Cryptocurrency

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Merging Gold with Blockchain Technology

Since ancient times, gold has always been something that has had value attributed to it. All writings from civilizations long gone have mentioned gold and its valuable attributes. Throughout history, gold has gone through numerous changes to make it more accessible for investors. The problems with gold are also it’s strengths. Gold is of course, a physical metal. Unlike fiat currencies, gold cannot be simply printed and duplicated whenever the governments of the world decide they would like some more of it. Gold mining, like all mining, is an expensive and time inefficient process. Gold has a finite number when it comes to above ground stores. The problem with gold is, it is in no way an effective currency to use for daily exchanges. To store or move gold is an expensive process. This has led investors to search for an alternative to holding the actual physical gold. Gold ETFs have long been an option for investors. These exchange traded funds have long been an easy way to add gold to your portfolio without having to store the physical metal. There is also gold mining stocks for those that choose to invest like that. However, there is no other methods to use gold as a day to day currency for transactions. With blockchain technology, this will finally become a reality. The Kinesis platform has numerous ties to the gold and precious metals industry. Kinesis is partnered with ABX, the Allocated Bullion Exchange, a leader in the gold and precious metals industry. They have numerous exchanges on in several different countries and are really a global platform for the sale and exchange of gold bullion. Kinesis is doing with blockchain what ABX did with the internet, offering all new and interesting ways to harness the best store of value the world has ever seen, gold. The Origins of Kinesis Kinesis has a distinct and grand vision for their platform that rivals anything else in the crypto world today. There is truly no other platform in the blockchain industry today that comes close to the full fledged financial institution that Kinesis offers. Kinesis is led by Chief Executive Officer Thomas Coughlin. In a recent interview with the financial and investing show “Crush the Street,” Coughlin describes his background in the precious metals industry, and the origins of the Kinesis vision. Coughlin describes the path that led him to Kinesis started in 2008 with the financial crisis. “I was looking for basically a sound investment and safe haven instrument which led me into the precious metals industry and as I went into that industry, I identified so many inefficiencies with the space.” Coughlin’s background in the finance industry comes from his experience as a hedge fund manager. From there, he founded ABX. At the time, ABX was a leader in merging technology and gold in ways that investors have needed for some time. The natural next step to further the merging of gold and technology is to harness the power of blockchain. This is exactly what Kinesis strives to do. In this interview, Coughlin touches on some of the key differences between the Allocated Bullion Exchange and Kinesis. He mentions that it was always in his mind to be able to facilitate peer to peer transactions in a way that was completely decentralized. This was an issue seeing as ABX is a centralized system, which limits the potential. ABX stands in the middle of every transaction, so users don’t have full control over what they do with their funds. With banks for instance, having a man in the middle can cause long backups for your funds. Your accounts can also be locked or held against you. This is simply not feasible for business owners and individuals. Kinesis has a strong vision for their platform that needed to be completely decentralized for the benefit of all users, and to avoid the problems banks cause. Gold and Blockchain Come Together Kinesis is focused on what makes sound money. This principle is what has drove Coughlin for a long time. Fiat currencies all over the world are facing deflationary pressure due to the national banks over printing funds and thus diluting the value. For this reason, Kinesis decided to utilize gold and silver as their backing assets for their cryptocurrencies, KAU and KAG. Both of these cryptocurrencies are backed on a one to one basis, one gram of gold for every KAU and 10 grams of silver for every KAG coin. Kinesis takes gold and silver and essentially puts them on a high speed rail system which is the blockchain. Bringing gold onto the blockchain opens it up to many new possibilities that were not present before. First, transacting with gold becomes an anonymous process. Utilizing the blockchain, anyone can send payments and transact with Kinesis cryptocurrency, completely anonymous. This protects individuals liberties and identity in an age where your information seems too easy to fall into the wrong hands. With traditional banking systems, the method of exchanging account information to send and receive payments has led to numerous identity theft issues. Hackers can also easily get this information just from your online shopping habits. These are security risks that need to change in the future. With Kinesis, gold can become an instant method of payment anywhere in the world. With blockchain integration, it becomes a highly efficient medium of exchange. The world has long moved past gold and instead used fiat currencies essentially backed by nothing, which has led to financial crisis in many different parts of the world. The devaluing of currencies has been going on for decades, further promoting gold and precious metals as the stable alternative. Kinesis brings back stable value for everyday commerce by bringing gold into this new technology sector and integrating it with cryptocurrencies. Eliminating Abstract Value In the interview with Coughlin, a very important point he discusses is the abstract value of not only cryptocurrency, but all fiat currencies in general. He explains that most of the volatility in crypto comes from the fact that no one is quite sure what the true value of these cryptocurrencies are, perhaps it’s even zero. They are valued according to the confidence in them, and the confidence in the development teams. In this sense, cryptocurrencies today are very similar to legacy fiat currencies like the USD or Euro. The belief in fiat currencies backing, and the trust of the government is what keep them going. This is also how countries like the United States ends up with over 20 trillion dollars worth of debt. Kinesis cryptocurrencies eliminate this need for trust, essentially creating a trust-less system, which is what Bitcoin and alternatives were supposed to be. A user does not have to trust in the value of the Kinesis tokens, as each token is verifiably backed by gold and silver. As long as these precious metals hold their value, Kinesis tokens will hold their value. The arrival of stablecoin options in crypto is long overdue. Stablecoins like the Kinesis currencies will allow crypto to be adopted by users and merchants on a grand scale, and finally make crypto an everyday means of payment and exchange like it was intended to. As of now, there is next to no adoption, leaving many wondering what the true purpose of Bitcoin is, and whether it can continue to hold its value into the future without drastic changes to the underlying technology. Kinesis will outperform major crypto currencies by eliminating the abstract value and the volatility. Why Kinesis is Superior to other Cryptocurrencies If you are discussing trust, it is safe to assume more users trust in the value of gold versus the value of experimental technology. This is because gold has a timeless value attached to it. Where the world has gone through numerous technological advances, gold has stayed constant. The industrial revolution is long past, as is our dependence on steam or coal based energy, and yet gold has retained value throughout all of history. So while we watch this experimental technology called cryptocurrency grow, and the faith attached to it, we have to keep in mind that we run the risk of it one day being outdated, redundant technology. Everything in technology is rapidly changing, so there is not telling if there is a better crypto alternative right around the corner. This makes Bitcoin and other cryptocurrencies, very risky propositions. Especially considering we truly have not seen these blockchain systems be tested by mass adoption yet. This again puts Kinesis in quite an advantageous position. While other crypto currencies have no backing of any kind, Kinesis cryptocurrencies are backed by the best store of value in history, gold. This means Kinesis has the potential to effectively outlast all competitors and be the leader in stablecoins. In comparison, Tether, another stablecoin, has had nothing but controversy regarding their platform. Tether is backed by USD, an already rapidly deflating currency. This aside, Tether has numerous controversies regarding their lack of professional and publicly available audits. This has not been comforting for Tether holders. Especially considering Tether is supposed to be pegged to one dollar, but has its own share of volatility, and has failed to hold that dollar peg. Kinesis has verifiable stores of precious metals, and all transactions on the Kinesis blockchain will be publicly open to inspection. Fiat currencies are going through rapid deflation worldwide, with Venezuela bolivars and Turkish lira being prime examples of the catastrophes that can transpire. Any stablecoins backed by fiat currency are subject to deflation over time for this same reason. Kinesis will continue to be a solid alternative to all cryptocurrencies, and will be a leader in real world adoption. The Kinesis network will continue to grow, while other blockchains see less and less use. Kinesis will continue to be the superior cryptocurrency. Understanding Asset-Backed Systems According to Coughlin in this interview, Kinesis cryptocurrencies don’t actually represent tokens that are “backed” by gold in the traditional sense. The Kinesis cryptocurrencies are actually divisible units of gold and silver down to unit sizes that can be used to pay for smaller transactions. The ability of cryptocurrencies to be fully fungible and break down to smaller increments that 1 unit are a great advantage compared to stocks and bars of gold. Furthermore, there cannot be any more coins minted without there being gold in the Kinesis system to back it. This means there is no free flowing coins on the network that dilutes the individual Kinesis coin value. There is a two tier market structure with Kinesis. The first tier is where users mint their own Kinesis coins. They use their fiat currencies to actually mint their own gold and silver backed Kinesis currencies that are then deposited directly into their Kinesis wallet. This allows users to essentially be their own central bank, and have full control over their funds with no middle man. The second tier in the Kinesis system is where these actions are added to the blockchain ledger, for full transparency and immutable records. The Kinesis Business Model The Kinesis system is unlike any other in crypto today. What Kinesis is offering is a full yield and reward based system for all participants in their network. Kinesis is incentivizing the use of their coins for all minters in their system, which will in turn make Kinesis an attractive passive investment compared to things like rental property or stocks. Typical gold investors do not receive any type of yield, but within this new industry Kinesis has established a yield system that will reward users in four different ways. Minter Yield First there is the Minter Yield. When minters create their Kinesis coins, they are forever tied to this person. When the minter uses these in transactions, the coins will then return a 5% based on transaction fees in perpetuity. The blockchain ledger allows us to track the movement of these coins forever. This will allow Kinesis to determine the original minter of these coins and continue to reward them. This is incentive for users to continue to participate in the network by minting new coins and using them, and essentially a new ecosystem is being formed on the Kinesis network. Depositor Yield Kinesis depositors will also receive a 5% share of transaction fees on the first deposit and use of the Kinesis coins from their Kinesis wallet. Holder Yield For those that choose to hold the Kinesis coins instead of using them, Kinesis holders receive a 15% share of all transaction fees. This is calculated every day and the total is sent to their Kinesis wallet every month. Referral Yield This yield is specifically for those who choose to refer users to the Kinesis platform. Referrals will bring even more rewards for the platform users. The Growth Incentive What Kinesis is doing is incentivizing the growth of a stablecoin network. Traditional, there is no rewards or growth involved with stablecoins. With options like Tether or TrueUSD, the only reason to use these currencies are either as a safe haven against Bitcoin’s violent volatility, or as an onramp to major crypto exchanges. Other than that, there is no incentive, and to the opposite point, in the case of Tether and other major stablecoins, you are effectively losing value because Tether has failed multiple times to keep it’s dollar peg. Thus you are bleeding your portfolio just holding it. Kinesis has this yield system in place to create network growth organically. The more people using the network, the more benefits there are for the existing users. With Kinesis backed by gold and silver storages, there is also a better system to ensure that Kinesis will not lose its stable value. This makes it the better stablecoin option, ensuring it will be used on major exchanges more than alternatives. Also pushing Kinesis’ growth is their connections to ABX and other business partners. ABX is not a newcomer by any means. It is actually a well trusted and respected platform with many high level connections. In this interview, Coughlin details a strategic deal in place with a large mobile bank with 150 corporate clients and millions of active users. These partnerships were all born out of the existing operation, ABX. The Kinesis platform is the farthest thing from other crypto startups. Many of them just have a white paper and an idea and are starting from the ground floor. Kinesis is already well established and connected with a large community that is interested in this sound money project. Kinesis Roadmap Things are moving at a rapid pace for Kinesis. Currently in public sale, the KVT tokens are yet another offering for the Kinesis platform. With the connections Kinesis has, and the technology built around it, it can be scaled to a huge user base. The KVT token sale is your chance to take part in the value of the entire network, quite like stocks for businesses. The KVT tokens will grant users a share of the entire fee base for the network. This could potentially be a huge share when the Kinesis platform fully launches. The capital raised through this token sale will go towards building up all the infrastructure and technology that the vast Kinesis platform will need. In early 2019, Kinesis will begin to offer their long awaited gold and silver backed cryptocurrencies, KAG and KAU. This will be the first leap for the Kinesis network. Also planned is the Kinesis debit card. This card will grant the user the ability to utilize their Kinesis holdings for every daily transaction, even where cryptocurrencies are not yet accepted. This is in addition to the Kinesis wallet, which will link directly with the Kinesis debit card. Kinesis will also launch both of their crypto currency exchanges, for both minting new KAG and KAU coins, and for other altcoin transactions. Ultimately, 2019 will be a huge year for Kinesis as it becomes the leader in stablecoins and cryptocurrency technology. While many cryptocurrency platforms have little more than a white paper and empty promises, Kinesis has a full fleshed out vision, and the experience and development team to make it happen. The cryptocurrency market needs a stablecoin leader, and Kinesis will assume this role. What Kinesis offers is a full closed loop monetary system. Every detail and need for the user has been well thought out and considered. This ensures no reliability on services outside the Kinesis platform. While other blockchain companies hire for development of wallets or exchanges, Kinesis is creating all of these products themselves. This is a team with an unblemished record of meeting the needs of their customers. Coughlin first envisioned Kinesis before blockchain technology existed, and with ABX, he was just waiting for the proper time. Blockchain ledger technology has changed the finance industry and made it possible for the Kinesis platform and others to fulfill their missions. With the Kinesis ICO coming up for the KAG and KAU tokens, the future of cryptocurrency is within grasp. Legacy fiat systems will continue to be devalued and citizens of the world will continue adopting alternatives to ensure their financial futures. What they will be gaining with the Kinesis platform is full, unhindered financial freedom. Kinesis is abolishing the middle man, and ensuring that all users have full financial control of their funds, forever. There is no censoring of transactions, or locking accounts like services such as Paypal. The user has their Kinesis wallet, and is able to use their funds whenever they choose. This is a momentous time for financial liberty, and Kinesis is providing the platform that benefits everyone, from merchants to individuals. Gold is being merged with technology in ways that have never before been possible. With this system, gold is truly brought into the future. Investors and everyday people now have access to gold in ways that before were not easy or cheap. While gold has always been a store of value in times of crisis, it will finally return to the use it once had, an everyday means of payment and exchange. Kinesis is providing the platform that will allow users to finally be financially independent.

Zubair Bukhari
Zubair Bukhari

25/10/2018

How Stablecoins will lead to consumer adoption of crypto

Cryptocurrency mania reached unparalleled heights in 2017. The feverish hype ushered in explosive growth in this new technology sector. With money pouring into the blockchain sphere from every direction, it’s more important than ever to have an unbiased review of the underlying technology. While the public interest has certainly been grasped, it’s of the utmost importance to keep in mind that this new technology is very much still in its infancy. Mass adoption is the most important aspect when you consider the longevity that this technology, or any technology for that matter, will have. It’s without debate that cryptocurrency has not gained even a fraction of the adoption rate that it will need to be successful in the future. This includes merchants, big corporations and individual users. In technology and marketing, often “killer features” are discussed. Crypto’s killer feature is adoption. Without the everyday use factor, reliability and consumer dependence, there will not be a bright future for the cryptocurrencies of today. If the adoption doesn’t grow at the same rapid pace that public interest grew in 2017, then cryptocurrencies will remain a speculative financial instrument, and before long they will be forgotten. At the current moment, blockchain and decentralized applications, more commonly know as Dapps, have little real-world use. Nothing close to the hype and promises of the thousands of ICO’s that have been launched in the last few years. On the contrary, most of these blockchain-based businesses are not live and ready for consumer use yet. This sector is still full of new and experimental technology, and this comes with big risks and big expectations to fulfil. Dapps and Blockchain have a lot to offer the world, and their integration in our daily lives and the technology we already use could very well usher in the next great industrial era. For these new technologies to be adopted by consumers, they need to provide a user experience that is straightforward, simple, familiar and ultimately better and cheaper than what consumers already use. These are the foundational principles of mass adoption of any new technology that has ever existed. The population at large is not interested in complicated technology for the sake of something different or new or unique. They are interested in things that make their lives simpler, easier and make their transactions and purchases cheaper. Blockchain and cryptocurrencies have some huge hurdles to jump before we get to the blockchain utopia described by the proponents of this new technological sector. Crucial Steps for Consumer Adoption of Crypto Currently, in the financial world, centralized applications are the leaders and always have been to some degree. These are the biggest names that are known the world over and are the leaders in the financial sectors. These include the biggest banks internationally like Citibank, HSBC, and JP Morgan. The legacy credit card payment networks like Visa and MasterCard. Even the new transaction networks and wallets like Paypal and Venmo that exist through online and mobile applications to reach people anywhere in the world. While Blockchain and decentralized applications have yet to gain real world use traction, they have a lot of promise and could potentially morph to exceed the hype in any of the ways we can imagine today. To get there, we need adoption on a mass scale to make these options competitive and enticing. Here are some of the biggest steps that crypto needs to take for consumer adoption. User Friendly Wallet Interface As an industry, we need to accept upfront that the vast majority of people are not technologically inclined. While younger generations are now being born with smartphones in their hands, the older generations are grasping only what they want or need from day to day. The past and present challenges of storing your cryptocurrencies are not things that will be welcomed by mass audiences today. During crypto’s inception, the only way to store your cryptocurrency was through archaic and clunky desktop wallets. These required setup and installation and basic to advanced knowledge of computers and command line interpreters just to store your money. Even today, newer web wallets are clunky and daunting, and that is before you bring in transaction hashes and blockchain explorers. There is simply too much to consider for the average consumer and as a result, they are turned off and instead leave their crypto on exchanges. This is a terrible habit to get into in a time where numerous exchanges have been sited for their poor security practices and the track record of high value exchange hacks is well known and documented in the public’s eye. Wallets must be easy, streamlined and consumer-friendly. Venmo in particular is an industry leader in just this, easy to use wallets for the everyman. Venmo seems to follow the philosophy of Leonardo Davinci and other great minds. That principle is that the key to perfection lies in simplicity. With Venmo there is a wallet, username, and an optional security feature. This is a stark contrast to industry leader in crypto wallets, MyEtherWallet. MEW uses complicated transaction addresses, long signatures that are easy to mistype. The delivery process is shaky and time-consuming. There are moments of uncertainty when sending any transaction and often times people are prompted to check constantly that they sent their money to the correct address. Most crypto wallets are also poorly designed. While many other popular and well-known services like Venmo have crisp clean designs, many web and desktop wallets are made by small independent teams in crypto. These teams are often programmers and not designers, so little thought is put into the actual design or layout. They are more concerned with function, security and reliability, which are admittedly very important. However, it is already daunting enough to use crypto wallets and the blockchain for transactions as is, and these wallets are hard to navigate and find the correct features to use, just adding to the uncertainty of the user with every transaction. These wallets interfaces need to have easily identifiable usernames to distinguish the endpoint of the transactions, instead of long strings of characters. The Ethereum Name Service (ENS) is attempting this for the Ethereum network. Gas for transactions should be calculated in wallet, and give the user choices such as slow or fast transactions, resulting in low or high fees for the user. We are an increasingly mobile-based society. For some people, their mobile phone is their gateway to the internet, rarely using desktop or laptop options. For this reason, all crypto wallets need to have mobile-friendly options that are fast, reliable and lightweight on their devices. This will enable users to send and receive transactions anywhere in the world and is crucial to mass adoption. Low Transaction Fees High transaction fees are something that consumers will have trouble agreeing to. This is something that will certainly pose a barrier to entry for the average consumer. Especially when these fees fluctuate daily and cannot be relied on, like what we saw throughout 2017 with Bitcoin. The more that Bitcoin was used, the higher the fees became when people were gladly paying even more in fees to make sure that their transaction went through as fast as possible. Consumers are used to paying fees when sending money, especially with credit card transactions, but if you want people to switch to your service, you need to offer a better alternative. Not the same thing they already dislike. Also, many Dapps require multiple transactions, greatly increasing fees overtime. Merchants in particular simply cannot have these fluctuating fees. Their businesses depend on accountability and they have to know upfront what they spend to accept and receive crypto payments. There is not many ideal options out there now in crypto, but there has to be a low cost transaction alternative to the current issues crypto is facing. Quick Transactions In addition to the low fees, there cannot be transactions that get stuck in limbo before reaching there destination. If crypto really is the future of money, and money over the internet, then it needs to be as instant as email. This shouldn’t depend on a certain time or how full the blocks are, this needs to be anytime anywhere transactions that are solved instantly. This is crucial for mass adoption and our current needs as a society. Even more importantly, the biggest hurdle for mass adoption of crypto revolves merchants accepting it for their goods and services. The only way this make sense for them is if it is a low cost and instant transaction for them. This alone can take customers from Paypal, who is infamous for blocking transactions, holding payments, and freezing accounts. With online shopping at all time highs around the world, lighting fast transactions is no longer a luxury, but a requirement. Mass Adoption Scalability Every individual cryptocurrency has their own idea on how to properly scale for the mass adoption that is promised to come. Unfortunately, all solutions at this time are either completely theoretical or still deep in development with no posted release date. This includes the Lightning Network with Bitcoin, and sharding with Ethereum. Two of the most promised and coveted solutions to the ever present scalability issue. This foundational issue is one that nearly split the bitcoin network apart in 2017 over disagreement on what the solution would be. This in turn spawned Bitcoin Cash, a Bitcoin fork with bigger block sizes. There simply cannot be arguments in these emerging technologies that cause splits between communities. For crypto to be flourished and adopted, there has to be unified scaling solutions. Consumers will not wait around for crypto to work itself out. Transactions become cheaper with different scaling methods. With Lightning Network, transactions with become almost free because nothing is recorded on chain except for the details regarding the initial settlement. To be effective, Lightning Network will need an ever increasing amount of user nodes to run.Ultimately, scaling will bring more throughput which makes transactions faster and more reliable for merchants and users. Currently, the network is often congested, leading to pitiful throughputs, like Ethereum processing around 15 transactions per second. Comparatively, Visa processes 150 million transactions a day, almost 2000 transactions per second. There is no comparison with current crypto networks. If Bitcoin for instance received just a percent of Visa’s business every day, the network would be completely unusable for everyone. Mass Adoption of Stablecoins It seems as though most of the cryptocurrency markets are coming to the point where they must decide to be either a speculative instrument for investors and traders, or a means of everyday commerce for merchants and users worldwide. Transactions in Bitcoin commonly means the user pays too much and merchants lose money due to volatility. In fact, many merchants that accepted bitcoin from its inception to now have dropped their support in 2017 and 2018 because of this fact. The last few years, the world has watched the volatility of cryptocurrencies and decided that it is not quite ready to be used for daily purchases. On the contrary, at the current moment, people are afraid to spend it at all. Most seem to be terrified of missing out on increased value for their dollar. If no one uses cryptocurrencies for transactions, then this is defeating the need for them at all. It seems as though people have woken up to this and are ready for an alternative that is reliable and can be used efficiently everyday, anywhere in the world. Stablecoins are the Holy Grail of Mass Adoption If there is one thing that the crypto market desperately needs to survive, it’s stablecoins. The crypto market is absolutely starved for asset-backed tokens that are trustworthy, reliable and immune to the daily fluctuations of other big-name cryptocurrencies. This immense need for this instrument has prompted some to call stablecoins “the Holy Grail of the crypto markets.” While asset-backed financial instruments are nothing new to the financial world, they are something that will be a novel and new implementation in the crypto world. Stablecoins, put simply are cryptocurrency tokens that are pegged to a stable price and value. While they share all the features that make other cryptocurrencies so popular, they do not have the same volatility that exist in other areas of the crypto markets. This in turn enables them to be better candidates for the store of value proposition that was expected of the earliest cryptocurrencies like Bitcoin. These stablecoins are still able to be stored in wallets, sent anywhere in the world, and preform all other functions that crypto is famous for. While there are some stablecoins that exist today, like Tether, there are several problems with these options. There has been many public issues with Tether, with some accusing them of being insolvent and the individual Tether units being unredeemable. Some have also speculated that they have quickly fleeting banking relationships. This is troubling considering Tether has state numerous times that they have 1 USD for every USDT token in existence. Now more than ever, the crypto sphere needs a stablecoin that comes from a verified, trustworthy source. Other needs for a stablecoin comes from the very lifeblood of this new financial market, the exchanges themselves. Exchanges need a value pegged instrument to serve as a financial pairing instrument such as BTC/USDT. They cannot use an instrument that fluctuates wildly. This has led several exchanges to create their own stablecoin, like Gemini with GUSD. Also, Circle, who owns popular exchange Poloniex, has plans to launch their own stablecoin, USDC. There are numerous other projects in development, such as Basecoin and MakerDAO. Most of these projects are still well in their infancy with lots of production still needed. I predict we will see immense amounts of these stablecoin projects in the future. It will take some time however, before we see a truly successful stablecoin at scale, and used by the public at large. There are certain qualities that stablecoins and asset backed coins need to prove to truly be ready for adoption. First off is the obvious, price stability. Along with any other cryptocurrency, it also needs scalability. Finally, resiliency is needed. These few attributes are the absolute minimum a stablecoin needs to have. While some might argue that privacy and decentralization, the core of the cryptocurrency philosophy, are non-negotiable necessities, it is had to argue for them when it comes to stablecoins. While they might be great additional features, we need secure and trusted sources to back up these assets and make them truly reliable. Stablecoin Model #1 Centralized IOU Issuance There are several theoretical models behind stablecoins. The first is to issue what are essentially IOUs. This is the model that is used by tokens like Tether and Digix. In this instance, a centralized company holds assets in a vault or bank account and then issues tokens with the promise that they represent a claim of the backing assets. This gives the token value because it is claimed to represent another underlying asset with a clearly defined value. One of the issues with this model is that it is a centralized approach, which therefore requires trust in the issuer. You have to believe that the issuer actually owns and holds the asset represented by the token and that they will honour the IOU in the future. This model has obvious risks involved, and there have been serious public concerns about stablecoin issuers Tether in recent history. Stablecoin Model #2 Collateral Backed The second model is based on pioneers BitShares. This model consists of trust-less assets that are verifiable on-chain, an important distinction. This model is also used by companies Maker, Haven, and numerous others. In this model, decentralized crypto assets are what backs the stablecoin. For instance, Maker’s Dai stablecoin is backed the amount of ETH held in collateral in an Ethereum smart contract. The collateral is held trust-lessly in a smart contract, so users aren’t relying on any third party. This option is decentralized and not at risk of any insolvency. Simply put, this model would allow users to create stablecoins by creating a smart contract, and then locking collateral that exceeds the amount of tokens issued. If a Maker user wanted to generate $100 worth of Dai stablecoins, they could then lockup $150 worth of Ether. The benefits of a smart contract are in its usability. The collateral could be obtained by paying back the stablecoins, or the contract could be terminated with the collateral assets sold if certain pre written requirements aren’t met. The biggest benefit however, is that there is no trust in central parties required. Central parties controlling funds is the very antithesis of the cryptocurrency movement. There is one glaring issue with these smart contract stablecoins. The issue is the collateral that backs the stablecoin is often times an incredibly volatile crypto asset such as ETH or BTS. These assets have wildly swinging values, and as a result, most of these projects require the stablecoins to be greatly over-collateralized enough that compensates for the sharp and sudden price falls or drops. There is also no protection against unforeseeable catastrophes in the crypto markets. Stablecoin Model #3 Seigniorage Shares The last model is the seigniorage shares approach. This approach is very similar to what central banks do with fiat currency controls. This approach uses algorithms to control the supply of the price stable currency. However, unlike other models, there is no backing asset to these stablecoins. The only thing backing them is the expectation that they will retain their value over the course of their life span. In the seigniorage shares model, there is an initial creation of stablecoins that are pegged to a certain value of a popular and well-known asset like USD. Over time, the supply will automatically change in response to the demand for the asset. There are different methods to control the supply, but perhaps the most common is the method using bonds and shares that was introduced by the stablecoin, Basecoin. The demand for these stablecoins grows as the network grows. What initially was a fixed supply has to increase to meet the growing demand. Normally with an asset, an increased demand then in turn increases the price. In this model, however, new coins are issued to counter the increased demand, continuously inflating supply to keep the price pegged at a specific value. The biggest challenge of this model is figuring out how to expand and contrast the circulation of the stablecoins in a way that cannot be gamed or abused, while simultaneously being decentralized. While expanding the supply is straightforward and simple, when it comes to contracting the supply, that is quite different. The rules revolving around this action need to be clearly outlined and agreed upon. Users must somehow be incentivized to voluntarily part ways with their stablecoins, normally through the use of bonds. These bonds have a par value with $1 and are then sold at discounted prices to holders who surrender their stablecoins to be removed from circulation. Shares can also be used in this instance. Shares are like equity. They represent a claim on a future stablecoin distribution. Dividends on the asset are paid to shareholders, and often times shareholders also have voting rights. Upcoming Gold Backed Stablecoins Kinesis Location: Isle of Man Kinesis is the next step in the evolution of cryptocurrency. The Kinesis tokens, KAU and KAG represent 1:1 stores of 1gram of gold and 10 grams of silver. The Kinesis team has developed their own cutting edge native blockchain forked from Stellar. The Kinesis Network has rapid transaction speed and percentage based fees that are customizable, creating the best conditions for the native Kinesis tokens. Their Initial Token Offering runs until November, 2018. Kinesis also supports their own debit card. The Kinesis debit card will allow for instant conversion of KAU and KAG into fiat currency for use with any Visa or MasterCard system. Users of this debit card can even withdraw fiat from traditional ATM’s. This debit card is something that crypto users have been requesting for years, especially as less and less merchants are accepting cryptocurrencies every year. This is in addition to the new Kinesis in house designed wallet. The wallet was built to accommodate all their native currencies. There is the ability to save the addresses of payees for repeat transactions. You can also name accounts to remove the need for lengthy account keys. Security minded users can even choose the optional multi signatory function and sign and verify functions to increase their transaction security. Overall the web wallet boasts some very unique and useful features. AgAu Location: Zug, Switzerland AgAu is named for the chemical signs for gold and silver. They enable completely decentralized ownership of gold and silver assets. Their tokens are backed by 1:1 grams of gold or silver for the Ag and Au tokens respectively. Airgead Location: Dublin, Ireland The Airgead token provides an interesting concept in the crypto community. Each token can represent any amount of precious metals ranging from gold, silver, platinum and even palladium coins and bars. These precious metals can be merged in any amount into a single token. Cyronium Location: Jakarta, Indonesia Cyronium comes from Indonesia and is another gold backed token. Each Cyronium coin consists of 20 grams of 99% pure gold. A stark difference between other projects, Cyronium actually allows you to take the option of receiving physical coins that represent their native CYRO token. The coins are shipped to the purchaser and the CYRO tokens that correspond are destroyed to prevent any duplication. They have gold reserves in Singapore. EAU-COIN Location: Gothenburg, Sweden EAU-COIN is another gold backed token that implements smart contracts based on the Ethereum blockchain. All EAU-COINs are backed by gold reserves that are owned outright by the company. Each year there will be at least two issuing rounds for the tokens correlating to market demands and how much ground gold assets are being mined. Goldma Location: Zimbabwe Goldma is a unique and interesting proposition. Unlike most other gold backed tokens, this token is based on future mined gold and not any gold in vaults. Goldma is a token backed by a fully operational gold mine in Zimbabwe. When gold is mined, it is sold at spot and Ether is bought with the proceeds. Jinbi Location: London, UK Jinbi tokens (JNB) are backed by a gold supply that increases from the production of gold by their mining partner. Jinbi will pay dividends to token holders at every production milestone, payable in either physical gold or the JNB token. Karatcoin Location: Cossato, Italy Karatcoin is a platform that deals in the exchange of Karatcoin tokens and gold certificates. The token used is KCG gold token that represents 1 gram of gold secured in their own vaults. Kinesis Prepares for Market Rollout Right now in Crypto there is a massive need for a secure and reliable stablecoin. Kinesis aims to be the one to live up to this hype and fill this niche. With their specific yield, they will have continuous returns made to holders of their tokens that spawns from activities that their token is used for, essentially dividends to token holders. This includes referral bonuses for users that bring new clients. It will involve less risk than other traditional assets and ultimately, this can entice many new users. They are building strategic partnerships with industries like the Allocated Bullion Exchange which will allow for even more exposure. Kinesis is even creating their own exchange, appropriately name the Kinesis Currency Exchange. This is their own wholesale market where it’s native currencies will be created and then connected to the global market via their partnership with ABX. This puts them distinctly ahead of competitors in this field. There is also the Kinesis Blockchain Exchange being built. This will provide deep liquidity to the Kinesis token which is necessary for this stablecoin to thrive. The exchange will be a traditional crypto exchange where all the Kinesis tokens and other big market cap cryptos like Bitcoin and Ether can be traded. It seems Kinesis has all the challenges figured out and is providing creative solutions to these. There is numerous aspects to the Kinesis project that are breaking new ground and providing value to users. In time they will prove to be a leader in stablecoins and cryptocurrency in general.

Zubair Bukhari
Zubair Bukhari

15/10/2018

Best Cryptos to Invest in the Year 2019

Looking back in recent history, it seems as though big investors and financial organizations are changing their attitudes towards Bitcoin and altcoins. The media coverage worldwide illuminated the vast returns being had in the best cryptocurrency markets, with many coins up over 100x since their conception. This certainly has garnered the attention from both legacy and newcomer investors. Currently, everyone is waiting to see if cryptocurrencies can continue on their path to new all time highs. 2017 turned out to be a whirlwind year, with most cryptocurrencies soaring to new all time highs at the end of 2017 and early 2018. The media coverage of cryptocurrencies was nonstop, with news reports on financial programs almost daily. In addition, many movies and tv shows mentioned cryptocurrency, including the technology oriented show “Silicon Valley.” So far, 2018 has seen a vast pullback in the cryptocurrency markets. Many of the smaller altcoins are down over 90% with Bitcoin, which is considered by many to be the best cryptocurrency to invest in, still being down over 60% from all time highs. Even with the overall market pullback, many investors are still very bullish on cryptocurrencies going into 2019. Many big name institutions are jumping head first into cryptocurrency investing, with NYSE announcing a new crypto exchange, BAAKT. Also Fidelity has announced a crypto support platform for their customers. Even legendary Ivy league university Yale has announced a new 400 million dollar investment fund geared towards cryptocurrency. With so much bullish news adding up rapidly, almost everyone seems to expect a very profitable year for crypto leading into 2019. While Bitcoin is still currently the market leader there are also some big name altcoins that expect 2019 to be a huge year for them. The Altcoin Hierarchy Before getting into cryptocurrency investing, let us go through the basic classes of cryptocurrencies that exist in the market. While every class has the potential to have impressive returns, some coins have more impressive use cases and concepts, In addition to more qualified and funded development teams. Simply put, not all altcoins were created the same. The Penny Stocks of Crypto These are the bottom tier altcoins that could possibly become worthless in the near future. They operate much like penny stocks, advertising big promises of ‘guaranteed gains’. Eventually, many fail to offer a fraction of their promised returns. One of the ways to identify these is to look at their team members, their past experiences, objectives of the project, probability of mass adoption, actual use of the coins and many more. The reasons for their failure is usually because of unwillingness to work for the vision they once promised in the first place, bad wealth management, inclusion of scammers in their team, unrealistic expectation from the project and also making money via pump and dump schemes. Some of these coins are Trumpcoin, Russia Coin and Verge. Average Coins According to the ‘coinmarketcap’ website, there are currently more than 2000 cryptocurrencies listed on their website. Among those, there are around 500 of them that can be considered in this ‘average’ category. These are the coins that do have a purpose/objective to work on but fail to maintain a good development team. They and their coins don’t really have any kind of purpose in the cryptocurrency market and fail to finalize any kind of legitimate deals and partnerships with good investors. This makes their performance very limited as compared to other altcoins in the market. Some of these are Deep Brain Chain, Funfair, Decred, Navcoin, Populous, Cryptonex. Good Coins There are around 500 of such good coins in the market that do offer a good objective for the project, a solid team with good experience to execute such tasks, a good marketing strategy to reach out to masses to share their ideas and quality contacts to make some good partnerships in the market. The only reason why they are only classified as ‘good coins’ is due to the lack of uniqueness that the other ‘very good coins’ offer. They don’t really have that ‘point of parity’ in their project/product that separates them from their counterparts. Some of these are NEM, Stratis, Monero, and BAT. Very Good Coins There are around 100 such ‘very good coins’ in the market. Their objectives are well defined with a solid team to execute their tasks perfectly. Along with that, their marketing teams are also well-qualified to make their ideas reach to the masses. Because of such a wonderful blend, they are able to make better and stronger partnerships with a number of good companies. What separates them from the ‘Good Coins’ category is their USPs (Unique Selling Points). They are unique in what they do and that’s what makes the difference. Some of these are NEO, Stellar, Cardano, Ripple Top Tier Cryptocurrencies These are the top tier coins that provide the best functionalities. They have real-world usage, objectives to solve a real-world problem, strong fundamental teams to execute the mission of the project, marketing teams to spread the ‘idea’ and collaboration with a number of media channels to gain early investors. Also, due to a good PR team, they are able to make a very strong partnership with a lot of Fortune 500 companies that give them an extra edge over rest of the projects in the market. Some of these are VeChain, Ethereum, Bitcoin, IOTA, Icon, EOS, Kinesis. Promising Projects Going Into the New Year With more than 2000 cryptocurrencies out there in the crypto market, only a couple 100 of them qualify to be a top tier investment. It can be quite the challenge to find a worthy project among the thousands of choices. These next projects are some that show a lot of promise heading into 2019. Always remember the 3’S’ of the investment - Sane, Smart and Sensible.An investor who is sane, smart and sensible will always look into the facts before he invests in any business or project. Kinesis This is one of the most promising upcoming projects in blockchain and cryptocurrency technology. The broad overview of the coin is to offer an alternate and better evolutionary step beyond the basic monetary and banking system available today. In short, it is a cryptocurrency that is backed by precious metals like gold and silver. According to the CEO of the company, Thomas Coughlin, the Kinesis coin is basically divisible units of allocated gold and silver which you can use as a currency. There will be two stable Kinesis coins in the market backed by Gold and Silver. The stable Kinesis coins backed by Gold will be tagged as KAU and the stable Kinesis coins backed by Silver will be tagged as KAG. These stablecoins backed by the precious metals like Gold and Silver are real game changers as these 2 precious metals are definable stores of value for use in trade and investment in the real-world economies. The Kinesis coin is based on the Bespoke Blockchain Technology, a blockchain network forked off from the Stellar Blockchain Technology in order to suit the requirements of the Kinesis coin. The cryptocurrency project is headed by Thomas Coughlin who is also the CEO of the Kinesis company. He has 15 years experience in the investment, funds management and capital markets. Before being the CEO of the Kinesis company, he held similar positions for the Bullion Capital and TRAC Financial Group as well. Apart from Thomas Coughlin, there are other great members in the team as well. Their team consists of people like: Michael Coughlin, Chief Financial Officer, having 41 years experience as a CPA in the accountancy and financial services professions. Eric Maine, Chief Strategy Officer, having more than 30 years experience in Senior Management in the exchange and financial markets. Ryan Case, Head of Sales & Trading in Kinesis, having extensive experience as Head of sales trading & partnership and also valuable experience in commodity, cryptocurrency, forex and derivative markets. Jai Bifulco, Chief Marketing Officer, having a full-fledged 12 years of experience in award-winning full-stack marketer in Finance. He previously held roles of directors in multiple brokerages, consulting and Fintech sectors. There are more than 30 different team members in this project spanning their roles from The Executive Committee to the Advisory Board to the Operations and Development team. The coins are very limited in number as compared to other cryptocurrencies where the softcap is limited to just 15,000 KVT coins and HardCap is limited to 300,000 KVT coins. Minimum token that one can buy is set to 1 KVT which is equal to $1000. So far, more than 57,000 KVT tokens have been sold which roughly equals to a whopping sum of $57 Million. With such a huge investment already deployed for the development of the project, there are still 30 more days left for the ICO sale period to end. Also, apart from the investments gained, the Kinesis cryptocurrency is also focusing much on the partnerships with the top companies in the industry. These include companies like ABX (Allocated Bullion Exchange), MLG (Blockchain Consulting), Sigma Prime, Etherlabs and Fine Metal Asia Limited. When considering what cryptocurrency to invest in, this is certainly one to consider in 2019. VeChain Broad Overview - In simple layman terminology, Vechain is a supply chain protocol to track logistics inventory. It has successfully implemented blockchain technology in various sectors like agriculture and industries like luxury goods and liquor. They basically strive to solve real-life problems by providing solutions in various industries like: Logistics: In this sector, VeChain implements the blockchain technology to improve the flow of information from one department to another by breaking silos yet maintaining the data privacy of every department.Government: There are more than 111 VeChain nodes deployed worldwide. The municipal governments participate in the VeChain blockchain network as nodes. The VeChain blockchain network offers decentralization and immunity against the data hacking that allows room for transparent information exchange. This indeed improves the efficiency of the municipal governments. The technologies used to track the logistics are: Assigning digital identities to physical stocks that can be stored on the VeChain blockchain networkUsage of RFID (Radio Frequency Identification)NFC (Near Field Communication)Proof Of Authority ConsensusIn-House Temperature Controlled TrackingQuick Response Codes (QR Codes) The future potential of the VeChain cryptocurrency looks quite promising as the coin is signing new partnerships every month or so. Some of its partners are PricewaterhouseCoopers, DNV GL, Renault Group, KUEHNE + NAGEL, D.I.G, China Unicom and the State Tobacco Monopoly Administration of China. Every single company with whom VeChain partnered has millions of customers that will use the VeChain technology embedded in their system. This makes the coin solve real-life problems and have mass adoption. VeChain indeed makes a big difference in the logistics business. However, given the kind of turmoil that the entire cryptomarket is facing where the total market cap has fallen from $800 Billion to just around $200 Billion, no one can give any kind of assurance on the returns in your investment in the cryptocurrency assets. However, stablecoins like Kinesis has a reward yield system that incentivizes its investors for holding, depositing and also referring new users. Hence, the investors always stay on the benefit side even if the market collapses for a short duration. IOTA In simple terms, IOTA is a cryptocurrency which is designed for the Internet of Things. The cryptocurrency was developed to root a new direction to IoT by establishing a standardization called, ‘Ledger of Everything’ which means that the data exchange between sensor-equipped machines would be enabled to populate IoT. IOTA has the potential to make transactions easy. A basic use case of IOTA can be seen in IOTA enabled vending machines. These machines can dispense the items without involving the associated transaction costs. Some other use cases of IOTA are Reddit Chains etc. Technology Behind IOTA Surprisingly, IOTA does not use the traditional Blockchain technology for its design and development. In fact, a new platform called ‘Tangle Technology’ is being used for IOTA to operate on. The Tangle Technology deploys a mathematical concept called Directed Acyclic Graphs (DAG) which resolves both the scalability and transaction fees issues which we face in blockchain based cryptocurrencies. In IOTA, for a transaction to be valid, each node present in DAG Tangle must approve the previous two transactions occurring at the other node. And adding to a note, this process removes the chances of mining and makes the system fully decentralized. Future Potential Keeping in mind the remarkable result of IOTA, there exists a promising scope for it in the near future in various applications and platforms. IOTA would be standing tall and different in the future world full of cryptocurrencies vulnerable to quantum computers. IOTA has a lot of companies that it is working with. Some of them include Bosch, Volkswagen,Fujitsu, Accenture, Poyry and many more. When viewed from a macro perspective, so far IOTA looks to be fee-less, scalable and fast which makes it next to perfect. However, if you own IOTA, the chances of you liquidating it into fiat currency via a ‘debit card’ and buying something from a grocery store is quite low. In order to fill this gap of actually buying something from the street market and becoming the global currency, Kinesis has introduced its Kinesis Debit Cards that enables the Kinesis token holders to exchange their tokens against FIAT currency and simultaneously buy products from a grocery shop, something which IOTA fails to offer. ICON ICX Broad Overview: ICON is a South Korean based company that develops blockchain technology and accompanies the cryptocurrency called ‘ICX’. ICON is a network framework which has been designed to allow independent blockchains to interact with each other. It allows interconnected blockchain networks to participate in a decentralized system which converges at a central point. Technology: ICX token is built on the Ethereum blockchain network. ICON has developed a loop-chain platform that connects different blockchain communities through the ICON Republic which serves as the governing head for the Federation of other independent blockchain bodies. All the communities are linked to Republic through C-Reps (Community Representatives) which then connects to Nexus. C-Reps functions as the portals to the communities to establish a connection with Nexus. And this way the entire procedure is carried out. Future Scope: It is believed that ICON has plans to provide platforms to financial, security, insurance, healthcare, educational industries which can help them to carry transactions on a single network. Thus, ICON (ICX) can be seen having a good time in the coming days. Also, it has been successful in signing a partnership deal with the tech-giant Samsung where it will be using ICON’s own Chain ID for a new Samsung project called ‘Samsung Pass’. Apart from Samsung, ICON has also signed deals with PORTAL NETWORK & W Foundation. However, it is notable that ICON is built on the Ethereum network and is an ERC20 token. Hence, the transaction speed greatly depends on the Ethereum network. Currently, Ethereum can execute 15 transactions per second which is quite low in terms of what ICON (ICX) is currently aiming for. However, to fill this gap, we have Kinesis Bespoke blockchain that offers a whopping speed of 3000 transactions per second. This lightning fast speed keeps the Kinesis token way ahead than ICX token. Enjin Broad Overview The native cryptocurrency of the Enjin Network, the Enjin Coin (popularly known as only ENJ) follows the ERC20 token standard and is used with a smart contract-based blockchain platform. Its typical users include content creators, game developers, and other members of the gaming community, who need to use virtual tokens to manage and trade virtual goods in the gaming world. Technology behind Enjin As an ERC20-compliant token, the ENJ functions in accordance with the rules an Ethereum contract has to implement. It is used on a dedicated platform that is designed to support open-source software development kits (SDKs), applications, plug-ins, and payment gateways. As for its users, they will be able to efficiently participate in developing, launching, managing, and trade content and game-related products on the Enjin Network, without having to deal with the technical complexities. Summary of Potential The ENJ is expected to solve some performance issues in using similar cryptocurrencies on the market today, including payment frauds where goods are not actually delivered, slow transaction processes, lack of ownership of virtual goods, lack of transaction standards, and centralization problems. According to its creators, the ENJ coin, which is based on a blockchain, will create a distributed, trustworthy, and secure framework where transactions can be executed smoothly and quickly with minimal transaction fees. Its autonomous and decentralized system will ensure that all offers and deals will be honored. Conclusion Generally speaking, the Enjin Coin is good. It helps bring the benefits of blockchain to millions of people participating in the virtual goods market. Its creators are working hard to prevent fraud in the gaming world. However, it is still a relatively new project. As such, it is still volatile. This means that you still have to take utmost care and be wise when using it. EOS Broad Overview EOS is considered by many people who are participating in the virtual goods market as one of the best cryptocurrencies to use, supported by a powerful infrastructure for decentralized applications. Basically, the EOS blockchain is used for the development, execution, and hosting of decentralized applications (dApps) that are traded virtually. Technology behind EOS The EOS system is composed of two key components, which are the EOS.IO and the EOS token. As for the former, it functions like a computer’s operating system in managing and controlling the EOS blockchain, with the use of an architecture that enables horizontal and vertical dApps. As for the latter, it is held (instead of spent) by the users to be able to become eligible of building, running, and trading apps, as well as using EOS network resources. While EOS still does not have an official full form, it supports all core functionalities to allow individuals and businesses to create and trade blockchain-based apps. It also runs on a web toolkit for interface development, just like Apple’s App Store and Google Play Store. Summary of Potential While there are already a lot of cryptocurrencies based on Ethereum similar to it, the EOS system focuses on the critical and problematic points of the blockchain. Specifically, it attempts to solve the problems of scalability, speed, and flexibility that often cause transaction processes to slow down, which is a common issue in blockchain-based systems. According to its creators, EOS.IO could also address other problems that come with the ever-increasing size of the dApps ecosystem, such as limited availability of resources, constrained networks, spamming, false transactions, and limited computing power. It is said to be able to support thousands of commercial-scale dApps without hitting performance bottlenecks by using asynchronous communication methodologies and parallel execution across its network. Conclusion The EOS system is very advanced. It is designed to address common problems with standard blockchain-based networks. But like other new cryptocurrency platforms on the virtual market today, it still has some weak points to improve. Also, there is again the exposure to volatility, as users hold the tokens to be eligible to trade virtually. Nebulas Broad overview Nebulas (NAS) is a new generation blockchain and is open for public collaborations for decentralized application (dApp) development. Its adaptability and scalability are the two characteristics that could propel NAS to be one of the top cryptocurrencies, thus giving it enough leverage to compete in the market. Technology behind Nebulas Nebulas is the first cryptocurrency running on a 3rd generation blockchain, thus making it the dominant player of the new platform. This makes Nebulas highly flexible and scalable, even giving a good leverage in future-proofing their code. That could help avoid hard forking whenever some issues come up during scaling processes. Summary of potential Adaptability, scalability and search-ability are three of the biggest potential NAS has to offer. With the 3rd generation blockchain it uses, it can allow the adaption of other codes based from Nebulas. This means that other cryptos can adapt to its platform soon enough. Moreover, it can also act as a blockchain search engine. This can let users search particular blockchains based on efficiency and community strength. Finally, its goal to provide fair incentives to Decentralized Application (dApp) developers is something that collaborators could expect. This means that more developers are expected to come, thus strengthening NAS even further. Conclusion Nebulas (NAS) is a promising cryptocurrency to invest in, especially with its adaptability, scalability and search-ability potentials. It can help with the fluidity of cryptocurrency into this new generation platform. However, it still lacks the value stability that Kinesis or stablecoins hold. NAS is still unpredictable, unlike Kinesis that backs it value with real gold. Sky Broad overview SkyCoin is a full environment system of blockchain technology, and has the goal of endorsing the actual usage of cryptocurrency. Technology behind Sky Sky has its own algorithm, the Obelisk, which uses the web of trust dynamics to spread influence all throughout the network to come up with a consensus decision. The consensus decision depends on each node, by valuing its influence score. The influence score of each node is determined by the number of network nodes connected to it. This depicts the importance of the node to the network. Aside from the Obelisk, Sky also operates its own cryptocurrency which is SkyCoin, its own ICO platform Fiber, a decentralized social media platform called BBS, and a decentralized messenger called Sky-Messenger. Summary of potential Sky focuses its potential on being a full ecosystem of blockchain technology that encourages actual usage of cryptocurrency. Through its unique algorithm which is the Obelisk and some other dApps associated with it, Sky is a promising blockchain technology and could be considered as the most complete one as of today. Conclusion Sky, SkyCoin and the Obelisk is definitely a massive platform that could be considered as a full ecosystem of cryptocurrency and its related technology. Nonetheless, the SkyCoin depends its value on node influence scores, which could change from time to time as well. This makes Kinesis and Stablecoins still a better choice, especially for investors who want clear investments without hassle. Crypto Investment Predictions for 2019 While 2017 had the masses captivated and investing large amounts of capital, 2018 has seen price drops and sagging hopes. While the returns in 2017 exceeded anyone's expectations, a strong pullback was predicted by many. Whether or not this bear market continues from here is the real question many investors face today. Bitcoin's rapid rise and fall exposed many problems, and the developers of the top cryptocurrencies in 2019 took note. When considering the best cryptocurrency to invest in for 2019, factor in the following trends we predict will influence investments: More Pullbacks According to the CEO of Vellum Capital, Eric Kovalak, the price of cryptos will reach new lows before they will rebound to new heights. This includes the biggest cryptocurrencies in the market, including Bitcoin. Kovalak believes that it will be priced below $3,500 before it will find its way back up. However, there are many mixed opinions on the current price of BTC, with some arguing the bottom for the crypto markets have already been seen. Due to Bitcoin based remittances, uncertainty in global economies like Asia, Turkey and Venezuela, and mobile penetration, there will be a surge in interest and the price of bitcoin and other digital currencies. A Flood of Institutional Investors Institutional investors have been waiting on the sideline for the ETF to rule in favor of Bitcoin. According to Mike Novogratz, CEO of Galaxy Capital, once the ETF arrives, "institutional fomo’ will start flooding the market." Another factor is Kinesis, the investment blockchain that provides investors with a safe and reliable alternative. Pegged against precious metals, it provides protection against volatility that may be caused by political instability. The Kinesis Monetary System lets you own real gold or silver when you purchase the digital currency. Your ownership is then digitized and then made available for spending, trading, and transfer. What is even better, the monetary system can be used internationally, ensuring reliability of money around the world. With the recent crisis around the Turkish Lira, the price of gold has significantly increased. Mass adoption of crypto by consumers In January 2019, blockchain technology will be 10 years old. It remains a speculative investment to this day but 2019 could be the year of mass adoption for digital currencies. For this to happen, however, there has to be some triggers. Speculation should become a real utility.People must use blockchain projects in everyday life so they will gain widespread use.Decentralized applications (DApps) must gain mainstream status to promote widespread adoption of cryptocurrencies.Improved payment processing, addressing the issue on the current situation of slow transaction times and high transaction fees.Scalability of blockchain technology with little to no impact on its efficiency. To date, slow transaction times are due to the growing number of users and transaction sizes. This calls for blockchain to grow and have the ability to compete with Mastercard, PayPal, or Visa.Introduction of off-chain solutions that allow users to complete a transaction through peer-to-peer payment channel instead of within the blockchain. This will address slow transaction times. Security will be provided by the parent blockchain. Gold Is Still The Standard Despite the promises and unique functions of many cryptocurrencies, there is still uncertainty in these new markets. Gold has remained the best form of investment throughout history, and the best store of value, especially through times of crisis in politics and economies. Kinesis pegs its value to gold which has proven to be the safest investment in history. Therefore Kinesis stands to gain from the stability gold offers while simultaneously fusing it with the unique features of this cutting edge technology. With the Kinesis Monetary System, investing in gold is no longer the slow process that many older investors are used to. This cryptocurrency is backed by gold and silver and supports precious metals trade. It has three essential assets. Tokens that represent an investors ownership of gold and silver.The inherited system where performance is done.Complete blockchain security that supports investments and paves the way for the creation of new assets protected in a banking system. Most importantly, the Kinesis Monetary System allows thousands of transactions to be completed per second in a completely secure channel. The Near Future Even a decade later, cryptocurrencies are still very much in their infancy. At this time, no one is sure what shape this growing sector will take in the future. Many cryptocurrencies will come and go but the ones that show the most promise, that fulfill their use cases, will stick around for the long term. With any emerging technology, we have to watch how it evolves and how it merges with our everyday life, changing the way we interact with everything around us.

Zubair Bukhari
Zubair Bukhari

15/10/2018

What Is Cryptocurrency?

What is cryptocurrency? What are differences between cryptocurrencies? Learn more about crypto, altcoins and stablecoins with our guide. Cryptocurrency exploded in 2017, and the resulting media attention brought both praise and criticism. The resulting crypto speculation frenzy have led some to herald cryptocurrencies as “the Financial Revolution” and others to call it the ultimate bubble. As with any emerging technology, onlookers are both intrigued, and scared of the vast possibilities that crypto present. This is because cryptocurrencies and blockchain technology provide an alternative solution in some facet, to the everyday problems we all face. Cryptocurrencies are the foundation and main interest point of blockchain technology. The two are intertwined, with some stark differences. Cryptocurrencies are digital assets that can be exchanged for goods and services in place of tradable currency, like the US dollar, European euro, Japanese yen, and British pound, to name a few. The real power of cryptocurrencies comes with the ability to cut out the middle man. You do not need a central authority in-between you and the person or service you are paying. You host a wallet and have full control over your own funds. In simple terms, cryptocurrency is just like the money you put in a bank. Although with cash, you take physical coins and notes. However, money is nothing more than limited entries in a physical database of accounts, balances, and transactions, which you can only change if you meet certain conditions. With cryptocurrency, you have money that you can use to purchase items but only in digital form, over the internet or any other peer to peer exchange. The journey from concept to global phenomenon has been a rocky one. The world's largest cryptocurrency, Bitcoin, was little known for years with many rises and falls in it's price. However, in December 2017, Bitcoin skyrocketed to $20,000 per coin. It has seen a long drawback since then. Leaving many uncertain of it's future in a sea of other rising cryptocurrencies. While the price of major cryptos changes rapidly, the technology continues to develop at lightning speed. Today, there are many big players still working towards a stable, globally accessible digital currency to form the basis of a new global monetary system. The Birth of Bitcoin The cryptocurrency scene never has a dull moment for those involved. The story of Bitcoin's origin however, is very straightforward. It began only 10 years ago. At the time, certainly no one ever expected it to be the global phenomenon it turned out to be. The biggest enigma in the crypto field is the question that is still yet to be answered. Who is the creator of Bitcoin, the worlds first and still biggest crypto currency? The figure or group known as Satoshi Nakamoto unleashed Bitcoin in 2009 with the goal of creating an electronic peer-to-peer cash system. The Exciting and Troubled History of Cryptocurrencies: 2008: The domain name Bitcoin.org was registered on August 18, 2008. On October 31 of the same year, a mysterious being known online as Satoshi Nakomoto published Bitcoin: a peer-to-peer Electronic Cash System. During this time, Bitcoin had a value of a little over a cent per coin. 2009: Nakamoto sent Hal Finney, a computer programmer and friend, 10 Bitcoin (BTC) on January 12, 2009. This was the first ever Bitcoin transaction made. It was also the same year when Bitcoin’s value exploded. It grew quickly to $27 per coin. 2010: On August 15, 2010, the Bitcoin database was hacked, exposing its major flaws. An unusual transaction involving 184 billion BTC was noted by Jeff Garzik, Bitcoin developer. He said, “We’ve had a problem here.” That same year in what is now a legendary event, the world's first real world crypto currency transaction took place. A Bitcoin user named Laszlo Hanyecz swapped 10,000 BTC for two pizzas. This was both a ground breaking and ultimately very necessary step in pushing Bitcoin towards real world use cases and acceptance. Many people laugh looking back on how much those same Bitcoin are worth. While being worth only 30$ at the time, 10,000 Bitcoin today is valued at around $65,000,000. 2011: Rivals like Namecoin, Swiftcoin, and Litecoin made their debut in 2011, while bitcoin was accused of being involved in the “dark web,” especially on sites like Silk Road. But since bad publicity is still publicity, bitcoin prices skyrockets during this time before it dove down again. 2012: Bitcoin made a debut in popular consciousness when it was featured in an episode entitled “Bitcoin for Dummies” in the third season of the US drama “The Good Wife.” 2013: The blockchain split in two as bitcoin holders failed to agree on transaction rules. Two networks operated for six hours, leading to a significant drop in value. In other parts of the world, various countries had different reactions to the use of bitcoin. In Germany, bitcoin was not recognized as an official currency but as a “unit of account,” leading to taxing bitcoin-based transactions in the future. Meanwhile, in Vancouver, Canada, the first ever bitcoin ATM was installed. However, it was banned and considered illegal in China and Thailand. 2014: In one of the most infamous incidents in the history of cryptocurrency, Japanese Bitcoin trading exchange Mt. Gox went offline and filed for bankruptcy protection. Investors at the time lost everything and are still to this day fighting for their claims. There was some new ground gained in adoption however, with Microsoft and others allowing users to buy games using the bitcoins, recognizing the popularity and potential of the cryptocurrency. 2015: Ethereum as well as other cryptocurrency altcoins were introduced during this year. Coinbase, now one of the biggest and most popular exchanges in the west, raised $75 million in funding. This was the largest at the time for a bitcoin company. It was also during this time when European based bitcoin exchange company Bitstamp was hacked. They resumed days later, assuring their investors that their funds were not affected. 2016: Cryptocurrencies became more popular during this time. In fact, the number of ATM machines grew from 500 at the start of the year to 900 by the end of the year. It was also in 2016 when Uber Argentina, the Swiss national railway, and Steam, a software company, started to accept bitcoin payments. This marked even more adoption worldwide in what was starting to look like a promising new payment method. In May of 2016, DAO (Decentralized Autonomous Organization), a stateless venture capital was founded and funded on the Ethereum blockchain. This was the largest crowdfunded project ever in crypto. Unfortunately, it was hacked just a month after it was launched and all their assets were lost. This marked yet another high profile multi million dollar hack in the crypto scene and cast a spotlight on the need for increased security measures. 2017: After much debate from supporters and increased tension, the scaling debate in Bitcoin was in a way temporarily settled by the “Bitcoin cash" hard fork. This caused a split in the Bitcoin community and the miners over which version of Bitcoin to support. Today there is still the main Bitcoin legacy chain coin, and the fork known as Bitcoin Cash. In groundbreaking international news, Japan announced new laws deeming Bitcoin a legal payment method, while Skandiabanken in Norway accepts bitcoin both as a payment system and an investment asset. 2018: Major electronic manufacturer Samsung confirmed it will start making computer chips specifically to mine coins. Similarly, different European countries passed cryptocurrency regulations while others established partnerships with high profile crypto companies. It was also this year when Ripple launched an app with Santander for international money transfers. The Age Old Problems With Fiat Currency Adam Smith summarized the issue well: “The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.” Former IMF (International Monetary Fund) Chief Economist Kenneth S. Rogoff wrote a book called “The Curse of Cash,” where he suggested governments completely abolish cash notes. He wrote that cash is taking away money from legitimate free enterprise and putting it into the black market instead. He also accused the central banks around the world of promoting the black market by selling paper bills. The US dollar was once the gold standard of foreign currency holdings. It held real-world value since it was pegged to actual gold bullion held by the US Treasury. However, in 1971, the relationship between gold and the US dollar was severed. This means that the entire finance industry runs on the assumptions of price, and supply vs demand, but not of intrinsic value. Thus, when the American government cannot fund their spending on tax revenue, they simply print more money. In doing so, the value of the dollar has plummeted while gold has gone up. Another fundamental problem of fiat currencies is that it forces people to accept them. In the United States, for example, the use of legal force in 1933 was used to compel the people into accepting irredeemable Federal Reserve Notes replacing gold-back money. This makes fiat currencies immoral because coercion is used to make them acceptable. Aside from that, schemes that evolve around fiat currencies allow those who control such payment systems to redistribute wealth by altering the quantity, availability, and distribution, which can be considered legalized theft. Cryptocurrency, The Solution to Fiat A group of people saw the limitations of traditional banking systems. They saw that these could endanger people’s wealth, privacy, and peace of mind. This led the development of cryptocurrency – something that cannot be controlled by a single entity. They created something that will give everyone control over such currency, which will only require internet access, not regulatory entities, geographical borders, or governments. Although cryptocurrencies may not necessarily usurp the value of traditional banking and fiat currencies, there are certain advantages that are not available to the traditional payment systems. Cryptocurrency Advantages 1. Takes away the middle man: No government or private entity will have control over cryptocurrencies. So, when you buy property or make transactions, you can do it without the need for third parties. This cuts down the time in settling payments and makes fairer transactions. Moreover, cryptocurrencies cannot be devalued or taken away from you by any government. Accessible to anyone: Not everyone has access to traditional banking systems. But with cryptocurrencies, anyone who has access to the internet can have a crypto wallet. This makes cryptocurrencies useful in underdeveloped countries. 2. Prevents fraud: Because cryptocurrencies are decentralized, this makes them fraud-proof by nature. They cannot be counterfeited unlike paper currency. Additionally, with cryptocurrencies, exchanges are made using “push transactions,” which means that anyone who makes a transaction only sends the amount of currency they want to make to a vendor and nothing more. But with traditional credit and debit transactions, which are considered “pull transactions,” anyone you send money to will be able to pull not only the payment but also your personal information. This could increase the risk of fraud or identity theft. 3. Quick and easy payments: When using cryptocurrencies, payment is done in just a matter of seconds. You don’t need to provide a lot of personal details – all you need is the wallet address of the person or entity you want to send the payment to. Because you only need to have internet access to be able to make transactions, fast settlements and lower fees are made possible with cryptocurrencies. This is also because of the elimination of the middleman that normally profit from your transactions with fees. The Bitcoin Machine The primary reason Bitcoin was created in the first place was to cut out the middleman – traditional banks. This is because they usually take a big chunk of your payment. When you buy, a house, you will need to pay a real estate agent, which is the middleman, his six percent commission. If you’re going to transfer money to a bank in another country, you’ll also need to pay a processing fee. Aside from eliminating the need to pay hefty amounts for commissions or handling fees to middlemen, cryptocurrencies will also address fraud issues when making any kind of payment. Using traditional payment systems, you’ll need to divulge private information, which could be used fraudulently. How Bitcoin Operates Transactions: Transactions are stored in the bitcoin database, known as a distributed ledger, and is shared. It can then be accessed using the blockchain, which calculates the spendable balance of each bitcoin wallet. It will also verify new transactions. Private Keys: These are pieces of data that are kept in bitcoin wallets. They are used to sign transactions or transfers of value between bitcoin wallets. They are to be used only once. Blockchains will also verify whether a particular transfer comes from the owner of the wallet. To ensure that no unauthorized transaction will be made, you need to keep your private key secured. Mining:This is a distributed consensus system that confirms pending transactions in the blockchain. It is also the process of putting all private keys in a blockchain in chronological order. Mining also allows various computers to agree on the state of the system. After that, transactions will be stored in a block that follows rigid rules verified by the network, preventing other blocks from being modified, which would invalidate subsequent blocks. Bitcoin transactions are verified by the computers mining worldwide. These computers need to prove they are real and are properly adding to the ledger by solving a mathematical problem. Because mining uses a lot of electricity, the miners are rewarded with new bitcoins for their work. This process is what incentivizes people to participate in the network and keeps it running. The Problems Bitcoin Faces Despite the fact that Bitcoin has been adopted by many merchants worldwide, it is not the easiest cryptocurrency to use. Here are some of Bitcoin limitations: Higher fees: Because of the number of people using Bitcoin, the network got congested over time. This leads to higher and higher fees as people are willing to pay more to get their transactions through faster. Developers have been trying to solve this issue and so far, fees are starting to become lower again.Not easy to use: People who are not computer savvy will have a hard time using cryptocurrencies, like Bitcoins. Aside from that, you’ll need to keep a long set of numbers (private keys) safe to be able to make a transaction.Need for electricity: Mining requires a lot of electricity, which is bad for the environment. Plus, it’s quite expensive. It is estimated that total mining electricity worldwide rivals the annual consumption of a small country.Used for criminal activities: You don’t have to use your own identity when using bitcoin. This makes it easier for criminals to use Bitcoin for illegal activities like money laundering and illegal transactions Altcoins, the Bitcoin Alternatives Altcoin is a title that traditionally refers to anything that is not Bitcoin. There have been numerous that have come and gone throughout the years. Most have tried to be competitors to the Bitcoin throne, unsuccessfully. In the past these altcoins have tried to fill a niche that Bitcoin lacks. Today there are thousands of these altcoins available, many perfoming their own functions that Bitcoin was never intended for. Here is a breakdown on some of the notable altcoins that arose to address Bitcoin's most glaring shortcomings throughout the years: Namecoin This is an older experimental open source technology that was born two years after Bitcoin. It was intended to replace the domain name system to improve security, censorship resistance, decentralization, privacy, and speed of certain components, such as identities and DNS. Unfortunately, it never really caught on, although it had some lofty aspirations: Registration is inexpensive, costing only around $0.05. Compared to the standard procedure, the costs of a domain name registration is far lesser.There's no need to pay a renewal fee to retain the domain, but you must publish a transaction with the domain name every 6 months.Management of subdomains is similar to the management of the current domain system. For example, you will have access to all the subdomains of mywebsite.bit after you registered it to the Namecoin System.Use Namecoin to propose ideas, such as voting, file signatures, notary services, proof of existence, and bonds/stocks/shares. Litecoin Litecoin was born in October 7, 2011 and went live 2 days after, sometime after Namecoin. It was created by Charlie Lee, an ex-Google employee, who envisioned creating a lighter, cheaper version of Bitcoin. While Bitcoin was considered “gold”, Litecoin was the “silver”, a means for cheaper transactions. Both Bitcoin and Litecoin use proof-work consensus mechanism, helping safeguard the networks from attacks and abuses. Miners solve difficult cryptographic puzzles through their computational power. The main difference between Litecoin and Bitcoin lies in its mining procedure. With Bitcoin, you need a very powerful computer to mine, which are called ASIC miners. In fact, whole warehouses have been built to process Bitcoin mining. Experts believe there is a risk in this practice. Bitcoin’s total supply could be controlled by a small number of people – something that will contradict the reason cryptocurrency was created, which was to spread wealth evenly to all people. Charlie Lee created Litecoin to be mined using ordinary computers. This means that more people could get involved. Bitcoin uses SHA-256 algorithm, which favors processing power when mining cryptocurrency. Litecoin, on the other hand, uses “script algorithm,” which prioritizes those with high-speed random access memory rather than with processing power. Litecoin is the second most forked cryptocurrency and, besides the mining puzzle, it differs from Bitcoin with some parameter changes. For example, the time between block creation is 4 times shorter than Bitcoin, which takes 10 minutes. Dogecoin DogeCoin is a somewhat notorious cryptocurrency that started as a joke but quickly spread as a huge community grew around the new coin. It was born from a meme that was popular at the time, hence the Shibu Inu dog from the “Doge” internet meme on its logo. Dogecoin was created by Billy Markus and Jackson Palmer on December 6, 2013 with the intention of having an interesting digital currency that would reach more people than Bitcoin. In fact, it supported several marketing campaigns and public events. Some of the events it sponsored were as follows: A NASCAR driver installed Dogecoin logo on his carA community that raised over 30 thousand dollars to support the Jamaican bobsled team to let them travel and compete in 2014 Winter Olympic Games Another interesting difference between Dogecoin and other cryptocurrencies was the notion of random block rewards. With Dogecoin, each block bonus is random instead of being fixed, depending on a pseudo-random function used on the previous block hash. This allows miners to determine whether a reward is low or high, giving them time to mine other cryptocurrencies instead. Unfortunately, this feature was removed a few months later. Today, this cryptocurrency’s block reward system is fixed as all halving events have been completed since February 2015. Ethereum Ethereum is the first cryptocurrency that allows smart contracts to be created using a Turing-complete programming language. It was developed with the idea that contracts can correspond to a computer program and can be fulfilled and applied using a series of conditions that need to be met. These contracts are known as "smart contracts" and are a foundational principle in Ethereum. For a smart contract to be installed and run on a peer-to-peer network, users must pay in Ether. Ether serves as both the contract fuel and cryptocurrency of the Ethereum network. Some other uses for the Ethereum network are financial markets, electoral systems, registration of domain names, and crowdfunding platforms among many others. Ethereum also rose to prominence through 2016 and 2017 as being the #1 platform for other businesses to build their own cryptocurrencies and ICOs with. Monero Monero is a cryptocurrency that operates in a private, secure, and untraceable manner. It uses a ring signature algorithm where multiple signatures from participants are needed for monetary exchanges to be made. A transaction may be linked to a group of users but will not be traced back to them. This currency is also fungible, which means every coin circulated is completely identical to other coins in circulation. To ensure privacy, Monero’s privacy protections require a sender to specify a payment ID of their choice. This way, the receiver will have no idea about the source of funds. You can also generate an integrated address along with the payment ID for faster transactions. Cardano Cardano is a third-generation cryptocurrency designed to protect user privacy while allowing regulations to be imposed. Since its start in 2015 its roadmap continues to evolve. At the beginning of 2018, it finally hit the spot in the top ten market cap cryptocurrencies. Unlike other early born cryptocurrencies, Cardano is high speed, allows money ownership, security, and pseudonymity, supports the side-chain concept, and allows for extensible applications, such as gaming and gambling, identity management, and verifiable computations. What makes Cardano different from Bitcoin? It has an innovative multi-layer architecture that protects an individual’s rights to privacy in financial transactions while integrating regulations. Cardano Settlement Layer (CSL) is a stand-alone blockchain with ADA as a token. It stores and accounts for transactional value and supports a Control layer extension. In gaming and gambling, the settlement layer helps verify how honest the numbers were generated and the outcomes of a game. Ripple Ripple was released in 2012 by Chris Larsen and Jed McCaleb. It has many conceptual differences with Bitcoin in that it acts as a cryptocurrency too, but is more focused on being a digital payment network. The aim is to "do for payments what SMTP did for email, which enables the systems of different financial institutions to communicate directly." This allows banks and other financial institutions to incorporate Ripple into their own systems. Ripple was designed to operate on an open source and peer-to-peer decentralized platform that allows users to conduct financial transactions in any currency, be it in litecoin, bitcoin, USD, Yen, or other. How Ripple works can be a little bit complex. For example, Person A wants to send a payment of $100 to Person B who is from another city. Person A does this through Agent A with a password that will require Person B to answer correctly. Agent A will alert Person B’s agent, Agent B, of the transaction details, consisting of the password, recipient, and the amount to be reimbursed. What makes the process complex is that the funds that Agent B will transfer to Agent A, Person A’s agent, will come from his/her own account. This means that Agent A owes Agent B the amount of $100. Agent B can make a record of the transaction also known as IOU, which Agent A would pay on an agreed day, balancing out the debt. All of these activities will be done through a medium called Gateway, which serves as a link in the trust chain. This medium also works as a credit intermediary that sends and receives currencies over the network. Given this example, the Ripple network requires trust to initiate such transactions. Unlike Bitcoin and other cryptocurrencies, Ripple does not run with a proof-of-work or proof-of-stake system. The Future of Crypto Bitcoin’s birth and the subsequent cryptocurrency evolution that has gone on since 2009 is stunning. In less than a decade, there has been so much real-world accumulation of data that it becomes much easier to forecast how cryptocurrency will evolve en-route to becoming a viable global currency alternative. Last May 2018, Tim Draper, a famous venture capitalist, predicted the fate of Bitcoin. He said that it will reach $250,000 by 2022. Draper also made a prediction in 2014, saying that Bitcoin will be worth $10,000 in three years. His first prediction did come true because BTC hit a $10,000 mark in 2017. In fact, it made an all-time high value of $19,783 by the end of 2017. When asked by Rachel Wolfson, a Forbes contributor and cryptocurrency writer herself, what his basis for his prediction was, Draper said that it “based on the idea that Bitcoin was going to be easy enough to use in the future and that people would be able to start trading with it and using it as a store of value.” Draper also believes that more and more people are going to start spending currencies in everyday situations just like credit cards. He also said that cryptocurrencies will completely eradicate fiat currencies. It is true that cryptocurrency has had its fair share of ups and downs. But the trends of the market make it easier for people to make virtually accurate predictions of what to expect in the near future. Experts predict that Bitcoin and other digital currencies will have more patronage from institutional investors. More and more governments are looking to regulate cryptocurrencies, giving investors more confidence in putting putting their hard-earned money into them. In fact, more people are acknowledging cryptocurrencies’ potential as a viable asset for enticing returns. However, other experts believe that despite the measures being taken to regulate these digital currencies, there are still so many factors that make them volatile. Lack of institutional capitalNot enough intrinsic valueImplementation of regulations Those who have their eyes on the cryptocurrency market believe that as cryptocurrency becomes more popular, there should be a rhythmical pattern of its volatility. Stablecoins - The Next Evolution Cryptocurrencies are believed to be volatile no matter what will be done to address this issue. This is the very reason Stablecoins have been created. Stablecoins are a form of digital currency that were created to specifically address the volatility of cryptocurrencies. Currently, there are two distinct categories: fiat-backed Stablecoins, which are backed by real-world fiat currencies, like Euro, US dollar, and British pounds, and crypto-backed Stablecoins, which are backed by a second cryptocurrency. Another kind of Stablecoin is believed to become mainstream very soon. These Stablecoins will be backed by commodities like oil, and precious metals, namely gold. An upcoming Stablecoin is expected to be the leader in this emerging sector of cryptocurrencies. This new Stablecoin is Kinesis. It is designed to offer rewards to its users, as well as offer a flexible and reliable digital monetary system. Kinesis combines stability, cryptographic technology, and yield, making it easier for users to spend and at the same time, maintain their token value without the fear of volatility. The Kinesis team said, “Under the Kinesis Monetary System, we can take the greatest store of value, gold, make it an efficient medium of exchange via blockchain and cryptocurrency technology, then stimulate money velocity and economic activity through a multifaceted incentivizing yield system. Kinesis is not abstract or theoretical, it has been meticulously planned.” There has long been a need for an instrument like these Stablecoins. Exchanges in particular are in dire need for an asset that can make an appropriate pairing for other cryptocurrencies. While USD has long been the go to, Stablecoins provide all the functionality and features of normal cryptocurrencies that USD simply cannot compete with. This will enable the onramp of millions of dollars from investors that cannot trust the volatility of other cryptocurrencies as well as finally providing one of the initial purposes of crypto, a useable store of value for everyday purchases and exchanges. These are some of the concepts highlighted in the original whitepaper written for Bitcoin. Stablecoins will usher in the next era of cryptocurrencies and will lead to the mass adoption in everyday situations that crypto has been fighting for since the beginning.

Zubair Bukhari
Zubair Bukhari

02/10/2018

Why the Kinesis Blockchain Network was forked from Stellar

Following a number of prototypes and proof of concept builds, the Kinesis team determined that the most effective and fit-for-purpose selection for a blockchain network for the kinesis currency suite was to use the Stellar network forked to form a bespoke blockchain network. There was one defining objective that needed to be met with this choice, and this is the ability for Kinesis currencies to function as the high velocity, globally used currencies that form the basis for the Monetary System that Kinesis is pioneering. Stellar met these primary needs in a number of ways, both technical and algorithmic, but at the core of the decision lies 3 overarching reasons. 1. The speed of the Stellar network: The one obvious influence on this is of course hardware. The hardware upon which a network is hosted of course will have a bearing on the processing capabilities, but there is no accurate measure of this influence on network speeds prior to it being used in a network the scale proposed by Kinesis. The need for extreme flexibility here has been addressed by Kinesis through sophisticated designs in Cloud Technology. The other and more pertinent factor in network speed is, of course, its specific model of data propagation and cryptographic algorithm. In this regard, there have been a number of closely regulated tests performed on a number of blockchain networks. The outcomes of these give a good idea of the comparative average estimated speeds of the networks under load. The results of these tests place Stellar at the forefront of network speed, outstripping competitive networks not just marginally but by orders of magnitude. In an interview with the blockchain-focused podcast Epicenter, Stellar founder Jed McCaleb suggested ~4000 transactions per second was within the capabilities of the Stellar network. Following a number of experiments with stellar networks on various scaled hardware, the outcome of estimated speeds was between 3000 and 4000 transactions per second. At this stage, this remains an estimate but with higher speeds anticipated. Compare these numbers to those obtained through experiments of competitor networks: · Bitcoin’s 3.3 to 7 transactions per second, Bitcoin graphical statistics.· Ethereum’s average of 15 transactions per second, Ethereum Transaction Chart, Etherscan, 2018· VISA’s 1,736 average transactions per second at current volumes and 24,000 transactions per second actual capacity, VISA, Comparison to Visa, These figures will make it clear why Stellar was the top choice for the Kinesis blockchain technology and the ability for the fork of this network to cater to the high velocity of a fully fledged currency. 2. Stellar Consensus Model versus Mining Model: A key characteristic of the Kinesis and Stellar designs is that it does not implement the ‘mining’ model of blockchain like bitcoin and Ethereum do. The Stellar network utilises a purely Consensus model instead. The consensus model requires a specific number of nodes to reach consensus in order for a transaction to be persisted to the network, so transactions can only be propagated on the network if a number of nodes agree that they are authentic and comply with their calculations. This is quite different to the fact that extensive mining activities are required to propagate transactions in the Bitcoin or Ethereum models. This makes the propagation of new data to the network extremely costly to processing power and creates the possibility for run-away fees to do so. The Kinesis network also ensures that it is not possible for external parties to add false nodes to the network by ensuring that consensus is reached across trusted nodes only. Inauthentic nodes will simply be excluded from the process, ensuring that consensus can at all times be trusted. 3. Stellar Fee Accumulation Model: The Kinesis monetary system offers unique yield-bearing characteristics. To achieve this the transaction fees in the cryptocurrency need to be collected transparently and managed centrally in the network. In a mining model, the fees are allocated and earned by the miners who undertake the processing overhead of mining the data propagation, meaning that fees cannot be offered across a broader range of network participants.Additionally, the currency demand incentivises mining by the fact that the fees are directly allocated to miners only, resulting in fees varying unpredictably and escalating rapidly in this uncontrolled model. Where a mining model allocates transaction fees only to the miners, the stellar model utilised a consolidated fee accumulation approach across the entire network activity, and in this way, the fees can be accumulated for broad distribution to the participants of Kinesis. Additionally, the fees in Stellar and hence Kinesis are linked linearly to the actual transactions and calculated accordingly in a static manner, not artificially manipulated by mining. In this way the Stellar model allows Kinesis to prevents the run-away effect that mining has on fees by attaching fees to transaction activity itself, so those who transact with the kinesis currency will have predictable, transparent, and exceedingly affordable fees attached to their activities. The accumulation of fees in the Kinesis fork of Stellar is held securely in an off-chain account so that they remain secure until such time as they are distributed to the accounts of revenue earners. The fees accumulated, being part of the transparent blockchain processes, are visible ensuring that there is no way for them to be manipulated giving the network participants additional confidence in their revenue share. Why Fork the network: The final point to discuss is why the choice was made to create a bespoke blockchain network rather than use Stellar as it is. In the Kinesis currency designs, Kinesis itself is to form the underlying base currency in the blockchain system. To achieve this Kinesis blockchain needed to cater to a unique set of cryptocurrency characteristics. Regarding the base currency, on the Stellar blockchain one transacts using Lumins as the base currency and fees would be accumulated in Lumins. In the Kinesis blockchain, one transacts using Kinesis itself as the base currency. Fees are accumulated in Kinesis, for distribution as Kinesis coins, into revenue earners’ Kinesis blockchain accounts. The second important reason was to allow for the customisation of the fee mechanism to provide for a fee as a percentage of the transaction value. This is a custom feature of Kinesis and is one of the first blockchain networks to present this form of transaction fee calculation in the core network code. Again it supports the concepts inherent to the Kinesis system where velocity increases yield in the Kinesis currencies. While there are a number of other factors that were assessed through a variety of proof of concept experiments that lead to the choice in Stellar and the decision to fork the network to form a bespoke Kinesis Blockchain, these above hold the highest importance in achieving the true currency characteristics of a globally inclusive, transparent, reliable and high-velocity Monetary System on offer by Kinesis.

Zubair Bukhari
Zubair Bukhari

26/06/2018

The Kinesis Consensus Model and Trusted Nodes

It is often asked of us at Kinesis how our blockchain network, forked from Stellar, differs from the Bitcoin and Ethereum networks and what it means that these networks are built with different blockchain models. Kinesis Blockchain Network (KBN) is a fork of the Stellar network which utilises a consensus model to persist its transactions, known as its ledger. In KBN, 5 Trusted nodes are needed to reach consensus to have a new transaction persisted to the network. This means that 5 separate nodes, trusted by the network, need to agree that the new transaction has been arrived at by following the network’s cryptographic algorithm and has not been artificially created. Every node in the network is aware of which other nodes are Trusted nodes. Since the KBN is a public network it does mean that nodes can be added to the network by external parties. These nodes can legitimately hold the network’s transactions and historical data, but none of the existing Trusted nodes will recognise this new node as Trusted and hence it will never participate in consensus and hence it will be unable to contribute new changes to the network. This is the consensus model of the KBN, and Stellar, blockchain networks.In this model, the fees are placed on individual transactions and are accumulated by the network, rather than with individuals. This is different to the mining network models of Bitcoin and Ethereum, where any number of transactions (blocks of transactions) can be added to the network through ‘mining’ activities, ie through running the cryptographic algorithm using vast amounts of processing power to arrive at the new chain data. Fees are earned by those performing this processing. It is in this way that the demand for transaction propagation can increase fees to extraordinary levels in order to earn more for mining activities. This is the primary difference between these blockchain models. In consensus models trusted nodes in KBN can reach consensus about the propagation of change to the network transactions. Transactions are not added through the mining of new blocks of transactions that are added to the network. Mining also has no concept in the KBN consensus model, meaning that there is no risk of run-away fee escalation, and additionally the fees in the KBN, as per Stellar, are accumulated in a fee accumulation calculation that can then be distributed to participants. In the mining model, this would not be possible because fees are paid directly to the miner who works to add the transactions. In the context of an actual currency that anticipates large usage and high velocity of usage, the mining model would be prohibitive. The fee structure would not support a linear fee accumulation based on this velocity and would lead to processing challenges which in turn would slow the network down. The Stellar consensus model was selected to Kinesis because it allows the linear and central accumulation of fees per velocity and use of the actual currency and not per cryptographic process, it also allows for significantly higher speeds in-network propagation.

Zubair Bukhari
Zubair Bukhari

25/06/2018