Crypto Tax Havens: A Beginner’s Guide to Lenient Crypto Tax Locations

Like it or not, you need to pay taxes on your crypto capital gains. However, there are actually a few countries that levy a zero percent tax on crypto investment gains. There are still other locales that keep the crypto tax bite to a minimum. The first part of this article focuses on nations that tax cryptocurrencies (and capital gains in general) at a very low or a zero tax rate.

The second part takes a brief look at three offshore tax havens. One is a long-time Caribbean favorite among haven shoppers. Another resides only an hour east of the Carolinas by plane. And yet another is a relative newcomer, one especially-tailored for mainland US citizens. With a little imagination, the right contacts and a great tax attorney, you too can begin to move your crypto investing and business interests to a crypto tax haven.

Nations with Low Crypto Capital Gains Tax Rates

This is by no means an exhaustive list. You should also monitor the news for changes in crypto and capital gains tax policies around the world. This list of no or low crypto tax rates includes nations from Europe, South America, Asia, and Central America:

  • Belarus: No capital gains taxes will be levied on cryptocurrencies until 2023.
  • Germany: Zero percent tax on crypto gains, if held for more than a year.
  • Malta: No capital gains tax on cryptos at present. Malta, a European Union member, is a well-established offshore tax haven.
  • Panama: No tax on cryptos (or other forms of capital gains) for non-Panama sourced gains. This Central American tax haven also offers numerous ways to gain permanent residency status.
  • Peru: This developing nation recently cut its capital gains tax rate to 5 percent, which is among the lowest rates in South America. This rate applies to residents and non-residents alike.
  • Portugal: Currently, there is no crypto capital gains tax unless you trade crypto full-time as a business.
  • Singapore: Offers a zero percent capital gains tax rate, and this also applies to crypto gains.
  • Honorable mention: France slashed its capital gains tax on crypto from 45 percent to 19 percent in April 2018.

Meanwhile, Back on the Home Front

United States of America: For taxpayers in the lower income brackets, no federal income taxes are applied to long-term capital gains. Hold your crypto investment for more than one year and you’ll owe zero capital gains tax, subject to certain income restrictions. (Married filing jointly tax returns with a taxable income of $77, 200 or less will be exempt from the long-term capital gains tax, for example. Single filers can have up to $38,600 in taxable income and still be exempt from paying long-term capital gains tax.)

Here’s evidence as to why long-term crypto investing is superior to short-term crypto trading. At least from a federal income tax standpoint. For example, John and Suzy Taxpayer are married and file a joint return. Their combined salary is $54,000. They have a long-term crypto capital gains of $12,000. Here’s what their 2018 capital gains tax bill will look like this coming April 15th:

Their taxable income is less than $77,200 and their $12,000 crypto capital gain is classified as long-term. Therefore, they will pay zero in capital gains taxes for 2018.

Short-Term Crypto Taxes Are Much Higher

Compare that sweet deal with this one. Here, the Taxpayer family’s $12,000 in capital gains are all short-term (held one year or less). Their taxable income is identical at $54,000. Here’s a look at the large tax increase caused by short-term trading:

Their taxable income is less than $77,200 and their $12,000 crypto capital gain is classified as short-term. Therefore, they will pay $1,440 in capital gains taxes for 2018.

Unless you’re highly skilled at short-term crypto trading or trading crypto full-time as a business, by all means, consider holding your well-timed crypto investments for more than one year. The tax savings can be dramatic!

In many ways, the US can be one of the best onshore tax havens of all. Especially if your annual income is modest, and you invest in crypto for the long haul.

Puerto Rico: Nearby Tax Haven for US Mainland Citizens

Puerto Rico has been a US territory since it was wrested from Spain’s control in the Spanish-American War (1898). This beautiful island has a very interesting (some residents might say tragic) past. Now thanks to special income tax provisions, the best days may yet be ahead for Puerto Rico. Here’s how you may be able to personally enjoy these tax bennies:

Qualify for Act 20 Export Services status:

Basically, this means that you would move to Puerto Rico, register your business with the appropriate government department in San Juan and then look forward to a corporate income tax rate of 4 percent (that’s a full 17 basis points less than the US mainland’s corporate tax rate of 21 percent). Your Puerto Rican business must perform all of its operations within Puerto Rico and in no other nation, including the US mainland. However, it does not matter where your Puerto Rican businesses clients are located for it to qualify for the super-low 4 percent tax rate.

crypto tax haven Cabo Rojo PR

Cabo Rojo, PR: Puerto Rico’s ultra-low corporate tax rate and zero taxes on investment income combine to make crypto business owners and investors alike feel right at home. Image: DW Pendergast, July 2012.

Crypto Investors Rejoice

Qualify for Act 22 Individual Investors status:

This is also a boon for crypto (stock, bond, forex, futures, etc.) traders and investors who are US citizens. Act 22 eliminates all taxes on interest, dividends, and capital gains. If you move to Puerto Rico, establish permanent residency and make a lot of money from the crypto markets, you won’t owe any Puerto Rican or US Federal income taxes. Bonafide Puerto Rican residents don’t file US tax returns or pay the IRS at tax time. Instead, they pay the government of Puerto Rico its income tax demands. However, with Act 22, even paying Puerto Rican capital gains taxes will become a distant memory. At least until 2035, which is when the current provisions of both Act 20 and Act 22 are set to expire. 

Bear in mind that all Puerto Rican residents are still obligated to pay Social Security and Medicare taxes to the US government. Puerto Rico’s Act 22 simply eliminates taxes on interest, dividends, and capital gains. 

Bermuda and the Cayman Islands

The US taxes its citizens on all worldwide income, regardless if they actually reside in the US or not. The only way to get free of this obligation is to renounce your US citizenship. Simply moving to another nation will not free you from the US tax system. If you move to the Caymans and open a bank account (in any currency), you must still report the interest earned to the IRS. If you buy crypto or gold in the Caymans or Bermuda, you must still report your capital gains (or losses) to Uncle Sam when you sell it. It does not matter that you may never even repatriate your interest earnings or crypto capital gains. In the IRS’s eyes, you still owe them federal income tax. No crypto haven for you, at least not without doing some more serious offshore preparation.

Bermuda and the Caymans are blessed with lovely beaches. If you’re a golfer, Bermuda boasts some of the finest courses imaginable. Both nations offer strong asset protection and privacy laws. However, if you’re a US citizen, you’re still obligated to report all gains from either haven to the IRS. The days of US citizens simply flying to a haven with a suitcase full of 100 dollar bills, opening a secret bank account and enjoying tax-free gains are long gone. 

Of course, if you’re a multi-millionaire (billionaire is better) you can hire offshore tax attorneys who can help you establish foreign corporations or trusts. Depending on how aggressive and creative your offshore tax advisors are, they may be able to create unique, (mostly) tax-repellant entities that cause you to pay far less moola to the IRS. Legally. 

Money Gladly Welcomed

Some other popular offshore havens include Austria, Bahamas, Barbados, Belize, British Virgin Islands, Isle of Man, Liechtenstein, Luxembourg, Malta and Switzerland. The United States is also a premier offshore haven for non-US investors, as the US government doesn’t tax their earned interest on US treasuries or tax their capital gains. If you live in a nation that does not tax its citizens on worldwide income and choose to invest in US treasuries or make gains on US stocks, you won’t owe income taxes to any government at all.

Pro-Tax Advisors and Ongoing Expenses

The US (and other OECD nations) has very strict offshore account reporting rules. Failure to disclose the existence of your foreign bank or securities account could land you in trouble with the Feds. Once you’ve established (legally, please) offshore financial interests, you’ll need to hire the very best tax pros to prepare your federal (state, city) income tax return. The annual costs for such specialized tax work can be substantial, making it cost-inefficient for most small-fry crypto investors.

Crypto Tax Havens and Common Sense

If you’re a crypto investor or business owner looking to slash your US income taxes, chances are there’s a suitable tax haven waiting to welcome you, your cash and your biz. Invest in the very best legal, tax and financial advice available before venturing offshore, thus avoiding needless conflicts or tax penalties.

The post Crypto Tax Havens: A Beginner’s Guide to Lenient Crypto Tax Locations appeared first on CoinCentral.

Source: Coin Central

Unbundling CryptoNight and the Enigmatic CryptoNote

Understanding the CryptoNight algorithm requires us to first visit what the technology CryptoNote is all about.

CryptoNote is as much a software stack as it is a philosophy. As described on the CryptoNote website“CryptoNote is the technology that allows the creation of completely anonymous egalitarian cryptocurrencies.”

The description further expands on their philosophy with disdain for the current power distribution currently “…making human beings engage in rat races, detrimental rivalry and bloodshed.”

In many ways, CryptoNote is a means to an end. The creators of CryptoNote see the technological breakthrough of the blockchain as a human empowering tool. A mechanism to control transparency, eliminate the power imbalance, and reestablish personal sovereignty.

Best said by the creators of CryptoNote: “CryptoNote is not about creating yet another digital currency. It is the mindset and concepts that represent the first small step to regain the power over ourselves in order to live peacefully and prosper.”

CryptoNote or CryptoNight?

Both! In simple terms, CryptoNote is the umbrella technology that focuses on two primary concerns: untraceable payments and unlinkable transactions.

CryptoNight is the hashing algorithm that CryptoNote projects can use.

Let’s explore the two in more depth.

CryptoNote: The Anonymous Egalitarian Cryptocurrency Platform

CryptoNote – not a cryptocurrency, mostly.

Technically CryptoNote does have a coin, aptly named the CryptoNoteCoin. However, do not trade this coin… seriously, don’t. The CryptoNoteCoin is entirely for research and educational purposes. In fact, the coin is deliberately debased every two months by recreating the genesis block.

Despite not being a cryptocurrency itself, think of CryptoNote as a platform for anonymous and egalitarian cryptocurrencies.

CryptoNote Quote / CryptoNight

Egalitarian motives are baked into the philosophy of CryptoNote.

Anonymous by Default

CryptoNote focuses on two primary avenues to maximize anonymity at the protocol level: untraceability and unlinkability.

To be untraceable, CryptoNote leverages ring signatures to obfuscate the private and public keys in a transaction.

Simply put, your public key is in a group with other public keys so that analysis of your transaction cannot reveal you specifically. Rather, tracking your transaction will point to the group of public keys you belong to, not your specific address.

However, in the case of ring signatures, if your public keys are known then a reverse analysis is possible. In this case, analysis begins with your known public keys. Someone could then follow the transaction pathways to better understand the transaction.

To avoid this linking of your public keys to the activities of a transaction, CryptoNote employs one-time keys. Essentially, public addresses generate on a per use basis. This makes any reverse analysis highly improbable if not near impossible.

Egalitarian by Choice

Cryptocurrencies for the people! In a nutshell, egalitarianism is a political philosophy that emphasizes the equality of all constituents. According to the Stanford Encyclopedia of Philosophy, “People should be treated as equals, should treat one another as equals, should relate as equals or enjoy an equality of social status of some sort.”

In terms of CryptoNote, the tokenomics and governance of any blockchain using CryptoNote are egalitarian by default. Most notably in the mining of CryptoNote blockchains.

Blockchain security and validation, more commonly known as mining, often are victims of their own success. This is primarily due to the advent of ASIC (application-specific integrated circuit) mining.

A typical growth pattern of a blockchain will initially involve CPU and GPU miners. This type of mining equipment is fairly accessible to the general public and can be relatively affordable. The challenge comes when a blockchain becomes increasingly profitable for miners and inevitably attracts more competitive sources of capital.

Enter the ASIC. A specialized miner can be tenfold more powerful and efficient when mining. However, the development of specialized chips are prohibitively expensive and as such skew the centralization of mining.

Blockchain environments that are ASIC friendly often see extensive centralization of their hashing power into these specialized mining operations. Look no further than the bitcoin mining behemoth Bitmain, which has been successfully developing and operating their line of ASIC miners, including the famed Antminer.

To resist specialized mining, CryptoNote leans on two principles: requiring access to memory and being latency dependent. Without getting into the weeds on these, just know that these principles target the ASIC equipment by slowing down their ability to solve the required equations necessary to secure a blockchain and reap the block rewards.

Backstory of CryptoNote

The storied background of CryptoNote is definitely worth learning about. It’s an interesting labyrinth with possible ties to the Standford Bitcoin Group, Nick Szabo, and Satoshi Nakamoto to name a few.

For example, officially, Nicolas van Saberhagen is accredited in the white paper as the creator of CryptoNote. However, the identity of Saberhagen is unknown despite having once agreed to an in-person speech at a conference workshop. Saberhagen did not show and instead opted to call in via Skype with a voice anonymizer.

CryptoNote Whitepaper containing CrytoNight

The CryptoNote white paper by Nicolas van Saberhagen

CryptoNight: The Proof-of-Work Equalizing Algorithm

Now that you know that CryptoNote is a platform for launching privacy-focused, egalitarian blockchains, let’s focus on the more widely known component: CryptoNight.

CryptoNight is a proof-of-work hashing algorithm at the heart of the CryptoNote platform. This is where the egalitarian equalization really proves itself within CryptoNote.

As mentioned, CryptoNote limits the capabilities of specialized miners by being memory intensive. This is why CryptoNight is a memory-hard hashing algorithm.

In addition to being memory-hard, CryptoNight further dissuades the adoption of ASIC miners by being latency dependent. This refers to the time it takes for the mining hardware to solve an equation. For example, when computing an equation of 10+10, a preset latency will delay the results of 20.

The latency actively levels the playing field between various mining hardware. Furthermore, the computational calculations force a dependency on the calculation prior. This means that mining hardware cannot continue onto the next problem while waiting for the current equation to be returned.

CryptoNight in the Wild

It can be difficult parsing out the origins of CryptoNight and the various key players. Most accounts of the development of CryptoNight point to two entities: CryptoNote and Bytecoin.

It is likely that the Bytecoin team is at least partially comprised of CryptoNote developers, but that division is tough to determine. For the most part, Bytecoin is seen to be among the first cryptocurrencies to use the CryptoNote protocol and test out CryptoNight beyond the educational CryptoNoteCoin.

There are indications that the Bytecoin was initially incubated within the CryptoNote team, after which they separated from the core developers of CryptoNote. The CryptoNote team did, however, return to promote and develop Bytecoin in some capacity.

The exact details are difficult to ascertain as nearly every person in CryptoNote and Bytecoin is anonymous. It’s possible these two teams are one and the same but impossible to determine with full accuracy.

The Monero Factor

Today, Bytecoin is mostly a dead coin. The ASIC miners were able to overtake the hashing power of Bytecoin and dramatically shift the market.

But wait, I thought CryptoNote is ASIC resistant?

Keyword: resistant. Given enough time and popularity, ASIC manufacturers will crack the code and eventually find their profitability. Even the most ASIC resistant algorithms are subject to this threat.

Bytecoin was unable to keep the ASIC miners at bay because the protocol was left mostly untouched for years. Contrast this to the dynamic and regular updates of Monero, which continues to manage the advent of ASIC miners on their blockchain.

Monero and CryptoNight

Monero is one of the most popular blockchains to use CryptoNight.

Monero’s most recent fork implemented CryptoNightV8. With this update, any and all active ASICs mining the Monero blockchain were bricked, rendering them useless. Furthermore, Monero reinforced the memory-hard aspect of the CryptoNight algorithm, increasing the required memory.

Monero, currently, is the best use case for CryptoNight, provided the open-sourced developers continue to be true to the egalitarian principles.

Wrapping Up – What is CryptoNight?

As evident from Monero, being an ASIC resistant blockchain is an ongoing and dynamic challenge. CryptoNight is one tool within the CryptoNote protocol that provides a foundation for a blockchain to be egalitarian. However, without care and constant nurturing, CryptoNight is not indefinitely ASIC resistant.

In fact, time and popularity are the most corrosive factors to an ASIC resistant blockchain. Successful CryptoNote blockchains must remain ahead of the hardware manufacturers to be wholly unattractive.

Therefore, CryptoNight driven egalitarianism on a blockchain is an ongoing and active principle, not a static end-point.

The post Unbundling CryptoNight and the Enigmatic CryptoNote appeared first on CoinCentral.

Source: Coin Central

Blockchain Uses | Where Can Crypto Make a Real Difference?

So much hype has been built around blockchain uses that all sorts of bizarre coins have popped up offering to solve the middleman problem. While some are specifically created as a joke, others are purely used as money grabs in the hope of luring the next gullible investor. Despite a whole host of new coins coming to market, it remains doubtful that societies of the future will need several thousand different coins to exchange value.

Has the cryptocurrency community lost sight of its original vision? Bitcoin pioneered many of the fundamental blockchain uses when it was created in 2009. In this article, we’ll return to some of those fundamental principles because it’s highly unlikely that Satoshi Nakamoto envisioned a Trump Coin when he/she/they set out to change the world with cryptocurrency!

Blockchain Uses

Banking the Unbanked

According to the world bank, almost a third of people on the planet do not have a bank account. Two and a half billion people is a large number when you consider that many of us have had a bank account for decades. There has been some discussion in the crypto community of course, but for the most part, the West has ignored the issue. That’s because the West already has a well-developed infrastructure.

Now, consider how fragmented banking is across countries, continents, and cultures. Banking conventions are quite different in the US compared to Europe and then more so as you move further east. For those who do not already have established services, why build branches, ATMs, and card solutions when you can do all of this via your mobile phone?

Many of the unbanked, particularly in Africa, already use mobile money solutions like M-Pesa. And yet, M-Pesa still requires you to deal with an outlet who then deals with a major organization that handles deposits and withdrawals. With a smartphone and a cryptocurrency wallet app, you can remove both of those players and send and receive Bitcoin directly with a counterparty.

Censorship Resistance

Patreon

Censorship resistance remains a hot-topic issue in 2019 as we continue to see dominant platforms ban users. Two high-profile content creators, David Rubin and Jordan Peterson, recently announced that they would be closing down their Patreon accounts. Patreon is a crowd-funding site that allows anybody to build an online community and receive donations for their work.

The move by Rubin and Peterson is in solidarity with other creators who have been barred from the platform due to political reasons. While the pair plan to create their own payment solution, a number of Rubin’s own followers have been urging him to use Bitcoin as a more sensible alternative. He is currently testing out the waters to see what kind of uptake that will have:

Stripe

In another case, payment provider Stripe last year shut down payment services for a popular cryptocurrency YouTube channel called The Cryptoverse:

The above situations highlight the growing problem of power abuses from centralized companies. Some of these have the authority to remove an individual or company’s entire income stream. That kind of power is concerning when you consider that people’s livelihoods are at stake and can so easily be removed.

Bitcoin solves this problem effortlessly because miners process the payments. And they don’t care or know why two parties exchange value with each other. They simply facilitate the transaction and avoid any political reasons that could interfere with it.

Government & Governance

Government and governance are some other great potential blockchain uses. While the majority of governments push back on cryptocurrency solutions, there are an innovative few that are starting to embrace it. Some US states, like Ohio, and Crypto Valley in Switzerland are already introducing the (partial) payment of taxes using Bitcoin.

On the flip side, citizens of a country should be able to independently verify how the government spends. That, of course, can be achieved with a simple Bitcoin wallet, which shows where the funds are coming from and going to. Make government finances available via blockchain and you may just find out how many financial skeletons are actually hiding in that closet.

Blockchain Voting

Blockchain voting is another area that seems to be getting a lot of chatter, and for good reason. Though many countries claim to have working democracies, their voting process is anything but transparent. There’s often no way to actually verify how democratic they are.

On the blockchain, voting could work similarly to a process Switzerland implements, known as direct democracy. In the small mountain nation, any citizen can launch an initiative if they gather 100,000 valid signatures. They can then hold a referendum that could result in a direct change of the constitution.

This is only a simple example of course, but you see how powerful this could be when paired with an immutable blockchain ledger. Then, add the benefit of voting in the comfort of your own home. Democracies of the future may have very few politicians and an evolving constitution. For the people by the people might actually ring true.

Why stand in long queues for hours when we can vote simultaneously on the blockchain? Blockchain uses

Why stand in long queues for hours when we can vote simultaneously on the blockchain?

Where Can Blockchain Uses Make a Real Difference?

There may certainly be some novel uses for blockchain. There are all sorts of sectors with entrenched middlemen that could use disruption. That being said, while many investors are chasing the next big token, the real promises of blockchain are those simple but powerful concepts that Bitcoin continues to promote. Things like financial inclusion, censorship resistance, and transparent governance. Just as the internet paved the way for open access to information, blockchain will pave the way for open access to finance.

The post Blockchain Uses | Where Can Crypto Make a Real Difference? appeared first on CoinCentral.

Source: Coin Central

Interview: Zilliqa Team on Sharding, Scalability, and Secure Smart Contracts

Zilliqa is a secure and scalable blockchain platform for hosting decentralized applications with a couple of standout features compared to other dapp platforms. First of all, it uses sharding to ensure extremely high throughput, around two hundred more transactions per second than most current platforms.

Secondly, the team has developed its own smart contract programming language for use on the Zilliqa platform. It’s called Scilla, and they’ve designed it to be more secure than existing smart contract programming languages, such as Solidity, which often have vulnerabilities leaving the smart contract open to exploitation.

The Zilliqa team is set to launch its main net in the first quarter of this year. We had the opportunity to sit down with CEO and Co-Founder Xinshu Dong (XD) and Chief Marketing Officer Yiling Ding (YD) to find out all the latest news and developments.

Zilliqa team Xinshu Dong, CEO and Yiling Ding, CMO

Xinshu Dong, CEO, and Yiling Ding, CMO

Blockchain developers continue to grapple with issues of scalability. How do you think scalability has impacted the sustainability of blockchain gaming? How is gaming helping to tackle the scalability challenge?

YD: Gaming is an industry where the limitation of blockchain scalability presents itself plainly and immediately to developers and users. One surefire way to measure the success of a game is by its popularity.

With today’s blockchain platforms already struggling to accommodate 1,000 daily active users (DAUs), as a game becomes more successful and its user base grows, the reality is it would be almost impossible to continue running it on the blockchain. Though moving the bulk of a game’s transactions off-chain is a possibility, doing so only defeats the purpose of having a blockchain-powered game to begin with.

These scalability challenges inevitably contribute to poor user experience (UX) as they impede sustained gameplay –– the network struggles to finalize transactions in a timely manner and users are forced to wait for a few minutes for each transaction.

While technical innovation and advancement are usually celebrated, issues pertaining to transaction finality aren’t normally found in digital gaming. This poor experience will consequently dissuade both prospective gamers and game developers from blockchain games.

With this in mind, the gaming industry is giving blockchain platforms real and specific challenges to work with and, in time, potentially overcome. By developing scaling solutions that specifically target issues like in-game marketplace transactions, projects will be able to look beyond the mentality of “scalability for the sake of scalability” and develop solutions that instead showcase how the blockchain can enhance existing projects, platforms, and applications.

What’s your take on how non-fungible assets are impacting gaming? What does this mean for the average gamer, particularly when we hear about kids hacking games like Fortnite to sell accounts online?

YD: There are two main benefits of non-fungible assets – increased safety and security in the exchange of in-game assets, and the ability to truly preserve and protect them.

For a long time, the gaming community has sought ways to monetize in-game assets, resulting in the creation of unofficial black markets where users trade items, whether it’s skins or accounts with high-level characters in an MMORPG like Fortnite. These unofficial channels pose high risks to gamers who are purchasing assets as they become susceptible to fraud and information theft.

Tokenized alternatives provide an extra layer of safety for both buyers and sellers – sellers will need to prove their ownership of the item being exchanged, and as the transaction occurs on a decentralized platform, personally identifiable information won’t need to be shared.

These tokens are also characterized by true permanence and ownership, whereby gamers are assured that their assets are truly their own and remain tradeable. In contrast, developers hosting their platforms on a centralized server would be able to easily shut down or make changes to their marketplaces, resulting in gamers losing their assets.

Zilliqa uses sharding and a combined PoW/pBFT protocol to attain scalability for transaction speeds up to nearly 3,000 transactions per second. Can you talk us through your consensus protocol and how it works?

XD: Our consensus protocol is a four-part process that leverages PoW and pBFT so as to allow for a higher transaction throughput while enabling high security.

The first phase involves a five-minute window for all mining nodes to submit their PoW solutions –– PoW is limited to this phase where miners establish their identities, as well as to prevent Sybil attacks. After, the first subset of those mining nodes that fulfill a certain global difficulty requirement is able to join as Directory Service Nodes or Shard Nodes.

Once the shards are established, these groups undertake multiple rounds of pBFT consensus, signing off the new truth (or block of transactions) to be submitted to the network. The nodes that signed off the block will then split the block reward equitably among themselves. Within one round of PoW, multiple blocks can be written to the chain, thereby processing multiple transactions in parallel.

Scalability is often finely balanced against resilience. Can you explain how Zilliqa maintains network security while still achieving the benefits of a fast throughput?

XD: Security is a key priority for us, and it drives a great deal of our decision making when it comes to our consensus protocol and the creation of our programming language, Scilla. It was also a key factor that we took into account when we looked at scaling solutions.

Therefore, while there are many proposed solutions for scaling blockchains, we’ve found that sharding is a viable on-chain solution that allows us to preserve decentralization, scalability, and security.

By opting to scale on-chain, sharding can occur securely as the blockchain operates with the full security guarantee provided by itself. Decentralization also plays a large role in maintaining security, the consensus of public opt-in nodes and third-party censorship resistance of transactions are imperative to securing our blockchain.

Transactions per second

Transactions per second

Can you explain a little more why you made the decision to develop Scilla, a separate smart contract programming language, rather than adopting other programming languages like Javascript or Solidity? How does Scilla differ from those languages?

XD: When we were designing our smart contracts, we made the conscious decision to prioritize security over other aspects of smart contracts, as we believe security is critical to furthering the mainstream adoption of smart contract technology. Though we had the option to work with pre-existing programming languages such as Solidity and JavaScript, our technical assessments found that it’s very challenging to piggyback on them due to their existing syntax and grammar.

Scilla’s key differences from Solidity and JavaScript are high security and ease-of-use – these are its underlying design principles. Scilla has the capability to formally (mathematically) verify the security and correctness of smart contracts which has eliminated several common security vulnerabilities at the language level, such as reentrant calls to smart contracts and integer over/underflow.

Zilliqa’s use cases are listed as gaming, digital advertising, and payments. Why these three use cases specifically? Would there be limitations on using Zilliqa as a platform for other kinds of dapps, such as exchanges?

YD: As Zilliqa is an open and public platform, there are no limitations to what can be built on our blockchain. One of our current collaborations is with BOLT Global, a blockchain-based mobile entertainment system that doesn’t fit these three categories.

That being said, gaming, digital advertising, and payments are industries where we see an immediate need for high throughput blockchain solutions, so they are our current focus areas in terms of partnerships, research, and development.

In gaming, we’ve seen that scalability has been a clear bottleneck for blockchain games. For example, Etheremon had to move most of their game off-chain as Ethereum was too congested and transaction fees were too high, impacting overall gameplay.

In digital advertising, blockchain helps to tackle issues like ad fraud and impressions that will benefit media companies, advertisers, and consumers. On top of that, a high-throughput platform is needed to support the large number of campaigns occurring on ad exchanges daily.

Payments are also an obvious use case as they require high security and high throughput to handle the sheer volume of transactions. Beyond that, financial instruments such as security tokens and security token offerings would also benefit from a highly robust, secure issuance platform that Zilliqa can offer.

You recently got listed on Coinbase Pro, which is a great achievement and likely to help boost the value of the project. What’s your take on Vitalik Buterin’s controversial statement that centralized exchanges should “burn in hell”? Should decentralization be the goal of the entire blockchain sector or do you think there’s a role to play for centralized agencies in the mid and long-term future?

XD: Enabling decentralized applications for, and between, businesses and users is a key objective of ours, and indeed our driving force. At the same time, we do recognize that centralized platforms provide complementary benefits to fully decentralized systems insofar as performance and latency are concerned.

Not forgetting also that blockchain’s security and resilience all rely on its built-in redundancy in one way or another –– this comes to impact performance but is a result of blockchain’s inherently distributed nature.

Zilliqa has a lot of recognition in Asia as its home ground but has plans for European expansion –– we understand you opened a London office a few months ago. What else do you have planned in terms of expansion beyond Asia?

YD: We’re expanding into Europe for a number of reasons but a major driving force is the thriving developer community. There are developer hotbeds scattered throughout the continent such as Estonia, Bulgaria, and Romania where we recently held a developer workshop.

We are continuing to engage with the developer community throughout Europe and specific regions continue to be of interest to us. For example, France is known for its functional programmers which provides a great opportunity for us to tap into these talents to drive awareness and encourage the use of Scilla, a functional programming language.

We are leveraging our new base in London, which is emerging as a European blockchain leader as well as a long-standing financial hub, by pursuing local educational partnerships to drive blockchain education and greater awareness of Zilliqa among students. One such partnership is the three-month Future of Blockchain competition, targeting the UK’s top universities like Oxford, Cambridge, and Imperial.

The mainnet launch is set for January. What are the critical steps leading up to this launch? How can miners get involved in mining Zilliqa once the mainnet is live?

XD: We recently launched our fully-functional testnet v3.0, equipped with all the features that will be present on our mainnet. As the first fully-fledged testnet in the world, to our knowledge, to implement network, transaction, and smart contract sharding, it’s important that miners are able to rigorously test out these features and as they continue to do so, we’ll be able to add necessary safety checks to improve the stability and security of our blockchain.

Our public mining announcement also opened our blockchain to a larger developer community, thereby widening the pool of developers testing out our network’s features so that we can continue to make improvements in anticipation of our launch.

We’re also in the process of developing larger scale infrastructures to help miners migrate to our network in order to mine Zilliqa once we launch or mainnet. For now, miners can refer to our Github to join the mining on our testnet in order to help test our infrastructure.

Thanks for your time and all the very best for the upcoming launch!

The post Interview: Zilliqa Team on Sharding, Scalability, and Secure Smart Contracts appeared first on CoinCentral.

Source: Coin Central

What Exactly Is Ripple (XRP)? | A Complete Guide to the Banking Cryptocurrency

What Is Ripple?

Ripple is a privately held company that aims to create and enable a global network of financial institutions and banks. It does so by using the RippleNet blockchain software to lower the cost of international payments. Ripple calls the global network using this software the “Internet of Value.”

If you’re confused about Ripple (XRP), don’t worry.

The term Ripple is often used to describe the digital currency XRP, the open payment network on which that currency is transferred, as well as the holding company behind the whole project.

The XRP ledger is an open-source product created by Ripple. It was created to solve a major point of friction in international payments, pre-funding of nostro/vostro accounts. Banks can use XRP to source liquidity in real time. Payment providers can also use it to expand reach into new markets, provide faster payment settlements, and lower foreign exchange costs.

Ripple is essentially taking a stand against what they call “walled gardens” of financial networks consisting of banks, credit cards, and other institutions such as PayPal. These organizations tend to restrict the flow of money with fees, currency exchange charges, and processing delays.

In this guide, we’ll walk you through:

Ripple’s Opportunity

When you think about it, the state of the global payments industry is weirdly behind.

We can stream and download entire artist discographies on our phone in the middle of a forest. Yet, sending a few digits of currency to your grandma in Japan (if you don’t have a grandma in Japan, use your imagination) requires fees and processing time.

The technology for easy global payments already exists. So why is the global payments industry so far behind?

Well, it wouldn’t be a stretch to assume that the financial institutions collectively making trillions of dollars on payment fees aren’t racing to innovate a system that puts money in their pockets.

The financial industry also tends to keep pertinent information shrouded in complicated financial jargon tripping up the average person. Words such as “collateralized debt obligations” and “quantitative easing” have established the financial realm in an esoteric curtain.

However, instead of taking a “burn it to the ground” approach that many cryptocurrency ideologists have adopted, Ripple aims to work with the current financial world.

The equivalent of roughly $155 trillion dollars moves across borders every year. For the sake of example, let’s assume that everyone uses PayPal, which charges a 2.9% fee for each transaction. This means that about $4,495,000,000 ($4.495 trillion) of global payments goes straight to Paypal (or another institution). To add insult to injury, these payments usually take days to process.

How Does Ripple Work?

So, the opportunity for something like Ripple to shake things up is there.

You’re skeptical. We get it. There are dozens of starry-eyed altcoins saying “If we could only grab X% of this (insert incomprehensibly large, extremely competitive, and generally unattainable market), we’d be a dominant player in the industry.”

Ripple was initially launched in 2012. The thing is, it’s already a revenue-producing company with over 100 financial institutions on its blockchain network including Standard Chartered Bank, Westpac, Banco Santander, and BBVA.

A Short List of Ripple's Customers

A Short List of Ripple’s Customers

RippleNet

In order to understand how Ripple functions, it’s useful to know about the RTGS and RTXP (we’ll make sense of these jumbled letters soon).

When you send money via Bitcoin, the value is settled in real-time (not counting any Bitcoin delays). That’s what we mean by Real-Time Gross Settlement (RTGS).

Ripple uses gateways, which are best described as something similar to a global ledger made up of private blockchains. A gateway is essentially a digital portal that governments, companies, and financial institutions use to join the network. This mechanism is called the Ripple Transaction Protocol (RTXP), also known as RippleNet. This is the project’s pride and joy.

Once another government, company, or financial institution joins RippleNet, it can transact with other gateways at a much faster speed and a fraction of the cost. RippleNet also makes it possible to receive payments from any fiat (ex. USD, EUR,) or cryptocurrency (ex. BTC, ETH).

Ripple essentially made something for any type of entity that regularly moves large amounts of money across borders. For example, companies such as Apple and Amazon are already spending billions across borders.  

It’s important to note that RippleNet also functions as a currency exchange between all types of fiat money. However, in order to do do this, it has to be able to guarantee liquidity. That’s where XRP comes in. XRP is the digital asset that provides source liquidity to payment providers, market makers, and banks.

Three Distinct Products

Although people commonly refer to Ripple as one platform, it actually consists of three different products: xCurrent, xVia, and xRapid.

xCurrent is the platform’s primary product. When you hear about a bank partnering with Ripple, more likely than not, this is what they’re using. xCurrent does not require XRP.

xVia is the project’s most recent product. It’s a payments interface and suite of APIs. Like xCurrent, xVia doesn’t use XRP.

xRapid is the only product that uses XRP. Simply put, this product is a liquidity solution.

Transaction Statistics

While the network’s infrastructure makes sense for large corporations, it doesn’t lend much to the average consumer. RippleNet doesn’t provide the average person much of a benefit. So, Ripple likely isn’t going to change how you personally receive and send money anytime soon, but it is looking to revolutionize how money moves around the world on a larger scale.

ripple speed time

Ripple transaction times are significantly less than competitors.

Ripple has shown that is can handle a tremendous amount of transactions per second, even when compared to its fellow cryptocurrency Bitcoin. BTC handles about 15 transactions per second, whereas the XRP ledger can handle more than 1500 transactions per second.

Ripple’s Supply Structure

A key element to know about Ripple (XRP) is the sheer amount of XRP in existence. All XRP has already been created with a total supply of 100 billion. There are currently over 41 billion XRP tokens in circulation, with the rest held by Ripple Labs.

In an announcement in May 2017, Ripple stated its plans to release 55 billion of its XRP in escrow to ensure the certainty of the total XRP supply.

Ripple is Kind of Centralized

Given the fact that Ripple Labs held around 80 billion XRP tokens at one point, it’s not a far reach to say that Ripple is centralized, or at least more so than the majority of other cryptocurrencies.

However, Brad Garlinghouse (CEO and Founder of Ripple), views it differently.

Garlinghouse stated that “Ripple is not centralized. To be clear, if Ripple disappeared today XRP would continue to function. To me, that’s the most important measure of whether something is decentralized.”

He then went out to point out some of the facts that supported that the network is, in fact, decentralized.

Decentralization Strategy

In May 2017, Ripple released their decentralization strategy. They announced the plans to diversify the validators on the XRP ledger and expanded them to 55 validator nodes in July 2017. The team also shared plans to add third-party validating nodes, while removing one Ripple-operated validating node for every two third-party nodes, until there is no single entity that operates a majority of the trusted nodes on the XRP ledger. 

Ripple currently has 26 unique default validating nodes. Ripple only operates seven of those, meaning that 73 percent are under the control of outside parties. This push towards more third-party validating nodes shows that the Ripple team is making an effort to make the network more decentralized.

Because of this, a more accurate way to describe whether or not Ripple is centralized or not is that it’s a weird mix of both. You’ve got this holding company that has more than half the tokens. But, they have plans to release the rest, which is likely prioritizing the acquisition and onboarding of new partners on RippleNet. At one point, Ripple controlled the majority of the validating nodes, but that also has changed.

Being centralized isn’t necessarily a bad thing, but it does dissuade many “decentralized” ideologists within the cryptocurrency community.

Competition

Ripple’s primary competitor is Stellar. In fact, Stellar founder Jed McCaleb was also a co-founder of Ripple but left the company in 2013 due to disagreements with the rest of the leadership team.

Both projects specialize in cross-border payments and have a similar architecture. However, the Stellar Foundation is a non-profit while Ripple is a for-profit company. The overall mission of each project differs quite a bit as well. While Ripple is focused on helping giant banking institutions, Stellar is aligning themselves with the little guy in an attempt to bring banking the unbanked.

Where Can You Buy and Store XRP?

You can buy Ripple at many of the most popular cryptocurrency exchanges such as Bittrex, Kraken, and Binance. You could also any brokerage platforms such as Changelly.

If you want to hold XRP for the long term, we recommend using a hardware wallet such as the Ledger Nano S or one that supports XRP.

Hard wallets are generally much safer because they’re offline and have better security than exchange and other online wallets. However, they aren’t ideal for someone trading frequently.

Should You Invest in XRP?

Well, that’s entirely up to you.

XRP has a storied trading history riddled with a few notable price movements. From 2013 to the start of 2017, XRP was a relatively uninteresting token to watch. It had one exceptional price jump at the end of 2014 in which it leaped 500 percent in one month. As there was no significant news surrounding this move, some community members believed that it was an artificial pump.

XRP began its explosive growth in March 2017, seemingly after a press release that ten more financial institutions, including BBVA, had joined Ripple. It wasn’t until the 2017/early-2018 bull market that XRP hit its all-time USD and BTC price high. In early January 2018, the coin reached over $3.80 (~0.000263 BTC).

Now, you can grab some XRP for just under $0.33 (~0.0000899 BTC).

Things to Consider

Ripple’s success is ultimately dependent on the number of partners on RippleNet (which has been growing steadily over the past year), how many people use Ripple’s products, and how effective XRP is.

Ripple seems to be doing well on those fronts, however, it’s important to note the sheer supply of XRP on the market (a total supply of 100 billion). As if that wasn’t a hard pill to swallow for investors, Ripple currently holds around 59 billion XRP (~59% of the total supply). This means they can technically inject massive amounts of their XRP into the market to control the price and keep it generally low.

However, beyond the investment metrics, it’s important to really understand the position Ripple (XRP) is in.

  1. Do you recognize the opportunity Ripple may or may not have in front of them?
  2. Do you think the Ripple team can pull it off?
  3. What is the Ripple team doing every quarter to meet their goals?

You can also find more insights directly from the Founder and CEO of Ripple, Brad Garlinghouse, in a Quora Session. He talks about everything from whether you should invest in XRP and how Ripple could revolutionize finance.

Final Thoughts

So, whether you choose to invest in Ripple (XRP) or not, it’s worth watching as blockchain adoption increases. Ripple is one of the very few legitimate viable competitors to the old guard financial system, and it could play a major role in how money moves around the planet.

As far as any practical applications for use by the average person of an XRP token, there aren’t many. However, when you view Ripple (XRP) through the lens of the global payments industry, it’s a traditional high-tech David vs. the established Goliath.

Editor’s Note: This article was updated by Steven Buchko on 1.15.19 to reflect the recent changes of the project.

Additional Resources

Website

Twitter

Reddit

News

The post What Is Ripple (XRP)? | A Complete Guide to the Banking Cryptocurrency appeared first on CoinCentral.

Source: Coin Central

CryptoCompare | An Overview of the Cryptocurrency Market Data Provider

CryptoCompare is a cryptocurrency market data provider with a global footprint. The comparison website provides pricing information on more than 5,000 coins and a huge amount of corresponding currency pairs. The company was established in 2014 by co-founders Charles Hayter and Vlad Cealicu and is based out of London, United Kingdom. It employs around 40 people, mostly in London. Although, some employees also work out of continental Europe.

The platform does not provide trading services of any kind and is purely used to display metrics, reviews, and other useful data in real time. The best part? Most services are free of charge. We’re going to cover some of the interesting tools available and see how you can benefit from the site. Let’s get to it.

Partnerships

A largely unknown player in the financial data world, CryptoCompare is already starting to garner attention with some interesting partnerships. The company has secured key deals with established heavyweights such as Yahoo! Finance, Thomson Reuters, and VanEck.

These companies now rely on CryptoCompare for real-time cryptocurrency price information. Yahoo! uses data on over 100 cryptocurrency quote pages while Reuters has integrated the data into their financial desktop platform known as Eikon. For VanEck, CryptoCompare is delivering cryptocurrency indices aimed at the institutional investor.

Trends

The benefit of aggregating all that data allows the team to gather some interesting insights into how the cryptocurrency industry is unfolding. For example, countries with liberal policies towards crypto continue to dominate the number of exchanges and average daily volume categories. South Koreans trade heavily in Bitcoin and other well-established coins. Malta and Seychelles, though tiny islands, still account for more trading volume than the US. 

Average daily volume trends based by country

Average daily volume trends based by country

For these and other data trends and updates, you can follow along on their Medium page.

Reviews

CryptoCompare is a stomping ground for reviews in several areas where cryptocurrency enthusiasts need advice. Most of this feedback comes from actual users though there is the occasional affiliate link spam. You’ll probably want to combine this with other review sites to get a better overall picture. The main sections worth noting include exchanges, mining solutions, and wallets. The sheer volume of information available is quite impressive.

Exchanges

The list of cryptocurrency exchanges is extensive. So much so that you’ll probably get bored before scrolling down to the bottom of the list. You’ll be able to find all the typical information associated with each exchange like location, fees, and available coins. Most users, however, will be checking out the user-based reviews to get a feel for the pros and cons that other traders are currently experiencing.

Mining

If you’re interested in cryptocurrency mining then this section is for you. Cryptocurrency mining is a vast field and is not for the faint of heart. For this reason alone, many new enthusiasts have turned to cloud mining as a way to supplement their income. Here, you can catch up on company analyses, contract options, mining pools, and more.

Be warned, though, the Bitcoin mining calculator highlights the tough market conditions miners are currently facing at these price levels. We may need to see the Bitcoin price reclaim higher levels before the retail miner turns a healthy profit. On the other hand, if you’re a long-term HODLer you may be able to handle the pain. Remember that these calculators only provide estimates and your mileage may vary.

Bitcoin mining calculator

Bitcoin mining calculator

Wallets

The wallets section is more or less the same as the exchanges section though appears to recommend solutions that the team personally uses and/or trusts. Desktop, mobile, and hardware wallet reviews are included here with a list of supported coins and various security features.

Portfolio

If you’ve been in crypto for a while, you may have already picked up an app to help you manage your portfolio. If not, the team has done a stellar job of providing registered users with a pretty sexy portfolio tracker. Though, it might be a while before you’re able to get your Lambos on the moon!

CryptoCompare's portfolio tracker

CryptoCompare’s portfolio tracker

CryptoCompare API

CryptoCompare’s API data is arguably one of their best features. API stands for application programming interface and allows developers to retrieve market data from a company server somewhere online. You can already do this with most cryptocurrency exchanges, but since CryptoCompare is aggregating data across a wide variety of exchanges and markets, this provides some additional interesting data points.

The basic API service is free, which is great for anyone wanting to grab some data and mash-up their own applications. APIs are beyond the scope of this article, and you’ll need some programming knowledge to make full use of them. Regardless, keep your eyes peeled for the next generation of applications and user interfaces because APIs like these will be used to create them. This will make it a lot easier for us not-so-technically-inclined folk to keep in touch with the latest crypto trends.

API calls to suit your business needs

API calls to suit your business needs

What the Community Says

A brief look around social media and trust sites suggests that users generally like CryptoCompare’s tools and features. Some users complain about the complex interface and difficult language. In general, though, it seems to be a platform that quite a few users turn to for advice, particularly new users.

Conclusion

CryptoCompare certainly has an impressive résumé after only five or so years of operation. As the cryptocurrency markets continue to mature, the race will be on to provide the most comprehensive real-time data available for both retail and institutional investors.

Given the investment from heavyweight news services like Reuters and Yahoo! Finance, we can only hope that real institutional investment is just around the corner. CryptoCompare’s business model is quite clever because it allows a practically free service for retail while generating sufficient revenue from institutions.

As mentioned earlier, the interface can get a bit busy, making it difficult for new users to get the most out of the platform. That’s a small price to pay, however, for a free service. If data is your game and particularly if you’re a programmer, CryptoCompare might just be a solid choice for you.

The post CryptoCompare | An Overview of the Cryptocurrency Market Data Provider appeared first on CoinCentral.

Source: Coin Central

Ethereum Constantinople Fork | What You Need to Know

If you’ve been following along with Ethereum’s progress you’ll know that the worlds second most popular blockchain will soon be transitioning from proof of work to proof of stake. The final outcome will be a protocol known as Casper. To guide that process, network-wide updates are consistently taking place.

Ethereum has four major upgrades planned as part of its roadmap and they can be tracked as follows. Frontier went live in July 2015. Homestead, in March of 2016. Metropolis is currently being implemented with codename Constantinople as its second step. The last one to arrive on the scene will be Serenity. Ethereum team lead Péter Szilágyi anticipates the hard fork to take place on block #7080000 around the 16th of January.

Ethereum Improvement Proposals

As part of Ethereum’s improvement process, proposals are regularly suggested by the core developers. These will improve the overall functionality of the blockchain as Ethereum moves ever closer to Casper. The community has approved the following five EIP’s for the Constantinople upgrade. Each EIP links to the technical details if that’s up your alley.

EIP 145 – Bitwise shifting instructions in EVM  

Introduces native bitwise shifting in the Ethereum Virtual Machine. This will allow developers to make some operations more efficient thereby saving on gas fees.

EIP 1014 – Skinny CREATE2 

This will allow users to interact with addresses that haven’t been created yet on the blockchain. This deals with state channels which will allow Ethereum to better scale in the future.

EIP 1052 – EXTCODEHASH opcode 

Allows smart contracts to check the code of other smart contracts more efficiently (ie. less processing power). Again, the network will require less gas to perform these checks.

EIP 1234 – Constantinople Difficulty Bomb Delay and Block Reward Adjustment 

Ok, this is the big one. EIP 1234 proposes a delay to the difficulty bomb for approximately 12 months. Sounds cool but what is a difficulty bomb? Currently, the developers have built increased mining difficulty into the Ethereum algorithm to force miners to eventually switch over from proof of work to proof of stake. That’s a problem because Casper isn’t ready yet and users still need the security of the miners in the meantime.

The other more controversial change is a reduction in mining rewards from three Ether per block down to two. That’s a pretty substantial loss in mining profits and investors will be keeping a close eye on how this will affect hash rates and the overall security of the network going forward.

EIP 1283 – Net gas metering for SSTORE without dirty maps 

Another efficiency upgrade allowing several actions to be taken on each transaction similar to how EOS currently implements multi-level transactions.

How Do You Get on to the New Blockchain?

Major upgrades result in hard forks of the Ethereum blockchain. That process splits the chain in two which has caused some issues in the past. Fortunately, the community has reached consensus on this one and everyone will be moving to the new chain.

If you’re simply a coin holder then you don’t need to do anything. Exchanges, services, and node providers should be doing this on your behalf so the effect will be minimal for most users. Be aware though that some of these services may pause deposits and withdrawals of Ether during the changeover. If, on the other hand, you’re running an Ethereum node you’ll need to update to the latest software. 

Onwards and Upwards

Ethereum continues to improve with each update. The Constantinople fork is not particularly groundbreaking though is making good strides towards improving the overall efficiency of the network. If you’re a miner, you’ll want to upgrade as soon as changes go live. May the fork be with you!

The post Ethereum Constantinople Fork | What You Need to Know appeared first on CoinCentral.

Source: Coin Central

What Is Ardor (ARDR)? | Blockchain as a Service, Explained

What Is Ardor?

Ardor is the latest in the growing field of contenders for blockchain as a service (BaaS) providers. It provides the blockchain infrastructure for businesses and institutions to leverage the strengths of blockchain technology without having to invest in developing custom blockchain solutions. Instead, Ardor offers a main chain that handles blockchain security and decentralization. It provides customizable child chains that come ready to use, out of the box, for various business applications.

ardor qualities

Ardor Qualities

The developers of Ardor are the same company behind the open source Nxt project. Ardor goes beyond Nxt to solve critical issues of blockchain bloat, scalability, and customization. 

First, we should take a detailed look at Ardor, its foundations in Nxt, and its first child chain project Ignis. While the project holds a lot of potential for driving blockchain as a service to new levels of usability and accessibility, its success likely depends on the amount of traction the development team can generate for early applications. Nxt has struggled to gain the widespread adoption the developers had hoped for, outside of some significant examples like BNP Paribas and Accenture, and Ardor presents a turning point for the development team to generate excitement.

In this guide we will cover:

 

To Understand Ardor, You Need to Know About Nxt

Before we dive into what makes Ardor unique, it’s worth looking at the Nxt platform and its origins. Ardor has gained the nickname of “Nxt 2.0” since it relies so heavily on the Nxt core programming. In fact, Ardor will contain nearly all the features of Nxt plus additional advanced capabilities.

nxt client

Screenshot of native Nxt client

Nxt started in 2013 and was one of the very first ICOs ever to launch a cryptocurrency. Although the initial ICO only raised $6,000 in donations, the Nxt founders have stuck with the project. Nxt was among the first projects to code a new blockchain from scratch, not borrowing any code from Bitcoin. Its open source code is written in Java, and it was also the first blockchain to fully implement proof of stake.

Nxt was designed for experimentation, and the goal was to allow companies and other entities to implement their own blockchain solutions using the API, creating new coins on top of the Nxt blockchain, and even copying/editing the Nxt source code. The development team has created various functionalities that can be activated when a new token is created. These include asset creation, trading, blockchain voting, and the creation of marketplaces. Nxt strives to make it easy for companies and entities to create new tokens and begin using them out of the box.

The Problems with Nxt

Nxt is a well respected, verified, and established blockchain technology with a comparatively long history and an experienced development team. However, as blockchain usage increases over the coming years Nxt, and other blockchain technologies, will face some fundamental problems with payments, scalability, and customization.

Native Tokens

The first and most straightforward problem is the use of native tokens for transaction fees. Nxt uses a forging proof of stake system, meaning that the total token supply has already been created and new tokens aren’t created with each block.

Instead, the forgers that verify the blocks receive a portion of the transaction fees paid on the network. As such, the transaction fees need to be paid in NXT. Even if you’ve created a new currency that’s independent of Nxt, you’ll still need to own NXT in order to pay miners, diluting the value of your own currency. This is also true for currencies that use Ethereum’s ERC20 protocol to build on top of the Ethereum blockchain. They pay fees in Ether.

Blockchain Bloat

Most blockchain technologies, including Nxt, are also encountering some form of blockchain bloat. The root of this bloat is the need to download the entire history of the blockchain in order to operate a full node on the network. The storage requirements for operating a full node increase as more transactions take place.

Soon, operating a node on a blockchain could mean downloading hundreds of gigabytes of transaction data in order to get your node up and running, creating a severe bottleneck for adding new nodes. While Nxt has implemented some pruning of information that isn’t relevant to verifying the transactions, the current system of downloading a complete copy of the transaction history is not sustainable long-term.

Customization Issues

Blockchain as a service solutions that encourage customization, new asset creation, and trading platforms face a challenge when it comes to helping clients maintain their systems. While it’s relatively straightforward to create a clone of the Nxt blockchain, doing so would also require separate servers and ongoing maintenance to keep the customized system running smoothly.

Clones will lag behind on software updates and security protocols, and Nxt would have to invest too much effort in ongoing support for customized solutions based on Nxt.

How Ardor Works and Solves Those Problems

Ardor includes every feature supported by the Nxt blockchain, but it changes the architecture of how new blockchains get implemented. It separates security from functionality by creating multiple chains. The Ardor main chain is a slimmed down bare bones blockchain built for speed and security.

Child Chains

When you want to implement a new project on Ardor, you create something called a child chain. The child chain holds all the functionality and customizability supported on Nxt. However, it is still linked to the main chain and derives its security and decentralization from using the main chain for verification.

ardor child chain

Ardor Child Chain

This new structure allows the implementation of child chains and features in a matter of minutes or hours. Since the blockchain infrastructure is already in place with the Ardor main chain, child chains can quickly adopt custom use cases. These child chains still receive all the speed, security, and usability upgrades of the main chain, since they’re all integrated on one platform.

Transaction Pruning

Ardor solves the blockchain bloat problem using a transaction pruning system. In the future, it won’t be necessary for every node to hold a complete copy of the transaction history, just the relevant recent transactions that have gotten the blockchain to this point. Ardor will also support archival nodes that will operate to keep full transaction histories should they be needed.

Ardor Benefits

Ardor Benefits

To solve the native token problem, Ardor uses a system of bundlers, nodes on the network that accept fees paid in the child chain token. These bundlers then pay the Ardor main chain forgers in ARDR, essentially acting as conversion clearing houses for transaction fees. This means that the end user can initiate a transaction in a child token and pay the transaction fees in the child token.

In theory, users could be unaware of the existence of Ardor at all. This commitment to the unsexy work of infrastructure development is what makes it so difficult for Ardor to generate buzz and press attention. However, if it gains traction, Ardor could be the foundation for endless new blockchain applications.

Ignis: The First Child Chain Built on Ardor

To test Ardor’s capabilities and serve as an example of an operating child chain, the Ardor developers have created Ignis. Ignis will implement all of the customizable features that come from the Nxt code base. Essentially, Ignis was a proof of concept designed to be the first of many more child chains on the Ardor platform. The Ignis ICO raised $15 million in funding for development.

Ardor and Ignis

Ignis is the first child chain of Ardor.

In the future, equity trading platforms, digital file transfer services, private enterprise blockchain applications, and others could use Ardor child chains. Ardor’s strengths are quick time to set up and wide customizability, making it a great option for companies looking to leverage blockchain without the resources to dedicate to custom development.

Coin Supply

There are just under one billion ARDR coins in circulation. Because Ardor uses proof of stake instead of proof of work, no new coins will be issued. Proof of stake offers various advantages although it also has some disadvantages too.  

Roadmap and Team

The Ardor genesis block was confirmed on January 1, 2018. Since then, there have been several notable developments. These include the implementation of lightweight smart contracts on the testnet, which are soon to go live on the mainnet.

Several projects have also launched on the Ardor mainnet. These include Triffic, a tokenized customer loyalty program platform, and Max Crowdfund, a property financing project. Ardor has also presented a proof of concept for a decentralized exchange to Binance

Pruning of child chains and sharing of snapshots are both currently on the testnet, with a plan to put them live on the mainnet in progress. The team is also currently researching the use of zero-knowledge transactions and user issued side chains.

None of this is particularly sexy to the non-technically minded. However, the point is that there are multiple developments visible at different stages of implementation from research to testing. This points to a strong long-term vision for the project. 

Jelurida The Team Behind Nxt, Ardor, and Ignis

Nxt, Ardor, and Ignis are all projects from a private company called Jelurida. The Jelurida team is one of the most experienced blockchain development teams, dating back to Nxt’s launch in 2013.

The team is composed of respected, experienced developers with now over four years of experience creating and maintaining blockchain code. In addition, one of the co-founders has a legal background, and she manages the legal implications of open source architecture and blockchain applications.

Trading History

The value of ARDR tokens has largely followed the same pattern as Bitcoin and other cryptocurrencies. There was huge spike around January of 2018, and a steady falling off over the rest of the year. If we are being generous, then the mainnet launch took place in January. This would have been likely to spark investor interest in ARDR tokens. 

There was a small increase in the price of ARDR in May 2018. A few events which may have caused this peak. There were two ICOs announced on the Ardor platform, and the project also launched the Chinese language version of its website, which may have opened ARDR up to a wide base of Chinese investors. 

The project was in the top thirty coins at its launch last January. Now, it sits in the top eighty. 

Competitors

The New Economy Movement, known as NEM was inspired by Ardor’s predecessor, Nxt, and contains many similarities in its applications. Other projects that are using child or side chains include Lisk and Aelf, although both of these projects use the delegated proof of stake protocol rather than pure proof of stake. 

Where to Buy ARDR

You can buy ARDR tokens on many of the major crypto-to-crypto exchanges including Binance, Bittrex, and Huobi. If you want to buy ARDR with fiat, then Changelly offers that option. 

Where to Store ARDR

Ardor offers its own wallet with Apple, Windows, and Android operating systems integration. You can also use this wallet to store Ignis tokens or the tokens from other projects on Ardor child chains. 

Conclusion

Ardor is doing some pretty important work thinking about new ways to structure blockchain infrastructure and security. If done correctly, the end result could be a solution that any business could implement. It wouldn’t require extensive technical expertise or ongoing maintenance.

However, there are now multiple other development platforms providing stiff competition for Ardor. The team has a lot of work to do if they are going to stay ahead of the curve. 

Ultimately, the next year or two will likely prove the most critical time for Ardor. If the project can prove itself as a viable development platform for a few critical projects, it may prove to be a good long-term bet. 

Editor’s Note: This article was updated by Sarah Rothrie on Jan 12, 2019, to reflect the recent changes of the project.

Additional Resources

Community forum

Twitter

Reddit

Discord

Telegram

The post What Is Ardor (ARDR)? | Blockchain as a Service, Explained appeared first on CoinCentral.

Source: Coin Central

Ethereum Classic, Consensys, Bitmain, and More: Crypto Startups Are Feeling the Price Dip

Ethereum Classic grabbed the headlines recently after it suffered a 51 percent attack on its blockchain. The crypto’s development team was quick to reassure its users through social media. However, some exchanges such as Gate.io have come forward to confirm that they have lost funds to the hack. Engineers from Coinbase also compiled a report that confirmed the attack. The report revealed that the double spending and blockchain reorganizations had led to the loss of at least $1.1 million. 

Incidentally, Ethereum Classic’s development team threw in the towel a month ago citing lack of funds. The team announced on December 3  that funding efforts had been unsuccessful and that it was unable to fund its activities. It further attributed the funding struggles to a cash crunch in the company and the 2018 market crash.

ETC’s development team hasn’t been the only team that has found it extremely difficult to operate under the current conditions. With Bitcoin down by over 80 percent from its 2017 high, funding has been a major challenge.

Nobody Saw It Coming

In 2017, the crypto market was on its best run yet. ICOs were raising billions of dollars, investors were buying cryptos without questioning their values, and crypto prices were shooting up with each passing day. Nothing could go wrong. Except something did.

Since January 2018, crypto prices have been on a downward spiral. Granted, there have been some positive price rallies in between. However, they have been short-lived and nowhere close to the previous year.

Most crypto startups raised money through ICOs. At the time, the method received praise for its ability to cut out the middlemen and give every investor the chance to invest in promising startups. The ICOs raised funds through Bitcoin and Ethereum, predominantly. With both currencies down 80 percent, most startups have seen their funds reduced drastically. This has led some to shut down, while others have had to lay off some of their staff.

Even the Giants Weren’t Spared

The crisis has affected every other crypto startup, from the giants to the smaller firms. One giant that has felt the dip is Bitmain. The Beijing-based mining chips manufacturer was one of the most profitable companies in the industry in 2017. Bitmain controls more than 75 percent of the ASIC market. It also owns two of the largest Bitcoin mining pools, Antpool and BTC.com.

Bitmain

Mining heavyweight Bitmain has been hit hard by the crypto downturn.

Bitmain recently succumbed to the price dip and the reduced liquidity, laying off a huge number of its staff. The company owns a huge stash of cryptos, key among them Bitcoin and its fork, Bitcoin Cash. While Bitcoin is down 80 percent, Bitcoin Cash has fared worse and is down 96 percent.

In December last year, Bitmain shut down its research and development center in Israel. The center had 23 staff members, all of whom the firm laid off indefinitely. Reports have also emerged that the company will lay off close to half of its current staff. The layoffs are being attributed to lack of funds due to the dipping prices of cryptos. Most of the staff to be laid off are from the non-core business divisions such as artificial intelligence.

ConsenSys has also fallen victim to the bear market, laying off some of its staff in a bid to restructure operations. The New York-based company was founded by Ethereum co-founder Joseph Lubin. It incubates Ethereum startups. In December last year, the company confirmed reports that it would lay off 13 percent of its workforce. Three weeks later, it emerged that the layoffs could affect as much as 60 percent of the workforce.

The Smaller Firms Are Caving Even Faster

While the large firms can afford to ride out the bear market, the smaller firms aren’t as fortunate. Many smaller crypto startups have caved, laying off a majority of their staff or shutting down completely.

steemit

Steemit has laid off 70 percent of its workforce.

One of these is Steemit, the decentralized social media app that focused on fair compensation for content creators. Steemit laid off 70 percent of its workforce in December last year. Steemit’s founder, Ned Scott explained via a blog post:

Given the weakness of the cryptocurrency market, the fiat returns on our automated selling of STEEM diminishing, and the growing costs of running full Steem nodes, we have been forced to layoff close to 70% of the team. The remainder of the team is staying on to focus primarily on reducing the costs of the infrastructure running steemit.com

The bloodbath hasn’t spared the crypto exchanges either. One of the victims is Shapeshift, the crypto exchange founded and led by Erik Voorhes. The exchange laid off 37 employees just a few days ago, reducing its team by over 30 percent. In a blog post, Voorhes cited the crypto winter as the reason behind the layoffs. He also thanked the employees who have catapulted the exchange to its current level.

Is This How the Story Ends?

There have been many other companies that have laid off staff, but most of these have been under the radar. They include Kraken, Coinfloor, Huobi, and Spankchain.

While these are some of the more notable names that the crypto winter has affected, there have been hundreds more. According to a report by Sky News, the UK has seen a staggering 340 blockchain and crypto companies close their doors.

So, is this how the story ends? Hopefully not. The crypto industry has come a long way in the past decade. From a niche concept a few years ago, cryptos have grown to hundreds of billions of dollars. More importantly, they have impacted very many sectors of the economy.

As the new year kicks in, we can only hope that the affected companies can bounce back to their former glory.

The post Ethereum Classic, Consensys, Bitmain, and More: Crypto Startups Are Feeling the Price Dip appeared first on CoinCentral.

Source: Coin Central

What Is Theta Token (THETA)?

Theta is a decentralized video delivery network with its own blockchain, designed for incentivizing the sharing of bandwidth.

Currently, video delivery networks suffer from poor reach to less developed countries, a high-cost setup and a centralized makeup. This lends itself to abuse and cutouts to service. Furthermore, Theta sees the current infrastructure as unprepared for the accelerating demands it will face due to 4K, 8K, virtual reality and other developments, such as light field technology.

Theta is building a peer-to-peer (P2P) mesh network that aims to solve these current issues while using a blockchain to serve as an incentive layer to keep the delivery network at a continual high performance.

 

 

In this guide we will cover the following:

How Does Theta Work?

Theta is comprised of two parts. The first is its video delivery network. This is formed from nodes that join the network and contribute their bandwidth. This network is what forms the actual decentralized video delivery. The second part is the Theta blockchain. This is for incentive purposes, to give a reason for participants to join the delivery network.

Theta Network

Right now, content delivery networks (CDNs) deliver video content and streaming. These typically consist of very large centralized data centers scattered across the globe. The main problem with these is that they are not geographically close enough to many viewers, which leads to lower quality streaming. Theta’s answer to this is to create a P2P mesh network of users who share their bandwidth. The result should be a global network to either replace or supplement the existing CDN infrastructure.

network diagram

A demonstration of how users participate in the Theta network

Users can lend their devices as caching nodes that relay video streams to any viewer in the world. A caching node is one that stores the video data. As a result, because the Theta network will have vast amounts more of caching and relaying points than the current system, stream quality will be improved. This is because packets of video data will not have to travel as far. Caching nodes will be rewarded with Theta tokens, and are thus incentivized to offer their spare bandwidth resources, strengthening the Theta network.

Theta’s white paper claims that its solution could reduce delivery costs by 80 percent over the existing infrastructure. It seems that this is due to the savings from not having to maintain the huge data centers that currently power CDNs. While this is a big claim, we will have to wait and see if they can fulfill this.

Improved Resilience

In addition to the improved quality of streaming that this should offer, Theta also hopes it will improve the resilience of the infrastructure. Right now, the entire streaming industry is dependent on a small number of data centers. This poses a risk whereby, if several go down or are taken offline, global streaming deteriorates massively. By distributing the caching and relaying to thousands and potentially tens of thousands of nodes, Theta’s network should be far more sturdy than the current system.

Variance in Quality

The main problem that Theta identifies is the difference in the quality of varying nodes. Additionally, there is nothing to stop nodes dropping off. To counter these issues, the team is building a server and client to help nodes identify the closest nodes to them in terms of network hops. Nodes will then be able to connect with their nearest peers, as opposed to connecting randomly with any node in the world. Theta hopes that this will allow nodes to pull streams much more consistently and so rival the consistency of current CDNs.

server and client

A demonstration of how the tracker server and client maintain consistency in node quality.

Theta Blockchain

The purpose of the Theta blockchain is to serve as a consensus layer for payments and rewards within the ecosystem. It is important to know that no video files are being stored in the blockchain whatsoever. This would be impossible due to the data demands it would impose.

The blockchain will be completely open-source and the team hopes that developers will build and deploy their own DAPPS on top of the blockchain.

Tackling Scaling

Since there will theoretically be tens of thousands of nodes contributing to the mesh network, there will, as a result, be a huge number of micropayments for rewards. On top of this, the blockchain needs to account for an equally large number of payments in the form of tips, purchases, and other token use cases. As a result, Theta is trying to build a proof of stake (PoS) blockchain with extremely high throughput, while not comprising decentralization and its security. This, of course, is no small problem and is something that has plagued many blockchain projects.

The team has split their blockchain into two levels. A small validator committee of just up to 20 validating nodes produce the blocks. Beneath that, an expanded pool of guardians running up into the thousands are responsible for validating the blockchain at set points and contributing to consensus. Theta believes that this will give that extremely high throughput without compromising decentralization.

On top of this, Theta is using an aggregated signature gossip scheme. This means that the guardian nodes instead of sending out their signatures to all other nodes sends them out to their neighboring nodes. This process continues, spreading the signatures much the same way as a virus would spread in a pandemic. This is designed to maximize the efficiency at which guardian nodes communicate with each other. The final part is the off-chain micropayment system that adds additional capacity to the blockchain. This is apparently double-spend resistant.

The Purpose of the Theta Token

Right now the Theta token exists as an ERC20 token and does not have any utility function. However, when Theta transitions to its native mainnet on March 15, 2019, these tokens will be swapped 1:1 for the new Theta tokens, riding on top of Theta’s new blockchain. 

Once the mainnet goes live, these new tokens will primarily be used for securing the Theta blockchain. In addition, the team hopes that people will use the token as a means of paying and rewarding content creators, trading virtual products and purchasing premium content.

708,000,000 out of a total supply of 1,000,000,000 tokens are currently in circulating supply. This equates to 71 percent, which means that the token supply cannot be diluted too significantly, positive news for investors.

At the same time as the mainnet launch, Theta will issue Gamma tokens to all THETA holders. Five Gamma tokens will be issued for every one THETA token held. These tokens will have the utility value and will be used to pay for video segment transactions and cover the smart contract operations. It appears, that the Gamma token, rather than THETA token will be used as a means of paying and rewarding content creators, trading virtual products and purchasing premium content.  There will be five billion Gamma tokens produced. 

Of course, until 15th March, investors only need to concern themselves with the current THETA ERC-20 token.

Theta Team and Roadmap

Theta’s team, advisors and list of partners is impressive. The team consists of 14 members as well as a multitude of blockchain and media advisors. Steve Chen, the co-founder of Youtube has been an advisor to Theta along with prominent members and ex-members from Twitch, Verizon and Plays.tv among others.

During the testnet phase, Theta has been partnering with Sliver.tv, its parent company, as well as Samsung VR and MBN, a major Korean media company.

In 2019, the team is aiming first and foremost to launch their blockchain and swap the current ERC20 tokens for the new Theta tokens. Beyond this, the focus seems to be around bringing on more content partners and generally growing the Theta network.

Theta Token Trading History

After the token sale in January 2018, Theta has been actively trading since January 27, 2018. It reached its all-time high of $0.314425 on January 27th. It has been in decline ever since, along with the rest of the cryptocurrency market. THETA performed similarly to other altcoins across 2018.

We should expect THETA to start breaking away from the rest of the market once the mainnet goes live in March, and users start to join the network. At this point, the token will move from a speculative vehicle to one with a use case as an incentive mechanism for network participation.

Where to Buy Theta

Relative to its market capitalization, Theta is a very liquid token, making it easy to purchase. Trading right now for Theta is focused in Korea, with the Korean Won accounting for the majority of volume on Coinbit, Bithumb and Upbit. However, there is also a reasonable amount of volume between Binance and Huobi for Bitcoin, Tether and Ethereum pairs. Investors can be confident in buying large amounts of Theta without experiencing any slippage.

How to Store Theta

For now, the current ERC20 token can be stored easily in any wallet that supports this standard. We typically recommend MyEtherWallet in conjunction with a hardware wallet such as a Ledger or Trezor. This gives you a high level of security along with a simple user interface.

Theta has said that they will release their new wallet before the mainnet launch. Users will able to store the new tokens in this wallet.

Conclusion

Theta’s answer to the current scaling problems of content delivery is certainly fascinating. Its unique approach to the P2P mesh network, which is incentivized and secured by the high throughput blockchain, if successful, could certainly be very disruptive.

Whether they can maintain the decentralization of their blockchain and keep their mesh network at a consistent quality are probably the two biggest questions right now.

The theta token itself makes a lot of sense as a utility token. More importantly though should work as a means to incentivize the sharing of bandwidth. This will in turn aid the development and growth of the mesh network.

With the mainnet set to be launched in the coming months, 2019 should be an exciting year for Theta, and we will certainly be watching them closely.

Additional Theta Token Resources

There are several other ways to keep up to date with the progress at Theta:

The post What Is Theta Token (THETA)? appeared first on CoinCentral.

Source: Coin Central