In early October, the US Commodity Futures Trading Commission (CFTC) charged this crypto exchange with illegally operating an unregistered trading platform.
A) Bittrex B) Binance C) Bitmex D) That other crypto exchange that starts with the letter “B” Scroll down for the answer.
Ranking and October Winners and Losers
2019 Top Ten Ranking - 40% dropout rate After losing quite a bit of ground in the rankings in September, the 2019 Top Ten rebounded a bit in October. Only BSV finished down on the month, down two places (from #9 to #11) and dropping out of the Top Ten. The rest either held or climbed: EOS, Tron and Stellar each advanced one position each and Litecoin picked up four places and was able to rejoin the Top Ten. It’s good to have LTC back in the familiar confines of the Top Ten, as last month it found itself on the outside looking in, for the first time since the Experiments started back in January 2018. 40% of the crypotos that were in the Top Ten on January 1st, 2019 have dropped out: Tron, Stellar, BSV, and EOS have been replaced by BNB, DOT, ADA, and LINK. October Winners – Big PoppaBTC had a great month, finishing up +25%. Second place goes to LTC, up +17% in October, followed by BCH, up +14%. October Losers – The losses were moderate this month, but the L for October goes to BSV, which lost -7% and fell out of the Top Ten. EOS was second worst performing, down -5%. For overly competitive nerds, here is a tally of which coins have the most monthly wins and losses during the first 22 months of the 2019 Top Ten Experiment: 2019 Ws/Ls Because it's the default winner in down months, Tether is still far ahead in terms of monthly victories (7). That’s more than twice as much as second place BSV, BTC, and ETH. And although BSV is up 74% since January 2019, it dominates the monthly loss count: it has now finished last in nine out of twenty-two months (paying attention, swing traders?). And XRP is still the only crypto that has yet to notch a monthly win.
Overall update – BTC’s lead increases, XRP back to the basement, 2019 Top Ten pulls ahead of other Experiments.
BTC extended the lead it carved out last month over second place ETH in October. The top two are up +262% and +191% respectively, followed distantly by Litecoin, which is up +79% since January 2019. The initial $100 investment in BTC is currently worth $369. For the first time since April 2019, BSV has dropped out of the Top Ten. Twenty-two months into the 2019 Top Ten Index Fund Experiment, 70% of the 2019 Top Ten cryptos are either flat or in the green. After barely escaping the basement last month, XRP has once again sunk to the bottom of the pack, down -33% since January 2019. At +66%, the 2019 Top Ten Portfolio has pulled ahead of the 2020 Top Ten Portfolio’s +61% gain and both are far, far ahead of the 2018 group , which is down -74% (more on that below).
Total Market Cap for the entire cryptocurrency sector:
Total market cap since Jan 2019 is +215% Since January 2019, the total market cap for crypto is up +215%. The overall market gained about $50B in October, ending the month just over the psychologically important $400B mark. This is now the highest month-end level since the 2019 Top Ten Experiment began 22 months ago.
Overall return on investment since January 1st, 2019:
The 2019 Group gained $122 in October, so after the initial $1000 investment, the 2019 Top Ten Crypto Portfolio is worth $1,660. 2019 Top Ten Index Fund Experiment ROI For some context, here’s a look at the ROI over the life of the first 22 months of the 2019 Top Ten Index Fund experiment, month by month: 2019 Top Ten ROI summary Unlike the completely red table you’ll see in the 2018 Top Ten Experiment, the 2019 crypto table is almost all green. The first month was the lowest point (-9%), and the highest point (+114%) was May 2019. At +66%, the 2019 Top Ten Portfolio is now the best performing out of the three Experiments but not by much: the 2020 Top Ten Portfolio is up +61%. Speaking of the other Experiments, let’s take a look at how the 2019 Top Ten Index Fund Portfolio compare to the parallel projects:
Taking the three portfolios together, here’s the bottom bottom bottom line: After a $3000 investment in the 2018, 2019, and 2020 Top Ten Cryptocurrencies, my combined portfolios are worth $3,537 ($264+ $1,660 +$1,613). That’s up about +18% for the three combined portfolios, compared to +11% last month. Here’s a table to help visualize the progress of the combined portfolios: 2018, 2019, 2020 Top Tens combined ROI To sum up: +18% gain by dropping $1k once a year on whichever cryptos happened to be in the Top Ten on January 1st, 2018, 2019, and 2020. But what if I’d gone all in on only one Top Ten crypto for the past three years? While many have come and gone over the life of the experiment, only five cryptos have started in Top Ten for all three years: BTC, ETH, XRP, BCH, and LTC. Let’s take a look at those five: A tie: BTC catches up to ETH this month for leader of the Three Year Club Up until this month, Ethereum would have been your best bet. As of the end of October, it’s basically a tie between BTC and ETH. Both are up +121%, (although BTC is technically $21 ahead of ETH). On the other hand, if I had followed this world’s slowest dollar cost averaging approach with XRP, I’d be down -32%. With BCH I would have just about broken even. Alright, that’s crypto. How does crypto compare to the stock market?
Comparison to S&P 500:
I’m also tracking the S&P 500 as part of the experiments to have a comparison point with traditional markets. The S&P continued to fall from an all time high in the summer, and is now up +30% since January 2019. S&P since Jan 2019? +30% The initial $1k investment I put into crypto 22 months ago would be worth $1,300 had it been redirected to the S&P 500 in January 2019. +30% is not a bad return at all. But the 2019 Top Ten Portfolio is up more than double (+66)% over the same time period. That’s 2019. But what if I took the same world’s-slowest-dollar-cost-averaging $1,000-per-year-on-January-1st crypto approach with the S&P 500? It would yield the following:
$1000 investment in S&P 500 on January 1st, 2018 = $1220 today
$1000 investment in S&P 500 on January 1st, 2019 = $1300 today
$1000 investment in S&P 500 on January 1st, 2020 = $1010 today
Taken together, here’s the bottom bottom bottom line for a similar approach with the S&P: After three $1,000 investments into an S&P 500 index fund in January 2018, 2019, and 2020, my portfolio would be worth $3,530. That is up +17.6%since January 2018. Compared to a +17.9% gain of the combined Top Ten Crypto Experiment Portfolios. You can also compare against five individual coins (BTC, ETH, XRP, BCH, and LTC) by using the table above if you want. It’s small, but that tiny 0.3% difference in favor of crypto. That’s now seven monthly victories for the S&P vs. three monthly victories for crypto, all clustered in the second half of the year. Crypto re-takes the lead in October....barely
Thanks mainly to Bitcoin, October was a good month for crypto and a good month for the 2019 Top Ten Portfolio. As traditional markets have struggled over the last few months, crypto seems to be headed in the opposite direction. I’m looking forward to seeing if those trends hold in the last few months of a crazy year. Take care of each other out there, stay safe. Thanks for reading and for supporting the experiment. I hope you’ve found it helpful. I continue to be committed to seeing this process through and reporting along the way. Feel free to reach out with any questions and stay tuned for progress reports. Keep an eye out for the original 2018 Top Ten Crypto Index Fund Experiment and the 2020 Top Ten Experiment.
Brief Comments on Goguen: Q4 2020, Q1 2021, utility, Marlowe, DSL, Glow, Plutus, IELE, smart contracts, thanksgiving to you, sidechains and Hydra, Goguen rollout and additions to product update
https://preview.redd.it/f13t8gy0c3w51.png?width=640&format=png&auto=webp&s=cfd61579208acfa14248c3e79908631db6590a6d The price of Bitcoin (BTC) made another attempt to gain momentum above $ 13,400 against the US Dollar and managed to break above the 13,500 level. At the time of this writing, BTC was trading at $ 13,835. Bitcoin experienced a pullback the day before, dropping below $ 13,000. The leading cryptocurrency found support at close to $ 12,800. The price is currently above the $ 13,800 zone. BTC had to gain traction above $ 13,200 to hit $ 13,500. In fact, this happened. The upward momentum that the bitcoin (BTC) price has experienced recently has spread, as it usually does, to the rest of the cryptocurrencies in the market. However, while the major altcoins have risen in value against the dollar, the story has been different when compared to BTC now you can have the latest news and blog posts about crypto and blockchain delivered to your mobile phone download the app Mickael Mosse”. In its most recent weekly report, published on Monday, the firm Glassnode highlights how the bull market has given a greater boost to bitcoin than to other major cryptocurrencies: ether (ETH) from Ethereum, bitcoin cash (BCH), chainlink (LINK ), polkadot (DOT), ripple (XRP) and binance coin (BNB). The price of BTC can be seriously corrected According to top cryptocurrency analyst, around the corner is a 'candle from hell' that will crush the recent cryptocurrency rally and potentially spark a change. According to cryptocurrency analyst and trader, Bitcoin may fall. Garner shared a chart with an indicator warning traders. Garner points to two previous examples, both of which occurred after the first cryptocurrency recovered a significant resistance level as support. The first candle that Garner mentioned took place just before the cryptocurrency halving event in May 2020. The bullish event is considered the change in supply that caused valuations to skyrocket. The second candle came in early August, a month that sent altcoins into extreme acceleration. Bitcoin continued to cut back, and then fell to $ 10,000 where a new critical test was conducted. The bullish confirmation was what helped Bitcoin climb to $ 12,000 and to current levels in the middle of $ 13,000. Garner says that if we go one "step" further, the price of bitcoin is likely to fall, at least in the very near term. The third candle may upset crypto investors who, despite many difficulties, are excited after such an incredible rally. Analysts make different comments Analysts make different statements about what will be next for the leading cryptocurrency. While many are confident that Bitcoin remains in a long-term uptrend, there are indications that a short-term pullback is possible. Bitcoin rose to $ 13,800 in a flow of buying volume. This brings the cryptocurrency to its highest level of the year. The highest level in the last 2 years is $ 13,950. The techniques state that withdrawal or at least a consolidation is possible. An analyst recently shared the chart below, noting that Bitcoin's two-day Sequential is currently at the '9 sell' candle. This indicates that the cryptocurrency will peak in the short term. A startup account with many followers on Twitter, Magic said that if the price of BTC increases to $ 14,000, it will force $ 20,000. If BTC exceeds $ 20,000 in mid-2021, the price could rise to a region between $ 65,000 and $ 80,000.
$1,000 invested in Top 10 Cryptos of 2019 now worth $1,260 (UP +26%)
EXPERIMENT - Tracking Top 10 Cryptos of 2019 - Month Eighteen - UP +26% See the full blog post with all the tableshere. tl;dr - Tether (as it's designed to do) holds its ground, all others finish the month in negative territory. Tron finishes June in second place, down -2%. BSV loses nearly 25% of value in June. Overall, since January 2019, BTC in lead, ETH takes over second place, XRP still worst performing. The 2019 Top 10 is up +26% almost equal to the the gains of the S&P 500 over the same time period (+24%).
According to a June article citing unnamed sources, which two FinTech companies are planning to allow their users to buy and sell crypto directly?
A) Paypal and Venmo B) Square and Cashapp C) Robinhood and Revolut D) Sofi and Coinbase Scroll down for the answer.
Ranking and June Winners and Losers
XRP and Stellar slipped one place each in the rankings in June, now at #4 and #14 respectively. EOS fell two spots to #11 and joins Stellar and Tron as the only three cryptos to have dropped out of the 2019 Top Ten since January 1st, 2019. They have been replaced by Binance Coin, Cardano, and newcomer CRO. Tether was the only crypto to move up in rank in June. Not a good sign when Tether is the only crypto to move up. Not a good sign when Tether enters the Top 3. June Winners – Tether. Second comes Tron, which basically held its ground at -2%. June Losers – BSV lost -23% of its value in June making it the worst performing of the 2019 Top Ten portfolio. EOS had a rough month as well, down -17%, dropping two spots in the rankings, and falling out of the Top Ten. If you’re keeping score, here is tally of which coins have the most monthly wins and loses during the first 18 months of the 2019 Top Ten Experiment: Tether is still in the lead with six monthly victories followed by BSV in second place with three. BSV also holds the most monthly losses, finishing last in seven out of eighteen months. The only crypto not to win a month so far? XRP. (In fairness, XRP has also not lost any month yet).
Overall update – BTC in lead, ETH takes over second place, XRP still worst performing
BTC is out front for the second straight month and ETH has taken over second place from BSV. Ahead until April, BSV has simply not keep up with the pack over the last two months. Bitcoin is up +144% since January 2019. The initial $100 investment in BTC is currently worth $249. Eighteen months in, 50% of the 2019 Top Ten cryptos are in the green since the beginning of the experiment. The other five cryptos are either flat or in negative territory, including last place XRP (down -50% since January 2019).
Total Market Cap for the entire cryptocurrency sector:
The crypto market as a whole is down about $20B in June, but still up +106% since January 2019.
BitDom finally wobbled in June, but not by much – it’s been in a very familiar zone for months now, indicating a lack of excitement (or at least a low risk tolerance) for altcoins. Taking a wider view, the Bitcoin Dominance range since the beginning of the experiment in January 2019 has ranged between 50%-70%.
Overall return on investment since January 1st, 2019:
The 2019 Top Ten Portfolio lost almost $175 in June. After the initial $1000 investment, the 2019 group of Top Ten cryptos is worth $1,259. That’s up about +26%. Here’s a look at the ROI over the life of the first 18 months of the 2019 Top Ten Index Fund experiment, month by month: 18 months of ROI, mostly green Unlike the completely red table you’ll see in the 2018 Top Ten Experiment, the 2019 crypto table is almost all green. The first month was the lowest point (-9%), and the highest point (+114%) was May 2019. How does the 2019 Top Ten Index Fund Portfolio compare to the parallel projects?
Taking the three portfolios together, here’s the bottom bottom bottom line: After a $3000 investment in the 2018, 2019, and 2020 Top Ten Cryptocurrencies, the combined portfolios are worth $2,710. That’s down about -10% for the three combined portfolios. Last month that figure was +4%. Better than a few months ago (aka the zombie apocalypse) where it was down -24%, but not yet back at January (+13%) or February (+6%) levels. Here’s a new table to help visualize the progress of the combined portfolios: ROI of all three combined portfolios - not exactly inspiring How do crypto returns compare to traditional markets?
Comparison to S&P 500:
Good thing I’m tracking the S&P 500 as part of my experiment to have a comparison point with other popular investments options. Even with unemployment, protests, and COVID, the US market continued to rebound in June. It’s now up +24% in the last 18 months. The initial $1k investment I put into crypto would be worth $1,240 had it been redirected to the S&P 500 in January 2019. As a reminder (or just scroll up) the 2019 Top Ten portfolio is returning +26% over last 18 months, just about equal to the return of the S&P 500 over the same time period. Just last month the ROI of the 2019 Top Ten crypto portfolio was nearly double the S&P 500 since January 1st, 2019. But what if I took the same world’s-slowest-dollar-cost-averaging/$1,000-per-year-in-January approach with the S&P 500? It would yield the following:
$1000 investment in S&P 500 on January 1st, 2018: +$170
$1000 investment in S&P 500 on January 1st, 2019: +$240
$1000 investment in S&P 500 on January 1st, 2020: -$40
Taken together, here’s the bottom bottom bottom line for a similar approach with the S&P: After three $1,000 investments into an S&P 500 index fund in January 2018, 2019, and 2020, my portfolio would be worth $3,370. That $3,370 is up over+12%since January 2018, compared to the $2,710 value (-10%) of the combined Top Ten Crypto Experiment Portfolios. Here’s another new table that compares the ROI of the combined crypto portfolios to a hypothetical similar approach with the S&P 500: We see in June the largest difference in favor of the S&P since the beginning of 2020: a 22% gap. Compare that February, when there was only a 1% difference in ROI.
Since January 2019, the crypto market as a whole has gained +106% compared to the 2019 Top Ten Crypto Portfolio which has gained +26%. That’s an 80% gap. At this point in the 2019 Experiment, an investor would have done much better picking different cryptos or investing in the entire market instead of focusing only on the 2019 Top Ten. Over the course of the first 18 months of tracking the 2019 Top Ten, there have been instances this was a winning strategy, but the cases have been few and far between. The 2018 Top Ten portfolio, on the other hand, has never outperformed the overall market, at least not in the first thirty months of that Experiment. And for the most recent 2020 Top Ten group? The opposite had been true: the 2020 Top Ten had easily outperformed the overall market 100% of the time…up until the last two months.
As the world continues to battle COVID, traditional markets seem to be recovering. Will crypto make a significant move in the second half of 2020? Final word: Stay safe and take care of each other. Thanks for reading and for supporting the experiment. I hope you’ve found it helpful. I continue to be committed to seeing this process through and reporting along the way. Feel free to reach out with any questions and stay tuned for progress reports. Keep an eye out for the original 2018 Top Ten Crypto Index Fund Experiment and the recently launched 2020 Top Ten Experiment.
And the Answer is…
A) Paypal and Venmo According to a Coindesk report in June, three sources familiar with the matter say that Paypal and Paypal-owned Venmo are planning to allow their users to buy and sell crypto. Paypal has declined to comment.
You have probably read dozens of articles dedicated to this subject before, and likely skipped even more. So why write another one, let alone read it? The short answer is times have changed. Well, times always change. Still, the point is that we may be amidst a paradigm shift in the cryptocurrency space right now even if we don’t feel it yet. by stealthEX Such a fundamental change is possible due to a confluence of several factors. Some of these factors are external and therefore not related to crypto. Others are internal and represent the value-oriented nature of cryptocurrencies. It just happened that all of them got activated under specific conditions at a certain point in time, which is today, give or take.
Economic woes in a post-Covid-19 World
You wouldn’t be far from the truth if you claimed that we haven’t yet pulled through the pandemic, to begin with. Unfortunately, it only makes matters worse unless you are a cryptocurrency investor and don’t care for the rest of humanity. Anyway, the damage has been done, and nothing can change that. We are now entering the phase that is technically called “competitive devaluations” and colloquially known as currency wars. You could also argue that if it didn’t happen at the peak of the coronavirus pandemic, it is not going to happen now. The sad truth is that we are only starting to feel the real pain. Even the deadly coronavirus doesn’t take over the body instantly, while it takes some time on the scale of a few months up to a couple years for the economic disease to spread through the fabric of society, evolve, and then erupt with inflation rates shooting through the roof, among many other nasty things. Please take your seat. The world reserve fiat, the American dollar, is sinking like Titanic, slowly but surely. We can’t say the same about less lucky currencies, though. We won’t dwell on the Venezuelan bolivar and Zimbabwean dollar as they are altogether beyond redemption, but fiats like the Brazilian real and Russian ruble are also balancing on the brink of another landslide devaluation, which they have seen many in the past. Sharp minds in the cryptocurrency space have been telling us about this development for ages. It all looked like a remote possibility in some distant future that as we felt deep down wouldn’t have a chance to come up in our lifetime. As it stands, we were wrong, and the events described are now starting to unfold right before our own eyes. In a strange twist of fate, large-scale cryptocurrency adoption is about to occur along with them, but not through some technical breakthroughs and innovation, or even the much-hyped DeFi, but primarily through the failure of conventional financial systems based on fiat currencies. Rest assured, the top dogs in the cryptocurrency pit are well aware of this dynamic, and they are not going to wait any longer. Grayscale Investments, a multi-billion dollar company behind a host of cryptocurrency trust funds, started to frenziedly buy up bitcoins a couple weeks ago. All in all, it acquired over 17,000 BTC adding to its already quite impressive stash of Bitcoin, now totalling almost 450,000 coins under its management. Love it or leave it, but it amounts to 2.4% of all bitcoins mined to date, including lost, burned, or left for dead as dust in Bitcoin wallets. In essence, it means that their effective share is way higher. But while Grayscale definitely sits at the top of the cryptocurrency investment chain, it is not the only company that went on a buying spree lately. MicroStrategy, a company largely unknown to the wider public, suddenly got religion and swapped over $400 million of its capital into 38,250 BTC. Even Barry Silbert, CEO of Grayscale, commented on this feat in his tweet. Twitter, by StealthEX So whenever there is a hint at price correction, someone comes out of the shadows and picks up a handful of bitcoins from the market propping up the price. Why are they doing this? You already know the answer.
In different words, all that cryptocurrencies had to do was to last long enough until fiat started to fall apart. It does now, and paradoxically such times are also times of great opportunity, Baron Rothschild’s way. The world’s largest cryptocurrency exchange, Binance, has been pushing its cryptocurrency payment card since April when it acquired Swipe, a firm focused on crypto-to-fiat payment cards. At the time of the acquisition Swipe already supported 20 cryptocurrencies and fiat transactions in major currencies. Binance.com, by StaelthEX For European users the Binance card was officially made available in August, and the exchange plans to enter the US market soon. Given its dominance in the crypto arena, it wouldn’t be unreasonable to expect the surge in the cryptocurrency use as a means of payment thanks to this. It is unlikely that people would spend their precious bitcoins, but the packmaster is not the only member of the pack that Binance handles. Cryptos like Litecoin or Bitcoin Cash can easily become currencies of choice to use with Binance debit cards. But what truly makes it a game-changer is the current turmoil in the global economic affairs which may turn out to be a once-in-a-lifetime chance for crypto to pick up where fiat currencies leave, or fail, to be exact. On the other hand, it may be a natural development after all, set in stone by the very first Bitcoin transaction and cemented for good when it got confirmed. Now things start to arrange themselves to fit their preordained layout. We have taken our time. As cryptocurrencies are not internally linked to, or tied by, the lunatic policies of monetary authorities, that is to say, no central bank can ask or force miners to mine more bitcoins, we have the first element in place in the layout for the cryptocurrency mass adoption to occur at the most basic level. In fact, it has always been there, so we just had to wait until the two other elements arrived, even though it took longer than most of us were ready to wait. The second required element in the grand picture of cryptocurrency adoption is the change in attitude toward wealth evaluation. So far the vast majority of people involved in crypto, including its most die-hard supporters, valued their cryptocurrency holdings in fiat terms. Without doubt, it was the US dollar, regardless of your home currency. But when fiat collapses or enters a long period of runaway inflation, people will be ready for a dramatic change in their approaches toward capital assessment as well as spending habits. And here comes the most important part where Binance hits the nail on the head. If you are unable to effortlessly spend crypto in your everyday life, the first two components cannot trigger this change in attitude on their own. We need this third element to make use of what has existed and take advantage of what has come around. In a way, what Binance did, and what its competitors are no doubt going to do as well if they don’t want to miss out on the opportunity, appears to be the part that snugly snaps into place when we finally get there. With Binance payment card, you can “buy the things you love with crypto”. So now the ball is in your court to support the full-scale cryptocurrency adoption coming up. Kidding aside, with fiat turning into trash by leaps and bounds all over the globe, this looks like a very enticing payment option for both the crypto purists and the unbanked. We have seen quite a few such cards in the past, but Binance seems to be adamant on making its variety really popular and actually usable. And then you can ride volatility waves to your financial benefit. If Binance succeeds, that may herald a new era of cryptocurrency adoption, a breakthrough of sorts after so many years of stagnation in this department.
Repercussions and ramifications
It is not like only we, traders and investors alike, see these trends. Governments are also taking notice and paying close attention. They can’t remove cryptocurrencies and they can’t help inflating their national currencies. However, they can still crack down massively on this and similar endeavors, trying to nip them in the bud. We don’t know yet what Uncle Sam is going to say but some muslim countries have been quite vocal in this regard. For example, Egypt has issued a fetva which prohibits bitcoin transactions as being against Sharia, an Islamic religious law. Another mostly Islamic country, Indonesia, has banned the use of cryptocurrencies as a means of payment. Russia, although not Islamic yet, is hellbent on effectively outlawing most cryptocurrency operations despite passing earlier a law on digital assets which is essentially neutral to crypto. To conclude, we must be aware that once things get serious and governments see that their monetary supremacy is being threatened, that they can no longer play their favorite game of inflation tax, they will leave no stone unturned to prevent mass use of crypto as an alternative means of payment. And cryptocurrency payment cards are hands down one of the best tools available for this use on a down-to-earth level, groceries and whatnot. Now you know what their target will be. And don’t forget if you need to exchange your coins StealthEX is here for you. We provide a selection of more than 300 coins and constantly updating the cryptocurrency list so that our customers will find a suitable option. Our service does not require registration and allows you to remain anonymous. Why don’t you check it out? Just go to StealthEX and follow these easy steps: ✔ Choose the pair and the amount for your exchange. For example BTC to ETH. ✔ Press the “Start exchange” button. ✔ Provide the recipient address to which the coins will be transferred. ✔ Move your cryptocurrency for the exchange. ✔ Receive your coins. Follow us on Medium, Twitter, Facebook, and Reddit to get StealthEX.io updates and the latest news about the crypto world. For all requests message us via [email protected]. The views and opinions expressed here are solely those of the author. Every investment and trading move involves risk. You should conduct your own research when making a decision. Original article was posted onhttps://stealthex.io/blog/2020/10/06/cryptocurrency-adoption-a-breakthrough/
Hey all, I've been researching coins since 2017 and have gone through 100s of them in the last 3 years. I got introduced to blockchain via Bitcoin of course, analyzed Ethereum thereafter and from that moment I have a keen interest in smart contact platforms. I’m passionate about Ethereum but I find Zilliqa to have a better risk-reward ratio. Especially because Zilliqa has found an elegant balance between being secure, decentralized and scalable in my opinion.
Below I post my analysis of why from all the coins I went through I’m most bullish on Zilliqa (yes I went through Tezos, EOS, NEO, VeChain, Harmony, Algorand, Cardano etc.). Note that this is not investment advice and although it's a thorough analysis there is obviously some bias involved. Looking forward to what you all think!
Fun fact: the name Zilliqa is a play on ‘silica’ silicon dioxide which means “Silicon for the high-throughput consensus computer.”
This post is divided into (i) Technology, (ii) Business & Partnerships, and (iii) Marketing & Community. I’ve tried to make the technology part readable for a broad audience. If you’ve ever tried understanding the inner workings of Bitcoin and Ethereum you should be able to grasp most parts. Otherwise, just skim through and once you are zoning out head to the next part.
Technology and some more:
The technology is one of the main reasons why I’m so bullish on Zilliqa. First thing you see on their website is: “Zilliqa is a high-performance, high-security blockchain platform for enterprises and next-generation applications.” These are some bold statements.
Before we deep dive into the technology let’s take a step back in time first as they have quite the history. The initial research paper from which Zilliqa originated dates back to August 2016: Elastico: A Secure Sharding Protocol For Open Blockchains where Loi Luu (Kyber Network) is one of the co-authors. Other ideas that led to the development of what Zilliqa has become today are: Bitcoin-NG, collective signing CoSi, ByzCoin and Omniledger.
The technical white paper was made public in August 2017 and since then they have achieved everything stated in the white paper and also created their own open source intermediate level smart contract language called Scilla (functional programming language similar to OCaml) too.
Mainnet is live since the end of January 2019 with daily transaction rates growing continuously. About a week ago mainnet reached 5 million transactions, 500.000+ addresses in total along with 2400 nodes keeping the network decentralized and secure. Circulating supply is nearing 11 billion and currently only mining rewards are left. The maximum supply is 21 billion with annual inflation being 7.13% currently and will only decrease with time.
Zilliqa realized early on that the usage of public cryptocurrencies and smart contracts were increasing but decentralized, secure, and scalable alternatives were lacking in the crypto space. They proposed to apply sharding onto a public smart contract blockchain where the transaction rate increases almost linear with the increase in the amount of nodes. More nodes = higher transaction throughput and increased decentralization. Sharding comes in many forms and Zilliqa uses network-, transaction- and computational sharding. Network sharding opens up the possibility of using transaction- and computational sharding on top. Zilliqa does not use state sharding for now. We’ll come back to this later.
Before we continue dissecting how Zilliqa achieves such from a technological standpoint it’s good to keep in mind that a blockchain being decentralised and secure and scalable is still one of the main hurdles in allowing widespread usage of decentralised networks. In my opinion this needs to be solved first before blockchains can get to the point where they can create and add large scale value. So I invite you to read the next section to grasp the underlying fundamentals. Because after all these premises need to be true otherwise there isn’t a fundamental case to be bullish on Zilliqa, right?
Down the rabbit hole
How have they achieved this? Let’s define the basics first: key players on Zilliqa are the users and the miners. A user is anybody who uses the blockchain to transfer funds or run smart contracts. Miners are the (shard) nodes in the network who run the consensus protocol and get rewarded for their service in Zillings (ZIL). The mining network is divided into several smaller networks called shards, which is also referred to as ‘network sharding’. Miners subsequently are randomly assigned to a shard by another set of miners called DS (Directory Service) nodes. The regular shards process transactions and the outputs of these shards are eventually combined by the DS shard as they reach consensus on the final state. More on how these DS shards reach consensus (via pBFT) will be explained later on.
The Zilliqa network produces two types of blocks: DS blocks and Tx blocks. One DS Block consists of 100 Tx Blocks. And as previously mentioned there are two types of nodes concerned with reaching consensus: shard nodes and DS nodes. Becoming a shard node or DS node is being defined by the result of a PoW cycle (Ethash) at the beginning of the DS Block. All candidate mining nodes compete with each other and run the PoW (Proof-of-Work) cycle for 60 seconds and the submissions achieving the highest difficulty will be allowed on the network. And to put it in perspective: the average difficulty for one DS node is ~ 2 Th/s equaling 2.000.000 Mh/s or 55 thousand+ GeForce GTX 1070 / 8 GB GPUs at 35.4 Mh/s. Each DS Block 10 new DS nodes are allowed. And a shard node needs to provide around 8.53 GH/s currently (around 240 GTX 1070s). Dual mining ETH/ETC and ZIL is possible and can be done via mining software such as Phoenix and Claymore. There are pools and if you have large amounts of hashing power (Ethash) available you could mine solo.
The PoW cycle of 60 seconds is a peak performance and acts as an entry ticket to the network. The entry ticket is called a sybil resistance mechanism and makes it incredibly hard for adversaries to spawn lots of identities and manipulate the network with these identities. And after every 100 Tx Blocks which corresponds to roughly 1,5 hour this PoW process repeats. In between these 1,5 hour, no PoW needs to be done meaning Zilliqa’s energy consumption to keep the network secure is low. For more detailed information on how mining works click here. Okay, hats off to you. You have made it this far. Before we go any deeper down the rabbit hole we first must understand why Zilliqa goes through all of the above technicalities and understand a bit more what a blockchain on a more fundamental level is. Because the core of Zilliqa’s consensus protocol relies on the usage of pBFT (practical Byzantine Fault Tolerance) we need to know more about state machines and their function. Navigate to Viewblock, a Zilliqa block explorer, and just come back to this article. We will use this site to navigate through a few concepts.
We have established that Zilliqa is a public and distributed blockchain. Meaning that everyone with an internet connection can send ZILs, trigger smart contracts, etc. and there is no central authority who fully controls the network. Zilliqa and other public and distributed blockchains (like Bitcoin and Ethereum) can also be defined as state machines.
Taking the liberty of paraphrasing examples and definitions given by Samuel Brooks’ medium article, he describes the definition of a blockchain (like Zilliqa) as: “A peer-to-peer, append-only datastore that uses consensus to synchronize cryptographically-secure data”.
Next, he states that: "blockchains are fundamentally systems for managing valid state transitions”. For some more context, I recommend reading the whole medium article to get a better grasp of the definitions and understanding of state machines. Nevertheless, let’s try to simplify and compile it into a single paragraph. Take traffic lights as an example: all its states (red, amber, and green) are predefined, all possible outcomes are known and it doesn’t matter if you encounter the traffic light today or tomorrow. It will still behave the same. Managing the states of a traffic light can be done by triggering a sensor on the road or pushing a button resulting in one traffic lights’ state going from green to red (via amber) and another light from red to green.
With public blockchains like Zilliqa, this isn’t so straightforward and simple. It started with block #1 almost 1,5 years ago and every 45 seconds or so a new block linked to the previous block is being added. Resulting in a chain of blocks with transactions in it that everyone can verify from block #1 to the current #647.000+ block. The state is ever changing and the states it can find itself in are infinite. And while the traffic light might work together in tandem with various other traffic lights, it’s rather insignificant comparing it to a public blockchain. Because Zilliqa consists of 2400 nodes who need to work together to achieve consensus on what the latest valid state is while some of these nodes may have latency or broadcast issues, drop offline or are deliberately trying to attack the network, etc.
Now go back to the Viewblock page take a look at the amount of transaction, addresses, block and DS height and then hit refresh. Obviously as expected you see new incremented values on one or all parameters. And how did the Zilliqa blockchain manage to transition from a previous valid state to the latest valid state? By using pBFT to reach consensus on the latest valid state.
After having obtained the entry ticket, miners execute pBFT to reach consensus on the ever-changing state of the blockchain. pBFT requires a series of network communication between nodes, and as such there is no GPU involved (but CPU). Resulting in the total energy consumed to keep the blockchain secure, decentralized and scalable being low.
pBFT stands for practical Byzantine Fault Tolerance and is an optimization on the Byzantine Fault Tolerant algorithm. To quote Blockonomi: “In the context of distributed systems, Byzantine Fault Tolerance is the ability of a distributed computer network to function as desired and correctly reach a sufficient consensus despite malicious components (nodes) of the system failing or propagating incorrect information to other peers.” Zilliqa is such a distributed computer network and depends on the honesty of the nodes (shard and DS) to reach consensus and to continuously update the state with the latest block. If pBFT is a new term for you I can highly recommend the Blockonomi article.
The idea of pBFT was introduced in 1999 - one of the authors even won a Turing award for it - and it is well researched and applied in various blockchains and distributed systems nowadays. If you want more advanced information than the Blockonomi link provides click here. And if you’re in between Blockonomi and the University of Singapore read the Zilliqa Design Story Part 2 dating from October 2017. Quoting from the Zilliqa tech whitepaper: “pBFT relies upon a correct leader (which is randomly selected) to begin each phase and proceed when the sufficient majority exists. In case the leader is byzantine it can stall the entire consensus protocol. To address this challenge, pBFT offers a view change protocol to replace the byzantine leader with another one.”
pBFT can tolerate ⅓ of the nodes being dishonest (offline counts as Byzantine = dishonest) and the consensus protocol will function without stalling or hiccups. Once there are more than ⅓ of dishonest nodes but no more than ⅔ the network will be stalled and a view change will be triggered to elect a new DS leader. Only when more than ⅔ of the nodes are dishonest (66%) double-spend attacks become possible.
If the network stalls no transactions can be processed and one has to wait until a new honest leader has been elected. When the mainnet was just launched and in its early phases, view changes happened regularly. As of today the last stalling of the network - and view change being triggered - was at the end of October 2019.
Another benefit of using pBFT for consensus besides low energy is the immediate finality it provides. Once your transaction is included in a block and the block is added to the chain it’s done. Lastly, take a look at this article where three types of finality are being defined: probabilistic, absolute and economic finality. Zilliqa falls under the absolute finality (just like Tendermint for example). Although lengthy already we skipped through some of the inner workings from Zilliqa’s consensus: read the Zilliqa Design Story Part 3 and you will be close to having a complete picture on it. Enough about PoW, sybil resistance mechanism, pBFT, etc. Another thing we haven’t looked at yet is the amount of decentralization.
Currently, there are four shards, each one of them consisting of 600 nodes. 1 shard with 600 so-called DS nodes (Directory Service - they need to achieve a higher difficulty than shard nodes) and 1800 shard nodes of which 250 are shard guards (centralized nodes controlled by the team). The amount of shard guards has been steadily declining from 1200 in January 2019 to 250 as of May 2020. On the Viewblock statistics, you can see that many of the nodes are being located in the US but those are only the (CPU parts of the) shard nodes who perform pBFT. There is no data from where the PoW sources are coming. And when the Zilliqa blockchain starts reaching its transaction capacity limit, a network upgrade needs to be executed to lift the current cap of maximum 2400 nodes to allow more nodes and formation of more shards which will allow to network to keep on scaling according to demand. Besides shard nodes there are also seed nodes. The main role of seed nodes is to serve as direct access points (for end-users and clients) to the core Zilliqa network that validates transactions. Seed nodes consolidate transaction requests and forward these to the lookup nodes (another type of nodes) for distribution to the shards in the network. Seed nodes also maintain the entire transaction history and the global state of the blockchain which is needed to provide services such as block explorers. Seed nodes in the Zilliqa network are comparable to Infura on Ethereum.
The seed nodes were first only operated by Zilliqa themselves, exchanges and Viewblock. Operators of seed nodes like exchanges had no incentive to open them for the greater public. They were centralised at first. Decentralisation at the seed nodes level has been steadily rolled out since March 2020 ( Zilliqa Improvement Proposal 3 ). Currently the amount of seed nodes is being increased, they are public-facing and at the same time PoS is applied to incentivize seed node operators and make it possible for ZIL holders to stake and earn passive yields. Important distinction: seed nodes are not involved with consensus! That is still PoW as entry ticket and pBFT for the actual consensus.
5% of the block rewards are being assigned to seed nodes (from the beginning in 2019) and those are being used to pay out ZIL stakers. The 5% block rewards with an annual yield of 10.03% translate to roughly 610 MM ZILs in total that can be staked. Exchanges use the custodial variant of staking and wallets like Moonlet will use the non-custodial version (starting in Q3 2020). Staking is being done by sending ZILs to a smart contract created by Zilliqa and audited by Quantstamp.
With a high amount of DS; shard nodes and seed nodes becoming more decentralized too, Zilliqa qualifies for the label of decentralized in my opinion.
Generalized: programming languages can be divided into being ‘object-oriented’ or ‘functional’. Here is an ELI5 given by software development academy: * “all programs have two basic components, data – what the program knows – and behavior – what the program can do with that data. So object-oriented programming states that combining data and related behaviors in one place, is called “object”, which makes it easier to understand how a particular program works. On the other hand, functional programming argues that data and behavior are different things and should be separated to ensure their clarity.” *
Scilla is on the functional side and shares similarities with OCaml: OCaml is a general-purpose programming language with an emphasis on expressiveness and safety. It has an advanced type system that helps catch your mistakes without getting in your way. It's used in environments where a single mistake can cost millions and speed matters, is supported by an active community, and has a rich set of libraries and development tools. For all its power, OCaml is also pretty simple, which is one reason it's often used as a teaching language.
Scilla is blockchain agnostic, can be implemented onto other blockchains as well, is recognized by academics and won a so-called Distinguished Artifact Award award at the end of last year.
One of the reasons why the Zilliqa team decided to create their own programming language focused on preventing smart contract vulnerabilities is that adding logic on a blockchain, programming, means that you cannot afford to make mistakes. Otherwise, it could cost you. It’s all great and fun blockchains being immutable but updating your code because you found a bug isn’t the same as with a regular web application for example. And with smart contracts, it inherently involves cryptocurrencies in some form thus value.
Another difference with programming languages on a blockchain is gas. Every transaction you do on a smart contract platform like Zilliqa or Ethereum costs gas. With gas you basically pay for computational costs. Sending a ZIL from address A to address B costs 0.001 ZIL currently. Smart contracts are more complex, often involve various functions and require more gas (if gas is a new concept click here ).
So with Scilla, similar to Solidity, you need to make sure that “every function in your smart contract will run as expected without hitting gas limits. An improper resource analysis may lead to situations where funds may get stuck simply because a part of the smart contract code cannot be executed due to gas limits. Such constraints are not present in traditional software systems”.Scilla design story part 1
Some examples of smart contract issues you’d want to avoid are: leaking funds, ‘unexpected changes to critical state variables’ (example: someone other than you setting his or her address as the owner of the smart contract after creation) or simply killing a contract.
Scilla also allows for formal verification. Wikipedia to the rescue: In the context of hardware and software systems, formal verification is the act of proving or disproving the correctness of intended algorithms underlying a system with respect to a certain formal specification or property, using formal methods of mathematics.
Formal verification can be helpful in proving the correctness of systems such as: cryptographic protocols, combinational circuits, digital circuits with internal memory, and software expressed as source code.
“Scilla is being developed hand-in-hand with formalization of its semantics and its embedding into the Coq proof assistant — a state-of-the art tool for mechanized proofs about properties of programs.”
Simply put, with Scilla and accompanying tooling developers can be mathematically sure and proof that the smart contract they’ve written does what he or she intends it to do.
Smart contract on a sharded environment and state sharding
There is one more topic I’d like to touch on: smart contract execution in a sharded environment (and what is the effect of state sharding). This is a complex topic. I’m not able to explain it any easier than what is posted here. But I will try to compress the post into something easy to digest.
Earlier on we have established that Zilliqa can process transactions in parallel due to network sharding. This is where the linear scalability comes from. We can define simple transactions: a transaction from address A to B (Category 1), a transaction where a user interacts with one smart contract (Category 2) and the most complex ones where triggering a transaction results in multiple smart contracts being involved (Category 3). The shards are able to process transactions on their own without interference of the other shards. With Category 1 transactions that is doable, with Category 2 transactions sometimes if that address is in the same shard as the smart contract but with Category 3 you definitely need communication between the shards. Solving that requires to make a set of communication rules the protocol needs to follow in order to process all transactions in a generalised fashion.
There is no strict defined roadmap but here are topics being worked on. And via the Zilliqa website there is also more information on the projects they are working on.
Business & Partnerships
It’s not only technology in which Zilliqa seems to be excelling as their ecosystem has been expanding and starting to grow rapidly. The project is on a mission to provide OpenFinance (OpFi) to the world and Singapore is the right place to be due to its progressive regulations and futuristic thinking. Singapore has taken a proactive approach towards cryptocurrencies by introducing the Payment Services Act 2019 (PS Act). Among other things, the PS Act will regulate intermediaries dealing with certain cryptocurrencies, with a particular focus on consumer protection and anti-money laundering. It will also provide a stable regulatory licensing and operating framework for cryptocurrency entities, effectively covering all crypto businesses and exchanges based in Singapore. According to PWC 82% of the surveyed executives in Singapore reported blockchain initiatives underway and 13% of them have already brought the initiatives live to the market. There is also an increasing list of organizations that are starting to provide digital payment services. Moreover, Singaporean blockchain developers Building Cities Beyond has recently created an innovation $15 million grant to encourage development on its ecosystem. This all suggests that Singapore tries to position itself as (one of) the leading blockchain hubs in the world.
Zilliqa seems to already take advantage of this and recently helped launch Hg Exchange on their platform, together with financial institutions PhillipCapital, PrimePartners and Fundnel. Hg Exchange, which is now approved by the Monetary Authority of Singapore (MAS), uses smart contracts to represent digital assets. Through Hg Exchange financial institutions worldwide can use Zilliqa's safe-by-design smart contracts to enable the trading of private equities. For example, think of companies such as Grab, Airbnb, SpaceX that are not available for public trading right now. Hg Exchange will allow investors to buy shares of private companies & unicorns and capture their value before an IPO. Anquan, the main company behind Zilliqa, has also recently announced that they became a partner and shareholder in TEN31 Bank, which is a fully regulated bank allowing for tokenization of assets and is aiming to bridge the gap between conventional banking and the blockchain world. If STOs, the tokenization of assets, and equity trading will continue to increase, then Zilliqa’s public blockchain would be the ideal candidate due to its strategic positioning, partnerships, regulatory compliance and the technology that is being built on top of it.
What is also very encouraging is their focus on banking the un(der)banked. They are launching a stablecoin basket starting with XSGD. As many of you know, stablecoins are currently mostly used for trading. However, Zilliqa is actively trying to broaden the use case of stablecoins. I recommend everybody to read this text that Amrit Kumar wrote (one of the co-founders). These stablecoins will be integrated in the traditional markets and bridge the gap between the crypto world and the traditional world. This could potentially revolutionize and legitimise the crypto space if retailers and companies will for example start to use stablecoins for payments or remittances, instead of it solely being used for trading.
Zilliqa also released their DeFi strategic roadmap (dating November 2019) which seems to be aligning well with their OpFi strategy. A non-custodial DEX is coming to Zilliqa made by Switcheo which allows cross-chain trading (atomic swaps) between ETH, EOS and ZIL based tokens. They also signed a Memorandum of Understanding for a (soon to be announced) USD stablecoin. And as Zilliqa is all about regulations and being compliant, I’m speculating on it to be a regulated USD stablecoin. Furthermore, XSGD is already created and visible on block explorer and XIDR (Indonesian Stablecoin) is also coming soon via StraitsX. Here also an overview of the Tech Stack for Financial Applications from September 2019. Further quoting Amrit Kumar on this:
There are two basic building blocks in DeFi/OpFi though: 1) stablecoins as you need a non-volatile currency to get access to this market and 2) a dex to be able to trade all these financial assets. The rest are built on top of these blocks.
So far, together with our partners and community, we have worked on developing these building blocks with XSGD as a stablecoin. We are working on bringing a USD-backed stablecoin as well. We will soon have a decentralised exchange developed by Switcheo. And with HGX going live, we are also venturing into the tokenization space. More to come in the future.”
Additionally, they also have this ZILHive initiative that injects capital into projects. There have been already 6 waves of various teams working on infrastructure, innovation and research, and they are not from ASEAN or Singapore only but global: see Grantees breakdown by country. Over 60 project teams from over 20 countries have contributed to Zilliqa's ecosystem. This includes individuals and teams developing wallets, explorers, developer toolkits, smart contract testing frameworks, dapps, etc. As some of you may know, Unstoppable Domains (UD) blew up when they launched on Zilliqa. UD aims to replace cryptocurrency addresses with a human-readable name and allows for uncensorable websites. Zilliqa will probably be the only one able to handle all these transactions onchain due to ability to scale and its resulting low fees which is why the UD team launched this on Zilliqa in the first place. Furthermore, Zilliqa also has a strong emphasis on security, compliance, and privacy, which is why they partnered with companies like Elliptic, ChainSecurity (part of PwC Switzerland), and Incognito. Their sister company Aqilliz (Zilliqa spelled backwards) focuses on revolutionizing the digital advertising space and is doing interesting things like using Zilliqa to track outdoor digital ads with companies like Foodpanda.
Zilliqa is listed on nearly all major exchanges, having several different fiat-gateways and recently have been added to Binance’s margin trading and futures trading with really good volume. They also have a very impressive team with good credentials and experience. They don't just have “tech people”. They have a mix of tech people, business people, marketeers, scientists, and more. Naturally, it's good to have a mix of people with different skill sets if you work in the crypto space.
Marketing & Community
Zilliqa has a very strong community. If you just follow their Twitter their engagement is much higher for a coin that has approximately 80k followers. They also have been ‘coin of the day’ by LunarCrush many times. LunarCrush tracks real-time cryptocurrency value and social data. According to their data, it seems Zilliqa has a more fundamental and deeper understanding of marketing and community engagement than almost all other coins. While almost all coins have been a bit frozen in the last months, Zilliqa seems to be on its own bull run. It was somewhere in the 100s a few months ago and is currently ranked #46 on CoinGecko. Their official Telegram also has over 20k people and is very active, and their community channel which is over 7k now is more active and larger than many other official channels. Their local communities also seem to be growing.
Moreover, their community started ‘Zillacracy’ together with the Zilliqa core team ( see www.zillacracy.com ). It’s a community-run initiative where people from all over the world are now helping with marketing and development on Zilliqa. Since its launch in February 2020 they have been doing a lot and will also run their own non-custodial seed node for staking. This seed node will also allow them to start generating revenue for them to become a self sustaining entity that could potentially scale up to become a decentralized company working in parallel with the Zilliqa core team. Comparing it to all the other smart contract platforms (e.g. Cardano, EOS, Tezos etc.) they don't seem to have started a similar initiative (correct me if I’m wrong though). This suggests in my opinion that these other smart contract platforms do not fully understand how to utilize the ‘power of the community’. This is something you cannot ‘buy with money’ and gives many projects in the space a disadvantage.
Zilliqa also released two social products called SocialPay and Zeeves. SocialPay allows users to earn ZILs while tweeting with a specific hashtag. They have recently used it in partnership with the Singapore Red Cross for a marketing campaign after their initial pilot program. It seems like a very valuable social product with a good use case. I can see a lot of traditional companies entering the space through this product, which they seem to suggest will happen. Tokenizing hashtags with smart contracts to get network effect is a very smart and innovative idea.
Regarding Zeeves, this is a tipping bot for Telegram. They already have 1000s of signups and they plan to keep upgrading it for more and more people to use it (e.g. they recently have added a quiz features). They also use it during AMAs to reward people in real-time. It’s a very smart approach to grow their communities and get familiar with ZIL. I can see this becoming very big on Telegram. This tool suggests, again, that the Zilliqa team has a deeper understanding of what the crypto space and community needs and is good at finding the right innovative tools to grow and scale.
To be honest, I haven’t covered everything (i’m also reaching the character limited haha). So many updates happening lately that it's hard to keep up, such as the International Monetary Fund mentioning Zilliqa in their report, custodial and non-custodial Staking, Binance Margin, Futures, Widget, entering the Indian market, and more. The Head of Marketing Colin Miles has also released this as an overview of what is coming next. And last but not least, Vitalik Buterin has been mentioning Zilliqa lately acknowledging Zilliqa and mentioning that both projects have a lot of room to grow. There is much more info of course and a good part of it has been served to you on a silver platter. I invite you to continue researching by yourself :-) And if you have any comments or questions please post here!
UYT Main-Net pre-launching AMA successfully completed with a blast
7 pm, 29th September 2020 Beijing time the UYT Main-Net pre-launching AMA successfully completed with a blast! Here is a full record of the AMA: Host: Hello everyone, it’s a great honor to host the first AMA of UYT network in China. Today, we have invited the person in charge of UYT Dao. Let’s ask Mr. Woo to introduce himself Woo: Hello, I’m Ben. I’ve met you in the previous global live broadcast. I’m the director of UYT Dao and the founder of IGNISVC. At present, I’m the CEO of the TKNT foundation and have been engaged in the blockchain industry. Q1. At present, different types of blockchains have emerged, but cross-chain interaction is still suffering a lot. In your opinion, what is the necessity and significance of cross-chain? Answer: The full name of UYT is to unite all your tokens, which is to integrate all public chains and increase the liquidity of the whole industry. Our purpose is not to create another public chain, but to become a platform for the exchange of value, technology, and resources of all public chains. What we need to solve is that each individual chain can circulate with each other. The full name of UYT is to unite all your tokens, which is to integrate all public chains and increase the liquidity of the whole industry. Our purpose is not to create another public chain, but to become a platform for the exchange of value, technology, and resources of all public chains. What we need to solve is that each individual chain can circulate with each other. Q2. The founder of Ethereum, V Shen, once wrote a cross-chain operation report for bank alliance chain R3, which mentioned three cross-chain methods. Which one does UYT belong to? Can you briefly introduce the cross-chain solution of UYT? Answer: In Vitalik’s cross-chain report, there are three main cross-chain methods. The first is that both parties do not know that they are crossing the chain, or that they cannot “read” each other, such as the centralized exchange. The second way is that one of the links can read other chains, such as side-chain / relay chain. That is, a can read B, and B cannot read a; The third is that both a and B can read each other’s, which can achieve the value and information exchange between a, B, and the platform. UYT belongs to the third kind. Our new official website will be online soon. Here are a few simple points: first of all, the architecture of UYT includes relay chain, parachain, parathreads, and bridges. In terms of ductility, it has exceeded almost all the public chains currently online. In the UYT network, there are four kinds of consensus participants, namely collector, fisherman, nominator, and validator. The characteristics of this model are: first, all people can participate without loss. Secondly, as long as anyone makes more contribution to the ecology, he will get more rewards, otherwise, he will receive corresponding punishment. The underlying layer of UYT is the substrate, which uses the rust programming language. Rust is committed to becoming a programming language that can solve the problems of high concurrency and high-security systems elegantly. This is also a great advantage that we are different from other blockchain projects in technology. Q3. What are the roles in the UYT network? What are their respective functions? Answer: After the main network of UYT is online, there will be four roles: collector, fisherman, nominator, and validator, which is totally different from the current system of the test network. The collector, in short, is responsible for collecting all kinds of information in the parallel chain and packaging the information to the verifier. Fishermen, to put it bluntly, is fishing law enforcement, which specifically checks out malicious acts and gets rewards after being checked out. The nominator, in fact, is a group of rights and interests. The verifier is its representative, and they entrust the deposit to the verifier. Verifier, package new blocks in the network. It must mortgage enough deposits and run a relay chain client on a highly available and high bandwidth machine. It can be understood as a mining pool. It can also be understood as the node in the current UYT DAPP. Q4. What is the mining mechanism of the UYT network? The only way to obtain UYT after its issuance is to participate in mining activities. In the initial stage, the daily constant output times of UYT are set to 1440000, and the cycle of bitcoin is halved. Mining rewards can be obtained in the following five ways: 1) Asset pledge mapping mining 2) Become the intermediate chain node of uyt network 3) Recommendation and reward mechanism 4) Voting reward 5) UYT network Dao will take out 10% of gas revenue from block packaging for community construction and reward of excellent community personnel Q5. The rise and fall of the blockchain are very fast. In order to give investors confidence, is there a detailed development plan, implementation steps, and application direction of UYT network in the next few months? Answer: UYT Network test network has been running stably for a year. After the main network is launched, all mechanisms will undergo major changes. The relationship between the UYT test network and the main network can be understood as the relationship between KSM (dot test network) and dot the main network, and the feasibility of the technology can be reflected more quickly by the UYT test network because of its faster timeliness and all future technology updates Some will move to the main network after the stable operation of the test network. In order to give users a better experience and give more rewards to excellent nodes, all Dao organizers are working hard for it. The development team has completed the cross-chain of bitcoin and some high-quality Ethereum based tokens in the early stage, and now the code has all been open source. For other mainstream currencies, community members can apply for funds to develop. In order to develop the ecology and make a better technical reserve, we will set up a special ecological development fund when the main network goes online. The transfer bridge is our key funding direction. The maximum application amount of a team is as high as 100000 US dollars. In addition, if other public chains want to connect to UYT, they will get technical support. In order to encourage developers to participate in ecological construction, Dao also launched a series of grants to support development. Developers can directly pull the better applications on Eth and EOS directly, or develop new products according to their own advantages. These directions are now the focus of funding. Due to the early online testing time of uyt network, it is based on the earlier version of substrate1.0. The on-chain governance mode can only be realized after the upgrade of 2.0 is completed. At present, the upgrading work is going on steadily, and the on-chain governance will be implemented in the main network with the launch of the uyt main network. As a heterogeneous cross-chain solution with high scalability and scalability, UYT network can perfectly bridge the parallel encryption system and its encryption assets in theory, and its wide applicability in the future can be expected. Therefore, we do not limit the areas where UYT network will play its advantages and roles. But in the general direction, there will be mainly DEFI and DEX ecological plates. From the industry, it can cover a wide range of fields, not only finance but also games, entertainment, shopping malls, real estate, and so on. Q6、How can UYT help DEFI? Answer: UYT network can not only link different public chains but also make parallel chains independent and interlinked. Just like the ACALA project some time ago, it has successfully obtained Pantera capital’s $7 million saft agreement. Although the concept of DEFI is very popular now, all DEFI products are still in the ecology of each public chain, and the cross-chain DEFI ecology has not been developed. UYT is to achieve cross-chain communication, value exchange, and develop truly decentralized financial services and products. For example, cross-chain decentralized flash cash, cross-chain asset support, cross-chain decentralized lending, Oracle machine, and other products. At present, our technical team is also speeding up the construction of infrastructure suitable for the landing of more DEFI products and services and is committed to creating a real cross-chain DEFI ecology, which is only a small step of UYT’s future plan. Q7、TKNT should be one of the hottest projects in the UYT ecosystem recently. Please give us a brief introduction to the TKNT project and the value of TKNT in the UYT ecosystem. Why can TKNT increase 400 times in 7 days? And what is the cooperative relationship between UTC and TKNT? Answer: I will answer each project from the technical and resource aspects. Let’s first introduce UTC. UTC is the token of Copernican network and the first project of UYT game entertainment ecology. In the future, it will be responsible for linking. Due to the high-quality public chain in the entertainment industry, because of the limited slots of UYT, each field will seek a high-quality partner and help the partner become the secondary relay chain of UYT. After the main network of UYT goes online, many chains will want to access UYT Greater value circulation, due to the limited external slots of UYT, the cost is also very high. At this time, you can choose to connect to UTC first, and then connect UTC to UYT. With more and more links with UYT, it will gradually evolve into a secondary relay chain of UYT network. UTC’s resources, online and offline, offline payment and offline entity applications, also have a very large community base. The ecological partners have very good operation experience in the game industry. They will use blockchain technology to change the whole game entertainment industry to make it more transparent and fair. At the same time, there are enough entity consumption scenarios. This is also UYT Because of the reason why the network chose to cooperate with it, the UTC project has been supported by the UYT ecological fund. The support fund includes that after the main network is launched, it will also be the first ecological cooperation project supported by UYT. Because of the online time of the main network of UYT, UTC can’t directly form a chain at present and will give priority to issuing on Ethereum. TKNT is a new concept project TKN.com TKN is the largest online centralized guessing game platform in the world at present. TKNT mixes bet mining and DEFI, so it can carry out fixed mining through platform games, build a system that can realize game participation and in application payment in all Dapps based on ERC20, and combine with various financial services. The reason why TKNT has created a myth of 400 times in 7 days is that the TkN platform has a buyback plan. As we all know, the online quiz game entertainment platform has an amazing profit. Every quarter, the profit will be used to buyback. The strong profit support has led to the huge increase of token. In the future, all users can use UTC to participate in TkN games. Therefore, the main network of UYT is that Line is also of great significance to TKNT. With the maturity of UYT ecology and technology, TKNT can have a more powerful performance. If TKNT wants to link more public chains, it needs to access UYT network, and realize a bigger vision with cross-chain interaction of UYT. After TKNT was launched on the exchange, the highest price has risen to $14, and now it has dropped to about $2.50. You will see that it will once again set a record high and create greater miracles. You will also see that $3 will be the best buying point for TKNT, because there will be several major moves in TKNT, and the global MLM plan will be launched on October 7 in Korea, China, and other countries There will be many marketing teams in Europe to promote TKNT, including DAPP.com As a shareholder of TkN, TKNT will also make every effort to promote TKNT. Secondly, TKNT will be launched next month on the largest digital currency exchange in South Korea, and Chinese users will see the shadow of TKNT on Binance in November. Of course, the decentralized trading platform of UYT will also be launched in the future. Q8. What is the significance of the launch of UYT’s main network for the industry and ecology? Answer: UYT is one of the few cross-chain platform projects in the industry at present. There are many public chains and coin issuing projects. Why? Because of less work, more money. However, there are very high technical and capital requirements for cross-chain and platform. This barrier is very high, so almost no project side is willing to do this. But once this is done, it will be of great significance to the whole industry of digital currency and blockchain. Because it will subvert the current situation of the whole currency circle and chain circle acting on their own, and the painting land is king. Let each independent ecosystem achieve a truly decentralized and trust-free cooperative relationship. This huge change will promote the whole industry to develop into a healthy and virtuous circle macro ecosystem. Q9. The slogan of many project supporters is that UYT should surpass Ethereum. What is the difference in technology between UYT network and Ethereum? Answer: Thank you so much for supporting UYT. In fact, the correct understanding is that UYT is the next era of Ethereum. First of all, UYT has a different vision from Ethereum. Before the emergence of UYT, Ethereum, and EOS, no matter how well they developed, belonged to the era of a single chain. The popular metaphor is a LAN. However, UYT can realize the interoperability of each chain and bring the blockchain into the Internet era. Secondly, UYT is far superior to Ethereum in technology. It mainly includes three aspects: shared security, heterogeneous cross-chain, and no fork upgrade. In the case that Ethereum 2.0 has not been implemented, UYT is the most friendly bottom layer for the DFI projects and other Dapps on Ethereum. Now, the hair chain architecture substrate of UYT is compatible with Ethereum smart contract language solidity, so eth developers can easily migrate their smart contracts to UYT. Up to now, there is no good solution to the congestion problem of Ethereum, while UYT network not only solves the network congestion problem. What’s more, UYT can easily realize one-click online upgrade, instead of having to redeploy a set of contracts on Ethereum for each version upgraded and then require users to follow them to migrate the original assets from the old contract to the new contract. Developers can quickly and flexibly iterate their own protocols to change their application solutions according to the situation, so as to serve more users and solve more problems. At the same time, they can also repair the loopholes in the contract very quickly. In the case of hacker attacks, they can also solve the hacker stealing money and a series of other problems through parallel chain management. We can find that for Ethereum, UYT not only solves the congestion problem we see in front of us but also provides the most important infrastructure for the future applications such as DFI on Ethereum to truly mature into an open financial application that can serve all people. It also opens the Web 3.0 era of the blockchain industry. In terms of market value, Ethereum currently has a strong ecological construction, with a market value of US $40 billion. UYT will also focus on the development of this aspect after the main network goes online. No matter in terms of market value or ecological construction, I have enough confidence in UYT, after all, we are fully prepared. Q10. What is the progress of the ecological construction of UYT? What opportunities do current ecological partners see in UYT or what changes may be brought about by UYT ecology? Answer: After the main network of UYT goes online, there will be a series of ecological construction actions, and more attention will be paid to establishing contact with traditional partners. Cross-chain decentralized flash cash, cross-chain asset support, cross-chain decentralized lending, Oracle machine, and other products will also be the key cooperation direction of UYT. UYT will give priority to the game and entertainment industry because this industry is most easily subverted by blockchain. As the ecological construction of UYT gets bigger and bigger, the future slots will become more and more expensive. The earlier you join UYT ecology, you will get more support from the ecological fund because the ecological fund is also limited. From the perspective of token value-added, all the project parties will cooperate with the project side in the future, and the project side needs to pledge a certain number of UYT to bid for slots, except for ecological rewards, others need to be purchased from market transactions. The difference between the pledge here and the pledge we understand is that the UYT of the ecological partner participating in the auction pledge cannot enjoy the computing power for mining. UYT main network has several opportunities for Eco partners to look forward to, the first point is bitcoin, bitcoin will be later than other assets late, but eventually, all the bubble and value will return to BTC, after the wave of DeFi bubble elimination, the focus will be very much in the bitcoin. UYT ecology can provide a more mature bottom layer for defi. In addition, now Ethereum’s DEFI is that of Ethereum and ERC 20 tokens, and the outbreak point of bitcoin has not yet arrived. Therefore, the DEFI of UYT ecology may be the next opportunity, which is a good opportunity for everyone. The second opportunity is that after the main network goes online, the future UYT ecological projects will compete to bid for slots. In fact, the original intention of UYT is to realize the interconnection of all chains. The chain outside the UYT ecology also needs to communicate. The third is cross-fi. The BIFI is hatched on Ethereum, and the def on UYT can realize multi-chain operation. For example, TkN games or future UTC game platform users can call bitcoin on the UYT chain. This form only belongs to the decentralized finance in the cross-chain era of UYT, which can be called cross-fi. Q11. Which exchanges will UYT go online next? What is the online strategy like? Answer: As the founder of ignisvc and as UYT As the head of the Dao organization, we have always had good cooperative relations with major exchanges all over the world. TKNT will appear in several exchanges one after another. Hitbtc exchange in the United Kingdom, Upbit and Bithumb Exchange in South Korea, Bitfinex exchange in the United States, Binance exchange in China, BKEX exchange, and Kucoin exchange in China are all our partners, and they have been paying close attention to UYT Development, UYT is the public chain with the largest user base and the highest community participation in the cross-chain field, so the future value is immeasurable. If we have to go to the exchange, then we will choose one of the above exchanges to launch. But the vision of UYT is to create a fairer, safer, and transparent circulation in the field of digital currency, and users can master all the assets by themselves, Therefore, in the beginning, there is a simple DEX on the UYT wallet, which is a simple matchmaking transaction and is also an on-chain transaction. After the completion of the UYT DEX, more transactions may occur in the UYT DEX. However, after the main network of UYT is online, centralized exchanges can directly access the block data synchronization of UYT, and it is not ruled out that some exchanges will directly go online for UYT trading. Such exchanges will not enjoy the support of the ecological support fund of UYT. The network project is a community-led project. Each cooperation plan of the exchange will be carried out in the way shared by the community in the future. Dao organization can only implement it according to the voting results. Q12. What are the plans for the promotion of ecological development and market by the launch of UYT main network? Answer: The launch of the main network will be completed around October 15. On the offline side, due to the epidemic situation, we will jointly organize corresponding market activities with nodes in different countries. At present, there are three large-scale offline meetups that have been identified. We will also start a global roadshow when the epidemic is over. On the online side, we have opened online Wechat, Kakao, Twitter, Reddit, and telegram communities. We will carry out AMA activities in various countries and promote them all over the world in various ways. Of course, we will launch MLM plans and cooperate with more marketing teams.
https://preview.redd.it/mnxeb74hk4j51.jpg?width=990&format=pjpg&auto=webp&s=32d152a7495971c10e1af12185abe5e77b61fd14 How popular is DeFi? Link, known as the leader of the oracle machine, has increased by 305.19% for the past three months, with an investment return of 17,052%, climbing to the fifth spot in the cryptocurrency ranking list by market value in the short term; Since its issuance, YFI, which has soared 350 times all the way, has attracted 630 million US dollars of investment in 5 days, and was even dubbed the next Bitcoin in this circle; From Comp for lending, KNC and BAL, governance tokens for decentralized exchanges, to SNX which is a stable currency payment network, various governance tokens of the DeFi ecosystem have emerged in an endless stream, stirring the blood in the market. Such a boom is not only reflected in the currency price, but also pushes the brand new DEX based on the AMM (automated market making) model an overnight hit. UniSwap, known as the next-generation casino, has surpassed the world's first-tier centralized exchanges such as Binance, OKex, and Huobi in user activity, daily trading volume, and daily turnover. With the rapid rise of UniSwap, the DEX threat theory has once again triggered heated discussions among the media and communities in the blockchain industry. DEX on the Rise The success of UniSwap is by no means something accidental. As early as 2018 when centralized exchanges suffered the hacker theft one after another, Vitalik Buterin, founder of Ethereum, predicted that the future lay in decentralized exchanges and that Ethereum, by developing a "better" decentralized platform, could empower the cryptocurrency community to regain the dominance from the centralized cryptocurrency exchange. To realize the decentralized concept of returning to users their asset ownership, geeks in the blockchain industry have made many attempts. Kyber Network, Bancor, Balancer, 0X, Curvefi, etc. are all DEXs based on Ethereum blocks. For a long time, affected by the performance of Ethereum and cross-chain issues, these DEXs were once stagnant. With the lessons learned from Ethereum DEX, newcomers to the DEX have focused on high performance, high TPS, and rich assets as the ultimate goal for product development. Amid the DEX threat theory, major exchanges have deployed their own public chain DEX products in a response to their respective development strategies: Binance launched Binance DEX on its Binance Chain, and Bittrex Exchange unveiled Ethfinex on the Ethereum and EOSfinex on the EOS blockchain, two platforms where users can exchange for fiat currencies; last year, CoinEx officially launched CoinEx Chain, a public chain dedicated to decentralized transactions, followed by CoinEx DEX. Since the birth of the DEX in the blockchain world, this field has never run out of competition. By independent development or other’s advantage? From 2017 when it was established to 2019 as it stabilized, DEX has witnessed its annual trading volume skyrocketing from less than US$5 million to over US$2.5 billion. As DeFi gains fame and grows rapidly, DEX has grown into the most popular source of money, attracting a flood of speculators. In the past month, the trading volume of the global cryptocurrency market DEX has exceeded US$ 4 billion, more than twice the figure across 2019. In the past two years, despite the increasingly in-depth exploration in the DEX, the cross-chain issue remains a stumbling block in its development path. DEX will not outperform CEX in the trading experience until a cross-chain solution is worked out. The concept of DeFi went viral in 2019. With the continuous improvement of the DeFi ecosystem, the current Ethereum blockchain has developed into a complete decentralized financial system, covering mortgage lending, interest from deposit, leveraged trading, token exchange, identity authentication, and other infrastructure essential to traditional financial systems. In addition to the mouth-watering profit, the DeFi ecosystem has also brought along explosive growth in both the type and quantity of digital assets, making DEX a market favorite. Compared with the DEX dedicated to public chains, the Ethereum-based DEX has been equipped with more possible functions and thus become more attractive thanks to the comprehensive supplementary infrastructure on Ethereum. This also presents DEX pioneers with new opportunities. Dubbed “Swap’s summer”, the summer of 2020 has seen a market rush in Swap development after UniSwap became a hit. Miniswap, Justswap, and btswap are no more innovative than UniSwap according to their product structures and white papers. By comparison, OneSwap has injected unique essence into its product design and governance model based on UniSwap's automated market making. Upgraded UniSwap OneSwap, which has a double mining model + order book, has received an investment of tens of millions from CoinEx even before the product is launched. It is known that OneSwap is jointly developed by a group of technology geeks who have engaged in the cryptocurrency community for many years. The project was initiated by a member of the team in an attempt to upgrade UniSwap after he experienced the convenient AMM enabled by UniSwap. Without limit orders, users have to trade in the price set by the platform, which, however, compromised their experience. In addition, the lack of liquidity mining and transaction mining rewards cannot reduce the losses of liquidity providers caused by unilateral market conditions. "DEX still has much room for perfection, and could even surpass CEX in trading experience" The OneSwap development team always believes that UniSwap still has a long way to go before it becomes the strongest DEX in the DeFi ecosystem. They have endeavored to, relying on their abundant experience in exchange product development and digital currency trading, create the most powerful DEX product in the DeFi ecosystem based on smart contracts. OneSwap is called the “upgraded UniSwap” in the community. By the combination of the Constant Product Market Maker (CPMM) model in the Uniswap project and the on-chain order book, it reduces restrictions on users’ trading, and, through its OneSwap Wallet, improves user interaction methods and further enhances their experience in trading and product usage. OneSwap boasts one-click token issuance and listing essential to DEX. Unlike the listing review mechanism on Binance DEX, the setting of OneSwap is more consistent with the concept of decentralization. Anyone can put his or her good projects and ideas, if any, into practice through OneSwap without permission. In terms of product design, OneSwap will add to its function menu the Candlestick chart, order form, and depth chart according to user habits, apart from limit orders. These functions will offer OneSwap users an experience as smooth, easy-to-use, and convenient as in the CEX. A new source of money?A two-prongedplatform withtransaction mining + liquidity mining To support on-chain governance, OneSwap will issue a ERC20 governance token called ONES. The total number of ONES remains constant at 100 million, 50% of which will be used as community funds to support the construction of the OneSwap ecosystem and 50% will be owned by the OneSwap team. Community funds can be applied for through on-chain governance. 5% of the part held by the team will be unlocked initially, and the rest will be unlocked at a rate of 5% every six months until all is unlocked after four and a half years. After the OneSwap product was launched, the OneSwap team will take part of the initially unlocked tokens as airdrop rewards for the open beta. Then OneSwap will officially start liquidity mining and transaction mining, and the governance token ONES will also be simultaneously launched on centralized trading platforms across the world. The first round of mining activities will last for one month, and mining rewards are yet to be made public. Liquidity mining is a popular way of obtaining governance tokens in the DeFi ecosystem. Well-known DeFi projects including COMP, Cure, and Banner have all enabled liquid mining. Transaction mining could date back to 2018 when Fcoin grew popular. The transaction mining model initiated by Fcoin in 2018 once set off a bull market that year, pushing many investors into financial freedom in the rush of transaction mining. In addition, transaction mining based on the DeFi ecosystem is still a blue ocean, which is not common in the current market. The success of OneSwap's double mining model, if possible, would surely start a craze in the cryptocurrency market. The OneSwap team has not yet announced specific mining rules, but disclosed that it has developed the smart contract code. To ensure the product security, OneSwap will invite three well-known security agencies in the blockchain industry to audit the code and announce the auditing results in early September at the soonest. Conclusion DeFi did not rise to fame without reason in 2020. Such overnight popularity is an inevitable result of Ethereum's efforts to build a decentralized consensus mechanism and improve infrastructure in the past few years. Ethereum has almost become the only public chain in the DeFi circle and the only construction base for well-known DEX. If OneSwap succeeds, it means a huge breakthrough for both DeFi and Ethereum, and decentralization in its true sense is around the corner.
Why Ethereum Problems Make UMI the Flagship Among the New Generation Cryptocurrencies
https://preview.redd.it/8skuypxp9lj51.jpg?width=1023&format=pjpg&auto=webp&s=ba5a38ba592428f92dc7c1943a780ff127132875 Ethereum cryptocurrency that comes second in terms of capitalization on the crypto market is traditionally seen as fast and profitable. However, over the last few weeks it's had a rough patch. Since early August, the network has had huge queues of transactions pending processing while fees have skyrocketed and surpassed the historical high. The main issue though is that even fees of a few dollars per transfer don't help get rid of the“traffic jams”. The cause of this is numerous DeFi projects and a huge number of financial pyramids based on the Ethereum platform. Both generate excessive load on the network. The situation is downright unpleasant, and our users might question whether the UMI network could face a similar challenge? We'd like to assure you it could not. The UMI network is by default protected against these problems — it cannot have “traffic jams”, fees or financial pyramids. But first things first. How has the Ethereum network ground to a halt? In its report dated August 4, Arcane Research that provides analysis within the field of cryptocurrency stated that over the previous week the daily size of transaction fees in the Ethereum network has surged up to a record high for over two and a half years. On August 3, the median value #%D0%9F%D1%80%D0%B8%D0%BC%D0%B5%D1%80_%D0%B8%D1%81%D0%BF%D0%BE%D0%BB%D1%8C%D0%B7%D0%BE%D0%B2%D0%B0%D0%BD%D0%B8%D1%8F)of the fee amounted to $0.82, with the overall amount of transaction fees totaling $2 mln. However, it only signaled the start of real problems. Over the next week, fees continued to grow and by August 11 the median fee value almost doubled equaling $1.57. Larry Cermak, an expert at a big analytical and news-making crypto portal The Block, wrote in his August 15 tweet that over a week the total amount of transaction fees in the Ethereum network totaled $34.5 mln, having surpassed its historical high. Meanwhile, in the Bitcoin network that is seen as too expensive the fees were almost four times lower at $9 mln. The total fee amount paid by cryptocurrency users over a week:
Ethereum — $34.5 mln;
Bitcoin — $9 mln;
Monero — $2,240;
Tezos — $1,876;
Cardano — $1,615;
XRP — $1,138;
BSV — $1,102;
Stellar — $1,059;
Bitcoin Cash — $1,027;
UMI — $0. Let's talk about it a little later.
https://preview.redd.it/z9azd9v6alj51.png?width=1600&format=png&auto=webp&s=25c365d6e14665ecda4a2b8d19b2fc57dd5cde1e Historical Growth Chart for Ethereum Fees.Source The existing situation shows that Ethereum is actually not as fast and profitable as commonly cited. Additionally, this could happen to almost any cryptocurrency except UMI that charges no fees whatsoever. We will tell you why. Why have these problems emerged? There is nothing unoriginal: the Ethereum network simply can't handle an increased load. Arcane Research analysts consider that a principal cause of this situation is the constantly increasing number of the DeFi ecosystem projects built on the Ethereum blockchain. Their number is growing all the time which causes the overload of the network. As of August 12, the total amount of funds in DeFi applications reached $4.3 billion which is 19.5% higher than that in the past week. At the time of writing this article, the amount surged to $6.21 billion. You can see the current data here. What is the most unpleasant about DeFi protocols is that a lot of them are scam projects. Which is not the worst part though. There is also another factor that significantly slows down the Ethereum network. There are a lot of pyramid-like projects that are built on the EOS platform and use smart contracts. One of them is SmartWay Forsage, which regularly overloads the network with a large number of transactions, causes traffic jams, and, consequently, leads to increased fees (keep in mind that Ethereum miners choose transactions with a higher commission). Vitalik Buterin, the co-founder of Ethereum, revealed his disapproval of the SmartWay Forsage methodology and asked them to "leave and not pollute Ethereum ecology in the future". However, the project is slow to do this — it continues to deceive users. This is only the tip of the iceberg of scam projects which abounds on the EOS network –– they continually emerge, work for a while, then go down as scams and are replaced with new ones. This never-ending stream of "investment projects" based on the Ponzi scheme overloads the system. This is the reason why Adam Back, a pioneer of the crypto industry and founder of the technology company Blockstream, equated Ethereum with such infamous projects as Onecoin and Bitconnect. Adam Back's solid dig at Ethereum became the subject of much debate among crypto enthusiasts. Of course, it all doesn't mean that Ethereum is a bad cryptocurrency. On the contrary, it has a lot of advantages over other coins. But all that has happened exposes Ethereum's faults which must be eliminated. The problem is that they may not be fixable. It is far from certain that the developers will be able to get rid of all the defects as the system has huge scalability problems. The crypto community has to admit that Ethereum, like other first-generation cryptocurrencies, has issues with capacity, fees, and scalability and is gradually becoming obsolete. 2020 is the time for young innovative cryptocurrencies such as UMI. UMI is the flagship of new-generation cryptocurrencies. In real fact, any cryptocurrency could face it. Each cryptocurrency charges fees which typically surge when the network is overloaded or the price is going up. Everyone will remember 2017 when in line with price growth and the network's overload Bitcoin transaction fee reached a high of around $40. But when it comes to UMI, it works the other way round. The UMI network's advantages are high capacity, no fees, and scaling possibilities. It uses the best and fastest crypto industry solutions and excludes all inefficient methods by default. Smart optimization in combination with the Proof-of-Authority technology operating on the master node basis enables almost instant payments. At the stage of network testing, an incredibly high capacity was achieved:
up to 4,369 transactions per second;
up to 262,140 transactions per minute;
up to 15,728,400 transactions per hour;
up to 377,481,600 transactions per day.
Ethereum processes about 20 transactions per second. It means that the UMI network can process transactions that Ethereum processes over a year in 1 to 5 days — and with no fees. https://preview.redd.it/rwohnov3alj51.png?width=1125&format=png&auto=webp&s=4329b75c0bd8b7a22276b529f5ca433d17a0874f The UMI network can process transactions that Ethereum processes over a year in a few days and with no fees.More details What is more important is that less than 0.001% of the network's overall potential is used now. The UMI network has a lot of reserve capacity and can handle hundreds of thousands of times heavier load. Moreover, with scaling possibilities, UMI can keep up with the times. The UMI code ensures the safe introduction of any upgrades — the network can be easily modified and scaled with cutting edge technology solutions. In other words, traffic jams will never pose a problem for us. UMI will instantly process all transactions, with no fees. Always. https://preview.redd.it/t0068th0alj51.png?width=544&format=png&auto=webp&s=019f46ec8c093480c4638cf098312a5a146134a8 A real-time speedometer displays the number of transactions processed by the UMI network per second.Link Additionally, unlike Ethereum and other cryptocurrencies, the UMI's staking smart contract prevents possibilities of any pyramid schemes, meaning eliminates their negative influence. Our staking is completely safe and secured against scammers. Read more about this in our article. Any UMI staking structure could work forever. In other words, you can multiply your coins at a rate of up to 40% per month for an indefinitely long period of time. UMI doesn't inherit the disadvantages of the first-generation cryptocurrencies. This is an innovative, carefully designed network based on state-of-the-art technologies. UMI is an ambitious step toward the future. And we're making it together right now! Sincerely yours, UMI team
The power players of consumer finance in the 21st century will be crypto-native companies who build with blockchain technology at their core.
The crypto landscape is still nascent. We’re still very much in the fragmented, unbundled phase of the industry lifecycle. Beyond what Genesis Block is doing, there are signs of other companies slowly starting to bundle financial services into what could be an all-in-one bank replacement. So the key question that this series hopes to answer:
Which crypto-native company will successfully become the bank of the future?
We obviously think Genesis Block is well-positioned to win. But we certainly aren’t the only game in town. In this series, we’ll be doing an analysis of who is most capable of thwarting our efforts. We’ll look at categories like crypto exchanges, crypto wallets, centralized lending & borrowing services, and crypto debit card companies. Each category will have its own dedicated post. Today we’re analyzing big crypto exchanges. The two companies we’ll focus on today are Coinbase (biggest American exchange) and Binance (biggest global exchange). They are the top two exchanges in terms of Bitcoin trading volume. They are in pole position to winning this market — they have a huge existing userbase and strong financial resources. Will Coinbase or Binance become the bank of the future? Can their early success propel them to winning the broader consumer finance market? Is their growth too far ahead for anyone else to catch up? Let’s dive in. https://preview.redd.it/lau4hevpm7f51.png?width=800&format=png&auto=webp&s=2c5de1ba497199f36aa194e5809bd86e5ab533d8
The most formidable exchange on the global stage is Binance (Crunchbase). All signs suggest they have significantly more users and a stronger balance sheet than Coinbase. No other exchange is executing as aggressively and relentlessly as Binance is. The cadence at which they are shipping and launching new products is nothing short of impressive. As Tushar Jain from Multicoin argues, Binance is Blitzscaling. Here are some of the products that they’ve launched in the last 18 months. Only a few are announced but still pre-launch.
Binance is well-positioned to become the crypto-powered, all-in-one, bundled solution for financial services. They already have so many of the pieces. But the key question is:
Can they create a cohesive & united product experience?
Binance is strong, but they do have a few major weaknesses that could slow them down.
Traders & Speculators Binance is currently very geared for speculators, traders, and financial professionals. Their bread-and-butter is trading (spot, margin, options, futures). Their UI is littered with depth charts, order books, candlesticks, and other financial concepts that are beyond the reach of most normal consumers. Their product today is not at all tailored for the broader consumer market. Given Binance’s popularity and strength among the pro audience, it’s unlikely that they will dumb down or simplify their product any time soon. That would jeopardize their core business. Binance will likely need an entirely new product/brand to go beyond the pro user crowd. That will take time (or an acquisition). So the question remains, is Binance even interested in the broader consumer market? Or will they continue to focus on their core product, the one-stop-shop for pro crypto traders?
Controversies & Hot Water Binance has had a number of controversies. No one seems to know where they are based — so what regulatory agencies can hold them accountable? Last year, some sensitive, private user data got leaked. When they announced their debit card program, they had to remove mentions of Visa quickly after. And though the “police raid” story proved to be untrue, there are still a lot of questions about what happened with their Shanghai office shut down (where there is smoke, there is fire). If any company has had a “move fast and break things” attitude, it is Binance. That attitude has served them well so far but as they try to do business in more regulated countries like America, this will make their road much more difficult — especially in the consumer market where trust takes a long time to earn, but can be destroyed in an instant. This is perhaps why the Binance US product is an empty shell when compared to their main global product.
Disjointed Product Experience Because Binance has so many different teams launching so many different services, their core product is increasingly feeling disjointed and disconnected. Many of the new features are sloppily integrated with each other. There’s no cohesive product experience. This is one of the downsides of executing and shipping at their relentless pace. For example, users don’t have a single wallet that shows their balances. Depending on if the user wants to do spot trading, margin, futures, or savings… the user needs to constantly be transferring their assets from one wallet to another. It’s not a unified, frictionless, simple user experience. This is one major downside of the “move fast and break things” approach.
BNB token Binance raised $15M in a 2017 ICO by selling their $BNB token. The current market cap of $BNB is worth more than $2.6B. Financially this token has served them well. However, given how BNB works (for example, their token burn), there are a lot of open questions as to how BNB will be treated with US security laws. Their Binance US product so far is treading very lightly with its use of BNB. Their token could become a liability for Binance as it enters more regulated markets. Whether the crypto community likes it or not, until regulators get caught up and understand the power of decentralized technology, tokens will still be a regulatory burden — especially for anything that touches consumers.
Binance Chain & Smart Contract Platform Binance is launching its own smart contract platform soon. Based on compatibility choices, they have their sights aimed at the Ethereum developer community. It’s unclear how easy it’ll be to convince developers to move to Binance chain. Most of the current developer energy and momentum around smart contracts is with Ethereum. Because Binance now has their own horse in the race, it’s unlikely they will ever decide to leverage Ethereum’s DeFi protocols. This could likely be a major strategic mistake — and hubris that goes a step too far. Binance will be pushing and promoting protocols on their own platform. The major risk of being all-in on their own platform is that they miss having a seat on the Ethereum rocket ship — specifically the growth of DeFi use-cases and the enormous value that can be unlocked. Integrating with Ethereum’s protocols would be either admitting defeat of their own platform or competing directly against themselves.
The crypto-native company that I believe is more likely to become the bank of the future is Coinbase (crunchbase). Their dominance in America could serve as a springboard to winning the West (Binance has a stronger foothold in Asia). Coinbase has more than 30M users. Their exchange business is a money-printing machine. They have a solid reputation as it relates to compliance and working with regulators. Their CEO is a longtime member of the crypto community. They are rumored to be going public soon.
Let’s look at what makes them strong and a likely contender for winning the broader consumer finance market.
Different Audience, Different Experience Coinbase has been smart to create a unique product experience for each audience — the pro speculator crowd and the common retail user. Their simple consumer version is at Coinbase.com. That’s the default. Their product for the more sophisticated traders and speculators is at Coinbase Pro (formerly GDAX). Unlike Binance, Coinbase can slowly build out the bank of the future for the broad consumer market while still having a home for their hardcore crypto traders. They aren’t afraid to have different experiences for different audiences.
Brand & Design Coinbase has a strong product design team. Their brand is capable of going beyond the male-dominated crypto audience. Their product is clean and simple — much more consumer-friendly than Binance. It’s clear they spend a lot of time thinking about their user experience. Interacting directly with crypto can sometimes be rough and raw (especially for n00bs). When I was at Mainframe we hosted a panel about Crypto UX challenges at the DevCon4 Dapp Awards. Connie Yang (Head of Design at Coinbase) was on the panel. She was impressive. Some of their design philosophies will bode well as they push to reach the broader consumer finance market.
Early Signs of Bundling Though Coinbase has nowhere near as many products & services as Binance, they are slowly starting to add more financial services that may appeal to the broader market. They are now letting depositors earn interest on USDC (also DAI & Tezos). In the UK they are piloting a debit card. Users can now invest in crypto with dollar-cost-averaging. It’s not much, but it’s a start. You can start to see hints of a more bundled solution around financial services.
Let’s now look at some things that could hold them back.
Slow Cadence In the fast-paced world of crypto, and especially when compared to Binance, Coinbase does not ship very many new products very often. This is perhaps their greatest weakness. Smaller, more nimble startups may run circles around them. They were smart to launch Coinbase Ventures where tey invest in early-stage startups. They can now keep an ear to the ground on innovation. Perhaps their cadence is normal for a company of their size — but the Binance pace creates quite the contrast.
Institutional Focus As a company, we are a Coinbase client. We love their institutional offering. It’s clear they’ve been investing a lot in this area. A recent Coinbase blog post made it clear that this has been a focus: “Over the past 12 months, Coinbase has been laser-focused on building out the types of features and services that our institutional customers need.” Their Tagomi acquisition only re-enforced this focus. Perhaps this is why their consumer product has felt so neglected. They’ve been heavily investing in their institutional services since May 2018. For a company that’s getting very close to an IPO, it makes sense that they’d focus on areas that present strong revenue opportunities — as they do with institutional clients. Even for big companies like Coinbase, it’s hard to have a split focus. If they are “laser-focused” on the institutional audience, it’s unlikely they’ll be launching any major consumer products anytime soon.
Coinbase Wrap Up
At Genesis Block, we‘re proud to be working with Coinbase. They are a fantastic company. However, I don’t believe that they’ll succeed in building their own product for the broader consumer finance market. While they have incredible design, there are no signs that they are focused on or capable of internally building this type of product. Similar to Binance, I think it’s far more likely that Coinbase acquires a promising young startup with strong growth.
Other US-based exchanges worth mentioning are Kraken, Gemini, and Bittrex. So far we’ve seen very few signs that any of them will aggressively attack broader consumer finance. Most are going in the way of Binance — listing more assets and adding more pro tools like margin and futures trading. And many, like Coinbase, are trying to attract more institutional customers. For example, Gemini with their custody product.
Coinbase and Binance have huge war chests and massive reach. For that alone, they should always be considered threats to Genesis Block. However, their products are very, very different than the product we’re building. And their approach is very different as well. They are trying to educate and onboard people into crypto. At Genesis Block, we believe the masses shouldn’t need to know or care about it. We did an entire series about this, Spreading Crypto. Most everyone needs banking — whether it be to borrow, spend, invest, earn interest, etc. Not everyone needs a crypto exchange. For non-crypto consumers (the mass market), the differences between a bank and a crypto exchange are immense. Companies like Binance and Coinbase make a lot of money on their crypto exchange business. It would be really difficult, gutsy, and risky for any of them to completely change their narrative, messaging, and product to focus on the broader consumer market. I don’t believe they would ever risk biting the hand that feeds them. In summary, as it relates to a digital bank aimed at the mass market, I believe both Coinbase and Binance are much more likely to acquire a startup in this space than they are to build it themselves. And I think they would want to keep the brand/product distinct and separate from their core crypto exchange business. So back to the original question, is Coinbase and Binance a threat to Genesis Block? Not really. Not today. But they could be, and for that, we want to stay close to them. ------ Other Ways to Consume Today's Episode:
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₿ XRP Remittance and Dollar Value Surging, ZCash Bitcoin’s Sidechain, Binance on Brave & ETH 2.0
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