One of the more notable upcoming projects in the crypto space I’ve been particularly looking forward to is HEX, developed by early Bitcoin adopter Richard Heart.
Although I do not agree with all of the project’s assumptions, I personally believe it’ll be a pretty cool experiment at least.
Please remember, as usual, that this is not financial advisement, and I’m not suggesting that any crypto-enthusiasts out there should put money into HEX.
The aim of this article is simply to explain what the project is, how it works, and why Bitcoin hodlers should care.
Essentially, if you hold Bitcoin in your personal wallet, such as an Electrum, Trezor, or Ledger, you can mint your own HEX.
The cost? Signing a Bitcoin transaction.
What is HEX?
To put it in simple terms, according to Richard Heart, HEX tokens are essentially time deposits made over the Ethereum network.
If Bitcoin can replace digital gold, perhaps HEX could indeed replace digital time deposits. If you’re looking to better understand time deposits, please read this post here.
According to Investopedia, “A time deposit is an interest-bearing bank deposit account that has a specified date of maturity, such as a certificate of deposit (CD).
“The deposited funds must remain in the account for the fixed term to receive the stated interest rate. Time deposits are an alternative to the standard savings account, and will usually pay a higher rate of interest.”
Essentially, you lock up your HEX for a fixed period (a minimum of about one year) to receive a share of the remaining tokens in the pool.
I’ll discuss how tokens are allocated later, but let me underline why HEX is trying to break into the time deposits market.
As you can read on the HEX website:
“CDs are worth more than gold, credit card companies, and cash. CDs pay higher interest than savings accounts, requiring money be deposited for a fixed time. Banks profit on poor customer service, early withdrawal fees, and auto-renewing you at worse rates.”
How does HEX work?
HEX is an ERC-20 token. This means that HEX tokens are essentially smart contracts built over the Ethereum network.
Richard claims HEX had to be built on Ethereum because the protocol is better and safer than BTC – something I completely disagree with.
I love Ethereum, but not because it’s safer or better than Bitcoin. It helps people deploy new ideas instantly – that’s the value proposition.
Perhaps in time Ethereum will become as secure as BTC, although I highly doubt it since scalability requires some trade-offs (like decentralisation or security).
Nonetheless, that is not the point of this article. I agree HEX had to be built on Ethereum, but for different reasons like flexibility and the ability to run extra functionality.
The only point of HEX is to give Bitcoin (and Ethereum hodlers as well) the chance to make extra gains. Simple stuff.
How to get HEX
There are currently two ways to get HEX. The first is free and just requires you to hold Bitcoin prior to the Bitcoin blockchain snapshot, taking place Monday December 2 2019.
You’ll need to sign a transaction proving you are the owner of the private keys for your addresses. According to the website, there are five easy steps:
- Install MetaMask on your browser.
- Go to the ‘Claim’ tool on wallet.hex.win.
- Open your BTC wallet and sign the statement given to you by the Claim tool.
- Paste the signature into the Claim page.
- Click ‘Submit’.
The second way is to send ETH to the “adoption amplifier” – a smart contract that converts ETH to HEX on a daily basis.
You can also use referral links (Richard is the master of referrals) in order to…
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