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Analysis

$1.7bn is literally too much money, says Telegram bosses!

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Telegram’s scrapped the rest of its ICO, raising only $850m of private funding

Telegram announced in January they would launch an ICO to fund its Telegram Open Network (TON).  However, since they raised $850m privately, half of what they were intending to raise they have cancelled plans to seek further funding. Even at the time, we reported that $1.7bn was an extraordinary amount of money for what is a centralised, pre-mined, inflationary currency.

Initial plans were to raise $1.7 billion dollars to build their TON network, evenly split between private and public rounds of fundraising. However, after it raised $850 million in its first round of private investment they decided to cancel the public funding round. Less than 200 private companies and/or individuals have participated in Telegram’s offer.

Only investors with a net worth of more than $1 million or an annual income of more than $200,000 can participate in these private sales, and wealthy investors demonstrated a strong interest in Telegram’s project.

TON: the next big thing? Absolutely not.

In their 132-page white paper, detailed in a report from TechCrunch, plans are outlined to use the messaging app’s 180 million users to kickstart a new cryptocurrency that will rapidly scale to meet the needs of users. The wallet could launch as soon as the fourth quarter of 2018 with the “Telegram Open Network” open to users at the start of 2019.

The blockchain will be based on Proof of Stake. Bitcoin and similar tokens use Proof of Work, where miners need to solve difficult math problems to release new funds. This has been criticized as energy intensive, with one analyst suggesting the network has the same annual electricity consumption as the whole of Serbia, at around 32.36 terawatt-hours. Proof of Stake, which asks users to prove their investment in a token, has been suggested as an energy-saving alternative.

Telegram has released a 23-page description of it’s updated plans since their private investment rounds. In it, they describe building out the technology for the TON network as well as further development and maintenance of its main messenger service. In addition, the plans mention a “Visa/Mastercard alternative for a new decentralized economy,” to be based on their blockchain network.

Telegram has argued that current cryptocurrencies in the form of Bitcoin and Ether haven’t attracted a mass market due to structural flaws but with their access to such a large user base, they will be able to bring the new technology to a broader market.

Crypto community skeptical of TON

Jackson Palmer, the founder of early cryptocurrency Dogecoin states “I just think this is the CEO’s way of monetizing Telegram, basically.” He’s probably right, with no clear indication how TON would be any more useful as a cryptocurrency than Ethereum or Nano.

Cryptocurrency lead at Cinnober, Eric Wall says on Twitter: “Just looked through the Telegram ICO 132-page whitepaper for their TON Blockchain. Essentially a 100% premined, centrally issued, unbounded supply, PoS sharding shitcoin. One of the worst whitepaper I ever read. Full of blockchain armchair guessing and baseless estimates. 0/10.”

Good luck Telegram, you’re going to need it.

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Analysis

The top 5 altcoins of 2018: Cardano, Nano, 0x, Stellar and NEO

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For new entrants into the world of cryptocurrency Bitcoin attracts most of the attention.. There are, however, a growing number of alternative coins, or altcoins that are providing new solutions and becoming popular in their own right. The following post looks at our top 5 altcoins of 2018: Cardano, Nano, 0x, Stellar and NEO.

Our top 5 altcoins with a bright future ahead!

We believe the following altcoins are tipped for great success in 2018:

Cardano

Firstly, we will look at our top altcoin, Cardano. The platform was launched in September 2017. It has since gradually grown to dominance in the digital market. About 95% of its coin offerings when it started were from Japan, so it was dubbed “Ethereum of Japan”.

Cardano was created as a decentralized platform for smart contracts. The division of its computational layers into a basic layer that handles ADA tokens and another for placing smart contracts is one of its most notable difference from other platforms.  Cardano uses Ouroboros, a Proof of Stake (PoS) algorithm for determining how individual nodes reach a consensus. This is a critical aspect of the general support infrastructure for the ADA cryptocurrency. Ouroboros is a major innovation that has revolutionized blockchain technology.

Cardano offers a blockchain environment which supports financial applications in a secure and efficient way. It could also come to offer e-commerce providers a structure where they can operate with the benefits of the blockchain, as well as obeying rules of the regulators overseeing them.

Cardano stands out as the only cryptocurrency which is founded on a scientific philosophy. By providing advanced contract handling features, the cryptocurrency has garnered a loyal following of traders, investors and enthusiasts. Investors and traders are attracted to its outstanding characteristics. Cardano makes it possible to create sustainable systems for altcoins. Furthermore, development of its platform is easy thanks to its open-source, peer-reviewed system. The team supporting the cryptocurrency is also very active. As a result, it is stable and capable of surviving the fluctuations of the altcoin markets.

On February 1st, 2018, Cardano launched a hardware wallet for its consumers. Its e-Wallet known as Daedalus is unique in that it can activate independent, decentralized applications in the cryptocurrency’s Blockchain. Not only is the wallet accessible, it is highly secure. Refined algorithms are used to keep the contents safe from any digital threats. As such, investors can rest assured that their Cardano coins are safe.

Seeing as its foundation is solid and the altcoin provides practical benefits, the altcoin’s price has been steadily rising ever since launch in September 2017. Boasting a dedicated team, thriving community and unique innovations, Cardano has risen gradually to become one of the most promising altcoins today. The cryptocurrency is also up to some exciting innovations which are guaranteed to put it at the top of the list among the heavyweight altcoins this year.

Nano

Our second altcoin choice is Nano. With its rebranding from Raiblocks, Nano has become a household name and it has endeared many traders and investors. When the name changed, Nano’s price jumped by 38% with a ripple effect resulting in its market capitalization of $1.3 billion.

One of the biggest advantages of Nano are its lack of fees, scalability, and instantaneous transactions. Because of the lightweight protocol, there are no fees for transactions. Additionally, transactions are taken care of independently, with each transaction fitting with a UDP packet, preventing block size-related problems. The beauty of the ecosystem is that it used minimal resources; you do not need any high level hardware for mining the coin, thus zero fees will be sustained into the future.

It is also highly scalable thanks to the use of logarithms of data sets using tree-like structures. Lastly, the transactions are instantaneous since they precache the system’s anti-spam Proof of Work (PoW) to use with the following transaction following completion of each transaction. There might still be a delay for an ongoing transaction, but that helps prevent spam. The platform’s scalability and real-time free transactions are one of the reasons that its becoming popular day by day among the experts.

In 2018, the Nano(NANO) team plans to develop its light wallet and add chain pruning to reduce the size of the chain.

Major goals for the future include the protocol becoming an internet standard that is controlled by a diverse grouping of people from various areas instead of a single person or small group.

The team also wants to add IPv6 multicast to the transaction broadcasting so everyone who wants to can see the announcement for a transaction. The team hopes to have current payment providers accept the NANO tokens just like they would a fiat currency.

Among the major exchanges and recognition from Charlie Lee (founder of Litecoin), now Nano’s future will be bright. Experts in the cryptocurrency world are also happy about the strides that digital coin is transforming its functionality and now its solving many real-life problems of the consumers. Nano is set to make it as one of the most popular cryptocurrencies of the future.

0x

Our third favourite altcoin is 0x. The team behind the 0x protocol includes three former Coinbase employees: Fred Eshram, Olaf Carlson-Wee, and Linda Xie. Xie in particular has been very active in promoting the decentralised protocol and in selling its virtues. In a recent interview with CoinDesk, she outlined how the Bitcoin protocol underserves cryptocurrencies and how there is a gap in the market for a bridging block such as 0x.

ZRX, or the 0x protocol,  is essentially a bridge between decentralised apps (dApps), and it enables links between digital currencies for the sake of trading. For example, 0x is compatible with Ethereum, one of the leading cryptocurrencies. The 0x protocol’s compatibility with other currencies makes it a strong contender for decentralised trading.

The 0x protocol is one of the closest yet to the requirements of the GDAX framework. It promotes the following values: serving open financial markets, solving problems and creating value, offering economic freedom, and providing decentralisation. As Linda Xie herself notes, 0x fits perfectly with the GDAX framework and it would fit easily into existing exchanges as a result. Xie acted as an advisor to the creation of the framework, and is perfectly placed to understand its requirements and challenges.

Xie is working with Jordan Clifford (another Coinbase veteran) on investment project Scalar Capital, which is thought to have invested heavily in ZRX. She says that 0x should be bought and held with the aim of long term gains, and she sees the importance of emphasising market control, not centralised control, over cryptocurrencies. “If they’re going to be doing a decentralised governance system, the project founders or the coin creators themselves shouldn’t have a majority of these coins,” notes Xie.

The backers and founders are skilled and knowledgeable in crypto legal compliance, in transaction facilitation and in understanding the market – making 0x one of the stronger emerging digital tokens.

Stellar

Stellar is another altcoin we believe has a bright future ahead.  In Stellar’s own words, they “spent 2017 on a rocketship strapped to a missile strapped to an off-brand roman candle made of pure gains.”T he Stellar team has some big plans to continue these positive trends for 2018 as well. Their  two main goals for this year are the Stellar Decentralized Exchange and Lightning Network integration.

Founded in 2014, the development team behind Stellar is focused on eradicating poverty and maximizing potential of every individual. The blockchain technology which comes at a very low cost makes use of its currency called lumens for various charitable causes. Stellar also plans to give away 95% of the total stock of its currency.

According to Stellar’s website, it is a decentralized network that is capable of connecting payment procedures, banking systems, and customers. The integration is done in a way that would enable the digital transaction of money in a swifter and more reliable way as well as ensure negligible transaction costs.

At the end of 2017, a team of experienced experts was recruited to design a front-end for Stellar’s intrinsic decentralized exchange. The project is called SDEX and internal prototypes are under construction. SDEX will be the state-of-the-art front-end that will result in a product of the fundamental technology. SDEX will aid protocol-level, on-chain transactions for any Stellar coin and the application will create liquidity to broaden the choice of assets and reduce the spreads.

In order to make sure that SDEX can successfully keep up in competition with other significant exchanges, the team behind Stellar plans to elevate the number of market-makers and anchors on Stellar’s network. The exchange will be used to stimulate the team’s vision of dealing with more real-world assets on the blockchain network of Stellar. More and more ICOs are coming to Stellar because of its low transaction rates, high transaction speeds, and scalability. Stellar’s team is committed to incorporating a large range of financial tools on the network. SDEX will be the first of a kind exchange for all Stellar tokens and the team envisions a future where several virtual assets, oil futures and carbon credits will be transacted together at cheap and quick rates

Stellar’s team plans to keep on awarding lumens via the Stellar Build Challenge to individuals and business organizations that make contributions to the ecosystem of Stellar.

One of the strongest points of the Stellar story is the innovation of technology. The team has taken note of the market-generated demand for more privately-enabled transactions on the Stellar network. Hence, the integration of the lightning network is an agenda for 2018. The lightning network will have a significant beneficial impact on Stellar’s long-term security and scalability. There has been awareness regarding lightning’s capability for improving Stellar’s potential for a long time.

While upgradations are implemented improving the performance of Stellar, it is crucial to ensure that the blockchain network remains robust and secure. Hence the team plans to reduce the surface of attack at the protocol level by integrating invariant support (the checks will be consistently conducted by the validator). These checks will alleviate the effect of bugs on the ledger state.

The team behind Stellar is focused on easing the process of running a full validator. In order to ensure the maximum decentralization of the Stellar network, the overhead of running nodes must be maintained at a minimum level. By rendering the nodes steadfast and self-supporting, the node operators can invest their time into other activities. The future plan is to make enhancements which would enable the supervision of the health of Stellar’s blockchain network and the way data is transacted through nodes. For this, some statistical data of peer-to-peer code will be reviewed by the team.

IBM is already using Stellar Lumens and there is much more coming out in Q2, 2018. The biggest news is that Central Bank Digital Currency (CBDC) will soon be launched on the coin Stellar. Stellar Lumens are used as the primary currency that builds a strong bridge between IBM clients and its UPS or Universal Payment Solution.  Thus, there is a huge possibility that Stellar can reach the highs of $ 1 by Q4 2018.

NEO

Last but not least is our fifth top altcoin, NEO. One of  the major factors which is driving growth for NEO is the support of the Chinese government and its robust technology.

NEO, which was originally called AntShares, was created in 2014 by Da Hongfei in China. It is the biggest cryptocurrency which has emerged from China. NEO, like Ethereum, is a platform designed for developing Decentralized applications (Dapps), Smart contracts and ICOs. Because of this close resemblance to Ethereum, NEO is often referred to as the “Chinese Ethereum”.

NEO offers many technological advantages over Ethereum. NEO can handle about 10,000 transactions per second whereas the Ethereum blockchain currently supports around 15 transactions per second.

NEO supports programming in multiple languages like C++, C#, Go, and Java, whereas Ethereum only supports one language — Solidity. This has made NEO quite popular among the developer community, as they can use NEO’s platform in the language they already know rather than have to learn to a new one.

In 2018, NEO is expected to build an infrastructure for achieving their vision of building the Smart Economy. The basic idea of the smart economy revolves around digitizing real-world physical assets like cars, houses or anything else that you can think of. These digitized assets can then be sold, traded, and leveraged through smart contracts. With such aggressive plans, a good team, and rising prices, NEO is definitely one of the best altcoins 2018.

Do you agree with our top 5 altcoins? If not,  let us know what your top altcoins are for 2018?

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Analysis

Everything you need to know about HTC Exodus

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HTC introduces blockchain phone – HTC Exodus

As part of what HTC claims is its “effort to expand the blockchain ecosystem,” the company introduced its latest blockchain phone known as the HTC Exodus this week. HTC sees the Exodus as a handset that will let owners keep their data – and blockchain currencies – private and secure on the device rather than in the cloud, where your sensitive information may be easier to extract and tamper with. 
The announcement comes almost one week before the launch of its latest flagship, the HTC U12. Its  bid for elevated smartphone security also comes at a time of peak scrutiny for security and data privacy. However, it is not the first time the concept of a blockchain smartphone has been introduced. In April, Sirin Labs announced that Foxconn will manufacture its blockchain powered smartphone, FINNEY.

HTC ‘s vision for the future of smartphones

“Our vision is to expand the blockchain ecosystem by creating the world’s first phone dedicated to decentralized applications and security,” HTC states on a website dedicated to the new device.

They go on to say “With the release of the HTC Exodus we can now make this a reality… we believe we can help reshape the internet.”

HTC Exodus Design

HTC hasn’t released any official images of what the Exodus will look like. Instead, the company posted a rough sketch of what appears to be the smartphone’s components. Please see below.

HTC Exodus Spec

There aren’t many details when it comes to spec either. What we do know is that the phone will feature a native cryptocurrency wallet. The HTC Exodus will also support decentralized apps through the phone’s hardware, which it claims are more secure than standard apps. The phone is also expected to allow the trading of native crypto coins without any mining fee. According to their website, there are eight major features of HTC Exodus:

  1. Trusted hardware
  2. Tons of protocols
  3. Universal Wallet
  4. Trusted UI
  5. Save your ID and data on phone
  6. DApps on mobile
  7. Phone will act as a node of Ethereum and Bitcoin
  8. Exodus forum for the users

Initially, it will launch with support for Bitcoin, Ethereum, Dfinity networks, and Lightning Network, but the company says it will eventually support the entire blockchain ecosystem. HTC plans on creating a native blockchain network with all eExodus phones, in an effort to double and triple the number of nodes of Ethereum and Bitcoin.

Release date of HTC Exodus

No release date or price has been set for HTC Exodus but you can reserve the HTC Exodus phone online.  The company has hinted it might even accept cryptocurrency when the handset does go on sale.

HTC Exodus to run separately from main business

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Analysis

Nano vs Bitcoin Cash

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In this article we will be discussing Nano vs Bitcoin Cash. As people begin to see the flaws of Bitcoin, and invest elsewhere, we see coins like Nano and Bitcoin Cash (BCH)  picking up investment. In this article, we will look at these two cryptocurrencies and evaluate which is the stronger currency of the two.

Nano vs Bitcoin Cash – which cryptocurrency is the leader of the pack?!

What is Nano?

 

Nano has been tipped to become the next Bitcoin. The main reason for its fast growth and success is because of its architecture. Though the cryptocurrency operates by providing a decentralized model of bypassing centralized institutions such as banks, it design utilizes block-lattice architecture and delegated Proof of Stake (PoS).  This eliminates the need for miners, makes the network fast, and lighter.

These unique features and applications mean that Nano is indeed better than Bitcoin and most cryptocurrencies that use Proof of Work (PoW) and standard Proof of Stake (PoS) consensus models.

What is Bitcoin Cash?

Bitcoin Cash is a decentralized peer-to-peer cryptocurrency that was developed from the Bitcoin Core. Bitcoin Cash was formed as a hard fork of Bitcoin. In some cases, you will get the cryptocurrency being referred simply as an upgraded/ peeled/ or forked version of Bitcoin core software released in August 2017. A further Bitcoin Cash hard fork took place in May 2018.

We will now evaluate the advantages and disadvantages of Nano vs Bitcoin Cash.

An analysis of Nano vs Bitcoin Cash: advantages & disadvantages

What are the advantages of Nano?

  • No transaction costs
If you have some cash and want to send abroad using the banking system, the chances are that it will be very expensive. Even the cryptos that came earlier such as Bitcoin and Ethereum are still very expensive. For example, the cost of sending cash using Bitcoin network was more than $ 50 in January of 2018. However, Nano has ushered a new dawn in cryptocurrencies where users can make transactions for free. This is one of the benefits drawing a lot of people to the network.
  • Open source & anonymous
One notable thing about cash stored in the bank is that bank account details can easily get leaked to third parties. Worse still, your bank account can easily get frozen if a court battle whirls to your doorstep. However, Nano is an open source and anonymous network that is hidden from third parties.
  • The main network that allows users to own the network
When people use the standard payment services such as PayPal, MasterCard, and banking, they feel passive. Once they make the savings or send cash, they get the sense of accomplishment and move away. Like other cryptocurrencies, Nano helps people to join, use, and own the network. This means that you are part of the network and your vote will be required when consensus is needed.
  • One of the most secure networks
When people join the cryptocurrency network, they are interested in getting the most secure option for their assets. The delegated proof-of-stake model used in the Nano system helps to keep it secure from miners who might have malicious intentions.
The commitment of the Nano development team has also managed to keep the system free from hackers since inception. These considerations have won the Nano the tag of the most secure blockchain in the crypto world.
  • Allows users  to operate with utmost freedom
If you want to send cash abroad on the weekend or at night, the chances are that it will be impossible. Even those that have some mobile activated applications only allow people to send a limited amount of cash. However, Nano cryptocurrency network is different. The crypto network allows users to operate with utmost freedom. Whether it is at weekend, public holiday, or at night, you are sure of being able to use the network.
  • The cryptocurrency value and community has been growing steadily
The effectiveness of a crypto network is partly gauged by its value and community. For Nano, these parameters have been experiencing positive growth in since inception. As the value took an upward trend early in 2018, the crypto community also kept growing. Many people believe that this growth will keep growing and the crypto could become the next Bitcoin.

What are the disadvantages of Nano?

While the benefits associated with Nano are very many and appealing, it is important to appreciate that the network also comes with a lot of risks. Like other cryptocurrencies, users in the Nano network operate anonymously. While this is seen in many ways as an advantage, it is also a great demerit. The anonymity makes it easy for users to fall to scammers. Other risks of operating in the Nano network include.

  • Risk of attack by hackers
Though the Nano network development team has been working extra hard to keep the network safe, and no successful attack has been reported since inception, you cannot be 100% secure.
  • The risk of new and more appealing cryptocurrencies 
The third generation cryptocurrencies such as Nano are mainly aimed at addressing shortcomings noted in the previous networks. For example, Nano targets addressing shortcomings noted in the Bitcoin and Ethereum networks. However, newer and more advanced cryptocurrencies are also likely to emerge in the future and pull down the appeal of Nano. This could lower its value and diminish the trust people have in it.
  • High volatility
Cryptocurrencies such as Nano have demonstrated to be highly volatile. Every time that something related to the crypto industry takes place, Nano and other cryptocurrencies respond immediately. When China announced that it was going to burn ICOs (Initial Coin Offering), Nano value responded by shifting downwards. A similar downward shift was noted when a cryptocurrency exchange was hacked in South Korea towards the end of 2017.
  • The looming regulations
Every country in the globe is working on some form of regulation to help control cryptocurrencies. From China to the United States, the governments are feeling threatened by the cryptocurrencies so much that they want to limit their growth. China has already outlawed ICOs and looks committed to suppressing other crypto related activities. If most countries pass harsh regulations as anticipated, there is a risk that adoption and use of Nano could go down or diminish completely.
  • Direct threat to the banking system
While the first and second generation cryptocurrencies were aimed directly offering an alternative to banks, third generation cryptocurrencies have been working on partnerships. For example, OmiseGO and Ripple provide banks with a platform for enhancing payment as opposed to looking like a direct threat. But Nano architecture aims at replacing the banks especially with its zero transaction fee. This could deny Nano support from such financial institutions as they channel their clients to other friendly networks such as Ripple.

What are the advantages of Bitcoin Cash?

The fast growth of blockchain technologies is an indication of the public acceptance and approval. At first, Bitcoin and other cryptocurrencies were considered disruptive and a threat to the conventional institutions such as banks. But the narrative has changed over time. Today, even governments are starting to appreciate the huge benefits that come with using blockchain technologies. Bitcoin Cash has particularly stood out because of its unique design and fast growing value. Here are the main benefits to anticipate after joining the network.

  • Bitcoin Cash is completely anonymous
The main attraction drawing more users to the BCH network is the high level of privacy. The team behind Bitcoin Cash network targeted enhancing anonymity for all their operations. From traders to individuals, no one wants third parties such as banks to know their personal details. All the transactional info in Bitcoin Cash network are encrypted so that even miners who confirm transactions can only ascertain the amount but not the owners.
  • Payment assured across the globe
If you want to make payment on a weekend, during public holidays, or at night through the bank, it is impossible. Most of these institutions only work between 8 am and 4 pm. However, Bitcoin Cash empowers you to make payments any time of the day or night. Because you have the network right in the wallet or node, sending payment is only a click away. This is the freedom that many have yearned to get for years.
  • The network is owned by users
When you join the Bitcoin Cash network, it becomes yours. That is right. The Bitcoin Cash network is owned by users. You are part of the system and will be involved in making the decisions on the network. Instead of relying on a centralized authority, Bitcoin Cash relies on the consensus of users spread on different nodes in the network.
  • Freedom from third-party seizures
If your cash is in the bank, the risk of getting seized is very high. A case can easily whirlwind into your doorstep and drag you to court. Whether it is a social media or workplace issue, you can easily get involved without necessarily committing a criminal offense. With such risks, the savings in the bank are an easy target by lawyers. However, joining and storing your fund in Bitcoin Cash provides the freedom from third-party seizures. You operate anonymously and at no point will the court freeze your Bitcoin Cash account.
  • The value of Bitcoin Cash continues to grow rapidly
As more cryptocurrencies enter into the fast-growing industry, users want to join those that give them better prospects for growth. Bitcoin Cash is one of them. Though it was only 5 months by close of 2017, it managed to hit top five most valuable cryptocurrencies by then. Its growth has been remarkable with experts in cryptocurrencies indicating that it could easily rival Bitcoin.

What are the disadvantages of Bitcoin Cash?

Just like Bitcoin Cash has numerous benefits, it also comes with a number of risks that users should know of. The hacking in a South Korean exchange at the end of 2017 saw many cryptocurrencies including Bitcoin Cash slump in value. Therefore, no one can be sure of what will happen to Bitcoin Cash in the next few days, months or years. Here are the main disadvantages associated with Bitcoin Cash.

  • The risk of being overtaken by newer cryptocurrencies
Bitcoin Cash was forked from Bitcoin to create a new and more effective cryptocurrency. With new cryptocurrencies joining the industry at a supersonic speed, the risk of Bitcoin Cash getting overtaken by newer and more effective networks is rather high. This could see Bitcoin Cash getting relegated to the back seat as people scramble for the new option.
  • The looming regulation
From the US to China, the topic of cryptocurrencies is a hot potato issue. There is a general feeling that many governments are about to implement laws aimed at punishing cryptocurrencies. For example, Russia and Thailand have cautioned their traders that upcoming laws could make their cryptocurrency related operations illegal. The looming regulations are making a lot of people shy away and could pull down the value of Bitcoin Cash within hours after getting passed into law.
  • The danger of losing Bitcoin Cash
Like other cryptocurrencies, your Bitcoin Cash can also be lost. You could easily lose BCH through hacking of the personal computer, attack on the exchange, or sending to the wrong address. The danger of losing BCH is that they are very difficult to restore. In most of the situations such as sending BCH to the wrong address or getting hacked means that the coins are gone forever.
  • The risk of getting involved in scams
The anonymous nature of Bitcoin Cash has become an instant attraction to fraudsters. Because the transactions are completely encrypted, scammers are sure that they cannot get discovered. This puts users at a risk of getting drawn to scams without knowing. Some scammers often release fake ICOs (Initial Coin Offerings) and steal from unsuspecting clients. Others might opt to acquire or make fake products and sell through the BCH network. You must be extra careful to only buy and carry transactions with trusted addresses.
  • High volatility
While the fast-rising demand for cryptocurrencies has drawn a lot of people into the industry, the level of volatility is very worrying. Within a very short moment, the value of Bitcoin Cash can plummet and cause huge losses. This has been experienced in other cryptocurrencies such as Ethereum during the DAO attack and Bitcoin during the Silk Road Scandal.
  • The Com
Many people have said that the whole idea of Bitcoin Cash was little more than a scam to gain money from the Bitcoin name. Numerous lawsuits have been filed against people who are claiming Bitcoin Cash as being ‘the real bitcoin’, which is marring the currencies reputation.

Nano vs Bitcoin Cash:  evauation & conclusion

In the Nano vs Bitcoin Cash debate, both have their advantages and disadvantages as we have seen. However, overall, Nano seems to have the largest scope for growth. The recent ‘‘Bitgrail hack‘ wasn’t a flaw with the technology of the network – the price dip was purely speculative and emotional.

Many coins have been hit hard by the 2018 ‘bear market’ but it seems in comparison Bitcoin Cash has been hit the hardest.  Newer altcoins are taking over. Furthermore, an article was recently published stating how Bitcoin Cash might be in trouble. Meanwhile,  Nano is among the top coins trading today.

Having evaluated the advantages and disadvantages of the two cryptocurrencies, it would seem in the Nano vs Bitcoin Cash debate, Nano is the stronger cryptocurrency of the two. It is also a hot contender for the most promising cryptocurrency of 2018.

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Analysis

Why Charles Hoskinson left Ethereum

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In The Beginning

Charles Hoskinson fell into the crypto space partially by accident. He started off by reading a few whitepapers, as he had a significant interest in P2P Technologies. He has admitted to having a “Libertarian cypherpunk blend“, which many of the first cryptocurrency enthusiasts would admit to. Hoskinson actually started in the scene by looking at Bitcoin. He formed the ‘Bitcoin Education Project’ which by his description was aimed at “bringing lot’s of people to Bitcoin and teach them why the revolution is so magical and so amazing“. This project was formed as a Unity class, with over 70,000 students.

Following on from that success, and with the knowledge gained from so many students, he decided in around 2013 to get involved more deeply. One of the hottest topics at the time was around decentralized exchanges and very stable cryptocurrencies. That project was called Bitshares and was partially successful.

Foundation of Ethereum

One of the things that Charles Hoskinson found so difficult was how difficult it was to build a programming language. At this time many others including Vitalik Buterin were finding the same issue, and their solutions were similar in concept – namely “What would happen if we had a programming language on top of the protocol?“. This was the first idea of smart contracts. Hoskinson was involved with Ethereum for around 6 months, helping the project “find its identity, find its footing [and] find its marketing”. In an interview, about Etherum Charles Hoskinson said “The big issue, however, was that when they first began the project it was an aggregation of a lot of philosophies, properties, and people. When I came in, I was the unifier to keep all these tribes running and to solve the most important component: How are we going to get funded?”

There then, however, came a decision to be made. Ethereum was doing well, but needed more funding. There was a decision to be made. Do they take VC funding, or not. Involving a VC would likely require governance and the project to be a full for-profit entity. Whereas Hoskinson wanted the project to be more of a non-profit. Charles Hoskinson goes on to say “Concisely, we had a philosophical fight about whether to take VC money or not and I was on the losing side of the fight. I was mutually pushed out of the organization and went on to do other things while they went on to form the foundation.”

Ethereum Portrait

The Fight

As an outsider, we’ll never know the scale of the “fight” or just how mutual the decision to leave was, but it was at that point he then decided to leave the project to Buterin and others to continue. I personally think any project like this that has true aims to change the world has to be non-profit, because at some point there’s going to be a conflict between what is best for the future, and what makes the most money, so controversially I would agree with Hoskinson. Having said that, in our capitalist world, for-profit companies do succeed, and we can’t deny the growth and popularity of Ethereum.

The Future

At this point, he said “I’m not going to do this again, I’m not going to do protocols. What I’m going to do is create a factory for protocols”. The idea behind this was to build out both a research firm and an engineering firm, really looking into the science behind cryptocurrencies and only dealing with the specific people that they choose, in a very opinionated way. This project has become the Cardano project, and is growing successfully.

Some would say the Cardano project is even beating Etherum at this point. They may not have the market cap, but even 1.5 years behind Ethereum, Cardano is already utilising a Proof Of Stake alorigthm, while Ethereum is still on the flawed Proof Of Work system, and may well be until next year.

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Analysis

Dash

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Dash – a fork of Litecoin – includes the features of Litecoin (limited supply, 2.5 minute block times, proof-of-work (POW) validation system) along with the ability to transact instantly, via an instant send feature, and anonymously, via a private send feature, and to vote on updates to the network. This is implemented through a two-tiered validation system. The first tier involves the traditional mining/POW system from Bitcoin, Ethereum, Litecoin, and many others. The second tier includes a network of Masternodes which are required to maintain a minimum of 1000 DASH. Each node that maintains this minimum is deemed a Masternode that participates in confirming transactions instantly, anonymizing transactions by mixing public keys so you don’t know who the sender or receiver are, and voting on updates to the network. In exchange, the Masternodes receive rewards of about 2 DASH to every Masternode per week.

chart-21

Pros: Contains many of the benefits of Bitcoin including decentralization, immutability, and limited supply; two-tiered system allows for very fast (~ 1 second) and/or private transactions for users willing to pay an additional fee as well as governance where Masternodes can vote on updates to improve the network (e.g., such as increased block sizes to improve scalability); fungible – due to the anonymity associated with the private send features, unlike Bitcoin where coins used in illegal transactions may be “marked”  

Cons: Two-tiered system can lead to centralization as the cost to operate a Masternode of 1000 DASH is prohibitive to most; several competitors in the daily transactions space (Bitcoin Cash, Litecoin, Nano) and in the privacy coin space (Monero, Zcash, ByteCoin); private send feature does not fully anonymize transactions and they can be traced to previous transactions that were not anonymized; attempts to address multiple problems (transactions speed, anonymity, etc.) with one coin, whereas multiple coins focus on each of these problems individually and arguably in a better way

Analysis

To perform an objective analysis, each cryptocurrency is rated based on the following factors: (1) validation method; (2) leadership; (3) community participation in development; (4) transaction volume and market capitalization; (5) industry participation; (6) security; (7) usability; (8) technical features; (9) growth; (10) legal risks; and (11) estimated time of arrival.

Validation Method

Dash uses the same proof-of-work (POW) system as Bitcoin to validate transactions, but a different mining algorithm in X11. Originally, miners could run X11 on CPUs but hashing power has increased considerably and now requires ASICs. As described above, Dash has a second tier made up of Masternodes that perform decentralized governance by voting on updates, mix transactions to anonymize them, and instantly validate transactions within a second as opposed to about 2.5 minutes to validate a transaction via the first tier POW system. Masternodes receive 45% of the block reward (currently 5 DASH per block), miners obtain another 45%, and the remaining 10% goes to the treasury system for development. Each Masternode has 1 vote for updates to the network. If a threshold number of Masternodes vote in favor of the update then it is enacted. In other systems like Bitcoin and Ethereum, updates to the network are made through a fork where the chain splits into two. Miners effectively vote for the update by continuing to validate transactions from the old chain or moving over to the new chain. However, this voting occurs after the fork, so the developers can add an update which does not end up being enacted if the miners continue to devote computing resources to the original chain. In Dash’s Masternode governance system, updates are voted on before they are added into the protocol.

Leadership/Community Participation

Dash is led by its creator and lead developer Evan Duffield and the Dash Core Team, a company made up of about 30 employees. Duffield has received some criticism for the release of Dash where almost 2 million coins were released due to a bug when the code was forked from Litecoin. Although Duffield claims that the community did not want him to relaunch or perform an airdrop, some suspect he did this on purpose to ensure he would have a significant portion of the coins. In this manner, he could control the network through the use of Masternodes by running a large percentage of them and voting for his own proposals and against proposals that did not directly benefit him. To be fair no one knows how many Masternodes are owned by Duffield or members of the Dash Core Team.

Transaction Volume and Market Capitalization

Dash is 13th in market cap (~4B) with a transaction volume of about $130M per day.

Industry Participation

A few online retailer and businesses accept Dash such as Dash Video Casino, Organic Contraband Coffee, and a few other small companies. Additionally, it can be purchased through several exchanges, such as Bittrex, Binance, Bitfinex and many others. There are also Dash ATMs in select locations throughout the world. However, Dash has yet not received widespread acceptance and may only be used at very limited locations.

Security

In terms of security, Dash has many of the same advantages and disadvantages as Litecoin. Some argue that the second tier of Masternodes leads to additional security vulnerabilities, because the large cost (1000 DASH) of running a Masternode prohibits individual users or small entities from participating. Thus, only large entities may be able to run Masternodes which can lead to centralization. On the other hand, currently there are over 4700 Masternodes running on the network and while some speculate that the Masternodes are owned by a few entities, it seems more likely that there are at least a thousand owners. Accordingly, it is unlikely one company can take over the network or a hacker can attack one company that owns thousands of Masternodes and gain control.

Usability

Like Litecoin, Bitcoin Cash, and NANO, Dash is intended to be used for day-to-day transactions. With the advent of the instant send feature, transactions can be completed in less than a second which allows for very fast cash like transactions. Additionally, Dash can be used with an element of privacy due its private send feature. There are many reasons why someone would want to transact privately. For example, on the Bitcoin network hackers and thieves may identify the wallets with the largest number of coins and target them.

Technical Features

As described above, Dash has many of the same features as Litecoin. The main difference is its second tiered network of Masternodes that performs decentralized governance and instant and/or anonymized transactions. Decentralized governance allows for the Masternodes to vote on updates to the network (where each Masternode has 1 vote) before they are implemented into the protocol. For example, Dash has dynamically increased block sizes through these updates during periods of high transaction volume. Though this seems to be more efficient than alternative mining systems which fork the code to perform an update, critics argue that a user or company, such as Evan Duffield or the Dash Core Team could control the voting power and thus, the network by owning enough Masternodes. Furthermore, unlike Monero the transactions executed by the private send feature are not fully anonymized. For one, they can be traced to previous transactions that were not anonymized. Additionally, the private send feature is a coin mixing service based on CoinJoin. The coin mixing service breaks down transactions into specific dominations of 0.01, 0.1, 1, and 10 DASH, mixes the denominations with similar denominations from other users and includes several outputs to each person’s wallet at a different address called a change address.Though the senders are anonymous in this implementation the transactions are not. Other privacy coins such as Monero utilize Ring Confidential Transactions to anonymize the transactions themselves.

Growth/Legal Risks

Being in both the daily transactions and privacy coin arenas, Dash has many competitors including Litecoin, Bitcoin Cash, NANO, Monero, ZCash, and Bytecoin. Nevertheless, Dash does set itself apart via its two-tier system that allows for decentralized governance and by providing both privacy and daily transactions features in one coin. If only a small percentage of altcoins survive in the long term as many have predicted, Dash may be one of them since it implements multiple features.

Estimated Time of Arrival

Dash launched in 2014 and is now fully developed and ready for use. However, the Dash network has not been tested to the same extent as Bitcoin’s.

ETA: Now

Conclusion

The two-tiered network sets Dash apart in a unique way and allows for even more features to be implemented through its decentralized governance. Nonetheless, as Dash has not yet shown it is the best at any single feature (e.g., daily transactions, privacy), users may prefer coins that can focus on and perfect individual attributes within cryptocurrency over one that addresses several.

Acknowledgment:

Analysis brought to you by the hugely talented Cameron Pick. Originally published on https://cryptonalysis.net which everyone follows on Twitter.

 

 

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Analysis

Tether

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Tether (USDT) is a stable coin pegged to the US dollar meaning that one Tether coin (tethers) will always be worth roughly one dollar. Unlike other cryptocurrencies which experience wild price swings and extreme volatility, each coin is supposed to have a stable ($1) value.

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To accomplish this, it utilizes a proof of reserves system to maintain a one-to-one reserve ratio between the tethers and US dollars. This means that if 1 million tethers have been issued, Tether Limited, the company who created Tether, must maintain $1 million. To issue new tokens, Tether Limited must receive the same amount in dollars, and when account holders cash in their tethers, Tether Limited plans to remove the cashed-in tethers from the supply (i.e., destroy the tethers). To prove they are maintaining the proper amount of reserves, Tether Limited claims they will subject themselves to regular audits and publish the bank balance which will be matched up against the number of tethers in circulation. The number of tethers in circulation can easily be verified on the respective blockchains in which they live (e.g., the Bitcoin blockchain, the Ethereum blockchain, etc.), but account holders have to rely on Tether Limited to regularly subject themselves to audits and publish bank balances.

Pros: Substantially reduces price volatility compared to other cryptocurrencies; users get the benefits of cryptocurrencies and blockchain technology (increased security and lack of censorship due to immutability and decentralization) with the stability of fiat currency

Cons: TETHER MAY NOT BE MAINTAINING THE APPROPRIATE RESERVES – they have yet to publish the results of an audit and recently fired the accounting firm, Friedman LLP, that had been working on the audit. If Tether is not in fact maintaining the appropriate fiat reserves, Tether’s value may plummet to close to zero; founded by Brock Pierce the former child actor who was recently removed from the EOS project amidst allegations of a shady past; Tether seems to have a little too close of a relationship with the cryptocurrency exchange Bitfinex – both companies share two of the same operators   

Analysis

To perform an objective analysis, each cryptocurrency is rated based on the following factors: (1) validation method; (2) leadership; (3) community participation in development; (4) transaction volume and market capitalization; (5) industry participation; (6) security; (7) usability; (8) technical features; (9) growth; (10) legal risks; and (11) estimated time of arrival.

Validation Method

The coins are issued both on the Bitcoin blockchain via the Omni Layer protocol and the Ethereum blockchain as an ERC20 token. There have also been talks of adding the coins on the Litecoin blockchain. In any event, the validation method for each of these blockchains is a proof-of-work (POW) system. This requires validators known as miners to solve a cryptographic riddle which is difficult to compute but easy for others to verify. Therefore, mining requires a large amount of computing resources and electricity. The transactions validated by the miners are then recorded on the Bitcoin blockchain or other blockchain. The link in the footnote below is an example of a Tether transaction record on the Bitcoin blockchain.

Leadership/Community Participation

Former child actor Brock Pierce founded Tether. Pierce is a very controversial character and was recently removed from the EOS project amidst allegations of an unsavory past. If this isn’t bad enough, Tether has an unusually close relationship with cryptocurrency exchange Bitfinex. The two companies share multiple operators in common, Phil Potter and Giancarlo Devasini. This intimate relationship with an exchange leads to several concerns calling into question the entire legitimacy of the cryptocurrency. For example, some believe that Tether Limited is not maintaining close to the appropriate amount of cash in US dollar reserves, and is instead issuing unbacked tethers and selling them on Bitfinex for bitcoins. Bitfinex/Tether can then obtain Bitcoin by “printing” currency.

Transaction Volume and Market Capitalization

Tether currently has the highest transaction volume of all cryptocurrencies at about $2 billion. However, its market cap (~2.3B) is closer to fifteenth.

Industry Participation

Several exchanges have begun to accept Tether including Bitfinex and many others. On the other hand, retailers have not started to accept the coin and it is very limited in where it may be used.

Security

In terms of security, Tether has many of the same advantages and disadvantages as the blockchain it lives on, such as Bitcoin, Ethereum, etc. However, the proof of reserves system requires that users trust a third-party (Tether Limited) to maintain the appropriate amount of reserves. Therefore, there is an element of centralization to the Tether protocol, and if Tether Limited is hacked, robbed, or loses the fiat reserves in any other way, then the value of each Tether coin may decline significantly. Unfortunately, Tether is currently facing allegations that it has been printing coins without maintaining the corresponding amount of US dollars in reserves. Firing their auditor amidst these allegations did not quell anyone’s concerns.  Accordingly, the entire value of the Tether network (which should be the value in US dollars it has in reserves) has been called into question.

Usability

Tether can be used for several different purposes, including as a store of value similar to Bitcoin. Because  it is a stable coin users don’t need to worry about volatility when storing their life savings. Tether can also be used to purchase other cryptocurrencies. Typically, investors or traders prefer to buy cryptocurrencies at specific price points. For example, a buyer may want to purchase Cardano when 1 ADA is less than $0.10. However, ADA may only be purchased with Bitcoin or Ether. To buy Cardano at the moment 1 ADA drops below $0.10, a buyer must store a certain amount of Bitcoin or Ether with the exchange she is using to purchase Cardano. Bitcoin and Ether are extremely volatile and the value of either may drop significantly as the buyer waits for ADA to drop below $0.10. Accordingly, by storing Bitcoin or Ether on an exchange and waiting for ADA to reach a selected price point, the losses the buyer suffers from a drop in value of Bitcoin or Ether may offset the opportunity to purchase ADA at a lower price in fiat currency. Tether, on the other hand, should remain approximately the same value as it is stored on the exchange and therefore, the user does not have to worry about this problem. For example, if the buyer stores 1 Ether on the exchange when it is worth $1000 and ADA is worth $0.20, and the price of Ether dips to $200 when ADA reaches $0.10 per coin, the buyer can purchase 2000 ADA.  On the other hand, if she stores 1000 tethers on the exchange worth $1000, the tethers should continue to be worth $1000 when ADA reaches $0.10. As such, she can buy 10000 ADA or 5 times the amount she could have bought if she instead stored Ether on the exchange. Tether could also be used for daily transactions (e.g., for a cup of coffee), especially when it’s executed on top of a daily transactions blockchain such as the Litecoin blockchain to limit transaction fees and confirmation times.

Technical Features

Tether was originally on the Omni Layer protocol, a protocol designed as a second layer on top of the Bitcoin blockchain that allows Bitcoin to create tokens that represent currencies. As a result, it shares similar technical features with Bitcoin: decentralization, immutability, and transactions validated by miners in a POW system broadcasted to the network on a public blockchain. Tether also issued an ERC20 token on the Ethereum blockchain through a series of smart contracts enabling interoperability of Ethereum-based protocols and DApps.

Growth/Legal Risks

Unfortunately, as a stable coin Tether does not have the potential for massive growth associated with other cryptocurrencies. The best-case scenario is that each Tether coin remains around $1. The value of the Tether network as a whole can go up as more tethers are purchased and issued to users. Currently, the market cap is around $2.2B and if price stability becomes a necessity for cryptocurrencies it could reach close to $1T. Nonetheless, there are substantial legal risks as Tether Limited has not released the results of an audit. If Tether Limited does not have the appropriate amount of cash in US dollars to back up the number of tethers issued the price of Tether may take a dive.

Estimated Time of Arrival

Like Bitcoin, Tether is currently in use and has been paired with many other altcoins on several exchanges. Tether plans to expand to different blockchains such as the Litecoin network.  Further plans for expansion include compatibility with a hardware wallet such as TREZOR and with the Lightning Network.

ETA: Now

Conclusion

Tether seems to be a great concept allowing for the benefits of cryptocurrency utilizing blockchain technology (e.g., immutability, decentralization, enhanced security, etc.) without the volatility of its competitors. Nevertheless, it has not been implemented in a way that is fully decentralized as it requires its users to trust Tether Limited to maintain fiat reserves. Thus far Tether Limited has not been able to show that they have held up their end of the bargain, and this coin is too risky at the moment without knowing whether and to what extent Tether Limited is holding onto US dollars.

Acknowledgment:

Analysis brought to you by the hugely talented cryptocurrency enthusiast Cameron Pick. Find out more at https://cryptonalysis.net and be sure to follow the cryptoanalysis Twitter account: https://twitter.com/Cryptonalysis1

 

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