A Digital Currency Revolution Is Taking Place in Venezuela

Venezuela residents are now more than ever before exchanging Bolivars for Bitcoin due to the political uncertainty that has gripped the South American nation. The highly contentious re-election that occurred last year and the subsequent swearing-in ceremony that happened on January 10 has pushed tensions to boiling point.

The re-election saw President Nicolás Maduro retain his presidency after what was widely termed as a show election. The embattled president has ignored calls from the European Union and the international community to step down. Protests against his leadership have also rocked the country.

A Political Standoff

The current political standoff is fueling the scramble to acquire bitcoin. More Venezuelan citizens are opting to use the digital currency because it has higher value retention than the Bolivar. The country experienced a 1,000,000 percent inflation rate in 2018, hence the move towards cryptocurrencies.

Crypto P2P trading platform, LocalBitcoins has reportedly processed over $15 million in Bolivar to BTC trades within the past seven days. These figures have been confirmed by statistics derived from CoinDance.

Venezuela currently faces elaborate economic sanctions imposed by the United States’ government. This is due to a spate of human rights violations and flagrant acts of corruption committed by the present administration at the expense of its citizens. Many of the sanctions target President Maduro’s inner circle, as well as a host of government agencies.

The latest government institution U.S. sanctions are targeting is the state-run oil company, PDVSA. The U.S. slapped the PDVSA with sweeping sanctions that bar it from making oil exports to the United States. PDVSA is only allowed to do so if it agrees to accept payments made via blocked escrow accounts, which are not under the control of the country’s leadership.

Venezuela buys Bitcoin

A Pro-Bitcoin President

Venezuela’s self-proclaimed interim president, Juan Guaido, is an active proponent of Bitcoin and has publicly rallied against Maduro’s cryptocurrency, the petro. The Venezuelan administration has tried to push for its usage among the population by forcing some government-issued payments, such as pensions, to be made in petro.

This has done little to create widespread acceptability. Foreigners who wish to obtain a passport are also required to make payments in the petro cryptocurrency.

That said, Venezuela citizens are generally distrustful of the government-controlled petro cryptocurrency. This is because the country’s leadership largely determine its fortunes. It is likely that Guaido will ditch the petro if he assumes power.

The current administration developed the petro to circumvent international sanctions. Guaido is supported by many E.U. nations and the United States and is unlikely to need a state cryptocurrency to overcome the sanctions, which are set to be lifted if he usurps Maduro.

The good news for the BTC crypto community is that he has shown great support for Bitcoin since 2014. Numerous tweets illustrate his enthusiasm for the digital currency in its formative years.

In December 2017, when Bitcoin was experiencing a boom, he dissed Maduro’s petro cryptocurrency, dismissing it as a digital scam. According to his statement, no one could ascertain whether it was really backed by the country’s oil reserves.

Guaido has also been supporting Bitcoin adaptation efforts in the country and was quick to announce the launch of the Plataforma Sur Bitcoin cryptocurrency exchange platform, which allows Venezuelans to trade their Bolivars for BTC.

Political Unrest Delays the Installation of the First Bitcoin ATM

Venezuela is set to get its first bitcoin ATM in the coming weeks. This is according to Jorge Farias, the CEO of Cryptobuyer, a Panama based crypto ATM enterprise. He declared this during a recent interview with Union Radio.

Farias revealed that the ATM was already in the country pending installation. Speaking to Coindesk, he cited political unrest as one of the main reasons why his team was hesitant to begin installation right away.

The new Bitcoin ATM development comes in the wake of reports that the Venezuela government has been intermittently blocking access to the LocalBitcoins P2P crypto trade website. This is amid government concerns that capital flight at this crucial moment could further cripple the country’s economy.

LocalBitcoins has reportedly processed over $15 million bitcoin-Bolivar transactions within the past month. Reports of the block are unconfirmed as CoinDance still indicates that Bolivar-bitcoin trades on the platform are on the rise.

Venezuelans Propagate Cryptocurrency Use Across Latin America

Venezuelan citizens have a long history with cryptocurrencies, which have for many years offered respite from the Bolivar’s high inflation rate. They are also viewed as a suitable means of money transfer.

According to Matias Goldenhörn, a director at Athena Bitcoin, the South American crypto ATM market has been growing at an exponential pace. This is largely because of the widespread awareness propagated by the Venezuelan diaspora community.

Because of the economic sanctions that have crippled the country’s international money transfer system, many opt to send funds to their relatives back at home via cryptocurrency networks. The Venezuelan diaspora community also helps spread crypto awareness across the continent.

According to Goldenhörn, Athena Bitcoin has been able to rake in about $3 million in profits from 25 crypto ATMs installed across Latin America largely because of this social element.


This article by Elizabeth Gail was previously published on Coincentral.com

About the Author:

Elizabeth Gail is crypto-enthusiast and a blogger. Her specialties include cryptocurrency news and analysis. When not writing about crypto, she’s out taking part in humanitarian endeavors across the world. You can reach out and engage with her on Twitter.

5 Most Useful Blockchain Videos: A Beginner’s Guide

This article by Sarah Pritzker first appeared on Youtubetomp3shark.com.

You might be somewhat familiar with the idea of blockchains, or you might have only heard of the phrase in passing (or you might not have any idea what a blockchain is but thought the article title sounded more interesting than the topic currently being discussed in the meeting your supervisor is making you sit through…). Either way, there are still a lot of questions that you probably have. This article has links to videos that will answer all your questions about blockchain.

What is a blockchain?

How does a blockchain actually work?

Are blockchains really as secure as they claim to be?

Can you invest in blockchain itself?

What is the advantage of blockchain?

Maybe you’re getting more involved and want to delve deeper into the exciting and fascinating world of blockchains. In that case, your questions might be more advanced like:

What programming language is used for blockchains?

Is blockchain open source?

Is blockchain hackable?

Are there other use cases for blockchain beyond bitcoin storage?

Will blockchain change the world?

What is Blockchain - VideosNo matter what your string of queries, the best place to find the answers is always the internet. There are thousands and thousands of videos out there explaining the definition, uses, and inner workings of the blockchain.

I know what you’re thinking. Great! Let’s sift through thousands of videos to find the ones that actually make sense, answer your questions, and give over the information you want in an appealing manner. If that doesn’t sound as much fun as a barrel of monkeys (why would a barrel of monkeys be fun anyway?!), then you’re in luck.

Since we know how interested our readers are in the topic, we’ve aggregated the best videos from across the web that talk about blockchains. From the straight-up definition to the more advanced jargon that most of us will never really understand, check out the 5 most useful blockchain videos out there to help you get started down the path of blockchain wisdom.

Great Blockchain Video #1: What is blockchain? CNBC Explains by Tom Chitty

And here’s why: It gives you all the important information you want to know, starts from the beginning, and explains the entire concept well

There are a lot of blockchain for beginners videos. You’ll recognize them by the names like, what is a blockchain, blockchain explained, or blockchain for beginners. The truth is, though, that most of these videos take a lot for granted, assume you know more than you actually do about the topic, or don’t really explain the concept in a practical way.

And that’s why this CNBC exclusive done by Tom Chitty is our first recommendation for anyone who is just starting out on the learning journey to blockchain technology. If you can understand the accent and overlook the poor wardrobe choices, then you can actually learn a ton from this explanation video. Chitty goes through the ABCs of blockchains, showing the negatives alongside the positive uses for blockchains. He also shows you exactly how it works, why it is so secure, and what future applications might be possible for this technology.

The CNBC video also takes you through the benefits and possible financial ramifications that are involved in embracing this technology. All in all, Chitty does a great job of explaining a complex topic and gives you a lot of food for thought.

Great Blockchain Video #2: New Kids on the Blockchain by Lorne Lantz

And here’s why: Practical ways people are currently putting blockchain to good use and how they will even more so in the future

Aside from the fact that this is a TED talk, which automatically makes it amazing, Lorne Lantz explains exactly how blockchain works quickly and eloquently. He then moves on to break down how blockchain works within the bitcoin universe, something that most people are curious about. Finally, Lantz illustrates how blockchain can be used in other instances. This is not only fascinating, but it is a great way to educate the public about how this brilliant technology can be utilized in the future and within our day-to-day interactions.

Great Blockchain Video #3: Understand the blockchain in two minutes by Institute for the Future (IFTF)

And here’s why: It’s fast and easy to watch but surprisingly thorough for a two-minute video

We all want to know more about various topics like cybersecurity, the effect of drug and alcohol combinations, or depression and prevention. But let’s face it, we’re lazy! And what’s more, our attention spans are shorter than Michael Jordan’s laughable attempt at becoming a baseball star. For this reason, I am highlighting this video from IFTF.

The Institute for the Future does snapshots of interesting topics, trending concepts, and technological advancements that they deem worthy of a closer look. This video on blockchain is just two minutes long, but somehow it manages to explain everything you really need for a cursory understanding of the topic (and even a little more). So, if you’re already antsy just from reading this intro, check out the IFTF blockchain video (you can watch it double speed if you’re that strapped for time!).

Great Blockchain Video #4: How the blockchain will radically transform the economy by Bettina Warburg

And here’s why: Food for thought on a more advanced technology that is offering a safer and more reliable forum for value exchange

Whether you’re a conspiracy theorist, a budding financial mogul, or just someone who thinks it’s really cool to see entire empires brought to their knees by the unlikely underdog (think David and Goliath or Spartans against the Persians), this is a must watch video. Bettina Warburg explains briefly how throughout history we have used various methods to exchange values within our societies. From protection to fish and coins and now to the more advanced banks and digital currencies, the world has always had its way of trading valuables for desired goods.

In this video (yep, another TED talk), Warburg takes us through the process of how blockchain is the next chain in the evolution of value exchange. She expertly breaks it down, so you can see how this makes sense on a sociological, economic, and technological level. What’s more, she demonstrates how blockchain is the safest, easiest, and most reliable method we have come up with yet.

So basically, Warburg’s video shows viewers how blockchain is like a solid, unbreakable safe, which makes it more trustworthy and evergreen than any other transaction method that came before it. I don’t want to spoil the video for you, so just watch it for yourself.

Great Blockchain Video #5: Blockchain: Massively Simplified Richie Etwaru

And here’s why: A fabulous twist

This video starts off seemingly like all other beginner’s guides to blockchain. It talks about the early days of the internet (those dark times of dial-up modems and even earlier ARPAnet packet switching technologies) and quickly fast forwards to show you how kickass technology has become (as if we needed a video to tell us that).

All very interesting stuff, but nothing new. And then Etwaru does something that nobody else we’ve seen so far attempt. He takes blockchain and explains how it can bridge a gap that no other technology has been able to traverse, a gap that is so fundamental to human interactions and our society as a whole that it’s truly a marvel that we’ve gotten this far in history without having a more reliable failsafe for it.

In this video, Etwaru explains that inventions are all about bridging gaps in our society, world, and lives. He then continues on illustrating how blockchain bridges the gap of trust, one of the most core and necessary element of our society, one that holds trillions of dollars on its wobbly shoulders. With his mesmerizing voice, witty personality, and mind-blowing revelation, Etwaru really blows the top off of this simplified concept. And that’s what makes his video on blockchain really stand out.

Blockchain Explained, Expanded, and Explored

So, there you have it. Sure, you could sit there for hours and hours watching video after video, sifting through the crap and suffering through the clunky terminology, but why bother? We’ve rounded up the cream of the crop, the best videos out there, the ones that’ll give you the biggest bang for your buck. In fact, if you just watch these five videos, you’ll:

  • Know all the basic information about what blockchain is, how it works, and what it’s used for
  • Be able to hold your own in a conversation that is arguing the different sides of blockchain
  • Have some interesting ideas to help stir up controversy when everyone’s talking about this technology at the office water cooler, at your next family barbecue, or this Thursday night at the bar
  • Just generally sound like a smartass because you know more about an interesting topic than almost anyone else in the room

Of course, if you are a real newbie to the blockchain concept, then here’s some quick information to warm you up to the subject and to ensure you don’t sound like a complete idiot the next time the subject comes up.

  • Blockchain is an online database that can be accessed by anyone and from anywhere in the world (provided you have an internet connection)
  • Blockchain is decentralized, which means its ledger is shared on every computer around the world, so it has no single central location
  • Blockchain can be added to by anyone, but once a record (or block of information) is created, it cannot be tampered with, changed, or deleted
  • Bitcoin is NOT the only use case for blockchain technology. In fact, it’s just the beginning baby! From banking to cybersecurity, crowdfunding, Internet of Things, and healthcare, blockchain has so many real-life applications.

Now that you’ve got all this information in your head, knowledge is power. So, get out there and do the best thing anyone can do with a boatload of interesting information; flaunt it in front of your friends.


This article by Sarah Pritzker was originally published on https://www.youtubetomp3shark.com, all rights reserved.

About the Author:

Sarah is a Content Writer, Editor & Strategist at Youtubetomp3shark.com. Follow her on Twitter.

 

FinTech Blockchain: A Look into a More Efficient Future

Blockchain technology is quietly transforming industries in ways that were unimaginable a few years ago. Transactions that once took days to complete, and multiple third-party verifications systems, can now be conducted more efficiently. Companies continue to recognize the power of blockchain in streamlining their financial dealings. Today, FinTech blockchain applications are a normal part of the business world. The blockchain space is now over a decade old, and there are numerous government blockchain applications being tested. Here are some of the ways that FinTech blockchain changed the scope of global e-commerce.

Global Payments

Anyone familiar with the process of transferring money internationally understands that it is an expensive and time-consuming procedure. During the transfer process, valuable funds can be lost due to fluctuations in the global exchange rate of fiat currencies.

FinTech XE Currency Converter

Recognizing these shortcomings in the current system, cryptocurrencies such as Ripple created an international money transfer system that enables near-instant transfers of unlimited amounts for next to nothing. Today, there is an entire cryptocurrency sector focused on providing international money transfer solutions to individuals and businesses.

In September 2017, six major banks, including Barclay’s, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC and State Street, partnered to create their own native cryptocurrency called the utility settlement coin. This decision highlights banks’ growing interest in the cost-savings achieved through blockchain integration.

P2P Payments

Blockchain technology provides a true peer-to-peer payment experience. Bitcoin, the world’s first cryptocurrency and largest blockchain, is described as “a peer-to-peer electronic cash system” in Satoshi Nakamoto’s Bitcoin white paper. This distinction is important because it is the exact opposite of how the current financial system operates.

In a traditional financial setting, you aren’t actually sending your funds directly. Instead, you are asking the bank if they could send funds on your behalf. If your bank approves your request, and only if they approve, the funds are sent to the other person’s bank. This process is expensive and requires multiple parties to monitor the transaction. Each of these organizations adds a small fee.

Blockchain technology eliminates the need for third-party verification systems because the network’s nodes monitor transactions. The transparent nature of the technology greatly reduces the risk of fraudulent activity. As long as 51 percent of the nodes are not corrupted, the blockchain remains protected. Consequently, this also eliminates the majority of transaction fees encountered when doing business or sending money.

Sending Funds

In the case of remittance funds, third-party fees can equal over 10 percent of the sender’s transaction amount. In places that depend heavily on remittance payments, such as India and Africa, blockchain-based alternatives have emerged.

A recent partnership between SBI Remit and BitPesa highlights how companies want to reduce these costs by integrating a FinTech blockchain. The partnership allows SBI Remit customers to send money from Japan to Africa using a blockchain-based system. The costs are significantly less, and the customer’s transaction is completed much faster than a traditional remittance payment.

Trade Finance

The trade finance sector is another industry seeing an integration of FinTech blockchain. The use of blockchain in the trading sphere has developed greatly ever since the first successful blockchain transaction was conducted by Barclays and Ornua in 2016. This transaction proved that blockchain tech reduces the average waiting period for a trade transaction to complete, from three days down to four hours.

Additionally, the use of smart contracts reduced the workload of these transactions through automation. Today, tokens exist that integrate trade finance regulations directly. These tokens are called security tokens.

Security Tokens

Security tokens change how traditional corporations raise funds. These tokens integrate regulatory standards directly into their protocol to enable a merging of traditional financial markets and blockchain systems.

Audits

Audits are a time-consuming and often expensive procedure that can take weeks to complete. Blockchains are excellent for auditing purposes because of their immutable nature. All transactions placed on the blockchain are permanent and can’t be altered or deleted without approval from a majority of the network.

In September 2018, it was revealed that the four largest accounting firms in the world joined the Taiwanese blockchain consortium to further investigate integrating this technology into their current accounting systems. The blockchain firm Digital Asset is another example of a company offering blockchain auditing services at an enterprise level.

Digital Identity

As banks seek to reduce operating costs, it becomes evident that a large majority of expenses are derived from identity verification requirements. These requirements can vary from bank to bank. The lack of any standardized requirements makes the market more open to fraud as con artists seek to capitalize on the confusion.

Due to these concerns, banks are now looking towards blockchain tech for their future personal identification needs. Blockchain-based identification systems have been in development for years. The Microsoft Azure project is one of the most notable of these concepts under development.

Microsoft Azure Features via Compare

Microsoft Azure developers want to take your digital identity, which is currently stored across multiple platforms, apps, and websites, and return the control of this information to you. The developers plan a one-stop shop to house all of your digital identification securely and in an accessible manner. You would then be able to control who has access to this sensitive data.

Compliance

The SEC vocalized many concerns regarding the ICO market and the lack of regulations over the last two years. These concerns hit a fevered pitch when multiple celebrity endorsements of failed ICOs became public knowledge, such as the Paragon coin saga.

In this case, the famous rapper, The Game, and Miss Iowa, Jessica VerSteeg, promoted a fraudulent blockchain marijuana project. Investors claim the money raised went towards real estate investments, rather than the seed-to-shop blockchain quality system described by the celebrities.

Blockchain technology needs a compliant-friendly version to bridge the gap between traditional financial institutions and the new digital economy. Security tokens fill this gap. Thanks to the development of security tokens, compliance regulations are met without the need for third-parties.

The desire for this merger created a thriving security token market. Today, multiple companies such as Polymath offer businesses an easy way to host their own security token offering (STO).

Credit Scoring

The credit sector is another area that will see drastic changes in the coming year. Today, there is no universal global credit system in place. This lack of standardization hurts travelers as they seek to invest in new regions and are, as a result, forced to rebuild their credit from square one.

A recent Forbes piece highlighted the blockchain-based credit firm Bloom. Bloom seeks to develop a robust global infrastructure to lower the costs associated with credit monitoring, updating, and processing. Developers hope that their international credit bureau can replace the compartmentalized systems in place today.

Limitations of Blockchain

While blockchain technology is of undeniable importance, you should know that this technology can’t catch every error. Errors committed during data entry onto the blockchain could be another point of concern with this system. Also, some adversaries to the technology believe that scalability concerns could limit the use of FinTech blockchain in the future.

Bitcoin suffered huge scalability issues during crypto’s 2017 breakout. At one point, congestion got so bad on the blockchain that it would take hours and cost high fees to send even a small amount of Bitcoin.  Nowadays, developers use a number of creative tactics to eliminate blockchain congestion, such as secondary layers and private payment portals. 

FinTech Blockchain: A Smart Gamble

While blockchain’s opponents’ concerns are valid, the technology seems to have a very bright FinTech future ahead of it. In the business world, the most efficient system wins out. In other words, if it’s all about the bottom line, you can’t ignore blockchain technology.


This article by David Hamilton was previously published on Coincentral.com

About the Author:

David Hamilton aka DavidtheWriter has published thousands of cryptocurrency related articles. Currently, he resides in the epicenter of the cryptomarket – Puerto Rico. David is a strong advocate for blockchain technologies and financial sovereignty. His Website.

Blockchain Billionaire | The Upcoming Class of the Mega-Wealthy

Given the growth of both the cryptocurrency and wider blockchain space over the past several years, it’s more than likely that we’re going to see a new class of billionaire emerge who have made their fortunes off the backs of blockchain technology.

Let’s look at the many routes that these individuals might follow.

The Basic Blockchain Billionaire HODLer

If the cyberpunks and hard money advocate’s vision of a cryptocurrency dominated world comes to fruition, then some of those currently HODLing and accumulating cryptocurrencies are set to become billionaires. It’s even conceivable in the case of parties such as Satoshi Nakamoto, that we may see the world’s first trillionaire.

The potential existing capital that these coins could absorb is truly astonishing. Currently, the world’s narrow money supply is estimated at $36.8 trillion. More astonishingly, the broad money supply stands at $90.4 trillion. The current capitalization of the entire cryptocurrency market stands at just $118 billion. There is a 766 fold difference between the current crypto market cap and the global broad money supply.

From Whales to Titans

Let’s take our example of Satoshi Nakamoto then and extrapolate some figures.

Sergio Lerner estimated Nakamoto’s bitcoin holdings at 1.149 million Bitcoin. Of course, you then need to add all the forks he would be entitled to such as Bitcoin Cash, Bitcoin SV, Bitcoin Gold, among others. Nakamoto, with his combined Bitcoin and forks, would today have a portfolio worth $4.372 billion. To become a trillionaire, he would need this amount to multiply 263 times. While seemingly outlandish, if crypto does eventually become the dominant form of currency, this is not an inconceivable scenario. It does seem quite possible that just one party could control over $1 trillion of capital in the future.

Vitalik Buterin is another major holder of crypto assets, with his portfolio unsurprisingly being heavily focused on the asset he helped create, Ether. Buterin’s EtherScan address currently displays a balance of 350,000 ETH. To be a billionaire in US dollars, he would need to see ETH rise to a price of $2,857. Given a previous all-time high of $1,431, it’s quite likely that after another market cycle Buterin’s holdings could surpass $1 billion.

 

Etherscan

An Emerging Blockchain Billionaire Class

There are of course many other major holders of crypto assets such as Joseph Lubin, the Winklevoss twins, and Chris Larsen, among many others. These investors, assuming they do not dispose of their cryptocurrency, are probably the surest to net huge amounts of wealth should we see another wave of adoption in the crypto space.

In this situation, even comparatively small investments today could create future billionaires. If there was say a 250 fold increase in the crypto markets and an individual today invested $4 million evenly distributed across various crypto assets, then they would join the billionaire class. In this scenario, we would likely see a brand new class of the super-rich emerge.

The Innovator Blockchain Billionaire

Aside from a potential movement of capital by way of currency and money, the application of blockchain technology could conceivably create entire new industries and sub-industries. These are very difficult to foresee. No one outside of Apple could have predicted the iPhone or how successful it would be. Oftentimes, consumers do not know what products or services they want before they are presented with them.

In this regard, we are likely going to have to see many entrepreneurs bring blockchain based products and services to market before we really know what will be truly groundbreaking.

The Wallet Kings

One of the more obvious examples is crypto asset wallets. These wallets are a new technology and industry, rather than one that has been repurposed. Both software and hardware wallets play an essential role in the cryptocurrency ecosystem. The success of companies who innovate new wallets is a much surer thing than any hypothetical application of blockchain. This is because they are an essential part of the crypto ecosystem and infrastructure.

Hardware wallet manufacturers such as LedgerTrezor, and KeepKey are at the forefront of the cold storage wallet service. They are in a strong place to position themselves as a service, viewed as essential by commercial and personal clients. In a crypto friendly world, the market is likely to view these businesses as providing necessities rather than luxuries.

Similarly, designers and builders of software wallets that provide excellent user experience, secure architecture, and low friction and fees are very likely to enjoy enormous success. This space is less developed than the hardware wallet space. Although, providers such as Pillar, Ethos, and others could perform extremely well over the coming years if they can effectively capitalize on the potential.

In a world where cryptocurrency plays a major role, the wallet and storage space is almost certain to prosper. These companies could well be some of the first to reach multi-billion dollar valuations as a result.

The Disrupter Blockchain Billionaire

The final category of those likely to profit most heavily from blockchain are the disruptors. These are the folks who are able to shake up an existing industry and successfully insert their blockchain-based products and services into the market. The most likely case is with those who can disintermediate. Disintermediation refers to the reduction or removal of middlemen from a business environment. Blockchain, of course, is offering promising avenues for this in its use of smart contracts to replace current man-driven operations.

Blockchain Takes On Wall Street

People often see Bitcoin as the antithesis or nemesis of the banks. However, taking on Wall Street and the financial industry extends beyond just the cryptocurrencies. Companies that can disrupt the current functions of financial institutions through blockchain could profit enormously.

Invoice Financing

Let’s take invoice financing as one such example. This industry revolves around offering small and medium-sized businesses the opportunity to monetize their invoices and open up cash flow. By offering this service, providers typically charge very high fees. These fees result from both the lack of external competition and the manpower required for administration. Companies like Populous and PayPie, however, are providing services that replace human administrators, bankers, and managers. They do this with Ethereum-based smart contracts and code. This industry is currently valued at $2.8 trillion and is a bread and butter revenue source for banks around the world. If companies like these can successively replicate and improve on existing services at lower fees, then they are in a prime position to become multi-billion dollar companies.

Capital Markets

Another sub-industry within finance that blockchain companies are targeting are the operators of capital markets themselves. Currently, investment banks, brokerages, and clearing houses stand in between investors and traders anywhere in the world. In fact, we are lucky in the cryptocurrency ecosystem to have access to P2P exchanges and markets. Companies like Veritaseum are looking to take out these existing middlemen altogether. They allow users to trade in a P2P manner at much lower costs and with a broad range of assets. They do this all through Ethereum based smart contracts. Of course, companies like Veritaseum need to prove a lot more before anyone can bet on them being a potential billion-dollar valued company. However, if successful, these financial services focused businesses could be wildly disruptive.

 

Veritaseum

Blockchain Billionaire Future Potential

Assuming that cryptocurrency and blockchains continue their impressive growth over the coming decades, we are going to see a new class of billionaires and the super-rich. These individuals, much like those who capitalized on the potential of the internet during the 1990s, will either have to accumulate these crypto assets in sufficient amounts or find a highly valuable use case for blockchains, either in an existing or brand new industry. Predicting individual cases is difficult, although the potential industries they might emerge from is more clear.


This article by Ben Whittle was previously published on Coincentral.com

About the Author:

Ben Whittle is a crypto investor, writer & aspiring entrepreneur; who has been involved in the crypto market since April 2017. Originally a gold bug from 2013, he kicked himself when he realised what he had missed out on and ever since has been utterly obsessed with all things crypto. Currently building his own cryptocurrency focused company, he specialises in writing about macroeconomic events, scalability developments, government responses and valuation models for coins and tokens. He is sceptical of much of the ICO & ‘new generation platform’ space, preferring the ‘hard money’ coins above all else.

Five Tips to Avoid Falling for an Initial Coin Offering Scam

The Initial Coin Offering (ICOs) were all the rage in 2017. In 2018? Not so much. Last year was a rough ride as cryptocurrency projects bled out, many losing upwards of 95 percent of their value. Even Bitcoin, the kingpin of crypto, is down around 80 percent (January) as we head into the first quarter of 2019. Is there still money to be made? There’s always money to be made, though by now, ICO investors should have gotten the wake-up call that it’s not all moons and lambos.

ICOs are appealing because anybody can get involved. The new wave of venture capital is both its drawcard and its Achilles heel because the industry is largely unregulated. Initial coin offering scams have become commonplace. Now more than ever it’s important to stay on your toes if you intend on getting involved. Here are five tips to avoid falling for an initial coin offering scam:

1. Is There a Working Product?

A working product should be central to any serious investment in this space. Remember that high-profile projects like Bitcoin, Ethereum or Monero didn’t start out with massive funding. They were born out of visions of a better financial system and the actual code to back up that vision. Projects with verifiable prototypes are way less likely to be scams.

 

Andreas Antonopoulos

Promises of grandeur are littered across the crypto space. We’ve seen that kind of action before. At the height of the 2000 dot-com bubble, pets.com raised a whopping $82.5 million in their initial public offering. One year later, the company was bankrupt, and they actually had working products! As the crypto wisdom goes:

Don’t Trust, Verify!

2. Profile the Team Members

Accountability is the name of the game when it comes to investing in untested ideas. Profiling the team behind a project is by no means foolproof, but it does add an extra level of trust. If a team is going to ask for several million dollars in funding they sure as hell need to have some experience to back up their claims.

The most basic way to do this is for teams to provide easy to find LinkedIn profiles. This allows you to track an individual team members career progress. Does the development team have blockchain experience? Does management have a solid track record? Are there worrying gaps in a CV?

This is just a first step. Profiles can be easily faked depending on how much effort scammers are willing to put in. Good quality projects typically also attend events or host online Q&A’s allowing investors to get a feel for the team and their goals. If a project has no team page or fishy LinkedIn profiles, take your money and swiftly exit stage right.

3. Avoid Generic White Papers

White papers are a dime a dozen on the interwebs. They exist almost exclusively because of the Bitcoin whitepaper which has become somewhat of a holy grail in the crypto community. Freelance websites like Upwork are smothered with cheap white paper writing jobs. In other words, you get what you pay for. If a project is not willing to write its own white paper, that’s a huge red flag.

Scam projects aren’t offering a tangible project to begin with, and the best way to hide this is to confuse would-be investors with jargon. If you have no idea what they’re saying in the white paper, chances are they aren’t saying anything at all.

Don’t be fooled by techno-babble. Any legitimate product, whether in the traditional business world or here in cryptoland, can be simplified for people to understand. Smart projects can abstract the technical stuff away but explain the details if necessary. That doesn’t mean that a technical project is not worth investing in. If in doubt, see point one and get them to show you!

4. Watch out for Cookie-Cutter Websites & Fancy Marketing

Setting up a highly professional looking website is a piece of cake these days. It takes a few bucks and literally an hour to set up a sexy looking WordPress theme built especially for crypto. There are a number of specialist websites which cater to this:

 

WP Crypto Theme

Smart theme designers understand this and have raced to market to meet the growing number of blockchain projects. We all respond to fancy graphics and clever marketing. It’s the way we’re wired but it has almost nothing to do with blockchain. All blockchain is, is an inefficient database mostly used to remove a rent-seeking middleman. Dig down into the details and avoid the surface fluff.

5. Pay Attention to Suspicious Social Media Accounts

This one is a bit more difficult to observe. Scammers are growing smarter and savvy investors will want to be on the lookout for social media accounts with artificial followers. Bots have become a real problem online, particularly on platforms like Facebook and Twitter.

Fortunately, bots are also terrible at authentic engagement. Be on the lookout for spammy feeds with posts or tweets that don’t make sense in the context of the discussion. Building a community around your project takes time and effort. Many scammers just don’t have the patience and prefer to buy followers to create a false sense of hype and credibility.

Initial Coin Offering Scams – Final Thoughts

There you have it. Five actionable tips to help you avoid falling for an initial coin offering scam. Remember, there are no rules governing this. If you plan to invest a serious sum of money, then it only makes sense to carry out your own extensive due diligence.

Do your homework on previous scams, and don’t be greedy. If it sounds too good to be true, it probably is. Until the industry matures and we find some way to fairly regulate cryptocurrency investing, the risks will continue to be high. Don’t throw your chips in the pot if you aren’t prepared to lose them.


This article by Ryan Smith was previously published on Coincentral.com

About the Author:

Ryan is a web designer, writer, and cryptocurrency trader who hails from sunny South Africa. He eats, breathes and lives crypto. With personal experience in foreign exchange & crypto market trading he is always trying to understand the bigger economic picture. When not meticulously looking over charts he can be found planning his next road trip or running around a 5-a-side soccer field.

Distributed System Architecture: How Blockchain Revolutionized Peer-to-Peer Networks

When setting up a distributed computing network, there are different types of distributed system architecture that may be deployed. In this article, we take a deeper look at the types of distributed system architecture, with a specific focus on the peer-to-peer distributed system architecture of blockchain.

Types of Distributed System Architecture

Client-Server Model

Applications like email or networked printers typically use the client-server architecture. Essentially, providers (called servers) and requestors (called clients) have different roles. The server handles all of the processing, data management, and computing requirements, which are available on-demand to the client. If a database entry changes, the client doesn’t necessarily need to do anything. Only the data on the server needs to be changed.

The server doesn’t have to be a single device in this model; it could be multiple servers performing similar tasks to distribute the workload. The model refers to the role of the client and server, rather than the specific hardware.

 

Client Server Model

We use client-server interactions every day, each time we use a laptop or smartphone to surf the web, use social media apps, play mobile games, or watch a movie on Netflix. Client-server distributed system architecture is what we refer to when we talk about “centralized” computer systems, in contrast to blockchain as a decentralized distributed system architecture.

While this is a simple explanation, there are different types of client-server architecture, such as three-tier. This model involves separating the server running the application itself from the server housing the data behind the application. There are others, but as they aren’t relevant to blockchain, we won’t analyze them all here.

Peer-To-Peer Model

A peer-to-peer (P2P) distributed system architecture doesn’t have any specific clients or servers. A P2P network is a distributed system of machines called nodes. All nodes can perform the role of client and server either concurrently or at different points in time. The model is inherent in the name itself — in a P2P network, each machine is an equal peer, rather than being a client or a server.

P2P networks become popular after the release of file-sharing services like the music-sharing site Napster. The idea of P2P gained a kind of cult status because systems could operate independently of any centralized control. Today, outside of blockchain, file sharing protocol BitTorrent is probably the biggest and most recognizable name associated with P2P networks.

Unstructured vs. Structured Networks

Based on how the nodes link to one another, and how data is indexed and discovered, P2P networks are classified as structured or unstructured. In an unstructured system, nodes simply form random connections to one another. Unstructured networks are easy to build and scale up or down.

 

Unstructured Peer-to-Peer Network

However, because they are unstructured, it makes indexing much more difficult. If a node wants to find a particular piece of data or another node, it must flood the network to reach as many nodes as possible that may be a potential target for the search. This uses more network power, as all nodes must process all requests. Moreover, if the data is rare, it may not be found if all nodes on the network are unable to process all requests. Examples of unstructured networks include Kazaa and Limewire.

On the other hand, locating any data on a structured network is easy. Structured networks use a distributed hash table to identify which peers are holding which files and versions of files. Chord is one example of a structured P2P network.

 

DHT

Why Blockchain is Special

As a pure model for distributed system architecture, P2P networks have various benefits and challenges. The key advantage is resilience to downtime because there is no central point of failure.

However, because nodes in a P2P network are acting as both client and server, they are more vulnerable to attacks. Such attacks may include denial of service or distribution of malware or corrupted data. One study found that 15 percent of half a million files downloaded from Kazaa were infected with 52 different viruses.

While blockchains are not 100 percent incorruptible, Satoshi came up with an ingenious solution to the vulnerability problem when he wrote the Bitcoin white paper. By introducing a consensus protocol, all nodes on the Bitcoin network must agree that a transaction is valid. The use of game theory has each node competing to mine the next block.

Successfully mining the next block comes with a reward, providing node operators with an incentive to keep the network clean. Provided 51 percent or more of the node operators work in tandem to keep competing for the next block reward, the blockchain continues running free of attacks.

Conclusion

Of course, there are other elements to Bitcoin, such as the use of hashing and cryptographic signatures, that create the store of digital value. However, the solution invented by Satoshi for overcoming the inherent weaknesses in a P2P distributed system architecture remains one of the most compelling and innovative components of blockchain.

Since the inception of Bitcoin, many others have come up with inventive developments based on Satoshi’s idea. Those developments continue to this day. Blockchain represents a revolutionary step in distributed system architecture. Furthermore, the technology will still evolve for many more years to come.


This article by Sarah Rothrie was previously published on Coincentral.com

About the Author:

Sarah ran away from a corporate job so she could travel the world. After doing that, she found herself a much-loved new career as a freelance blockchain technology writer. She is now a full-time digital nomad, who travels the world while working on her laptop. In addition to writing and researching, she also runs her own websites – find out more at sarahrothrie.com. You can usually locate her somewhere near the food.