’s largest crypto platform, has just made its first acquisition, buying out a Calfornia-based cryptocurrency wallet startup. Trust Wallet provides a reliable security solution for users, along with facilitating a so-called decentralized application browser. Unlike other mobile-based wallets, Trust allows users to “control 100 percent of their funds,” not holding the private keys or other confidential information on their servers. In fact, all of the information that will be stored on company-owned servers is just the user’s public addresses, contact information, and social media handles.

According to Bloomberg, the wallet provider was launched in November and is currently home to 10 employees. The Trust Wallet application is currently focused on providing security for Ethereum-based tokens, and supports upwards of 20,000 different cryptos as of the time of writing.

Speaking on the acquisition, Chengpeng Zhao, the well-known CEO and head of the exchange, stated:

“The Trust Wallet team shares the same values as us and the products are very complementary. For users who like to withdraw funds into a wallet now, we have a product they can use.”

The details of the deal were not revealed, but the firm noted that they acquired the startup using a combination of cash, Binance stock and some of its in-house token, the fittingly named Binance Coin. But it was noted that the deal was not of a high value, as the crypto service provider currently doesn’t support an expansive user base.

It is important to note that Trust Wallet will still operate as an independent entity, but the Malta-based Binance will assist in operating the “admin side of the business,” along with market campaigns. Zhao noted:

We plan to keep the app as independent as possible. There will be more features going into it but not so much from a Binance demand perspective. We are like the addition of a godfather for the baby… there’ll be some cooperation.

The CEO took to Twitter to issue a series of tweets, expressing his excitement for the deal which they had just closed. CZ wrote:

“A secure, easy to use, on-chain mobile wallet with full dapp support. The next gen mobile wallet begins.”

He also called it a “diamond in the rough,” alluding to the firm’s plans to expand and integrate the wallet solution into Binance’s services. It is likely that Trust will be the first to be integrated into Binance’s upcoming decentralized exchange, which will allow users to directly transact with one another through a permissionless system.

Closing off his talk with Bloomberg reporters, the CEO added that his firm is in “early-stage talks” with other firms that appeal to the Binance team for future acquisition. Taking into account that Binance made upwards of $500 million since the start of 2018, it makes sense how they have so much capital to spare.

loading…

Posted on

Crypto And Charity: Binance Contributes $1 Million To Aid Japanese Flood Victims

Binance, the world’s largest exchange, has committed to an act of philanthropy, with this coming in the form of donating $1 million U.S. to victims of the Japanese floods. The floods have already killed over one hundred civilians so far, with many speculating that there are still over fifty missing.

Shinzo Abe, Japanese PM stated:

We are working against time. There are still many people missing and others in need of help,

According to BBC, western Japan has been seeing record levels of rainfall, with some areas receiving as much rain they would see in months in only a few days. Japanese authorities have ordered over two million people to evacuate the affected area as water begins to run through the streets.

Chengpang Zhao, Binance’s CEO, took to Twitter to express condolences to the victims, he wrote:

Our hearts go out to the victims in West Japan. @binance will begin with a $1,000,000 USD equivalent donation in either BNB, BTC, or JPY.  We also ask our crypto partners to join us and help our friends in need.

CZ, as he is called by the crypto community, also encouraged others to make a donation to the cause, in the form of sending ETH or ERC-20 tokens to a specific address.

Binance’s CEO also noted that projects looking for a Binance listing may receive “bonus points” for future listing requests. Additionally, CZ went out to say that exchange might even count donations towards the reportedly exorbitant listing fee.

It is currently unclear what the exact logistic scheme of the donation plan will entail, but it was made clear that the Binance team is working on a viable way to deliver the funds in collaboration with “local authorities.”

Some found it odd that Binance only offered an Ethereum address for donations, but others thought that it only made sense, as a number of projects on Binance are Ethereum-based.

As of the time of press, the wallet given is filled with over 190 Ether, valued at over $95,000, along with over $1.04 million in a variety of ERC-20 tokens. With these donations, Binance has already surpassed its goal of $1 million, but many hope for the continued success of the charity campaign.

Crypto and Charity: Is It A Growing Theme?

Despite the tribalism and individuality of many cryptocurrency investors, influencers and projects, the charity space around this industry has grown tremendously

Brian Armstrong, CEO of Coinbase, stated in a Medium blog post:

Cryptocurrency has produced a handful of billionaires already, and I suspect it may produce the world’s first trillionaires in the next decade. The Forbes list of wealthiest people is going to be shaken up by early digital currency holders.

It would only make sense for influential cryptocurrency players to start making an impact on the philanthropy space. In a recent announcement, Armstrong mentioned that he will be starting the ‘GiveCrypto‘ charity, aimed at supporting the impoverished through cryptos.

The CEO noted that the power of using a crypto-backed charity fund lies in the substantial growth potential, increase in adoption rates and most importantly, the appeal of a technological world. The fund has already garnered over $5 million from a variety of high profile cryptocurrency players, including the CEO of Ripple, ZCash, and BitMEX.

In other news, the Pineapple Fund, started by a Bitcoin early adopter, recently cleaned out its fund pool, donating over 5104 Bitcoin to over sixty of honorable causes.

The anonymous founder of the Pineapple Fund wrote:

Pineapple Fund was an experiment in philanthropy with cryptocurrency wealth. What happens when your ‘play-money’ becomes a treasure chest, and you’re past the satiety point of money?

Many believe that the generosity that has been seen in the cryptocurrency space with continue, with charities like GiveCrypto, The Pineapple Fund, and the most recent Binance donation showing the willingness of the community to give and a lot at that.

loading…

Posted on

Bernstein: No, Crypto Markets Aren't Like the Dot-Com Bubble

Analysts for Bernstein contended in a report published Friday that the cryptocurrency ecosystem is developing an alternative to Wall Street.

The report argues that the blockchain industry is setting up “parallel financial networks” that exist as alternatives to incumbent systems in operation today. And while these new platforms still operate “on the fringes of the mainstream economy,” Bernstein’s authors say that ‘with size and scale, we will witness mainstream talent and then eventually capital diverted towards” these new networks.

Indeed, the report argues that what is being developed is a “market-based innovation experiment” – yet one that isn’t without its issues, as seen by the prevalence of token sale scams, among other forms of crypto-specific fraud.

At the same time, Bernstein’s analysts suggest that the market for crypto-assets – being a global one that never closes for business – serves as a “natural correction system,” comparing that state of affairs favorably to the 2000s dot-com bubble that played out on regulated exchanges with specific operating times.

The analysts wrote:

“To see the fund-raising landscape as scam prone and with regulatory skepticism fails to recognize it as a market based innovation experiment to build out a new financial system. And the 24*7 trading market acts as a natural correction system for the bad actors unlike the dot com bubble where the feedback for weak business models came with a lag. Crypto markets build and destroy fortunes every day.”

The report also delved more deeply into specific cryptocurrencies, noting that bitcoin in particular “needs no more critiques.”

It continued, saying “to start with bitcoin is the first global, digital, non-state/non-central entity controlled, financial asset with 24 * 7 market-based prices. It also facilitates global money transfer & final settlement within less than an hour (at a cost between 0.5-1%) which no bank or international network offers.”

Bernstein also cited ethereum’s ERC-20 token and its use in token sales as “the killer application” for the network.

“While, fraught with regulatory uncertainties around retail sale of security and fraudulent projects, the fund-raising movement has funded many projects that are building the core infrastructure layer of the crypto fintech network,” the authors wrote.

Image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on

ICON Token Swap Underway With 'No Issues,' Foundation Says

Millions of dollars worth of ICON tokens are now on the move – as the cryptocurrency project begins its token migration.

Designed to connect independent blockchain communities with a variety of governance strategies, the ICON protocol first launched its crypto token, ICX, on the ethereum blockchain, but – in what has become an increasingly popular process – is now moving those tokens over to its very own blockchain.

More specifically, the project, which launched its mainnet in January, is tasked with swapping around $42,750,000 worth of ERC-20 tokens with an equal amount of native ICX tokens from now until September 25.

And according to the ICON Foundation, the organization in charge of development, so far it’s been smooth sailing.

Speaking to the process that started June 20, a representative for the foundation told CoinDesk:

“No issues have been reported and we haven’t had any on our end.”

As previously reported by CoinDesk, only supported exchanges – Binance, Upbit and Bitthumb – can currently shift ICX tokens to the new blockchain.

Therefore, according to the foundation, token holders must transfer their tokens to one of those exchanges in order to start the migration process. Later this month, on June 25, token holders will also be able to use the ICONex wallet to migrate their ICX tokens.

As soon as the migration is complete, users will be able to resume ICX deposits and withdrawals, the foundation said, although an estimated completion date was not provided. However, supporting exchanges indicated that they will wait to reopen deposit and withdrawal services until the ICON mainnet has proven safe.

“We will open ICX deposits and withdrawals again once we deem the ICX mainnet to be stable,” Binance said on its website.

For now, ICX token holders must trust the ICON Foundation and the supporting exchanges to execute the swap successfully. However, the foundation stated it may yet provide users with oversight of the migration.

“As of now there is no place to watch the process, however, we are exploring ways to make this possible,” a representative for the foundation told CoinDesk.

ICON, a crypto with a collective market capitalization of about $800 million, is only one of the top thirty cryptocurrencies to attempt a token migration in recent weeks. Tron, which aims to use its blockchain infrastructure create a “truly decentralized internet” kicked off its token migration on Thursday. Likewise, the scalability-focused EOS protocol underwent a token migration earlier in June.

Rubber ducks image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on

'Colored Coins' Startup Coinprism Is Shutting Down This Weekend

Coinprism, an online wallet service for “colored coins” founded in 2014, is closing its doors this weekend.

The startup said in a message on its website that it would shut down on Saturday and advised users to “withdraw your funds and export your private keys before this date.”

Coinprism was arguably ahead of its time. By using the bitcoin blockchain to create tokens representing other assets, its colored coins presaged the rise of ethereum and other networks built explicitly for such use cases.

But as founder and chief executive Flavien Charlon pointed out in an email to CoinDesk, much has changed since 2014, both on the tech and regulatory fronts.

“While we have been one of the first in the area of blockchain tokens, long before ethereum was even released, the ecosystem has since shifted towards ERC-20, which is more flexible and more powerful than bitcoin-based systems,” he wrote, adding:

“The unpredictability of transactions fees and confirmation times in the past couple of years have also made it hard to argue bitcoin is a good platform for this.”

Stepping back, Coinprism is one of a number of companies that sought to focus on colored coins, or bitcoins bearing extra pieces of data that give them a greater degree of uniqueness by way of the protocol’s scripting language.

Colored coins can serve as digitized stand-ins for real-world assets, for example, or represent things like loyalty points.

Yet as Charlon pointed out, work in this area has largely shifted to ethereum and other platforms. Many such tokens in circulation today are based on ethereum’s ERC20 standard.

Charlon also said the long-term business model of Coinprism was problematic, given the growing regulatory scrutiny of the ecosystem and around crypto assets in particular that have been sold through initial coin offerings (ICOs).

He told CoinDesk:

“We didn’t see a business model that would have been viable long term. Regulators are starting to pay attention to the space, and activities around blockchain assets (tokens exchanges, ICO tools and services, etc.) are likely to become heavily regulated in the next 5 years. That means some of these services will have to shut down or restrict their activities, some might go to prison, and only a small number of well capitalized companies will successfully adapt to the regulator’s demands.”

Reality check

Past that, Charlon said another reason Coinprism was calling it quits is because the limitations of blockchain were becoming apparent.

As he put it:

“In 99% of use cases we’re seeing, blockchain is unfortunately a sub-optimal choice as a technology. Blockchains have many disadvantages in terms of speed, scalability, costs and user experience. Unless censorship resistance is a critical requirement (which it rarely is, especially in the enterprise blockchain space where participants all know each other), blockchain is rarely the right technological choice.”

The blockchain’s vaunted transparency, privacy and cryptographic security can all be achieved “quite easily” with a traditional system, Charlon went on to argue, concluding:

“In the end it was about intellectual honesty. I didn’t like having to support projects that were trying to use blockchain for the sake of using blockchain, when I knew a centralized, more boring architecture would actually do a better job.”

Abacus image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on

The Decentralized Web Just Might Need Databases, Too

There’s a gap in the vision for the decentralized internet.

At least that’s according to Bluzelle, which recently raised $19.5 million in an initial coin offering (ICO) aimed at creating a network of decentralized online databases.

While several companies, including Filecoin and Storj, are already working on decentralized file storage, Bluzelle is targeting the databases that keep data quickly and easily accessible for websites and applications to pull from.

These databases make the internet more useful for interactive tasks, such as updating weather and stock prices. And Bluzelelle wants to bring that flexibility to the decentralized web, which is currently as slow as molasses.

So-called structured data gives websites and apps faster access to data they can read, change and be updated externally. And following the interest by investors to fund what they call “protocol tokens,” there seems to be consensus that now’s the time to be investing in this specific protocol.

Bluzelle sold 33 percent of its total pool of 500 million crypto tokens to 7,058 people and organizations.

Kenetic Capital, Kryptonite1 and 8 Decimal Capital participated in the ICO, which follows the $1.5 million in venture capital Bluzelle raised in August, in a round led by Global Brain, LUN Partners Capital and True Global Ventures.

While MySQL and several other open-source software projects are filling the database role on the internet, Pavel Bains, CEO and co-founder of Bluzelle, said he believes traditional tech companies will switch to decentralized database platforms as the technology matures.

One reason, he said, is that these platforms don’t have the single point of failure that has plagued mainstream technology in recent years.

Bains told CoinDesk:

“We see us as a complementary piece of the whole ecosystem. … A natural complementary piece is going to be the database layer. What we’ve seen is, over the last year is nobody’s really tackling this problem.”

Not one, but two tokens

Notably, Bluzelle didn’t just create one token, it created two.

The first, BLZ, is the ethereum-based ERC-20 token that was sold during the ICO. BLZ will eventually be used to purchase the second, BTN, which was created only for use on the Bluzelle platform.

What Bluzelle found, as others, such as Kik and Mobius, have noticed, is that ethereum-based token transactions are just too slow and expensive for a service that, at scale, will need to constantly be running loads of micro-transactions.

“If it’s not fast, it’s not going to be attractive,” Bains said.

In this way, BTN will act as the speedy, cheap token for micropayments.

Plus, the company wants to be able to provide “just-in-time pricing,” meaning the price paid to specific nodes to host, share and write data, will change on the fly based on demand on the network.

Bains told CoinDesk:

“If you did all those kinds of charges [with] a credit card or a traditional system, you’d eat a lot of merchants’ fees.”

So why create the ERC-20 token in the first place?

Because crypto tokens that will be tradeable on the open market have been shown to entice a large community of people invested in the product’s ongoing success. And as BLZ will be tradeable one-to-one with BTN, demand to access and use the platform should be accurately reflected in the price of the ERC-20 token, Bains said.

Cultivating the community

While Bluzelle has some competition in the space already from ethereum project Swarm, the latter’s immutability might not be right for every user, as Keld van Schreven, cofounder of blockchain investment company Kryptonite1 and Bluzelle backer pointed out.

For instance, because the public data Bluzelle will host can be changed, it will benefit a number of applications, including those that must adhere to Europe’s “right to be forgotten” laws.

Still, Bain said, Bluzelle is meant to be a “complementary piece of the whole ecosystem.”

Currently, Bluzelle is focusing on the crypto space, citing prediction markets, currency exchange protocols and data streaming services as three potential early markets.

Each of these markets has actors that are reading as well as writing large volumes of data (sometimes both at once), which make for natural use cases for Bluzelle.

Now that the ICO is over, Bains said, the company has turned its focus to “building out the open-source developer community,” because developers are some of the earliest adopters of technology.

“Our goal is to start with dapps,” he said.

And with that, Bluzelle expects its first major release to happen in April, with a wider public release planned for July.

According to van Schreven:

“Bluzelle has nailed an easy-to-use toolset and interface for developers building decentralized apps.”

Multicolored pipes image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at news@coindesk.com.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Posted on

Atomic Action: Will 2018 Be the Year of the Cross-Blockchain Swap?

What if there were no exchanges to hack?

As a new generation of crypto users begin to invest in the technology, developers are growing concerned about its infrastructure. They’ve seen this happen before – new users enter the space attracted by big gains, then suddenly, a catastrophic failure, usually at the very exchanges designed to hold and custody those funds.

But out of adversary, inspiration is taking hold, with high-profile coders turning their focus to atomic swaps, a concept that claims to allow for the direct, peer-to-peer transfer of cryptocurrencies across different blockchains. In the place of the vulnerable exchanges we use today, the idea behind atomic swaps is that these large repositories of customer money could be rendered obsolete by code.

And seasoned blockchain developers like Alex Bosworth believe this is all too necessary, especially given that users today need to effectively give up custody of their assets if they choose to hold funds on exchanges.

He told CoinDesk:

“Putting users in control of their own private keys has the best aggregate track record for security despite individual cases of loss. Funds under centralized control on exchanges have led to the most massive security failures we’ve seen.”

Andrew Gazdecki, CEO and co-founder of Altcoin.io, which recently launched a beta wallet for atomic swapping between crypto tokens, describes the problem in similar terms, arguing that users should be empowered to hold their own private keys (the alphanumeric strings that allow users to unlock, access and spend their funds) without relying on others.

“There are literally billions of dollars being held within these digital honeypots, and it’s nearly impossible to find the perpetrators,” he said.

Early examples of atomic swaps technology emerged in various stages in 2017, and while there’s disagreement as to the timeline they’ll be available to the public, some believe 2018 will be their year.

As Jameson Lopp, a BitGo software engineer, recently tweeted:

“Nearly instant atomic swaps … are coming sooner than everyone thinks. Definitely not a year away, but mere months.”

Atomic swaps already?

In some ways, atomic swaps are already here – depending on the kind of atomic swap you’re looking to make.

For instance, last year saw swaps between different blockchains built on similar code – the cryptocurrencies decred, litecoin and bitcoin – executed. Meanwhile, atomic swaps between cryptocurrency tokens on the same blockchain became more commonplace, with decentralized exchanges such as 0x and, as mentioned above, Altcoin.io, adding instant trades between tokens on ethereum compatible protocols.

Cryptocurrencies running on blockchains with much different codebases, though, must rely on purpose-built tools to facilitate these kinds of transfers today.

Toward this goal, a tool for exchanging zcash for bitcoin called ZBXCAT was developed last year. Described by co-developer Jay Graber as the “walkie-talkie of payments,” the tool will soon be accompanied by a simplified web interface.

Indeed, atomic swaps “could always be done manually,” Graber said. However, because this requires a degree of technical skill, before atomic swaps see mainstream use, easier to use platforms will need to be developed.

At the same time, Lightning Labs, a company devoted to promoting bitcoin’s Lightning Network, recently conducted its first off-chain atomic swap on its test blockchain. Completed in November, the transaction saw litecoin and bitcoin swapped on an off-chain payment channel.

Off-chain hurdles

Off-chain atomic swaps of this type are highly anticipated since trading would be automatic, not reliant on the processing times of different blockchains, but the technology needed to implement off-chain atomic swaps – things like the Lightning Network and Raiden Network on ethereum – are still under development.

Which is why some, like Lightning Labs CEO Elizabeth Stark, are less optimistic about cross-blockchain atomic swaps.

Stark recently discounted the hype, writing on a development channel, “Anyone telling people that Lightning swaps will be ready in months doesn’t know what they’re talking about.”

And in interview with CoinDesk, Stark said:

“There’s still a good amount of infrastructure to build.”

One website, swapready.net, provides a breakdown of how close each cryptocurrency is to supporting cross-chain atomic swap capabilities – and to date, there’s very few that can interoperate.

Mirroring Stark’s sentiments, Philippe Castonguay, developer relations manager at 0x, which offers on-chain atomic swaps of tokens on ethereum, told CoinDesk that developers looking to create atomic swaps between vastly different protocols are faced with “a lot of challenges.”

The infrastructure needed to interface between bitcoin and ethereum, for example, is still in development, and “to make it even worse, these cross-chain platforms also need to solve some of the main problems other blockchains are trying to solve, such as scalability,” Castonguay said.

Still optimistic

Yet, even with a lot a work still to do, many remain assured advances are close.

Bosworth, whose work has focused mostly on developing applications for bitcoin’s Lightning Network, for one, made his excitement about a new era public, tweeting: “The atomic age is coming, what cannot be swapped will be left behind.”

And Castonguay, whose work focuses on ethereum, also remains encouraged by the development happening within that ecosystem. Even if swaps between blockchains with different code bases prove cumbersome, he believes the blockchain could yield other solutions given the expansive capabilities of its code.

“Eventually the ethereum blockchain will be able to communicate with other blockchains,” he said. “Once this happens, all the different coins from different blockchains will be representable on the ethereum blockchain.”

For example, if bitcoin and ethereum blockchains can communicate with each other in a trustless way, then users could have an ERC-20 bitcoin on the ethereum blockchain, pegged one to one with bitcoin on the bitcoin blockchain, he posited.

Such short-term solutions, he thinks, could help advance the atomic swaps concept overhaul.

Castonguay concluded:

“I do believe it is possible that some blockchains might be able to interact with one another this year, but I think 2019 through 2021 would be a safer bet.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in BitGo. 

Molecules model image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at news@coindesk.com.

Posted on

Crypto Collectables? Ethereum's Next Killer App Is on Its Way

As silly as it might sound, the popular CryptoKitties app might foreshadow a powerful up-and-coming use case for ethereum – digital collectibles.

After its launch last week, CryptoKitties quickly became the most popular ethereum app – so popular in fact that there’s now CryptoPuppies (for those that prefer man’s “real best friend”),  and CryptoPets (which lets users choose any kind of digital animal pet they prefer).

But while some in the crypto community are skeptical of this new trend (“Dear god no,” said one reddit user to the idea of Pokemon on the blockchain), others see CryptoKitties as an unlikely pioneer in what could be one of the platform’s biggest applications.

Blockchain thought leaders such as litecoin creator Charlie Lee and Earn.com CEO Balaji Srinivasan, to name a few, argue the app is “actually important,” because it shows the promise of using the blockchain to instantly transfer all kinds of assets without a third party.

Lesser known, though, is that there’s reason to believe a real uptick in usable, consumer-friendly applications could be on the horizon. That’s because the system for creating these collectibles hinges on a technical standard similar to ERC-20, the same tech that sparked the boom in initial coin offerings (ICOs) in 2017.

Strange as it may seem, your favorite furry fluffball is made possible by a powerful technical standard underlying CryptoKitties called Ethereum Request for Comments 721 (ERC-721).

“People have been talking about [ERC-721] for a long time, but no one implemented it before. CryptoKitties happened to be the first,” Philippe Castonguay, developer relations manager for cryptocurrency exchange protocol 0x, told CoinDesk, adding:

“There’s a very big market incoming for ERC-721.”

The utility of uniqueness

According to many crypto developers, ERC-721 is better suited for digital collectibles than ERC-20.

For starters, tokens created with ERC-20 are “fungible,” meaning every token is just as good as any other token, like every U.S. dollar is just as good as any other U.S. dollar.

While this is a necessary property for a currency, it isn’t suited for “crypto collectibles” like CryptoKitties, since different cats need to have unique attributes, such as age, breed or color, permanently attached to them. In this way, some mixture of attributes within certain cats can become super rare, making them not only highly sought after, but also remarkably valuable.

One such cat on CryptoKitties traded for $110,000.

Secondly, ERC-20 tokens are divisible, meaning users can divide them up into tiny amounts for buying, selling or trading.

While this property is, again, useful for currency, it isn’t helpful for collectibles, since collectibles are generally only as good as their condition.

In CryptoKitties, half a cat wouldn’t be that fun or valuable to have.

All that said, there are still questions surrounding ERC-721. Although, it’s quickly gaining traction and is already being used,  it’s not yet complete and several developers are unhappy with the code as it stands today.

As such, Castonguay expects the standard to evolve:

“It will mature into a more robust and more acceptable standard over time.”

From punks to kitties

That said, the ideas underpinning ERC-721 aren’t completely novel, but are instead iterations on already functioning digital collectible systems.

For example, CryptoPunks created its own non-fungible token for trading pixelated punk heads over ethereum (CryptoPunks has even seen a spike in usage since CryptoKitties launched).

Following the success of CryptoKitties, startups and developers are beginning to express interest in ERC-721 as a way of making crypto assets easier to use.

James Martin Duffy, co-founder of startup LoomX, which is working on scaling infrastructure for ethereum, told CoinDesk, he has plans to deploy projects using the standard going forward.

“I see [ERC-721] tokens having huge potential in the realm of digital collectibles and online games,” Duffy said. “You could use them for digital playing cards … or in-game items in a massively multiplayer online role-playing game. The tokens could represent the swords, armor and other objects that your character has in his inventory. “

And it doesn’t stop there. According to Duffy, ERC-721 could also facilitate the tracking, trading and management of real-world assets such as houses or cars.

He’s not the only one that’s excited about the potential, though.

Developers of 0x, a decentralized exchange for ERC-20 tokens, see such a promising future for ERC-721 that they’re planning to add support for the token soon. In this way, ERC-721 tokens can be traded for ERC-20 tokens and ether as well.

Castonguay concluded:

“We see a future where all of these different kinds of tokens can be exchanged seamlessly.”

Toys image via Shutterstock

Text-to-speech function is limited to 200 characters

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at news@coindesk.com.