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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

The Kinesis Vision - An Interview with CEO Tom Coughlin

The Kinesis CEO, Tom Coughlin was recently part of an extensive US tour to meet with investors. During this time, Bart Chilton of the finance show “Boom or Bust” took the opportunity to interview the illustrious CEO about the rapidly growing institution, Kinesis. Coughlin was able to express his vision for the future of Kinesis and talk about the exciting developments Kinesis has had for the last several months. Kinesis Overview The cryptocurrency markets have the attention of the entire financial world. From the richest nations in the world to small independent countries, everyone is wondering how to proceed in this new rapidly expanding financial and technological sector. This involves new legislation, laws and tax plans and investor regulation for each country. Blockchain is quickly proving to be a valuable tool in most industries, and countries everywhere are figuring out how to adopt it for everything from government filing, to the tracking of goods along their supply routes. This is in addition to some of the biggest business corporations in the world like Walmart and Amazon. With many advances in the cryptocurrency and blockchain industries happening every day, one particular facet is still yet to be fully harnessed. The cryptocurrency market is in desperate need of a proper stablecoin that is truly reliable, and from a well established and trusted source. As described in the white paper, “The vision for Kinesis is to deliver an evolutionary step beyond any monetary and banking system available today.” Kinesis is in one part, an upcoming cryptocurrency project that promises to be the most efficient and trusted stablecoin in the market today. They are preparing to launch two digital currencies that will be backed by precious metals like gold and silver. These are time tested stores of value that have never lost prominence in the centuries they have been used for commerce, and investment worldwide. Kinesis has several tokens they are launching, their primary currencies being KAU and KAG. These two tokens are backed by gold and silver, respectively. This is in addition to their KVT token which is currently being offered in their public sale. The KVT token is their “Kinesis Velocity Token.” This is an ERC20 utility token for the Kinesis network. Holders will be long term investors and believers in the Kinesis project and will receive a proportional 20% share of all the transaction fees that transpire on the Kinesis network from the use of the KAU and KAG tokens. This is in addition to 20% of all commissions from the Kinesis Commercial center or KCC. Coughlin explains on Boom or Bust that Kinesis is more than just a cryptocurrency or stablecoin. It is a full monetary system with several tiers that has extravagant benefits to those that choose to be a part of their institution. “It’s secure and efficient and rewarding, really for the benefit of all both collectively and individually.” How Kinesis Works When you look into the inner workings of Kinesis, you will find a multi layered system that has been specifically designed to match almost every individual need of the consumer in the rapidly growing crypto space. Kinesis has done their market research from top to bottom and have a system that offers much more than any competitor in crypto, be it stablecoin or otherwise. Being developed and launched right now exclusively for the Kinesis platform, is everything from a sleek new proprietary crypto wallet, to their own crypto exchanges, to even a Kinesis debit card. The debit card is linked directly to your Kinesis wallet, making your Kinesis tokens spendable anywhere in the world, even where cryptocurrencies are not yet accepted. Coughlin explains in the interview that Kinesis has a “highly unique sort of two tier market structure.” The top tier is the primary market where anyone interested in using the Kinesis platform can go to mint and create their own cryptocurrency tokens that are backed by gold and silver. Essentially allowing anyone in this new market to create their own digital money, and thus be their own central bank while cutting out the middle man. In these times where distrust of legacy financial systems is growing, this is an attractive concept for many people. The second tier is the interaction with the blockchain where gold and silver are truly brought into this new digital age. The Difference between mining and minting When asked by Chilton about minting, Coughlin then explains the difference between Kinesis’ system of minting and mining which is used by the majority of other crypto currencies. Mining is the system used by other crypto currencies to create new tokens by solving very difficult mathematic algorithms with your mining rigs. This is a very extensive process that needs very hi-tech computer chips to do. This process is also incredibly wasteful as far as electricity is concerned. It is estimated that the total mining worldwide is comparable to the annual electric consumption of a small country. Minting however, is a conversion of fiat currencies into the new Kinesis tokens, KAU and KAG. Coughlin explains “the gold is already above ground, it’s already there, so it’s really a conversion between another currency into basically a gold currency.” This is the real heart of the Kinesis system. No wasteful mining that depends on mining pool centralized in China. Anyone can mint their own cryptocurrency with Kinesis by converted fiat currencies into these Kinesis precious metal coins. The coins KAU and KAG are backed on a 1:1 ratio. This means one gram of gold to one KAU coin and ten grams of silver to one KAG coin. KAU and KAG refer to the chemical names of gold and silver on the periodic table of elements. When someone wants to create these coins, they utilize Kinesis’ KCX or Kinesis Currency Exchange. When purchased with fiat currency, or alternatively bullion holdings, the Kinesis coins are then emitted into their Kinesis wallet at the same time. These coins can then be used immediately. Another great aspect of the Kinesis system is the bonus “minter yield.” This is in addition to three other types of yield that Kinesis offers. These yields bring added value to users and continues to flesh out this multilayered system that benefits active users. Minter yield: The person who mints the actual coins receives a five percent return of the transaction fees that transpire on the Kinesis coins they create and then use. This is a great bonus that continues to pay out for the lifetime of the coins. Holder Yield: Kinesis coin holders receive a fifteen percent share on their coins that comes from the transaction fees on the Kinesis network. This is calculated on a daily basis and credited to the associated e-wallets every month. Depositors Yield: This yield is a five percent share of transaction fees on their first deposit and then the use of the coins from their wallet. Recruiter Yield: This final yield is variable referral bonuses to for bringing new users to the kinesis system, be it individuals or corporations. Gold As an Investment Throughout History One great point that Coughlin touches on in this interview is that gold is the greatest store of value throughout history. Gold carries with it the reputation of a solid stable asset and has for centuries. One major factor that has turned off new investors in this digital space is the intangible nature of these new digital currencies. Older investors cannot understand the concept of money that isn’t backed by anything, and the fact that most cryptocurrencies have no real backing is exactly the reason for the notorious volatility they experience every day. Kinesis understands this dilemma well and that is precisely why they have chosen to use gold and silver as their backing currencies for the kinesis platform. “We are focused on what makes money successful, we’re talking about gold, it’s the greatest store of that the world’s ever seen.” Combining gold and the blockchain Kinesis is leading the crypto universe in gold and blockchain integration. It is finally time that gold comes into the digital age in a way that is safe against hacks, fast and cheap for users, and has all the features that make cryptocurrencies so attractive to users. Coughlin describes the second tier in the Kinesis system as a “highly efficient rail system.” He is referring to blockchain technology and all the advantages this brings to the gold markets. As Coughlin puts it, when you mint the Kinesis cryptocurrencies through the KCX exchange, the gold or silver is then submitted into the blockchain. “So that’s where we make it an efficient medium of exchange ultimately to be able to transmit or transfer value between different parties within the blockchain system.” Fast global transactions Gold has been the same for all of history. The medium in which we exchange it is what is changing. Gold cannot be moved cheaply and safely. With this Kinesis integration, gold will be as fast and easy to move as any other cryptocurrency. The core principle of cryptocurrencies as written in the bitcoin white paper is a peer to peer electronic cash system. A simple concept that unfortunately bitcoin has failed to provide. Kinesis will fill this role in new and exciting ways. Even before the Kinesis exchanges and the debit cards or anything else, it starts with peer to peer transactions. For Kinesis to be successful, transactions need to be fast and cheap for all users, all the time. To ensure this, Kinesis chose the best network to fork from to ensure these needs are met. In the end, Kinesis decided to fork from the Stellar XLM network. Stellar is well known for it’s speed in processing transactions. Following a number of tests and experiments, it is proven that the Stellar network was able to process between 3000 and 4000 transactions per second, a good starting point for Kinesis. This is a stark difference from the bitcoin network which processes a mere seven transactions per second. Another big detail that the Stellar network is known for is their consensus vs mining model. Stellar does not use mining in the way that competitors like Bitcoin or Litecoin do. Stellar uses a consensus model which requires a specific amount of nodes to reach consensus for transactions to be passed onto the network. The Kinesis network will utilize this feature. Kinesis will ensure that external parties cannot try to say, add false nodes to the network. This will be through a process where consensus is reached from trusted nodes on the network only. Mining is also risky when considering how it is essentially a technological arms race. There is potential for centralized mining pools to takeover the majority of the mining power and therefore the network power by have more miners than competitors. This is risky for any new or established network. Kinesis eliminates this risk with a fork from the Stellar network that utilizes the consensus method. This ensures that transactions remain fast, and cheap and don’t get clogged in the network. Kinesis promises lighting fast transactions anywhere in the world. This means two to three seconds, not hours or days which is the case with bitcoin at times of high network congestion. In addition, Coughlin also promises fees that are much lower than any competitor. He says the standard fee rate will be 0.45%, much lower than alternative cryptocurrencies or payment networks like Western Union which can be up to an insane 25%. Kinesis Decentralization The show’s host, Bart Chilton asks Coughlin an interesting question at a certain point in this interview. One that really touches on the message of both Kinesis and the entire crypto market in general. “What sorts of problems is Kinesis trying to address in the current financial system?” Coughlin goes on to describe the many problems with the banking system today that Kinesis will provide an alternative to. Here are some of the key points that Coughlin touches on. “We address problems across different sectors, and one of those sectors is the banking sector. So I go put money in the bank, I’m actually giving the money to the bank by transferring title of my money to that bank and so I’m holding counter party risk against that bank.” He goes on to describe the practice of bail outs for the bankers, where they have less risk or fear of being held accountable for running bad practices. Traditional banks act in the best interest of the bankers, not the users. Money in the bank is not money that you fully own or control. Kinesis and blockchain technology are changing that and putting you in full control of your funds. The Users are the Title Holders One of the most important key components of the Kinesis system is that the end user is the final title holders of all the gold and silver that users’ coins are backed by. Kinesis does not hold the users funds. Each individual has full control over their coins in the Kinesis crypto wallets and the coin holders are the gold and silver owners. In other crypto exchanges, you are turning the ownership of your coins over to the exchange when you deposit. You are then holding essentially a warrant for your funds to be paid upon withdrawal. It is important for the users and for the Kinesis system that users have full control over funds always. This is in the true spirit of cryptocurrency and for many in the scene, it is a necessity. As Coughlin says, “this is an attribute that Kinesis is addressing, one hundred percent.” Protection from Hacks Crypto exchanges get hacked because criminals know that is where many users keep their funds. With Kinesis, the users are in control of their funds. They are not sitting in an exchange where they have to wait for withdrawal delays. In addition, Kinesis is taking all measures to protect themselves and their users. The benefit of being blockchain based is that all the transactions are there visible on the blockchain. It is a transparent system that anyone can see and review. Transparency is key and Kinesis provides that. You know where your funds are being held. What makes Kinesis unique While there has been a few gold backed cryptocurrencies in the past, and there may be several more In the future, no one has approached this sector like Kinesis. In terms of what Kinesis offers, they are a much greater platform with numerous benefits to the user. Kinesis is a full monetary system with a primary and secondary market structure. Kinesis has mobile banking integration and even the Kinesis Commercial Center that ties in with merchants for ease of adoption. Kinesis has their own web wallets with rock solid support and sleek simple design layout for new users. Older model crypto wallets are clunky and easy to misuse and send transactions to the wrong places. Kinesis even offers a debit card that will allow users to spend their Kinesis coins anywhere where major credit cards are accepted. Therefore even though crypto merchant adoption is still slow, you can still spend your KAU and KAG coins anywhere in the world. Kinesis has a full yield reward system that incentivizes users. They have two dedicated exchanges. One being an exchange for minting new crypto coins and the other being a full service crypto exchange for digital asset transactions. No other blockchain or crypto project has a full fleshed out system like Kinesis has crafted. They have thought intensely about the end user and have provided a unique experience that meets all of the users needs in the cryptocurrency markets. Users benefit by spending money Kinesis is one of the only financial systems in the world that rewards the user for actually spending their money, as Coughlin puts it. Gold has traditionally been either an investment or a store of value for most of recent history. We are a long way away from the days of using gold for day to day transactions, food, services or whatever you need. Kinesis aims to bring gold back to being used as a day to day currency, through the use of the Kinesis coins. This is because Kinesis rewards users every time they choose to use the Kinesis coins, KAU and KAG. In a very astute and to the point example, Coughlin says “when presented with an option, okay I can spend my $20 US dollars now or I can spend $20 dollars worth of Kinesis coins, but I actually receive a benefit in perpetuity on Kinesis, I’m going to choose Kinesis.” That’s exactly the thought process consumers will have when they use the Kinesis system. As mentioned before, this is due to the yield system that rewards users with essentially rebates for using their tokens instead of hoarding them like gold investors. The yield system grants benefits to the user when tokens are minted, and used. There are numerous other benefits you are granted as a user just by participating in the network. With the Kinesis system, gold will return to a day to day medium of exchange through their KAG and KAU coins. Velocity tokens Coughlin then goes on to describe the other token on the Kinesis network. The Kinesis velocity token or KVT. This token is actually an ERC 20 utility token on the Kinesis platform. This token is currently in public sale, but is only available to licensed and accredited investors in the US, as Coughlin states. When you purchase and invest in these KVT tokens, you are investing into the strength and future of the Kinesis platform. This is because KVT holders actually receive a proportional 20 percent share of all the transaction fees that are associated with ALL of the Kinesis currencies. On top of that, holders receive another 20 percent of all commissions from the Kinesis Commercial Center. The benefits are very large for token investors. For those truly interested and believe in the Kinesis platform and it’s future, this is a chance to get a piece of the future growth and add it to their portfolio. Their Initial Token Offering for the KVT token is open until November 11th. Coughlin sums it up very well in the interview when asked about the KVT tokens. “So in the case of the Kinesis velocity token, whoever buys into these is buying into 20 percent of the revenue of the entire monetary system. So as you can imagine, a monetary system is a business with pretty big bones and if we follow through with our vision then it’s going to be quite a large business. Ultimately we’re getting good traction.” So really, when you invest in the KVT tokens, you are getting a 20% share of the network and all the transaction fees of the entire system. This is quite an attractive offer for the right investor. The Kinesis Advantage Kinesis has an advantage over all other cryptocurrency startups, and that thing is legitimacy. Kinesis was born from the ABX or Allocated Bullion Exchange. Coughlin explains in this interview that ABX is “a full institutional exchange for spot precious metals, gold ,silver and platinum, with an unblemished track record.” ABX was founded in 2011 and is very experienced already in the precious metals markets. So they are well equipped to advise and guide Kinesis through every asset of their business. ABX is also the world’s leading electronic institution. Technology is fused into their business, and they are very forward thinking when it comes to the future of finance. Naturally, blockchain would be the next logical step and Kinesis makes the perfect partner. There is few startups in crypto today that have the same reputation or connections that Kinesis and ABX have. More on ABX, their exchange exists on a global scale, which represents seven major trading hubs for precious metals around the world. This is on four different continents and seven different countries. Being the first electronic exchange for physical bullion puts ABX in a market leader position and adds a lot of reputation and value to the Kinesis rollout. Few projects or startups in crypto today have the vision or the scope that Kinesis presents. While most startups aim to solve one task or problem, Kinesis has a multi layered fleshed out system that simultaneously solves numerous problems in finance and crypto while providing a service that everyone needs. For starters, Kinesis will solve the volatility problem that major cryptocurrencies of today are facing. This will pave the way not only for merchant adoption, but mass consumer adoption for day to day peer to peer commerce. This is what crypto was meant to be in its inception. Kinesis has more to offer than any other stablecoin competitor, simply overshadowing competing startups. Exchanges everywhere in crypto need a stablecoin they can rely on. One that is not backed by promises or other cryptocurrencies, but by real world tangible assets. With the reputation that Kinesis has, and the fact that they are backed by precious metals, Kinesis will naturally be a favorite for exchange adoption everywhere. Kinesis offers true stability and most importantly, confidence in your investments. Kinesis offers more as a platform than any competitor. A debit card that is useable anywhere is yet another feature that crypto users have been begging for. Many users want to spend their cryptocurrencies but are unable to. This is a feature that is groundbreaking in itself before other Kinesis features are even touched upon. Kinesis is meeting all government requirements and legal obligations. This is something that puts them already ahead of competitors. Regulations in this crypto currency sector are rapidly growing, but legacy financial markets are no stranger to the needs. Again, Kinesis’ connections and experience in financial markets are putting them well ahead of new face crypto startups, many ran by young entrepreneurs without any experience. Kinesis Launch After the interview Coughlin stayed in the US to have many meetings with investors. The Kinesis platform is gearing up for their launch. The KVT token is currently in public sale for accredited investors and that sale is coming to a close soon. The Kinesis platform is ready to meet the public and will very soon in 2019. The roadmap promises to launch their KAU and KAG currencies in early 2019 Kinesis has put together an excellent team as well. This includes a the executive team that Coughlin is a part of, an Advisory board, an operations team, a development team and numerous partners. Few teams in crypto are as well put together. Kinesis has big platform put together and a big vision to fulfill. While there may be many stablecoin competitors coming into the market now, few have the same to offer in any sense. Kinesis aims to be the best in the market today. Utilizing the history and reputation of gold and silver to back their Kinesis coins ensures the rock solid stability that is needed in a stablecoin today. Coughlin has had several more interview talking about the Kinesis platform. The message is growing rapidly and many are interested in this new platform. Kinesis aims to be a leader in the cryptocurrency market and surely will be. Many are already heralding Kinesis as a “Tether killer,” though these projects have many differences and are hard to compare. Most competitors are difficult to compare to actually. Kinesis has a lot to offer this crypto scene. It will be very interesting to see these developments happen, and see what place in the crypto universe that Kinesis takes.

Zubair Bukhari
Zubair Bukhari

22/10/2018

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

Stablecoins: The Solution to the Volatility Problem

Cryptocurrencies like Bitcoin have come along with promising features and abilities. Although Bitcoin has shaken the world as a disruptive and game-changing technology, its volatility is a huge problem. One of the initial and most important intentions of Bitcoin was to be used as an everyday payment system. Simply put, it was intended to be a “peer to peer electronic cash system,” as titled in the Bitcoin white paper. So far, Bitcoin and other major cryptocurrencies have not been able to perform this initial important use case well. While there was initially some adoption from merchants, the adoption has been slow and due to technical issues, many merchants have dropped their support for Bitcoin and others. One reason merchants are unwilling to adopt crypto payments is the volatile price. In the current climate, one Bitcoin can be worth anywhere between $5800-$7000. To make up for crypto’s shortcomings, there is another class of cryptocurrencies that aim to solve the volatility issue that is ultimately holding Bitcoin and others back from being the everyday payment system they were designed for. This new breed of cryptocurrencies are appropriately titled “stablecoins.” Stablecoins bring the promise of solid price support that can be used as either a store of value, or an everyday means of exchange. It is for this reason that many are heralding stablecoins as having a far greater potential than Bitcoin. A stablecoin is a cryptocurrency that has stable price characteristics. Most stablecoins are pegged to the U.S. Dollar, while the upcoming Kinesis project will create coins that are backed by gold and silver bullion. The ultimate goal of stablecoins is to be an incredibly stable digital form of fiat-free cash, with the potential to solve the problem of cryptocurrency volatility. This provides traders and investors a safe haven during a market crash that can impact fiat currencies significantly. It also shields them from issues related to fiat currencies. Lack of support Due to strict regulations and banks becoming wary of cryptocurrencies, there are only a few exchanges that support fiat currencies. This makes it difficult to complete transactions using fiat-based cash. Slow transaction times It takes several days to send fiat to and from a bank account. Transfer between the ACH Bank and Coinbase wallet, for example, can take as many as 7 to 10 calendar days. Limited regulations As previously mentioned, regulations are now stricter when it comes to crypto-related transactions. This makes it difficult to purchase or pay for goods using fiat currency. When cryptocurrencies exploded in the mainstream market, their value increased exponentially, resulting in a flood of investment capital to Bitcoin and other cryptocurrencies. After the crypto mania phase, it wasn't long before more than 50% of the price of bitcoin decreased, along with the drop in media interest and its trading volume. This kind of cryptocurrency volatility can cause a large exodus of investors. It will also affect other cryptocurrencies that want to gain mass adoption status. It's hard to argue for the adoption of a currency in business if merchants can't rely on the daily value and fees associated with the currency. At the height of crypto mania in 2017, Bitcoin users were spending as much as 100$ or more for a single Bitcoin transaction due to the back log of transactions on the network. Transactions often took days to complete. This is unacceptable for business adoption. Stablecoins want to address this volatility by providing investors with a stable cryptocurrency. For it to work however, it has to satisfy the requirements of sound money. That is, it must be a store of value (SoV), a medium of exchange (MoE), a unit of account (UoA), and fungible. It must be easily moved and divisible as well. Store of value (SoV) This refers to a form of wealth which current value is maintained even to the future without any depreciation. Examples of solid stores of value are gold, silver, and other precious metals. Medium of exchange (MoE) For stablecoins to be a medium of exchange, it has to facilitate the sale of goods without using barter in the equation. Unit of account (UoA) A cryptocurrency must provide a unit of measurement that will allow its value to be defined and compared. For example, the cost of a car could be 10,000 units of a stablecoin. All cryptocurrencies can be used as a unit of account. The Stablecoin Solution Stablecoins matter because they are relatively stable in value, unlike Bitcoin and Ethereum. This is why it is often considered as a hedge against volatility, insulating you from the market volatility that is associated with cryptocurrencies like Bitcoin or Ethereum. If you trade 1 BTC for a stable coin, for example, its value will be the same even if the price of Bitcoin drops. You can also have stable coins converted back to BTC anytime. This makes stable coins ideal to use to invest in options, derivatives, and prediction markets. It is also a better currency of choice if you place a bet with a long and extended timeframe. Real Functionality How stablecoins work will depend on the type, whether its reserve-backed, algorithmic, or backed by other cryptocurrencies. The first type functions like paper money. Instead of being backed by gold reserves in a central bank, it is backed by one-for-one currency reserves that they are pegged to which in this case, are U.S. Dollars. A good example of this type of stablecoin is Tether (USDT). Even without any public proof, the 2.5 billion USDT coins that are in circulation are backed by dollars. Algorithmic stablecoins on the other hand, are controlled by an algorithm. There is software that controls the supply of the stable token, increasing and decreasing it to maintain its peg. Cryptocurrency-backed stablecoins, as the name suggests, use cryptocurrency as collateral instead of fiat money. Done on a blockchain, it removes third parties from the equation. The problem with this type of stablecoin, however, is that the cryptocurrency introduces a source of volatility that makes a stablecoin less stable than it is supposed to. As a solution, more collateral than a 1:1 basis is introduced into the transaction. For example, for a guaranteed $100 worth of a stablecoin, a larger amount of $150 worth of ether (Ethereum) must be deposited first. Stablecoins are commonly used as a liquidity tool for cryptocurrency exchanges. Many exchanges are wary of anything related to cryptocurrency because of its volatility, but stablecoins offer a solution to the problem. The Different Stablecoin Models Stablecoins are a new class of cryptocurrency that offer steady valuations and price stability. It is designed to retain its purchasing power with little to no impact from inflation. In order to maintain steady valuations, stablecoins are tied to price stable assets like gold or the U.S. dollar. Different methods are used to achieve price stability for different stablecoins. For now, there are three broad categories of stablecoins. But there are other stablecoin proposals at work and may be introduced sometime in the future. Fiat collateralized This type of stable coin uses a particular amount of a standard fiat currency as collateral. To issue crypto-coins, for example, U.S. dollars, gold, or oil can be used as collateral. A central entity is responsible for the collateral and will issue a token representing the money they hold. The ratio of the number of crypto-coins issued is also 1:1 against the fiat currency it is pegged to. This is why fiat collateralized is the most straightforward method of stablecoin creation and operation. Apart from a central entity or custodian that holds the collateral--fiat currency or commodity, this type of stablecoins require operational processes to ensure that valuations of collateral are maintained up to the mark. Processes include frequent audits and valuations. A popular example of a stablecoin using this type of architecture is Tether. On paper, it has a market cap of roughly $2.3 billion and with a daily volume that exceeds $1 billion. The token is hailed as the most stable cryptocurrency but is plagued with controversies from the lack of professional and publicly available audits. There is also TrueUSD, a flagship offering from TrustToken. It is a U.S. dollar-pegged stablecoin. It has a transparency mechanism designed to avoid issues that affected Tether. It currently has a public sale on CoinList. StableUSD, on the other hand, is another type of fiat collateralized stablecoin from Stably. It is backed by USD with every token fully backed and redeemable 1-to-1. It also offers support to multiple blockchains, including Stellar and Ethereum. Similar to TrueUSD, it aims to be verifiably transparent. Third party audits and real-time electronic bank data serve as verification of the cash reserves backing of each stableUSD. Fiat collateralized stablecoins however, have their share of problems. For this type of stablecoin to be successful, users have to trust the central entity that holds the money or collateral. In the case of Tether, trust is not exactly working out well. This is especially true with allegations about insolvency and accusations that this particular stablecoin is being used to drive up price of Bitcoin on exchanges. Crypto-collateralized Stablecoins Crypto-collateralized stablecoins depend on the cryptocurrency value that they use as collateral to maintain a stable target price against certain assets. Unlike fiat-collateralized stablecoins, which are simple but centralized, crypto-collateralized stablecoins are used in a much more decentralized approach, as they are backed by cryptocurrency reserves. In essence, these types of stablecoins work quite similar to their fiat counterparts. The only difference is, the collateral is not considered as assets in the real-world, but rather another cryptocurrency. They are extremely volatile. Thus, they are often over-collateralized (there is a huge rate of capital involved) to account for the price volatility of the underlying crypto collateral. Also, in the crypto-collateralized stablecoins system, a bulk of cryptocurrencies account for the price stability achieved by a particular stablecoin. While using these stablecoins is good for everyday situations, holding long term could be risky. There is still no account that this method has already been rigorously tested in real markets. One crypto-collateralized stablecoin is MakerDAO. Despite its increasing popularity, the implementation of such cryptocurrency has been perceived by users as complex and difficult to understand. Under the system, the user needs to deposit crypto assets into a smart contract, then receives a certain number of stablecoins. As previously implied regarding the use of these stablecoins, the cumulative price of the stablecoins he receives is lesser than the value of the crypto assets he deposited. One more major issue with using crypto-collateralized stablecoins is that if your crypto assets go through significant value depreciation, the loans you have taken out will be automatically liquidated. Non-collateralized stablecoins Unlike crypto-collateralized stablecoins, non-collateralized stablecoins are cryptocurrencies with stable prices and are not backed by collateral. Their implementation involves a system or an algorithm that contracts and expands the coin supply depending on the coin value. Basically, the non-collateralized stablecoin approach is based on the Quantity Theory of Money, which implies that “there is a direct relationship between the quantity of money in an economy and the level of prices of goods and services sold.” This means that the coin supply will depend directly on the prices of the stablecoins. For example, if a coin’s value is above $1.00, the supply would increase. On the other hand, if the value drops to less than $1.00, the supply would decrease. These activities create upward and downward pressure on the coins’ value, as needed. To understand more about this, let us take a look at some popular examples of non-collateralized stablecoins. Basecoin – Launched in October 2017, this stablecoin is backed by some of the biggest names in the industry, such as Metastable Capital and Andreessen Horowitz. A re-brand of Basecoin, called Basis, applies a 3-token system using Basecoin, Base Bonds, and Base Shares to implement a system that is similar to an algorithmic central bank. When the supply decreases, bonds are offered at a subsidized rate to pay for the principal and interest in the future. When the demand increases, the supply would also increase. Thus, new coins will be created.Base Shares – Simply known as “shares” in the cryptocurrency market, these tokens come on a fixed supply at the blockchain. These coins are not pegged to anything, with values stemming from their corresponding dividend policies. When demand for such coins goes up and more coins are created, shareholders would also receive newly-created coins as long as all outstanding bonds are redeemed.Carbon – This stablecoin is built on the Hashgraph platform and is compatible with smart contracts, making it highly feasible for use in financial applications. Specifically, it is considered to be used for the decentralized applications (dApps) landscape and for the Ethereum-based games, where a smart contract compatible stablecoin would be a good catalyst.Saga - Saga is a non-anonymous stable cryptocurrency that is backed by a solid set of advisors, such as JP Morgan Chase chairman Jacob A. Frenkel, (chairman of), Cornell professor and IC3 director Emin Gün Sirer, and PHP developer Zeev Suraski. This stablecoin is quite unique from its counterparts, as it is backed by reserves and uses a variable fractional reserve, which is essentially a reserve of conventional currencies. Its supply depends on the size of the Saga economy.Reserve - Founded by Nevin Freeman, this stablecoin originated as an investment round from Coinbase. How it will be implemented is yet to be seen. Overall, stablecoins are likely to evolve over the years. The market around these coins would become more and more competitive, with gradually rising interest in cryptocurrency. The Issues With Current Stablecoin Leaders What is the most stable cryptocurrency? A better question would be what is the best stable cryptocurrency? Because there are several options. None of them are perfect, however. Stablecoins are gaining popularity over other types of digital currencies because of protection from volatility. With links to real-world assets like U.S. dollars, precious metals like gold and silver, and oil, a stablecoin gives traders mental peace, an option for easily liquidated currencies, and eases up concerns on instability. Like most things, stablecoins have their problems as well. In fact, even the best stablecoins have certain disadvantages. Tether According to its website, Tether USDT is “100% backed by USD” with a conversion rate of $1 per 1 Tether. This offers some stability in a crypto space filled with other volatile currencies. But there are reasons for concerns. Not Decentralized Although it uses blockchain technology, the fact that it is run by humans, who are potentially capable of making mistakes, make Tether less reliable. Many believe that Tether is being issued by the same people that run the Bitfinex exchange, another leading exchange that accepts USDT as collateral for trading. This led to the assumption that the 1:1 ratio is not absolute and there might be some fractional reserve lending that is happening behind the scenes. Shady claims Many fear that Tether Limited does not hold enough U.S. dollars to back the stablecoins that are in circulation. In January alone, there were 850 million new digital tokens that Tether released. While this looks good in the sense that there is more capital flowing into crypto, critics say that the cryptocurrency market might be manipulated. This is because the increasing number of tokens released coincided with the record high prices of crypto. Poses a systemic risk With the trading volume of Tether regularly exceeding its market cap, the investment research firm Weiss Ratings thinks of it as a threat to the ecosystem. This is because Tether is one of the main sources of liquidity. As the Weiss report goes, “What happens if Tether does turn out to be shaky? ... What if this large source of liquidity suddenly evaporates?” True USD This is one of the best ERC20 stablecoins on the crypto market as it is pegged with the U.S. Dollars. This can be likened to the Tether USDT, except that it is fully fiat-collateralized, verified transparently by fiat-collateralized like TrustToken, and is legally protected. The people who manage the token are previous employees of Google, UC Berkeley, and PwC. But TrueUSD might not be as stable as it’s supposed to be. In fact, its price showed some volatility, following the announcement that the token will be listed on Binance. Its price had a sudden rise at an unprecedented 40%. It eventually subsided but it did reach $1.39 per token. This led to fears that the price return will dip below $1. But just like in March when TUSD was listed on Bittrex, traders were advised not to pay more than $1.05 per token to avoid losing money. Are the bots really to blame for the price bump? According to Rafael Cosman, co-founder and CTO of TrustToken, bots that are always listening for announcements of new listings tend to “buy any coin as soon as it is listed on a new exchange” to make more profit. But he is confident that anyone who knows that the token is redeemable for $1.00 will not pay for more as they stand to lose money. People are also anticipating on how the token will fare following an audit of its financial situation. Because the token is backed by U.S. dollars, many are wondering if it has enough to back the stablecoins in circulation. Tether for instance, has failed to present a proper audit test. At this stage, stablecoins can be considered highly experimental. So, expect some highs and lows even from the best stablecoins on the market. Investors however, don’t let these concerns stop them from trading, especially in the short-term. The fact that both Tether and TrueUSD are secured against the U.S. dollars and not subject to the level of speculations that other cryptocurrencies have brings the attention of investors. Just stay aware of what’s going on with these tokens on the market before you trade. Keep an eye out for the sudden bumps and drops and don’t pay more than what you’re supposed to for each token. White standard This stablecoin is currently the only one on the Stellar Blockchain, which is known mostly for its fast transaction times. Launched in August 2018 by The White Company and Fintech with the aim of creating a seamless foreign currency monetary system for users. During the official press release, CEO of The White Company, Elizabeth White, said, “Our goal is to unleash crypto’s real-world potential, and this partnership with Interstellar is the first of many steps in not just bringing the White Standard stablecoins to the masses, while increasing the ease for consumers to purchase Stellar lumens (XLM) with USD, GPB and the Euro.” White standard offers three variants of coins, tied to the US Dollars, UK Pounds or Euros. Once all the kinks are worked out, it is touted as allowing seamless deposits, withdrawals, and transfers in all three currencies. The White Company partners with Interstellar, an integrated decentralized exchange (DEX) platform and cryptocurrency wallet powered by the Stellar protocol. Currently, they offer users access to five major cryptocurrencies: Bitcoin, Stellar Lumens, Litecoin, Ripple, and Ethereum. This partnership will integrate the White Standard stablecoins so that Interstellar will be able to allow users to instantly withdraw, deposit, or transfer through the White Standard stablecoins. It may seem like WS stablecoins are quite similar to Tether. The only difference is that the latter does not offer current audited information. However, the White Standard is backed by the USD for the same reason the USD was backed by gold. Because it’s currently the worldwide medium of exchange it becomes easily traceable into any good or service. While there are concerns about inflationary pressures on USD, they have not yet been realized and are likely far off for now. Anatomy of Kinesis: the Ultimate Stablecoin What makes the Kinesis system an evolutionary step toward a better monetary system is that it acts as a store of value and a medium of exchange both at the same time. The Kinesis currencies will soon be launched in November 2018 and will have two currency systems: KAU and KAG. These will be minted into existence and will represent precious metals, which are the bases for the cryptocurrency 1:1. This means that 1g gold is equivalent to 1 KAU and 10g silver is to 1 KAG. These will be stored and insured in third-party vaults that will be audited twice every year. the Kinesis Standard Amazingly, the Kinesis system is designed to actually work. It’s not just any metal in a vault. The workings of the Kinesis system include: Kinesis Currency Exchange (KCX) – where the coins will be produced.Kinesis Blockchain Network (KBN) – where the coins will be utilized.Kinesis Blockchain Exchange (KBE) – where coins are traded.Kinesis Digital Bank (KDB) – where transactions are held.Kinesis Commercial Centre (KCC) – where various companies are able to offer goods and services. Different users will have the option to choose any form of exchange they want for gold, silver, and other major currencies, like the euro, dollar, pounds, franc, and yen. All of these will be integrated with the rest of the world using conventional channels. These include debit and credit cards on the MasterCard and Visa networks, as well as ATM networks, telegraphic transfers, Western Union, PayPal, MoneyGram, and more. Kinesis Solves the Issues of Other Stablecoins What makes Kinesis unique is that it offers price stability, which isn’t available in other stablecoins. This currency system does this by basing its currencies to physical precious metals, like gold, which has a strong store of value for the longest time. Thanks to the minds behind it, they have gone through the list of everything that could possibly go wrong with every coin and have provided solutions to each one of them. Kinesis also has a rewarding multi-faceted system that is unlike any other. It is also hedge-free because it offers assurance on price stability, as well as trading to a wider variety of assets. This is made possible by having strong partnerships with the world’s leading electronic institutional exchange for physical precious metals, like gold and silver, ABX (Allocated Bullion Exchange), as well as Deutsche Borse Group and European Commodity Clearing. Unlike Tether, wherein its tokens are backed by the US dollar yet are at high risk of fractional bank reserves, Kinesis transactions are conducted through bullion exchange networks. Aside from that, its users are rewarded through its velocity-based system, wherein rewards are based on frequency and rate at which they are carried out. In essence, Kinesis can be considered a trustworthy stabilizing force that drives up velocity further in the cryptocurrency world. In a way, it will offer a more suitable replacement for the highly controversial Tether token. Furthermore, there is a better incentive to trade capital. the Kinesis Launch The Kinesis system has a multi-faceted yield system that is unlike any other. It provides incentives to users’ participation by attaching it to different types of yield. This means that anyone who participates in the Kinesis system receives money for every transaction, as well as for the overall rate of money-changing hands. In other words, the system provides a great reward for using such currencies. This means that this stablecoin addresses an important issue that fiat monetary systems have: the need to inflate prices and devalue the currency to stimulate activity in the monetary system. Enjoyed reading our guide? Check out more crypto related guides!

Zubair Bukhari
Zubair Bukhari

05/10/2018

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