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While Bitcoin Price Soars, Technological Advancements Continue in the Background

The cryptocurrency ecosystem is agog with Bitcoin price so much that events happening around the underlying technology are forced to take a back seat from the eyes of the public. This, however, does not take anything away from the plenty technological inputs going on in the background with Bitcoin, Blockchain and the entire crypto ecosystem.

For instance, due to the amount of its user base, miner base and network size, Bitcoin is a very secure yet isn’t very adaptable to market’s needs. This is where smaller scale cryptocurrency such as PIVX, Litecoin and Dash come in where they are able to innovate and improve its underlying technology utilizing the different block consensus and governance system. This allows adding of new Blockchain technology without guesswork if its users will support the change.

Investors are pouring into Bitcoin

Simply put, such developments allow people to experience new technology earlier while the developers are able to gain new knowledge and data sooner rather than later thus helping the overall growth and development of Bitcoin and the entire cryptocurrencies.

The meteoric rise of Bitcoin’s fiat value is doing what it took geeks more than 20 years to accomplish: convince regular people that there was something worth looking at in this new experiment of creating, storing and safely transact digital value.

Recently, we have even heard about people taking out mortgages to invest in cryptocurrency.  A lot of the new market participants only need a few pieces of information to engage –

In fact, with little knowledge about the underlying technology, exchanges like Coinbase make it easy to get started with their simple and friendly user interface, a limited number of coins supported and the ability to integrate payments for your crypto with familiar western banking tools (i.e. checking accounts and credit cards).

Understanding forks and altcoins

“2017 will be known as the year of the Bitcoin forks.”

Jason Cassidy, president of Blockchain TV

There are dozens of these forks, which bring varying degrees of change and value to the space. If a fork (which is for all intents and purposes a copy) brings little value to the ecosystem, it is often generally disregarded. However, not all forks are created equal.

A very small percentage of these forks come into existence due to real needs in the industry, regardless of whether the entire community shares that view. These forks often give a 1:1 matching to the Bitcoin you hold at the time of the event. If timed correctly, one can make a decent amount of wealth from simply holding a Bitcoin. Understanding what each fork brings and if there is any long-term, inherent value is a question that requires due diligence on behalf of the investor.

On the other hand, the CEO of Netcoins, Michael Vogel believes that most forks end up serving as a gateway into Bitcoin for investors and a fantastic way for new ideas and features to be tested and later implemented in the “mainstream” Bitcoin.

“The irony is that many forks and altcoins have no real substance from a function perspective. And although a lot of alts have had meteoric price increases (even greater than Bitcoin on a percentage basis this year), investors ultimately realize that Bitcoin already has the infrastructure and user base that other coins don’t yet have,” says Vogel.

Therefore, the dominant pattern sees users entering into the ecosystem by converting their fiat currencies first into Bitcoin in most cases via the exchanges. This enables them to purchase the tokens that are usually on sale during the ICOs of these forks, and most often after the ICOs they head right back to Bitcoin whose value has been sustained over time.

Insufficient risk awareness

Blockchain Evangelist, Melvin Petties explains that limited intelligence of the underlying protocol fundamentals, dynamics and nuance make cryptocurrency speculation for everyday folks a more risky endeavor than they may be aware of.    

“I doubt if the “new money” in the game can talk at length about inherent risks or present/potential uses cases of these new asset management systems as a supporting argument  for the positions they have taken.”

Human beings are wired to try to make sense of new phenomena by processing all the information of the past.  Sometimes that can bite in the rear as may assume similarities where there are none.  As such, it helps to assimilate any new or additional information in the context to help make more sense of it in comparison to other experiences.

For example, imagine your buddy invites you to “catch some waves” and to your surprise, after two hours on the road you finally pull up to an indoor resort water park where they have one of those cool new “wave pools;” the waves are generated mechanically and are meant to impress, but not utterly frighten well-meaning vacationers. This is not the same as a trip to the beach right. The same can be said of traditional investment vehicles vs. cryptocurrencies and assets.  Some key interactions with each are very familiar; however, the context of operating within a purely virtual universe where the data is publicly distributed and infrastructure is community owned is very important to how you choose to engage.

Bitcoin vs. traditional investments

Anyone might want to know some of the machinations and nuances that make HODLing and transacting in this new medium different from the traditional experience that they are used to.  Let’s identify some of the ideas that could raise some eyebrows:

  • All the data created on the Bitcoin Blockchain is available for anyone to see.  That means that someday it will be possible for someone to back-trace any user’s entire transaction history assuming they have enough supporting clues.  In fact, this is how law enforcement catches criminals today.
  • There is no one to “sue” if transactions are ever posted in any consumer-friendly medium outside of a public protocol’s native ledger (generally incoherent to most people).
  • Every hacker on the planet right now has an interesting new dataset to play with and add to their arsenal of tricks for getting information about users.
  • Artificial Intelligence and Machine Learning make it possible to make correlations between big data easier than ever before.  What used to be “inside information” will possibly be available to anyone who knows how to ask the “right questions” of their queries and pattern recognition algorithms to predict future transaction flows.

The point of these considerations is not to scare people away from using or investing in cryptocurrency, but to better illuminate the context of this new environment and how it differs from our closed network design today. Hopefully, this perspective encourages investors to weigh the pros and cons of each coin they buy and judge the overall utility and value by present and future context.

The importance of the ‘rule-of-law’

One of the important inventions that we take for granted as society is the rule-of-law – a common and agreed understanding/ social construct for the proper/expected behaviors and consequences for various interactions between humans and the things they make. To be perfectly clear, we are just scratching the surface on how to do this in a coherent, dynamic, and flexible way as it relates to globally operated asset management systems.  Rules for a Flat World dives into some of the challenges and opportunities we face in getting there, but take a look at some of the cool rules we have created regarding data privacy and the stewardship of information managed by private institutions today:

  • Right to Forget – If I cut ties with a company, they don’t get to keep my data
  • FDIC – If someone robs the bank, my money is insured up to an established amount
  • Identity Management – If someone steals my personal information, I can put a flag on my records and be issued a new card to protect against future theft

None of these constructs have a way of being expressed just yet, but folks are working on the problem and some really fun and interesting business models will be built to fill the gap. Cryptocurrencies are here to stay and we need a new governance mechanism to help us cope with the inevitable mistakes and hacks that will occur.

Types of cryptocurrencies

Most cryptocurrency platforms and projects could fall into one of two buckets: currency and non-currency. Of course some protocols like Ethereum straddle the fence, but in general this rule is pretty sound.

Humans are always doing work on something, whether that’s serving each other or entertaining ourselves. At the end of the day, lots of developers and entrepreneurs decided to go the “non-currency” direction as they explore Blockchain technology for other purposes. On the currency side, you have projects that form out of dissent with existing implementations (known commonly as forks) or projects that are built from the ground up to address shortcomings they discovered in predecessors.

Bitcoin is and will continue to be the leading cryptocurrency but alternative cryptocurrencies through continuous innovation fuel the growth of the cryptocurrency ecosystem as a whole. For example, the PIVX combined proof of stake with the zerocoin protocol provides a case study for Bitcoins development and also opens up other avenues of entry for users who may want more privacy. Other innovations that have been forked off the Bitcoin protocol with the specific offerings to the ecosystem include Litecoin, Dash, Bitcoin Cash, Bitcoin Classic, among others.

A classic example

Bitcoin vs. Ethereum is a classic study of currency vs. non-currency.  Just look at how they each describe themselves:

  • Bitcoin: “Bitcoin is an innovative payment network and a new kind of money.”
  • Ethereum: “Ethereum is a decentralized platform that runs smart contracts:…”

Again, the point is to highlight how better information and the idea of context can go a long way to shape decisions about investing. Everyone who endeavors to create and support a cryptocurrency or Blockchain project is effectively raising the collective consciousness of the community.  Therefore, users and investors are expected to give great feedback through their actions by evaluating them more on their merits.

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Blockchain, Cryptocurrency Domain Names Hotter Than Ever

The history of domain names dates back to over three decades ago when the first ever .com name, symbolics.com, was registered by a Massachusetts based computer manufacturing company, Symbolics Inc. on March 15, 1985. Ever since, the domain name marketplace has grown significantly and today some highly demanded domain names sell for millions of dollars.

This year has been one to remember in the Blockchain industry with mainstream recognition and adoption beginning to accelerate. One of the sectors that is enjoying a corresponding peak in interest is the world of Blockchain and cryptocurrency domain names. Be it for marketing and advertising, brand recognition for a technology, or simply to promote a new product or service, quality Blockchain and cryptocurrency domain names are a hot asset.

Digital land rush

While many new investors entering into the industry are focusing on their initial cryptocurrency purchases, there is a digital gold rush taking place with high quality Blockchain domain names.  The Ethereum Name Service (ENS) auctioning of decentralized domain names has been a huge, hit with millions of dollars worth of sales having taken place.  While usage and overall popularity of .ETH or other decentralized domain names is minimal, the trend is likely be continue in growth.

Continuing the theme with ETH, the Ethereum.com domain name has recently been up for sale for close to $10 mln. Several months ago the ETH.com domain name was purchased by a well known domain name investor, Sharjil Saleem, for $2 mln.

As big as it gets

Perhaps the most impressive of the recent domain offerings is not a single name but a group of them.  President of Blockchain TV, Jason Cassidy, has assembled over 500+ of the best Blockchain domain names for sale. The portfolio is being put on the market for the first time with a price tag of $6 mln

If somebody buys the group, it could go down as the biggest ever single sale in the domain name industry, thanks to Blockchain technology and its associated opportunities. With all of the interest and sales taking place for cryptocurrency and Blockchain domain names in 2017, the table looks to be set for an explosive 2018 and onward.

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Blockchain Enabling Users to Benefit from Unused Assets, Excess Capacity

In the beginning, Blockchain seemed to be all about Bitcoin, but the technology is rapidly expanding beyond that initial use case. In fact, Blockchain is rapidly finding implementation in some unusual areas. One such area is the monetization of unused assets, such as Internet bandwidth and SMS services.

From novelty to opportunity

The Founder of Helium, Jason Cassidy, describes this development as one of the beautiful aspects of Blockchain technology. He notes that the ability of Blockchain tech to eliminate inefficiencies across the board makes it stand out. The ability to put unallocated resources to purposeful use is quickly becoming possible.

“Looking back in the brief history of cryptocurrency, we can see there are examples of Blockchains that put this into practice. [One such project] puts wallet users computational resources to use to help find causes for diseases while [another] takes a similar approach and applies it to scientific research.”

Cassidy further explains that this trend will continue as Blockchain developers discover new ways of putting resources to use by bundling them together to work towards a common, unified goal.

A typical example is the A2P SMS services market which boasts of an expected $63 Bln revenue in 2017. Blockchain-based services will soon offer the opportunity for individuals to sell their unused SMS to social networks and other companies. They use it for SMS notifications, SMS-based two-factor authentications, automatic booking confirmations, one-time passwords, and similar services. Users who contribute will become significant players and earn part of the huge revenue that exists within this market. In a sense, this Blockchain-based service might end up creating the first universal basic income.

Internet powered by the Blockchain

Michaels Vogel, CEO of Netcoins tells Cointelegraph that it might be possible to create a whole new Internet built on Blockchain. Vogel notes that Kim Dotcom is working on something dubbed the MegaNet, an alternative internet that doesn’t use traditional IP addresses and is significantly more secure because of its Blockchain backbone.

The interesting part of this idea is how unused computing power (e.g. your phone when it’s not in use) would then contribute its storage and processing power to the MegaNet. Says Vogel:

“I think there is huge potential for other ideas in the future to make use of the world’s dormant computing power, and harness it through Blockchain applications.”

Jeremy Epstein, CEO of Never Stop Marketing explains that this whole movement is about improving the utilization of assets. According to Epstein, unused bandwidth is an asset and before now, there was no effective way to get compensated for it.

An inevitable development

The combination of Blockchain technology and crypto-economics makes such projects not only feasible, but inevitable.

Epstein notes that we will see this play out in any industry where assets are undervalued because they are underused. Entrepreneurs will find ways to utilize nearly any excess resource, in time. Empty shipping containers, cars traveling from city to city and even premium website domains that people are just squatting on can now be leveraged via Blockchain technology.

This is the power of decentralization, a collective of individuals voluntarily working together. Anyone is free to join or to leave as they please. This freedom of choice aligns well with a humanitarian mindset and we expect to see much more of this innovation in the future.

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Blockchain Inclusion Program to Spark Financial Revolution

Using the Blockchain to reach the erstwhile unreachable population is one of the properties that has enabled the highest level of disruption within the ecosystem.

Organisations like Humaniq are using the Blockchain to deliver financial inclusion to over 2.5 bln unbanked people across the globe. Meanwhile, ChainTrade is creating a decentralized commodities exchange that will enable the currently excluded traders to participate in the food and raw materials market.

Introducing a real competitive market

According to Vincent Jacques, CEO of ChainTrade, decentralization introduces much needed competition that’s long overdue into the markets. He describes Blockchain technology as a tool that will revolutionize the world of commodity derivatives.

Jacques says:

“Worldwide trade of food and raw materials represents more than $2 tln annually. However, commodity derivatives are currently traded on a few centralized exchanges that are making huge profits. We want to move this trade to the Blockchain, building a decentralized platform accessible to anyone without intermediaries. It’s time to bring competition to this business, decentralize the exchanges, open them to anyone who wants to be part of it, and dramatically lower access costs. Blockchain technology will allow us to do just that: revolutionize the world of commodity derivatives.”

A tool for liberation

President and Host at Blockchain TV, Jason Cassidy identifies the ability to financially liberate the well over two bln people across the globe who are unbanked or underbanked, as one of the crowning achievements of Blockchain technology.

Cassidy notes that the banking sector has shut these people out for various reasons and has no intent on ever letting them into their system.

According to him, Blockchain technology removes power from central authorities and puts it back into the hands of the people. In this light, both political and commercially focused entities are going to find it challenging to legislate a technology that bypasses borders by its very nature.

He continues by noting that from a purely political perspective, the ability to give democracy a greater level of transparency is going to put pressure on politicians to be more upfront with their populace.

Cassidy elaborates:

“Politics is inherently linked to lack of transparency and at times dishonesty, so having a technology that greatly improves transparency will empower the average voter and taxpayer. Over time, elections and how collected tax dollars are being spent will be more visible, and this should usher in a greater deal of accountability. All these coming changes should increase the level of transparency that is afforded to a nation’s populace.”

Blockchain to unbundle closed systems

The activities of ChainTrade and similar organizations are perceived in many quarters as a bold move to disrupt existing systems that have so far unfairly withheld available resources from the general population for selfish reasons.

Most of these organizations are the big banks and institutional investors who control the markets from central points. These actors determine the rules and charge exaggerated fees that encourage the exclusion of smaller investors, thereby eliminating possible competition and raking in all profits.

In an earlier article on Cointelegraph, the efforts of Blockchain lending platforms like WishFinance were identified as a disruption that is breaking the stronghold of banks in the loans industry.

These banks are known to charge high interest rates and demand for collaterals. These conditions are often too high for SMEs to keep up with. But with the implementation of Blockchain technology in the loans ecosystem, WishFinance and other similar organizations are able to unbundle the system and make loans more available.

Benefits of diversification

Chairman of Auxesis Group, Kumar Gaurav explains that decentralized lending will enable a greater diversification and higher yields for lenders in their portfolio. Gaurav notes that opening global lending markets means SMEs can get access to more funding, and the variety of investors means a greater chance to fulfil lenders criteria, therefore finding a lender faster and easier. Gaurav also identifies Cashaa to be another example of P2P Blockchain implementation that can enable investors to participate in global economy in a decentralised way.

According to him, the company facilitates the transfer of investments across borders, allowing opportunistic portfolio diversification with higher yields, a process that will not only help existing SMEs but also the creation of new jobs. With Auxesis Group platform, Bitkarz has another example which can enable investors outside of India to invest in SMEs in India, to get the advantage of high investment yield. Kumar Gaurav claims:

“Blockchain-based rating systems in these products will slowly kick-off the bad actors trying to exploit the system, and will help in empowering our dream of a trust-based society.”

The disruption that is championed by the Blockchain may begin in the technological industry, but the rate at which it is encroaching into other areas of the socio-political ecosystem of human existence continually suggests a greater revolution in the world’s systems. Apparently, we are at the very beginning of an entirely new era of human existence.

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Despite China’s Ban, People Are Still Eager to Participate in ICOs

Minimal launching costs and the ability to solicit crowdfunding from virtually anyone in the world with ease have been identified as the main reasons why startups are embracing the Initial Coin Offering (ICO) model as a fundraising method.

Whether one represents an established organization or a group of college graduates with an innovative idea and little start-up capital, ICOs offer a level the playing field.

ICOs are currently preferred to traditional methods

President and Host at Blockchain TV, Jason Cassidy, explains that promising projects are taking the ICO route over the traditional venture capital path because of the low barriers to entry.

Cassidy notes that the rules of engagement for ICOs are often set by the project team, giving them considerably more control. This is the opposite of the venture capital space, where the investor usually dictates the flow of negotiations.

He elaborates, saying another important factor in the ICO boom is the relatively low cost to launch a successful crowdsale. ICOs are also raise capital much more quickly than the traditional funding routes, making it clear why projects often prefer Initial Coin Offerings.

More ICO regulation is imminent

However, Cassidy notes that as the industry grows, the level of difficulty for carrying out ICOs will increase due to imminent regulations by governments and institutions.

Cassidy says:

“Regulations are being put in place across the globe currently to bring a level of transparency and protection to the ICO model. As time goes on, more and more countries will bring forth regulations and the barriers of entry will increase, as will the quality of the ICO offerings that abide by the rules of those jurisdictions. Locales such as Zurich and Singapore are likely to become havens for ICOs given their friendly stance towards not only the crowdfunding model but the underlying technology itself.”

Earlier this month, the Chinese government announced a ban on companies that were carrying out ICOs within its borders, ordering them to refund investors who contributed to such projects.

This action by the Chinese government had a significant impact on the cryptocurrency market as the prices of token dropped sharply and many companies had to adjust their plans and programs.

Even though the event came as a surprise to many in the industry, China-based Partner at Cryptocrest Dana Coe tells Cointelegraph that the development was nothing out of the ordinary:

“To anyone who is familiar with Chinese law, this move to ban fundraising via ICOs comes as no surprise at all. China has long frowned upon “fund raising” activities within it’s borders. I’ve consulted for several successful ICOs over the past months, and when they asked about bringing their ICOs to China, my advice was, ‘Forget it. They will land on you like a ton of bricks if you are perceived as doing free-lance fundraising in PRC.”

He tells Cointelegraph that in China, events such as ICOs are illegal and the penalties are harsh.

China effect is good for the industry

According to Coe, the Chinese government has actually taken a rather soft touch in allowing these ICOs to just refund their customers and walk away. He notes that the fallout from China may be perceived as a setback, but given the possibility of shady ICOs harming the interests of consumers, and the reputation of cryptocurrencies as a whole, it is good to clean up the space. Coe elaborates:

“I expect some sort of registration framework may be proposed for future ICO-like offerings. This way at the very least a responsible party is known to the regulators. People want to participate in ICOs, they can still do so, it is just they will have to be more circumspect about it by using only crypto.”