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What Is Staking: The Ultimate Beginner’s Guide

What Is Staking: The Ultimate Beginner’s Guide
Staking means you are holding your cryptocurrency funds in a wallet and thus support the functionality of a blockchain system. Stakeholders lock their cryptos in their wallets. In return, they are rewarded by the network.

Proof-of-Stake versus Proof-of-Work.

What Is Proof Of Stake

To clear up the idea of staking, we should explain the Proof-of-Stake (PoS) consensus mechanism. PoS and its versions are widely used in many blockchain networks.
The pioneers of PoS were (most likely) Sunny King and Scott Nadal. They were the first to describe and implement this idea for the crypto project Peercoin (PPC). Originally, its blockchain was using a hybrid of PoW and PoS. It made the network less dependent on the alternative protocol and attracted more participants. They were miners who came to compete for a reward.

Delegated Proof-of-Stake in BitShares versus Proof-of-Work in Bitcoin.

Delegated Proof Of Stake

Two years later, Daniel Larimer, a prominent software developer, and crypto entrepreneur introduced a modified version of PoS. Its name was Delegated Proof of Stake (DPoS). The first network to apply it was Bitshares. Larimer also launched EOS and Steem. Both projects adopted the Delegated Proof of Stake protocol for their blockchains.
What is the key feature of DPoS? This mechanism allows all network users to ‘convert’ their crypto holdings into votes. These votes are used to elect trusted witnesses (‘delegates’). They will manage the blockchain on your behalf. The delegates validate the transactions and make sure the network functions as it should. The weight of your vote depends on how big your stake is. As a stakeholder, you get a regular reward for keeping your crypto in the network.

DPoS Pros

The DPoS model addresses the important problems of PoS and PoW blockchains. First of all, it’s the scalability issue. DPoS improves network capacity by increasing the speed of transaction processing. It is possible because the DPoS model allows reaching consensus much faster, as it needs fewer nodes to validate a transaction. On the dark side, Delegate Proof of Stake usage promotes centralization: a DPoS network relies on a limited group of delegates for its operation.

How Staking Works

As we said earlier, staking means holding cryptocurrency or tokens to support a network operation and getting a reward for it. Naturally, this process is typical for blockchains using the PoS protocol or any of its versions.
Unlike PoW, this protocol does not rely on miners who validate blocks by doing ‘work’. This work consists of solving math puzzles using increasingly powerful mining hardware. Instead, the mining power of any network participant depends on how many coins they commit to stake. It allows a PoS-based blockchain to avoid usage of ASICs and other equipment that consumes a great amount of electricity.

Advantages Of Staking

The bigger is the amount you stake, the better are your chances to become the validator for the next block and grab the reward. The PoS model saves you a lot of money. You don’t have to invest in expensive mining hardware and cooling equipment. Also, you don’t have to pay huge electricity bills every month. You still spend some money, but it’s a direct cryptocurrency investment. Every PoS network features its own ‘staking currency’.
The increased scalability, ensured by staking, is one of the main reasons why the Ethereum plans to move to this model in 2020 when it adopts the Casper protocol.
There are networks that prefer DPoS. In this model, you may use other network participants to signal your support for some event. It means you delegate decision making to the nodes you trust.
In fact, these delegates are responsible for handling the blockchain, as they deal with the issues of major importance. They play a key role in consensus achievement and make management decisions.

Consensus protocols compared: PoW, PoS and DPoS.

Network Inflation

There are blockchains who pay a staking reward in the form of a fixed percentage, the so-called ‘inflation rate’. The purpose is to persuade more people to stake their coins. It’s like a bank encouraging you to keep your money with them and not at home.
Until recently, Stellar was a typical example of such a scheme. Their fixed inflation rate was 1%. Every week, the network used to distribute ‘inflation money’ among the holders, who kept their funds in the staking pool. The main pro of this model is that you get a fixed bonus regularly.
For example, a Stellar user who was holding 10,000 XLM for 1 year, could expect the reward of 100 XLM. This information was open to all the users, helping them to decide in favor of staking. It motivated the people who preferred a moderate but predictable reward to a big but random one.
In the 4th quarter of 2019, Stellar abandoned the inflation scheme.

Staking Pool

An idea behind staking pools is simple. To form a pool, many network stakeholders combine together. It increases their collective odds of validating a new block and getting rewarded for it. Like in a PoW mining pool, the reward is proportionately split among all the participants. The money you put in, the bigger is your share.
Pooling might be the best staking solution if your network has a high entry barrier. In practice, it means that you have to contribute a large amount of money to enter, but you cannot afford it alone. Note, that running a pool is not free, as there are maintenance and development costs. As a result, you often have to pay a ‘membership fee’ to the pool providers. Normally, it’s a fixed percentage of your reward share.
Besides, pools may offer additional benefits related to withdrawal time, minimum balance, etc. It attracts new participants and results in a greater degree of decentralization of the network.

Cold Staking

Cold staking is when you stake your crypto using a cold (hardware) wallet. Such a wallet has no connection to the Internet. There are networks that let you stake the funds kept in cold storage. The biggest benefit of cold staking is that your funds are 100% safe. For large stakeholders, it’s the top priority. If a stakeholder takes the crypto out of the cold wallet, their rewards are discontinued.

Future Of Staking

The number of users seeking to contribute their assets to participate in blockchain management and decision-making grows. It means staking becomes popular. To meet the demand, the entry process is becoming more user-friendly. Accordingly, more people will be taking an active part in the development of their blockchain ecosystems.

Conclusion

In conclusion, staking is an innovative investment tool. It can compete with traditional ones in terms of stability. In terms of assets growth potential, it’s superior to them.
P.S. Hope you found this article interesting and useful. If you want to read more articles on crypto, finance, and blockchain check out our blog.
submitted by EX-SCUDO to CryptoCurrencies [link] [comments]

What Is Staking: The Ultimate Beginner’s Guide

What Is Staking: The Ultimate Beginner’s Guide
Staking means you are holding your cryptocurrency funds in a wallet and thus support the functionality of a blockchain system. Stakeholders lock their cryptos in their wallets. In return, they are rewarded by the network.

Proof-of-Stake versus Proof-of-Work.

What Is Proof Of Stake

To clear up the idea of staking, we should explain the Proof-of-Stake (PoS) consensus mechanism. PoS and its versions are widely used in many blockchain networks.
The pioneers of PoS were (most likely) Sunny King and Scott Nadal. They were the first to describe and implement this idea for the crypto project Peercoin (PPC). Originally, its blockchain was using a hybrid of PoW and PoS. It made the network less dependent on the alternative protocol and attracted more participants. They were miners who came to compete for a reward.

Delegated Proof-of-Stake in BitShares versus Proof-of-Work in Bitcoin.

Delegated Proof Of Stake

Two years later, Daniel Larimer, a prominent software developer, and crypto entrepreneur introduced a modified version of PoS. Its name was Delegated Proof of Stake (DPoS). The first network to apply it was Bitshares. Larimer also launched EOS and Steem. Both projects adopted the Delegated Proof of Stake protocol for their blockchains.
What is the key feature of DPoS? This mechanism allows all network users to ‘convert’ their crypto holdings into votes. These votes are used to elect trusted witnesses (‘delegates’). They will manage the blockchain on your behalf. The delegates validate the transactions and make sure the network functions as it should. The weight of your vote depends on how big your stake is. As a stakeholder, you get a regular reward for keeping your crypto in the network.

DPoS Pros

The DPoS model addresses the important problems of PoS and PoW blockchains. First of all, it’s the scalability issue. DPoS improves network capacity by increasing the speed of transaction processing. It is possible because the DPoS model allows reaching consensus much faster, as it needs fewer nodes to validate a transaction. On the dark side, Delegate Proof of Stake usage promotes centralization: a DPoS network relies on a limited group of delegates for its operation.

How Staking Works

As we said earlier, staking means holding cryptocurrency or tokens to support a network operation and getting a reward for it. Naturally, this process is typical for blockchains using the PoS protocol or any of its versions.
Unlike PoW, this protocol does not rely on miners who validate blocks by doing ‘work’. This work consists of solving math puzzles using increasingly powerful mining hardware. Instead, the mining power of any network participant depends on how many coins they commit to stake. It allows a PoS-based blockchain to avoid usage of ASICs and other equipment that consumes a great amount of electricity.

Advantages Of Staking

The bigger is the amount you stake, the better are your chances to become the validator for the next block and grab the reward. The PoS model saves you a lot of money. You don’t have to invest in expensive mining hardware and cooling equipment. Also, you don’t have to pay huge electricity bills every month. You still spend some money, but it’s a direct cryptocurrency investment. Every PoS network features its own ‘staking currency’.
The increased scalability, ensured by staking, is one of the main reasons why the Ethereum plans to move to this model in 2020 when it adopts the Casper protocol.
There are networks that prefer DPoS. In this model, you may use other network participants to signal your support for some event. It means you delegate decision making to the nodes you trust.
In fact, these delegates are responsible for handling the blockchain, as they deal with the issues of major importance. They play a key role in consensus achievement and make management decisions.

Consensus protocols compared: PoW, PoS and DPoS.

Network Inflation

There are blockchains who pay a staking reward in the form of a fixed percentage, the so-called ‘inflation rate’. The purpose is to persuade more people to stake their coins. It’s like a bank encouraging you to keep your money with them and not at home.
Until recently, Stellar was a typical example of such a scheme. Their fixed inflation rate was 1%. Every week, the network used to distribute ‘inflation money’ among the holders, who kept their funds in the staking pool. The main pro of this model is that you get a fixed bonus regularly.
For example, a Stellar user who was holding 10,000 XLM for 1 year, could expect the reward of 100 XLM. This information was open to all the users, helping them to decide in favor of staking. It motivated the people who preferred a moderate but predictable reward to a big but random one.
In the 4th quarter of 2019, Stellar abandoned the inflation scheme.

Staking Pool

An idea behind staking pools is simple. To form a pool, many network stakeholders combine together. It increases their collective odds of validating a new block and getting rewarded for it. Like in a PoW mining pool, the reward is proportionately split among all the participants. The money you put in, the bigger is your share.
Pooling might be the best staking solution if your network has a high entry barrier. In practice, it means that you have to contribute a large amount of money to enter, but you cannot afford it alone. Note, that running a pool is not free, as there are maintenance and development costs. As a result, you often have to pay a ‘membership fee’ to the pool providers. Normally, it’s a fixed percentage of your reward share.
Besides, pools may offer additional benefits related to withdrawal time, minimum balance, etc. It attracts new participants and results in a greater degree of decentralization of the network.

Cold Staking

Cold staking is when you stake your crypto using a cold (hardware) wallet. Such a wallet has no connection to the Internet. There are networks that let you stake the funds kept in cold storage. The biggest benefit of cold staking is that your funds are 100% safe. For large stakeholders, it’s the top priority. If a stakeholder takes the crypto out of the cold wallet, their rewards are discontinued.

Future Of Staking

The number of users seeking to contribute their assets to participate in blockchain management and decision-making grows. It means staking becomes popular. To meet the demand, the entry process is becoming more user-friendly. Accordingly, more people will be taking an active part in the development of their blockchain ecosystems.

Conclusion

In conclusion, staking is an innovative investment tool. It can compete with traditional ones in terms of stability. In terms of assets growth potential, it’s superior to them.
P.S. Hope you found this article interesting and useful. If you want to read more articles on crypto, finance, and blockchain check out our blog.
submitted by EX-SCUDO to CryptoCurrencyTrading [link] [comments]

What Is Staking: The Ultimate Beginner’s Guide

What Is Staking: The Ultimate Beginner’s Guide
Staking means you are holding your cryptocurrency funds in a wallet and thus support the functionality of a blockchain system. Stakeholders lock their cryptos in their wallets. In return, they are rewarded by the network.

Proof-of-Stake versus Proof-of-Work.

What Is Proof Of Stake

To clear up the idea of staking, we should explain the Proof-of-Stake (PoS) consensus mechanism. PoS and its versions are widely used in many blockchain networks.
The pioneers of PoS were (most likely) Sunny King and Scott Nadal. They were the first to describe and implement this idea for the crypto project Peercoin (PPC). Originally, its blockchain was using a hybrid of PoW and PoS. It made the network less dependent on the alternative protocol and attracted more participants. They were miners who came to compete for a reward.

Delegated Proof-of-Stake in BitShares versus Proof-of-Work in Bitcoin.

Delegated Proof Of Stake

Two years later, Daniel Larimer, a prominent software developer, and crypto entrepreneur introduced a modified version of PoS. Its name was Delegated Proof of Stake (DPoS). The first network to apply it was Bitshares. Larimer also launched EOS and Steem. Both projects adopted the Delegated Proof of Stake protocol for their blockchains.
What is the key feature of DPoS? This mechanism allows all network users to ‘convert’ their crypto holdings into votes. These votes are used to elect trusted witnesses (‘delegates’). They will manage the blockchain on your behalf. The delegates validate the transactions and make sure the network functions as it should. The weight of your vote depends on how big your stake is. As a stakeholder, you get a regular reward for keeping your crypto in the network.

DPoS Pros

The DPoS model addresses the important problems of PoS and PoW blockchains. First of all, it’s the scalability issue. DPoS improves network capacity by increasing the speed of transaction processing. It is possible because the DPoS model allows reaching consensus much faster, as it needs fewer nodes to validate a transaction. On the dark side, Delegate Proof of Stake usage promotes centralization: a DPoS network relies on a limited group of delegates for its operation.

How Staking Works

As we said earlier, staking means holding cryptocurrency or tokens to support a network operation and getting a reward for it. Naturally, this process is typical for blockchains using the PoS protocol or any of its versions.
Unlike PoW, this protocol does not rely on miners who validate blocks by doing ‘work’. This work consists of solving math puzzles using increasingly powerful mining hardware. Instead, the mining power of any network participant depends on how many coins they commit to stake. It allows a PoS-based blockchain to avoid usage of ASICs and other equipment that consumes a great amount of electricity.

Advantages Of Staking

The bigger is the amount you stake, the better are your chances to become the validator for the next block and grab the reward. The PoS model saves you a lot of money. You don’t have to invest in expensive mining hardware and cooling equipment. Also, you don’t have to pay huge electricity bills every month. You still spend some money, but it’s a direct cryptocurrency investment. Every PoS network features its own ‘staking currency’.
The increased scalability, ensured by staking, is one of the main reasons why the Ethereum plans to move to this model in 2020 when it adopts the Casper protocol.
There are networks that prefer DPoS. In this model, you may use other network participants to signal your support for some event. It means you delegate decision making to the nodes you trust.
In fact, these delegates are responsible for handling the blockchain, as they deal with the issues of major importance. They play a key role in consensus achievement and make management decisions.

Consensus protocols compared: PoW, PoS and DPoS.

Network Inflation

There are blockchains who pay a staking reward in the form of a fixed percentage, the so-called ‘inflation rate’. The purpose is to persuade more people to stake their coins. It’s like a bank encouraging you to keep your money with them and not at home.
Until recently, Stellar was a typical example of such a scheme. Their fixed inflation rate was 1%. Every week, the network used to distribute ‘inflation money’ among the holders, who kept their funds in the staking pool. The main pro of this model is that you get a fixed bonus regularly.
For example, a Stellar user who was holding 10,000 XLM for 1 year, could expect the reward of 100 XLM. This information was open to all the users, helping them to decide in favor of staking. It motivated the people who preferred a moderate but predictable reward to a big but random one.
In the 4th quarter of 2019, Stellar abandoned the inflation scheme.

Staking Pool

An idea behind staking pools is simple. To form a pool, many network stakeholders combine together. It increases their collective odds of validating a new block and getting rewarded for it. Like in a PoW mining pool, the reward is proportionately split among all the participants. The money you put in, the bigger is your share.
Pooling might be the best staking solution if your network has a high entry barrier. In practice, it means that you have to contribute a large amount of money to enter, but you cannot afford it alone. Note, that running a pool is not free, as there are maintenance and development costs. As a result, you often have to pay a ‘membership fee’ to the pool providers. Normally, it’s a fixed percentage of your reward share.
Besides, pools may offer additional benefits related to withdrawal time, minimum balance, etc. It attracts new participants and results in a greater degree of decentralization of the network.

Cold Staking

Cold staking is when you stake your crypto using a cold (hardware) wallet. Such a wallet has no connection to the Internet. There are networks that let you stake the funds kept in cold storage. The biggest benefit of cold staking is that your funds are 100% safe. For large stakeholders, it’s the top priority. If a stakeholder takes the crypto out of the cold wallet, their rewards are discontinued.

Future Of Staking

The number of users seeking to contribute their assets to participate in blockchain management and decision-making grows. It means staking becomes popular. To meet the demand, the entry process is becoming more user-friendly. Accordingly, more people will be taking an active part in the development of their blockchain ecosystems.

Conclusion

In conclusion, staking is an innovative investment tool. It can compete with traditional ones in terms of stability. In terms of assets growth potential, it’s superior to them.

P.S. Hope you found this article interesting and useful. If you want to read more articles on crypto, finance, and blockchain check out our blog.
submitted by EX-SCUDO to CryptoMarkets [link] [comments]

What Is Staking: The Ultimate Beginner’s Guide

What Is Staking: The Ultimate Beginner’s Guide
Staking means you are holding your cryptocurrency funds in a wallet and thus support the functionality of a blockchain system. Stakeholders lock their cryptos in their wallets. In return, they are rewarded by the network.

Proof-of-Stake versus Proof-of-Work.

What Is Proof Of Stake

To clear up the idea of staking, we should explain the Proof-of-Stake (PoS) consensus mechanism. PoS and its versions are widely used in many blockchain networks.
The pioneers of PoS were (most likely) Sunny King and Scott Nadal. They were the first to describe and implement this idea for the crypto project Peercoin (PPC). Originally, its blockchain was using a hybrid of PoW and PoS. It made the network less dependent on the alternative protocol and attracted more participants. They were miners who came to compete for a reward.


Delegated Proof-of-Stake in BitShares versus Proof-of-Work in Bitcoin.

Delegated Proof Of Stake

Two years later, Daniel Larimer, a prominent software developer, and crypto entrepreneur introduced a modified version of PoS. Its name was Delegated Proof of Stake (DPoS). The first network to apply it was Bitshares. Larimer also launched EOS and Steem. Both projects adopted the Delegated Proof of Stake protocol for their blockchains.
What is the key feature of DPoS? This mechanism allows all network users to ‘convert’ their crypto holdings into votes. These votes are used to elect trusted witnesses (‘delegates’). They will manage the blockchain on your behalf. The delegates validate the transactions and make sure the network functions as it should. The weight of your vote depends on how big your stake is. As a stakeholder, you get a regular reward for keeping your crypto in the network.

DPoS Pros

The DPoS model addresses the important problems of PoS and PoW blockchains. First of all, it’s the scalability issue. DPoS improves network capacity by increasing the speed of transaction processing. It is possible because the DPoS model allows reaching consensus much faster, as it needs fewer nodes to validate a transaction. On the dark side, Delegate Proof of Stake usage promotes centralization: a DPoS network relies on a limited group of delegates for its operation.

How Staking Works

As we said earlier, staking means holding cryptocurrency or tokens to support a network operation and getting a reward for it. Naturally, this process is typical for blockchains using the PoS protocol or any of its versions.
Unlike PoW, this protocol does not rely on miners who validate blocks by doing ‘work’. This work consists of solving math puzzles using increasingly powerful mining hardware. Instead, the mining power of any network participant depends on how many coins they commit to stake. It allows a PoS-based blockchain to avoid usage of ASICs and other equipment that consumes a great amount of electricity.

Advantages Of Staking

The bigger is the amount you stake, the better are your chances to become the validator for the next block and grab the reward. The PoS model saves you a lot of money. You don’t have to invest in expensive mining hardware and cooling equipment. Also, you don’t have to pay huge electricity bills every month. You still spend some money, but it’s a direct cryptocurrency investment. Every PoS network features its own ‘staking currency’.
The increased scalability, ensured by staking, is one of the main reasons why the Ethereum plans to move to this model in 2020 when it adopts the Casper protocol.
There are networks that prefer DPoS. In this model, you may use other network participants to signal your support for some event. It means you delegate decision making to the nodes you trust.
In fact, these delegates are responsible for handling the blockchain, as they deal with the issues of major importance. They play a key role in consensus achievement and make management decisions.

Consensus protocols compared: PoW, PoS and DPoS.

Network Inflation

There are blockchains who pay a staking reward in the form of a fixed percentage, the so-called ‘inflation rate’. The purpose is to persuade more people to stake their coins. It’s like a bank encouraging you to keep your money with them and not at home.
Until recently, Stellar was a typical example of such a scheme. Their fixed inflation rate was 1%. Every week, the network used to distribute ‘inflation money’ among the holders, who kept their funds in the staking pool. The main pro of this model is that you get a fixed bonus regularly.
For example, a Stellar user who was holding 10,000 XLM for 1 year, could expect the reward of 100 XLM. This information was open to all the users, helping them to decide in favor of staking. It motivated the people who preferred a moderate but predictable reward to a big but random one.
In the 4th quarter of 2019, Stellar abandoned the inflation scheme.

Staking Pool

An idea behind staking pools is simple. To form a pool, many network stakeholders combine together. It increases their collective odds of validating a new block and getting rewarded for it. Like in a PoW mining pool, the reward is proportionately split among all the participants. The money you put in, the bigger is your share.
Pooling might be the best staking solution if your network has a high entry barrier. In practice, it means that you have to contribute a large amount of money to enter, but you cannot afford it alone. Note, that running a pool is not free, as there are maintenance and development costs. As a result, you often have to pay a ‘membership fee’ to the pool providers. Normally, it’s a fixed percentage of your reward share.
Besides, pools may offer additional benefits related to withdrawal time, minimum balance, etc. It attracts new participants and results in a greater degree of decentralization of the network.

Cold Staking

Cold staking is when you stake your crypto using a cold (hardware) wallet. Such a wallet has no connection to the Internet. There are networks that let you stake the funds kept in cold storage. The biggest benefit of cold staking is that your funds are 100% safe. For large stakeholders, it’s the top priority. If a stakeholder takes the crypto out of the cold wallet, their rewards are discontinued.

Future Of Staking

The number of users seeking to contribute their assets to participate in blockchain management and decision-making grows. It means staking becomes popular. To meet the demand, the entry process is becoming more user-friendly. Accordingly, more people will be taking an active part in the development of their blockchain ecosystems.

Conclusion

In conclusion, staking is an innovative investment tool. It can compete with traditional ones in terms of stability. In terms of assets growth potential, it’s superior to them.
P.S. Hope you found this article interesting and useful. If you want to read more articles on crypto, finance, and blockchain check out our blog.
submitted by EX-SCUDO to ethtrader [link] [comments]

Understanding different Consensus Mechanisms

Understanding different Consensus Mechanisms

https://preview.redd.it/a8khq1zpfdx41.png?width=1920&format=png&auto=webp&s=a572570acbf0ab6a07dcf8af86009b6917295935
The BlockChain network consists of a series of nodes that form a distributed architecture. These nodes need to be aligned and run synchronously to maintain security in the network. Thus the concept of Consensus is devised to maintain harmony in the blockchain network.
A Consensus mechanism can be defined as a process where all the nodes abide by the same rules or protocols. These consensus mechanisms are very important for a blockchain network to function properly. The network is shared by numerous users who do transactions. These transactions are further validated to add it to the block and then to the chain. Thus the transactions, as well as the network, need to be regularly checked to maintain the safety and security of the network. Thus a good consensus mechanism or protocol is mandatory to protect the network from various attacks.
These protocols should be efficient, secure, reliable, and real-time so that they can check the authenticity of transactions and to which the network participants commonly agreed to the outcome.
Different Consensus Mechanism
There are different kinds of consensus mechanism which are based on different principles.
https://preview.redd.it/92dw63bifdx41.jpg?width=595&format=pjpg&auto=webp&s=d461c4099a4e3aaa3c4cae69eb7c535dd21c6193
1. Proof of Work (PoW)
Proof of Work was the first-ever consensus mechanism and was adopted by Bitcoin. It became very famous after that and was later implemented on Ethereum, Litecoin, etc. The algorithm is based on solving a complex mathematical puzzle which is very hard to crack. The node which solves it then broadcasts the outcome for verification. Once verified, the blocks are added to the network. This algorithm also rewards the miner who solves the puzzle.
Though PoW has provided the desired security which is very much needed to make the network bulletproof against hackers it was criticized over the years due to its high energy and resource requirements which are needed to solve the complex mathematical puzzles. But this is also the reason why the Bitcoin network is so valuable.
2. Proof of Stake (PoS)
This algorithm is based upon the stake of validators. The validators are decided based on a combination of different factors which includes the staking age and the node’s wealth. Any network user who wants to participate in the forging activity stake a certain amount of coin into the network. This is done by sending a special transaction that will lock up their base cryptocurrency (in Ethereum's case, ether). The stake size determines the chances of a node to be selected as the next validator who will forge the next block. The bigger the stake, the higher the chances.
This algorithm was introduced in 2011 with the idea to solve the problems with Proof of Work.
Some of the crypto coins like Nxt (NXT), Blackcoin, ShadowCoin, and Peercoin (PPC) use the PoS method. Ethereum (ETH) is also switching to a PoS system.
Advantages:
· Enhanced Security
· More decentralization
· Less energy
· Higher transparency
3. Proof of Authority (PoA)
In the PoA consensus model, the identity is chosen as the form of stake rather than staking tokens. It is an enhanced version of Proof of Stake. A group of validators is already chosen as the authority. Their task is to check and validate all the newly added identities, validate transactions, and blocks to add to the network. To ensure efficiency and security in the network the validator group is usually kept small (~25 or less).
PoA was proposed by a group of developers in March 2017 (coined by Gavin Wood) as a blockchain-based on the Ethereum protocol. It was developed with the idea to solve the problem of spam attacks on Ethereum’s Ropsten test network. The new network was named Kovan. It is the main test network for all Ethereum users today.
Projects using PoA: Kovan, Rinkeby, TomoChain, Swarm City, Go Chain, etc.
Characteristics of a PoA Network:-
· Less energy consumption as compared to PoW.
· No communication is required to reach the consensus between the nodes.
· Network operation is independent of the number of available genuine nodes.
· The chance of a node to become a forge depends upon both its stake and overall holding.
4. DPOS (Delegated Proof of Stake)
In 2014, Dan Larimer developed the Delegated Proof of Stake (DPoS) consensus algorithm. This algorithm is considered more efficient than the preceding PoS mechanism.
A DPoS algorithm is based on a voting system where stakeholders cast their votes to a third-party to outsource the work. These delegates are referred to as witnesses and are responsible for the generation and validation of new blocks. The voting power is proportional to the number of coins each user holds. Also, it varies from project to project. Each delegate presents an individual proposal when asking for votes. The rewards received by the delegates are proportionally shared with their respective electors.
Since a DPoS system is based on a voting system and is maintained by the voters, hence it is directly dependent on the delegates’ reputation. Due to this, the delegates are motivated to be honest and efficient, or else they will get voted out.
Cryptocurrency projects that make use of DPoS consensus algorithm- Bitshares, Steem, Ark, and Lisk.
The main advantage of DPOS is that it is more scalable i.e it can process more transactions per second (TPS) as compared to POW and PoS.
5. Hybrid PoW/PoS
The idea behind developing a hybrid Proof of Work and Proof of Stake systems is to maximize the advantages and minimize the disadvantage of both approaches (PoW/PoS).
This method allows mining and staking to create a balance between those outside the community (the miners) and those inside the community (the stakeholders).In this model, the PoW miners create new blocks that contain transactions to be added to the blockchain. As these blocks have been created, the PoS miners vote on whether or not to confirm them. PoS miners stake a portion of their tokens; the larger the stake, greater will be the voting power. However, rather than counting the total vote count to check the validity of the newly created block, the hybrid consensus mechanism randomly chooses 5 'votes' to determine the validity; if 3 out of the 5 chosen votes are positive, the block is confirmed and added to the blockchain. As a reward, PoW miners receive 60% of the block reward, PoS miners receive 30%, and the remaining 10% is dedicated to developmental efforts.
By using PoS voting, these systems protect the network from a 51% attack because it provides an additional layer of verification.
6. Delegated Byzantine Fault Tolerance (dBFT)
This consensus algorithm was invented by the developers of NEO, one of the world's largest platforms for building and deploying decentralized applications (dApps). The method is very similar to PoS,i.e vote to choose delegates and speakers.
All NEO token holders (ordinary nodes) have the right to vote for delegates irrespective of the number of tokens that they hold.
Any token holder can become a delegate if he fulfills the following criteria:-
· Reliable internet connection.
· Specific equipment.
· 1,000 GAS.
A speaker is chosen randomly out of these delegates. These speakers are expected to keep track of all the transactions and record them on the network. A new block is formed from the transactions that need to be validated. Once formed, the speaker sends the proposal of verifications to the elected delegates. If more than two-thirds of the delegates reach a consensus and validate it, the block is added to the blockchain.
Let me know in the comments what you feel about this article. Do read my other articles where I dig deeper into various technical aspects of Blockchain.
submitted by RumaDas to u/RumaDas [link] [comments]

Staking — The New Way to Earn Crypto for Free

Staking — The New Way to Earn Crypto for Free

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Airdrops are so 2017, free money was fun while it lasted but now when someone says free money in crypto, the first thoughts are scams and ponzi schemes. But in 2020, there is a way to earn free money, in a legitimate, common practice, and logical manner — staking.
Staking is the core concept behind the Proof-of-Stake (PoS) consensus protocol that is quickly becoming an industry standard throughout blockchain projects. PoS allows blockchains to scale effectively without compromising on security and resource efficiency. Projects that incorporate staking include aelf, Dash, EOS, Cosmos, Cardano, Dfinity and many others.

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PoW — Why change

First, let’s look at some of the issues facing Proof-of-Work (PoW) consensus that led to the development of PoS.
  1. Excessive energy consumption — In 2017, many concerns were raised over the amount of electricity used by the bitcoin network (Largest PoW blockchain). Since then the energy consumption has increased by over 400%, to the point where 1 single transaction on this network has the same carbon footprint of 736,722 Visa transactions or consumes the same amount of electricity as over 20 U.S. households.
  2. Varying Electricity Costs — The profit of any miner on the network is tied to two costs, the initial startup cost to obtain the hardware and infrastructure, and more critically, the running cost of said equipment in relation to electricity usage. Electricity costs can vary from fractions of a cent per kWh to over 50 cents (USD) and in some cases it is free. When a user may only be earning $0.40 USD per hour then this will clearly rule out certain demographics based purely on electricity costs, reducing the potential for complete decentralization.
  3. Reduced decentralization — Due to the high cost of the mining equipment, those with large financial bases setup mining farms, either for others to rent out individual miners or entirely for personal gains. This results in large demographic hotspots on the network reducing the decentralized aspect to a point where it no longer accomplishes this aspect.
  4. Conflicted interests — The requirements of running miners on the network are purely based on having possession of the hardware, electricity and internet connection. There are no limits to the amount a miner can earn, nor do they need to hold any stake in the network, and thus there is very little incentive for them to vote on upgrades that may benefit the network but reduce their rewards.
I want to take this moment to mention a potential benefit to PoW that I have not seen anyone mention previously. It is a very loose argument so don’t take this to heart too strongly.
Consistent Fiat Injection — The majority of miners will be paying for their electricity in fiat currency. At a conservative rate of $0.1 USD per kWh, the network currently uses 73.12 TWh per year. This equates to an average daily cost of over $20 million USD. This means every day around $20 million of fiat currency is effectively being injected into the bitcoin network. Although this concept is somewhat flawed in the sense that the same amount of bitcoin will be released each day regardless of how much is spent on electricity, I’m looking at this from the eyes of the miners, they are reducing their fiat bags and increasing their bitcoin bags. This change of bags is the essence of this point which will inevitably encourage crypto spending. If the bitcoin bags were increased but fiat bags did not decrease, then there would be less incentive to spend the bitcoin, as would see in a staking ecosystem.

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PoS Variations

Different approaches have been taken to tackle different issues the PoS protocol faces. Will Little has an excellent article explaining this and more in PoS, but let me take an excerpt from his piece to go through them:
  • Coin-age selection — Blockchains like Peercoin (the first PoS chain), start out with PoW to distribute the coins, use coin age to help prevent monopolization and 51% attacks (by setting a time range when the probability of being selected as a node is greatest), and implement checkpoints initially to prevent NoS problems.
  • Randomized block selection — Chains like NXT and Blackcoin also use checkpoints, but believe that coin-age discourages staking. After an initial distribution period (either via PoW or otherwise), these chains use algorithms to randomly select nodes that can create blocks.
  • Ethereum’s Casper protocol(s) — Being already widely distributed, Ethereum doesn’t have to worry about the initial distribution problem when/if it switches to PoS. Casper takes a more Byzantine Fault Tolerant (BFT) approach and will punish nodes by taking away (“slashing”) their stake if they do devious things. In addition, consensus is formed by a multi-round process where every randomly assigned node votes for a specific block during a round.
  • Delegated Proof-of-Stake (DPoS) — Invented by Dan Larimer and first used in Bitshares (and then in [aelf,] Steem, EOS, and many others), DPoS tackles potential PoS problems by having the community “elect” delegates that will run nodes to create and validate blocks. Bad behavior is then punished by the community simply out-voting the delegated nodes.
  • Delegated Byzantine Fault Tolerance (DBFT) — Similar to DPoS, the NEO community votes for (delegates) nodes, but instead of each node producing blocks and agreeing on consensus, only 2 out of 3 nodes need to agree on what goes in every block (acting more like bookkeepers than validators).
  • Tendermint — As a more sophisticated form of DBFT and a precursor to Casper, Jae Kwon introduced tendermint in 2014, which leverages dynamic validator sets, rotating leader elections, and voting power (i.e. weight) that is proportional to the self-funding and community allocation of tokens to a node (i.e. a “validator”).
  • Masternodes — First introduced by DASH, a masternode PoS system requires nodes to stake a minimum threshold of coins in order to qualify as a node. Often this comes with requirements to provide “service” to a network in the form of governance, special payment protocols, etc…
  • Proof of Importance (POI)NEM takes a slightly different approach by granting an “importance calculation” to masternodes staking at least 10,000 XEM. This POI system then rewards active nodes that act in a positive way over time to impact the community.
  • “Proof-of-X” — And finally, there is no lack of activity in the PoS world to come up with clever approaches and variants of staking (some are more elaborate than others). In addition to BFT protocols such as Honeybadger, Ouroboros, and Tezos, for further reading, also check out “Proof-of-”: Stake Anonymous, Storage, Stake Time, Stake Velocity, Activity, Burn, and Capacity.
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Earning Your Stake

In order to understand how one can earn money from these networks, I’ll break them down into 3 categories: Simple staking, Running nodes, and Voting.
Simple Staking - This is the simplest of the 3 methods and requires almost no action by the user. Certain networks will reward users by simply holding tokens in a specified wallet. These rewards are generally minimal but are the easiest way to earn.
Running a node - This method provides the greatest rewards but also requires the greatest action by the user and most likely will require ongoing maintenance. Generally speaking, networks will require nodes to stake a certain amount of tokens often amounting to thousands of dollars. In DPoS systems, these nodes must be voted in by other users on the network and must continue to provide confidence to their supporters. Some companies will setup nodes and allow users to participate by contributing to the minimum staking amount, with a similar concept to PoW mining pools.
Voting - This mechanism works hand in hand with running nodes in relation to DPoS networks. Users are encouraged to vote for their preferred nodes by staking tokens as votes. Each vote will unlock a small amount of rewards for each voter, the nodes are normally the ones to provide these rewards as a portion of their own reward for running a node.

Aelf’s DPoS system

The aelf consensus protocol utilizes a form of DPoS. There are two versions of nodes on the network, active nodes & backup nodes (official names yet to be announced). Active nodes run the network and produce the blocks, while the backup nodes complete minor tasks and are on standby should any active nodes go offline or act maliciously. These nodes are selected based upon their number of votes received. Initially the top 17 nodes will be selected as active nodes, while the next 100 will stand as the backup ones, each voting period each node may change position should they receive more or less votes than the previous period. In order to be considered as a node, one must stake a minimum amount of ELF tokens (yet to be announced).

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In order to participate as a voter, there is no minimum amount of tokens to be staked. When one stakes, their tokens will be locked for a designated amount of time, selected by the voter from the preset periods. If users pull their tokens out before this locked period has expired no rewards are received, but if they leave them locked for the entire time frame they will receive the set reward, and the tokens will be automatically rolled over into the next locked period. As a result, should a voter decide, once their votes are cast, they can continue to receive rewards without any further action needed.
Many projects have tackled with node rewards in order to make them fair, well incentivized but sustainable for everyone involved. Aelf has come up with a reward structure based on multiple variables with a basic income guaranteed for every node. Variables may include the number of re-elections, number of votes received, or other elements.
As the system matures, the number of active nodes will be increased, resulting in a more diverse and secure network.
Staking as a solution is a win-win-win for network creators, users and investors. It is a much more resource efficient and scalable protocol to secure blockchain networks while reducing the entry point for users to earn from the system.
submitted by Floris-Jan to aelfofficial [link] [comments]

Be careful with RaiBlocks. It's a coin with a lack of notion of confirmations/finality. Your coins are never really confirmed.

I'm sure I'll be accused of spreading FUD, so some brief notes about my bio:
Now about RaiBlocks. I do not want to do a full review and identify actual exploitable weaknesses. I just want to point some red flags which I discovered why reading the whitepaper. Whether these problems are actually exploitable is another question...
So let's start from the fact that there are two white papers. When you google "RaiBlocks white paper", you can find the old one, here.
it defines a concept of confirmations. Some quotes:
This is a clear definition of confirmation. There might be some subtle issues in it, but in normal case this algorithm will work. But it's, basically, a fantastically inefficient version of proof-of-stake, which requires orders of magnitude more bandwidth then necessary. Note that this paper doesn't describe delegation, so you have all nodes voting for each transaction, thus wasting millions time more traffic then necessary.
I think at some point Colin LeMahieu realised that he implemented a shitty version of PoS which doesn't scale, and tried to make it scale. You can find the new version of paper on Raiblocks.net web site. It's much more sciency looking. It seems that Colin was desperate to improve the protocol without changing the architecture. So you see some mental contortions. First:
Since agreements in RaiBlocks are reached quickly, on the order of milliseconds to seconds, we can present the user with two familiar categories of incoming transactions: settled and unsettled. Settled transactions are transactions where an account has generated receive blocks. Unsettled transactions have not yet been incorporated in to the receiver’s cumulative balance. This is a replacement for the more complex and unfamiliar confirmations metric in other cryptocurrencies.
So Colin tells us that we do not need a notion of "confirmed" and can use a notion of "settled" instead. So what's the difference?
Well, Colin is honest with us: settled doesn't mean confirmed. It only means that your node have acknowledged reception of coins, but that doesn't mean that coins are finally yours. There's no notion of finality of this system. Delegates can replace blocks with their votes on any time, so your money might disappear weeks after it was settled.
Without explicit voting on every transaction, you don't have a notion of confirmation or finality.
Another red flag:
... a fork must be the result of poor programming or malicious intent (double-spend) by the account’s owner. Upon detection, a representative will create a vote referencing the block ˆbi in it’s ledger and broadcast it to the network.
So conflicts, or forks, are resolved through voting. But how are they detected?
If a node can identify a conflict, it might be able to resolve it. But detection of discrepancy is one of major topics of consensus.
E.g. suppose Alice's node received version 1 of a block, while Bob's node received version 2. If they do communicate, they won't be aware of the conflict.
So how are conflicts detected in the RaiBlocks? The paper doesn't define this, but it mentions that block messages are sent between nodes, so a node can detect conflict when it receives different versions of blocks from different peers.
So conflict detection is possible in this model, but is it reliable? There's no evidence for that.
In theory, if you can guarantee that every message is delivered, you can achieve reliable conflict detection. But in practice, networks are not reliable. And you do not want full connectivity anyway (each node talking with each other node is fantastically expensive). And on top of that, RaiBlocks uses UDP network protocol, which is unreliable. There's no guarantee of message delivery. And if messages are lost, conflict might be undetected, thus Alice's node will think she received coins from Bob while the rest of the network will think otherwise.
This topic is not discussed in the paper.
RaiBlocks, not having a proper blockchain, also lacks a way to compare state of two nodes. In Bitcoin you only need to compare the latest hash: if hash is the same, then nodes are in perfect sync. But in RaiBlocks you have multiple "blockchains" for each account, so basically you have to compare state of every account to check that you are in sync. This is incredibly wasteful.
So, to summarize, I'd describe RaiBlocks as "UDP coin". It might work quite well if network conditions are good and messages are delivered. It can even tolerate some degree of packet loss. But there's no proof that it works in all conditions, in fact, the paper avoids the topic. There's no notion of confirmation. You never know if you received coins or not. There are probably many conditions in which the system would fail.
I'm not interested in finding an actual failure, it's not a good use of my time. So treat the above as an opinion of a guy who has significant knowledge about consensus algorithm upon reading the Raiblocks papers. Feel free to ignore it. :)
submitted by killerstorm to CryptoCurrency [link] [comments]

Daily analysis of cryptocurrencies 20191001(Market index 38 — Fear state)

Daily analysis of cryptocurrencies 20191001(Market index 38 — Fear state)

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Crypto Startup Drops References To XRP-Powered xRapid, xCurrent And xVia From Its Website Ripple appears to be quietly rolling out a major rebranding. The San Francisco startup has removed nearly all references to its three main cross-border payment products from its website: xCurrent, xRapid and xVia. Ripple appears to be streamlining its message by shining the spotlight on RippleNet, which is the umbrella name for the 200-plus companies that utilize Ripple’s cross-border payments technology.
Number Of BTC Whale Transfers Up By Nearly 150% as of 00:00, Oct 1 (UTC), 1) the number of Bitcoin active addresses is on a day-to-day increase of 30.37%, marking 624,900. 2) The number of Bitcoin on-chain transactions is 310,400 with a day-to-day increase of 9.87%. 3) The number of BTC whale transfers (over 100 BTC each) is 752 with a day-to-day increase of 149.83%. 4) Active addresses on Ethereum report 332,300 with a day-to-day increase of 19.14%. Note: On-chain transactions and active addresses of a cryptocurrency have a positive correlation with its price.
Six Japanese Securities Giants Form Self-Regulatory Body For STOs Six Japanese financial giants teamed up to establish an association to self-regulate security token offerings (STO) in the country, Monex announced on Tuesday, Oct 1.Dubbed Japan Security Token Offering Association, it has been established by Monex Group, Daiwa Securities Group, kabu.com Securities, Nomura Securities, Rakuten Securities, and SBI Securities. The proposed guidelines of the self-regulatory body will be effective from October 1, 2019.
Financial Giant Fidelity Backs Bitcoin Derivatives Yield Fund The Los Angeles-based Wave Financial has announced the launch of a Bitcoin derivatives-based yield fund, and Fidelity will provide custody for the fund’s BTC reserves. The Wave BTC Income & Growth Digital Fund is an incorporated fund stemming from the British Virgin Islands. The fund plans to let investors generate yield by selling call options on the BTC reserves held in the Fund.

Encrypted project calendar(October 01, 2019)

HT/Huobi Token: The financial base public link jointly created by Firecoin and Nervos is expected to be open source in October. RVN/Ravencoin: Ravencoin (RVN) Ravencoin will perform a hard fork on October 1. SHND/StrongHands: StrongHands (SHND) SHND 1000: The 1st currency exchange event will be held on October 1. ADA/Cardano: Cardano (ADA) plans to hold technical consensus meeting in Amsterdam on October 1st XRC/Bitcoin Rhodium: Bitcoin Rhodium (XRC) will record account balance awards on October 1st PPC/Peercoin: Peercoin (PPC) will perform Peercoin v0.8 (code tang lang) hard fork on October 1st

Encrypted project calendar(October 02, 2019)

BNB/Binance Coin: The 2019 DELTA Summit will be held in Malta from October 2nd to 4th. The DELTA Summit is Malta’s official blockchain and digital innovation campaign. BTC/Bitcoin: The B.Tokyo 2019 conference will be held in Tokyo from October 2nd to 3rd. CAPP/Cappasity: The Cappasity (CAPP) London Science and Technology Festival will be held from October 2nd to 3rd, when the Cappasity project will be attended by the Science and Technology Festival.

Encrypted project calendar(October 03, 2019)

ETC/Ethereum Classic: The 2019 Ether Classic (ETC) Summit will be held in Vancouver on October 3–4 ANT/Aragon: Aragon (ANT) is the AGP for the new mandatory community review period, with a deadline of October 3.

Encrypted project calendar(October 04, 2019)

KNC/Kyber Network: Kyber Network (KNC) will update the maxGasPrice parameter in the Kyber Network contract from 100 gwei to 50 gwei within 2 weeks after October 4.

Encrypted project calendar(October 05, 2019)

Ontology (ONT): Ony Ji will attend the blockchain event in Japan on October 5th and explain the practical application based on the ontology network.

Encrypted project calendar(October 06, 2019)

SPND/ Spendcoin: Spendcoin (SPND) will be online on October 6th

Encrypted project calendar(October 07, 2019)

GNO/Gnosis: Gnosis (GNO) will discuss the topic “Decentralized Trading Agreement Based on Ethereum” will be held in Osaka, Japan on October 7th. Kyber and Uniswap, Gnosis and Loopring will attend and give speeches.

Encrypted project calendar(October 08, 2019)

BTC/Bitcoin: The 2nd Global Digital Mining Summit will be held in Frankfurt, Germany from October 8th to 10th.

Encrypted project calendar(October 09, 2019)

CENNZ/Centrality: Centrality (CENNZ) will meet in InsurTechNZ Connect — Insurance and Blockchain on October 9th in Auckland.

Encrypted project calendar(October 10, 2019)

INB/Insight Chain: The Insight Chain (INB) INB public blockchain main network will be launched on October 10. VET/Vechain: VeChain (VET) will attend the BLOCKWALKS Blockchain Europe Conference on October 10. CAPP/Cappasity: Cappasity (CAPP) Cappasity will be present at the Osaka Global Innovation Forum in Osaka (October 10–11).

Encrypted project calendar(October 11, 2019)

OKB/OKB: OKB (OKB) OKEx series of talks will be held in Istanbul on October 11th to discuss “the rise of the Turkish blockchain.”

Encrypted project calendar(October 12, 2019)

BTC/Bitcoin: The 2019 Global Mining Leaders Summit will be held in Chengdu, China from October 12th to 14th.

Encrypted project calendar(October 14, 2019)

BCH/Bitcoin Cash: The ChainPoint 19 conference will be held in Armenia from October 14th to 15th.

Encrypted project calendar(October 15, 2019)

RUFF/RUFF Token: Ruff will end the three-month early bird program on October 15th KAT/Kambria: Kambria (KAT) exchanges ERC20 KAT for a 10% bonus on BEP2 KAT-7BB, and the token exchange reward will end on October 15. BTC/Bitcoin: The Blockchain Technology Investment Summit (CIS) will be held in Los Angeles from October 15th to 16th.

Encrypted project calendar(October 16, 2019)

BTC/Bitcoin: The 2019 Blockchain Life Summit will be held in Moscow, Russia from October 16th to 17th. MIOTA/IOTA: IOTA (MIOTA) IOTA will host a community event on the theme of “Technology Problem Solving and Testing IoT Devices” at the University of Southern California in Los Angeles on October 16. ETH/Ethereum: Ethereum launches Istanbul (Istanbul) main network upgrade, this main network upgrade involves 6 code upgrades. QTUM/Qtum: Qtum (QTUM) Qtum main network hard fork is scheduled for October 16.

Encrypted project calendar(October 18, 2019)

BTC/Bitcoin: The SEC will give a pass on the VanEck/SolidX ETF on October 18th and make a final decision HB/HeartBout: HeartBout (HB) will officially release the Android version of the HeartBout app on October 18.

After trading to a new monthly low at $7,670, bitcoin started an upside correction against the US Dollar. The BTC/USD pair broke the $8,000 resistance level to start the recent recovery. Moreover, there was a close above the $8,000 level and the 100 hourly simple moving average. As a result, the price climbed above the $8,150 and $8,200 resistance levels.
More importantly, yesterday’s highlighted major bearish trend line was breached with resistance near $8,080 on the hourly chart of the BTC/USD pair. The pair gained strength above $8,300 and surpassed $8,400. It even spiked above the $8,500 level and traded to a new weekly high at $8,525. At the moment, it seems like the price is facing resistance near the $8,500 level.
It might correct lower towards the $8,350 or $8,320 support. Moreover, the 23.6% Fib retracement level of the recent wave from the $7,670 low to $8,525 high is near $8,323 to provide support. If the price fails to stay above $8,300, it could correct lower towards the key $8,050 and $8,000 support levels. Besides, the 50% Fib retracement level of the recent wave from the $7,670 low to $8,525 high could provide support near $8,100.
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Three Laws of BTC Bull and Bear Cycle and Its Applications — Freezing Point Forecast — One

Three Laws of BTC Bull and Bear Cycle and Its Applications — Freezing Point Forecast — One
📷
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TOKEN Roll x FENBUSHI DIGITAL
Analyst: Song Shuangjie
Special Adviser: Shen Bo Rin
Guide:
The fourth price-rising cycle of BTC might commence around May 2019. The mainstream institutions join the game and ETF might be the driving force of the fourth round of price cycle.
Summary:
BTC has undergone three rounds of price cycles. ‘It is different this time’ has always been a terrible lesson for investors. The tokens, typical represented by BTC, are special in nature to other financial products, which makes it easily get mistaken that BTC will go up straightly and never decline. When the cycle power works, the asset price, which was thought to create a different history, will collapse. There are 3 major rules of the BTC price cycle:
A. BTC price cycle is closely related to its halving cycle. A complete BTC price cycle lasts for about four years. The price-rising section will commence one year ahead of the time before the output is halved. The BTC output was halved for the first time at the end of November 2012, and before that the BTC price touched the bottom in November 2011. The BTC output was halved for the second time in July 2016, as the BTC price touched the bottom in August 2015. As you can see, each time BTC output halving, is the start of a price-rising cycle, and the price speeding up begins with it.
B. BTC price fluctuation range decreases as market value increasing. The BTC’s (in circulation) market value varies with its price fluctuations, which means BTC’s price rising makes its market value increases, and the price fluctuation range decreases. It is similar to the historical process of other asset classes. During the first price cycle, the price of BTC rose by 10636 times which was the biggest gain, and the maximum drawdown was declined by 93.76%. During the second price cycle, the price of BTC rose by 623 times, and declined by 83.93% maximum. During the third price cycle, BTC rose by 98.57 times at most, the maximum declining has not been confirmed yet.
C. The innovation led by BTC is constantly evolving and more and more approved by the mainstream. From BTC to Altcoin, from Altcoin to Crowdsale, there are iconic innovations and applications in every price cycle. In the first cycle, the birth and gradual application of BTC was a landmark event. In the second cycle, with the re-emergence of BTC in 2013, the tide of the Altcoins was rampant, and a large number of Altcoins appeared. In the third cycle, Crowdsale began to be popular around the world, and many websites started to provide Crowdsale's news and discussion forum. Since 2017, Crowdsale has dominated the blockchain investment, far exceeding VCs and corporate investment. With the development of blockchain technology, the evolution of digital certification, the improvement of practitioners' awareness, and the evolution of government regulation, the innovation led by BTC has evolved and is more approved by the mainstream.
The third round of the price cycle might come to an end around May 2019, and followed by the fourth round of price cycle. The maximum rise in the BTC's fourth price-rising cycle will be smaller than last three cycles. BTC's increasing market value demands more capital. Digital token shall embrace supervision to absorb more institutional funds. ETF will be a viable solution. In the future, it will shift from Crowdsale to ETF, and from deregulation to embracing supervision.
Risk Tips: ETFs have put capital amount into this market less than that we expected. Quantum computer technology is advancing by leaps and bounds
Content
1 The First Round of Price Cycle .
2 The Second Round of Price Cycle
3 The Third Round of Price Cycle
4 Three Major Rules of BTC Price Cycle
4.1 BTC price cycle is closely related to its halving cycle
4.2 BTC price cycle is closely related to its halving cycle
4.3 BTC-led innovatioized by the mainstream
5 The new journey of BTC will Start in May 2019
List of Graphs
Graph 1: BTC Price Trend in The First Price Cycle (in USD)
Graph 2: BTC price trend in the second round of price cycle (in USD)
Graph 3: The number of tokens in 2013 has increased significantly Graph 4: BTC price trend in the third round of price cycle (in USD)
Graph 5: VIX index and BTC price are negatively correlated
Graph 6: Crowdsale has dominated blockchain investment since 2017 (millions of US dollars)
Graph 7: A large number of Crypto Funds were established in recent years.
Graph 8: ETH price trend (in USD)
Graph 9: ETH price is positively related to the size of Crowdsale financing
Graph 10: Lightning network capacity continues to grow
Graph 11: The number of lightning network channels continues to grow
Graph 12: The global Crowdsale growth rate slows down in 2018 .
Graph 13: Crowdsale’s fundraising has started to decline since 2018 .
Graph 14: Significant growth in venture capital in the blockchain sector in 2018
Graph 15: BTC block reward trend reduction
Graph 16: BTC price cycle and halving mechanism (in USD)
Graph 17: BTC market value scale trend increase
Graph 18: BTC price fluctuations become smaller
Graph 19: Admission to mainstream institutions has continued since the end of 2018
Graph 20: The third round of the price cycle may be completed around May 2019
Graph 21: The current stage of the price cycle has been probable more than half, and the downside space is limited
History doesn't repeat itself, but it does rhyme. --Mark Twain
‘It is different this time’ has always been a terrible lesson for investors. The tokens, typical represented by BTC, are special in nature to other financial products, which results in producing an idea, in some investors’ mind, that the price of BTC will go up straightly and never decline. When the cycle power works, the asset price, which was thought to create a different history, will collapse. No matter it is the A-share market of 2007 or the one of 2015, or any ‘bubble time’ in human history, the cycle power played its role. As far as BTC is concerned, its price has also experienced three rounds of cycles.
In addition, when the asset price is in a dark period of continuous decline and weak rebound, the power of the cycle also works. As long as it is a valuable asset, its price will eventually bounce back from the bottom. Opportunities have always been there, if you have an asset with high potential in hand. In the dark moments before dawn, the more you are afraid, the more you will be confused. At this time, you have to believe in the value investing. ‘Be fearful when others are greedy and be greedy when others are fearful’, not the other way around. That means, we shall invest reversely, buying undervalued assets gradually in the bottom region of price decline cycle; selling overvalued assets gradually in the top region of price-rising cycle; and following the trend in other time region of the cycle.
1 The First Round of Price Cycle
The first round of BTC price cycle lasted for 610 days, from March 2010 to November 2011, and in this cycle, BTC price rise rate was the highest of BTCs three price cycles.
The price rise stage of the first round of price cycle, from March 2010 to June 2011, lasted for 447 days. The starting price was 0.003 USD/piece, and the highest price was 31.91 USD/piece, the rise rate reached 10,636 times. The price decline section of the first round of price cycle, from June 2011 to November 2011, lasted for 163 days. In this price decline section, the starting price of BTC was $31.91 per piece, and the lowest price was $1.99 per piece. The decline rate was 94%.
On May 22, 2010, the famous BTC Pizza dealt. Laszlo Hanyecz from Jacksonville, FL, bought two pizzas with 10,000 BTCs. Each price ofBTC is less than 0.01US dollars.
In the first round of the price cycle, there is no explicit positive or negative factors causing BTC's price huge fluctuation. Fluctuations are more like in a “natural” situation. Before the first BTC bubble bursted in November 2011, its price was in a trend of increasing. The reason of rise was that the price base of BTC was very low. With the understanding of BTC gradually getting better, the demand increased, and then, the price rose. For example, June 2011, WikiLeaks and some organizations began accepting BTC donations.
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2 The Second Round of Price Cycle
The second round of BTC price cycle lasted for 1377 days, from November 2011 to August 2015, and in this cycle, the price of BTC exceeded gold for the first time.
The price rise stage of the second round of price cycle, from November 2011 to November 2013, lasted for 743 days. The starting price was $1.99 USD/piece, and the highest price was 1,242 USD/piece, the rise rate reached 623 times. The price decline section of the second round of price cycle. From November 2013 to August 2015, lasted for 634 days. In this price decline stage, the starting price of BTC was 1,242 USD per piece, and the lowest price was 199.57 USD per piece. The decline rate was 84%.
At the second price cycle, the range of application of BTC has been greatly expanded. In November 2012, WordPress began to accept BTC; and in October 2013, the world's first BTC ATM was deployed in a coffee shop in Vancouver where customers could buy and sell BTC. In November 2013, the University of Nicosia announced accepting BTC for tuition, the university's chief financial officer called it "gold of tomorrow"; In addition to some underground economy and gray economy began to accept BTC, BTC is also getting closer to daily life.
The success of BTC popularized altcoins. The first type of altcoin LTC (Litecoin) was created in October 2011, and it is the time when the BTC price came to the end of price decline. In 2011, Namecoin and SwiftCoin were born successively. In 2012, Bytecoin and Peercoin were issued, however, BTC was still in the stage of rising slowly from the bottom, and the market was not hot. Along with the re-emergence of BTC in 2013, the tide of the altcoins is rampant, and a large number of altcoins are issued. According to CoinMarketCap data, there were 66 kinds of altcoins at the end of 2013, while there were less than 10 at the beginning of the year.
The safe-haven properties of BTC are widely approved. BTC was a choice for people in many countries that are in crises. The residents flocked to BTC, hoping to maintain assets value through BTC. This phenomenon has occurred many times during the European debt crisis. For example, in early 2013, in order to get the bailout, the Cyprus government imposed taxes on deposits and imposed strict capital controls. In order to prevent property from shrinking, the Cypriot people rushed to bank runs and exchanged their currencies for BTC. The price of BTC quickly rose from 30 something to 265 US dollars.

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Due to the lack of supervision, BTC is often affected by negative events, which makes the market confidence in the danger of collapsing. In October 2013, the FBI seized approximately 26,000 BTCs from the Silk Road website, causing the BTC price to collapse to 110 US dollars. On December 5, 2013, the People's Bank of China banned the use of BTC by Chinese financial institutions, which made the price of BTC declined. In February 2014, Mt. Gox, the largest BTC exchange at the time, said that 850,000 BTCs of its customers were stolen, worth nearly 500 million US dollars, and BTC prices fell nearly half, from 867 to 439 US dollars.
The emergence of a large number of altcoins caused market bleeding. Since 2014, the number of altcoins has exploded. By August 2015, the number has reached 556, resulting in diversion of funds and market expansion. On May 1, 2013, BTC accounted for 94.29% of the market value of all tokens, and the market value of other tokens except the top 10 tokens was about 1%. By August 25, 2015, the proportion of BTC is about 83%, and the other tokens account for 4%, which is obvious.
No matter how magical token is, it is still a kind of asset. The mean return of value is a basic common sense of investment. The value will pull the price back to it, just like the gravity. The risk increases with the price rises, and the value appears when the price declines. In the rising section of this cycle, the price of BTC rose by 623 times, which is a great rise rate. When the price is too high, and the potential return in the future is insufficient, the attractiveness to new investors will fall, and the old investors will leave and look for more lucrative assets. Once the power of trend investors exhausted, the trend will reverse.
3 The Third Round of Price Cycle
The third round of price cycle of BTC is not over and is currently in the downward phase of the cycle. The price increased from August 2015 and lasted for 845 days till December 2017. The starting price of the price-rising cycle BTC was 199.57 USD/piece, and the highest price was close to 20,000 USD/piece. The rise rate is up to 99 times. Since December 2017, the price started to decline. The price has fallen to the lowest 3,191.30 US dollars up to now, a drop of 84%.
BTC networks expanded rapidly, and BTC has gained increasing recognition among legislators and traditional financial companies. Studies have shown that by November 2013, the commercialization of BTC is no longer driven by the underground economy, but by legitimate businesses. During this price cycle, people from more countries can get in touch with, select, trade and use BTC on a daily basis. In January 2016, Bitcoin computing capacity reached 1 exahash/S for the first time; In March 2016, the Japanese cabinet acknowledged that BTC has a function similar to real money. In 2017, Norway's largest online bank Skandiabanken integrated BTC accounts. In December 2017, Chicago Mercantile Exchange (CME) officially launched BTC futures, which is an important step for BTC to take toward mainstream investment. In October 2018, Fidelity launched its independent subsidiary Fidelity Digital Asset Services to provide digital asset services to institutional customers. In December 2018, the first round of financing was completed by the token exchange Bakkt launched by the Intercontinental Exchange. In February 2019, Nasdaq officially launched - Bitcoin Liquid Index (BLX) and Ethereum Liquid Index (ELX)- two indexes. The pension fund of US invests in the encryption fund, the mainstream organization is accelerating, and the relevant infrastructure is gradually improved.
BTC has become a risky asset. Under the current “three lows” environment - low interest rates, low spreads and low volatility, investors are seeking high returns, which leads to excessive financial risk behaviors and complacency, investors' risk appetite, and high leverage tools and the acceptance of high-risk products has increased, arbitrage transactions have prevailed, liquidity mismatches have been severe, and the overall market is fragile. As the results we can see that, the price of BTC is increasingly correlated with the VIX index (Chicago Options Exchange Volatility Index). A lower VIX index indicates that investors expect less volatility, while a higher VIX indicates higher expected volatility. The lower VIX index indicates that investors are optimistic about S&P 500, while the higher VIX means that investors are uncertain about the market outlook. When market volatility declines, investors buy stocks and other types of risk assets, when the market volatility rises, investors sell risky assets.
Risk assets will be dumped when risk appetite reduces panic market. BTC bid farewell to the nature of safe-haven assets and become a risky asset. Since December 2017, with the decline of the VIX index, the price of BTC rises, and the price of BTC is negatively correlated with the VIX index. At the beginning of 2018, the VIX index skyrocketed and BTC fell rapidly. In October 2018, the global market risk aversion trend increased, the VIX index went up, and the BTC price also fell sharply.

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Crowdsale has become the main financing method in the blockchain field. Crowdsale was born in the second round of the price cycle, Mastercoin did the world's first Crowdsale in July 2013. In 2014, Ethereum also raised funds through Crowdsale, when the price of ETH was less than 0.22 USD per piece. After 2016, when it is in the third price cycle, Crowdsale is popular around the world, and many websites began to provide information and discussion communities for Crowdsale. From a global perspective, Crowdsale has dominated the blockchain investment since 2017, far exceeding VCs and corporate investment. In 2017, Crowdsale raised 7.4 billion US dollars, and in the first half of 2018, Crowdsale Raised 12 billion US dollars.
The Crypto Fund emerged. Along with the Crowdsale boom, a large number of Crypto Funds were created. The number of Crypto Funds newly established in 2017 was nearly 200, far exceeding the total amount of the Crypto funds created in previous years, which fully demonstrated that, with the rise in the price of the token, the enthusiasm of funds to blockchain field is high.

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The rise of blockchain 2.0, the Crowdsale tide pushed ETH up nearly 10,000 times. In the third round of the BTC (Token) price cycle, the biggest star is not BTC, but ETH. Crowdsale after 2016, issued tokens mainly through Ethereum, which represented the rise of ETH in the blockchain 2.0 era. Crowdsale prosperity boosted the rise of ETH. On January 13, 2018, the price of ETH rose to a peak of 1,432.88 US dollars per piece, which is 6512 times rise rate comparing to its initial price.
The ETH price has a significant positive correlation with the growth rate of Crowdsale financing. The growth rate of Crowdsale financing decreased by 69.23% in 2015, the price of ETH decreased by 66.30% in the same year. In 2016, the growth rate of Crowdsale financing increased by 2737.5%, and ETH increased by 753.74%. In 2017, the growth rate of Crowdsale financing increased by 3,159.91%, and ETH rose by 8809.91%.

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Plan for public blockchain performance improvement emerged, and significant progress were made in lightning network. With the popularization of blockchains, the congestion of BTC and other public chains has gradually emerged, and performance has become one of the bottlenecks in the blockchain industry. In 2018, the performance-improvement plan of the public blockchain emerged. Improvements were made to the difference in blockchain logical architecture, including on-chain capacity expansion schemes by improving consensus mechanism and sharing, and off-chain capacity expansion schemes by status channel, sidechain, off-chain computing, and Layer 0 expansion scheme that enhance the scalability of the blockchain by optimizing the underlying data transmission protocol of the blockchain. Since the main net of BTC lightning network goes live, the number and capacity of channels have been increasing. As of March 10, 2019, the capacity has reached 790 BTC, and the number of channels has reached 35,464.

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Note: The Unique channel refers to the channel that is directly connected to the node for the first time, and the Duplicate channel refers to the channel between the nodes that have been connected.
The standardization of the token is promoted. On January 22, 2018, South Korea required all BTC dealers to disclose their identity, thereby prohibiting anonymous trading of BTC. During the first quarter of 2018, Facebook, Google and Twitter prohibited the promotion of Crowdsale, while the US Securities and Exchange Commission investigated a large number of Crowdsale projects, and issued bans to some Crowdsale projects. Regardless of the government's attitude towards the token, it is committed to incorporating the token into the regulatory framework for legal compliance.
The Crowdsale bubble bursted and the magical story is no longer magical. According to incomplete statistics, in 2017, 871 Crowdsale were completed in the world. These projects involved directions as distributed analogous Facebook, twitter, amazon, and next-generation public chain (blockchain 3.0), etc. These projects have raised a large amount of funds, but the actual operating is worrying. The promotion of the project dissipated a large amount of funds, but the actual development progress was far less than expected, resulting in the market's expectation failure and the diversion of funds from the mainstream token. Superimposed the impact of more and more negative news, technical adjustment requirements and market sentiment fluctuation. The market enters a negative cycle, as the decline begins.

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In 2018, there has been rapid growth in venture capital in the blockchain sector, indicating that venture capital still have good expectations about the application and future prospects of the blockchain. According to Coindesk data, the risk investment in the blockchain sector in 2018 reverse the decline of 2017, year-on-year increase of 257%, and the total amount for the year 2018 reached 3.1 billion US dollars.

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BTC peaked first. In terms of time, in the third round of the price cycle, the first to peak is BTC, which reached 19,870.62 USD per piece in December 2017. The peak of ETH happened later than BTC, in January 2018. EOS did not peak until April. The important reason for BTC to peak first is that the amount of funds needed to support the BTC market value scale is the largest. When the market’s ability to carry on is not enough, it is inevitable for the price of BTC to react first.
4 Three Major Rules of BTC Price Cycle
The price cycle of BTC has obvious regularity, and some unchanging factors determine the price fluctuation of BTC.
4.1 BTC price cycle is closely related to its halving cycle
One full BTC price cycle lasts approximately four years. In the first round of price cycles, the measure of time span is not reliable because of the availability of BTC trading prices. The second round of the price cycle lasted for 1,377 days, from November 2011 to August 2015, about four years.
The price-rising cycle of BTC is closely related to its halving period, and the price-rising cycle starts one year before each halving. At the end of November 2012, the first production of BTC was halved, that is, the number of BTC generated by each block was 25, and in November 2011, the price of BTC has bottomed out, and the halving of BTC is one year after the second price-rising cycle. In July 2016, production of BTC was halved the second time, that is, the number of BTC generated by each block was 12.5. In August 2015, BTC had already bottomed out, and BTC's production was reduced again one year after the third price-rising cycle started.

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BTC output halving blows the horn of each price-rising cycle, and the price speeding up begin. Although it is not BTC output halving that brings the price-rising cycle, but the halving of BTC output significantly reduced the growth rate of BTC supply, speeding up the rise of BTC price and the price-rising cycle. From November 2011 to November 2012, before the halving of BTC output, BTC increased by 6.74 times in one year. From November 2012 to November 2013, BTC price increased by 99.57 times. In the third price-rising cycle, BTC price rose by a maximum of 2.87 times in about 11 months before the production cut. After halving, BTC price rose by a maximum of 29.73 times in about 11 months.

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4.2 BTC price cycle is closely related to its halving cycle
The change in the market value scale of BTC (circulation) is mainly caused by its price fluctuations, and has little to do with the changes in the total amount of BTC output. According to CMC data, by April 28, 2013, the total amount of BTC that had been mined was about 11.18 million pieces, which is more than 53% of the total amount of BTC of 21 million pieces. The halving mechanism of BTC also accelerated the marginal decline of BTC total growth rate. Compared with the amount of BTC already mined, the new supply of BTC is very insignificant. In addition, the volatility of BTC prices far exceeds the volatility of BTC's total output, and the market value of BTC fluctuates with its price.
The market value of BTC has increased in trend. Because of the trend of BTC price-rising, the number of BTC total output has also increased in one direction, and the market value of BTC has increased in the long run. According to CMC data, on April 28, 2013, BTC's market value in circulation was only 1.5 billion US dollars. By the peak of the third price-rising cycle, the market value increased to 326.1 billion US dollars, and the current market value also reached 113.8 billion US dollars, increased by 74.87 times.
The price volatility of BTC is gradually getting smaller. With the increasing of BTC market value in trend, the BTC market is becoming more and more mature, more and more accepted by the public, more and more professional organizations are participating, the compliance operation is becoming mainstream, and the BTC price volatility is decreasing. Similar to the historical process of other asset classes, and the same thing is repeated again and again. In the first price cycle, the price of BTC increased by 10636 times, and the fell by 93.76% maximum. In the second price cycle, the price of BTC increased by 623 times, and fell by 83.93% maximum. In the third price cycle, the maximum increase of BTC price was 98.57 times, and the biggest decline has not been confirmed

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4.3 BTC-led innovation continues to evolve and is more and more recognized by the mainstream
From BTC to Altcoin, from Altcoin to Crowdsale, there are iconic innovations and applications in every price cycle. In the first cycle, the birth and gradual application of BTC was a landmark event. In the second cycle, with the re-emergence of BTC in 2013, the tide of the Altcoins was rampant, and a large number of Altcoins appeared. In the third cycle, Crowdsale began to be popular around the world, many websites started to provide Crowdsale's news and discussion forum. Since 2017, Crowdsale has dominated the blockchain investment, far exceeding VCs and corporate investment.
The original intention of Nakamoto to create BTC is to establish a more efficient means of trading that can be electronically transferred in a safe, verifiable and non-tamperable form. During the early days of bitcoin and blockchain development, this drove the development of most applications of BTC and blockchain. However, with the development of blockchain technology, the evolution of digital token, the recognition of practitioners, and the evolution of government regulation, the changes led by BTC continue to evolve and gain more mainstream recognition.
More and more countries recognize that the blockchain reflects its unique value in many fields. The government has gradually incorporated digital token into regulation, and mainstream institutions are increasingly recognizing BTC. In 2017, the Chicago Mercantile Exchange (CME) officially launched BTC futures, as BTC took an important step toward mainstream investment, improving the accessibility of BTC to traditional financial institutions. In March 2017, Cameron's Cliveworth and Taylor W. Crawworth brothers attempted to submit an application to the US Securities and Exchange Commission for BTC ETF (transactional open-ended index fund). Although on September 22, 2018, US Securities and Exchange Commission rejected nine BTC ETF applications, the approval of BTC ETF application is a high probability event in the long run. With the continuous improvement of related infrastructure and the gradual maturity of the market, the pace of institutional entry has shown signs of acceleration. Since the end of 2018, news about the organization of encrypted assets by mainstream institutions has continued.

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5 The new journey of BTC will Start in May 2019
The fourth price-rising cycle of BTC will start in May 2019, and mainstream institutions will enter the market, while ETF may become the core trend of the fourth round of BTC price cycle.
From the perspective of supply, the third halving of BTC begins around May 21, 2020. The price-rising cycle of BTC is closely related to its halving period. The price-rising cycle starts about one year before halving. From this perspective, the BTC price-rising cycle may be opened around May 2019.

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From the time dimension, the complete BTC price cycle lasts for about four years. The third round of the price cycle, which started in August 2015, will be completed around August 2019, and the fourth round of the price cycle of BTC will begin thereafter. Considering that the data in the second round of the price cycle is more reliable, only the second round of price cycle data is used as the measurement standard, the complete price cycle is 1377 days, about 3 years and 9 months, and the third round price cycle may end around May 2019.
Combined with the previous two BTC price cycles, the downturn phase of the current price cycle has been probably more than half, and further downside space is limited. In the first two rounds of the price cycle, the duration of the downlink phase is less than the duration of the uplink phase. The duration of the third phase of the price cycle has been confirmed (845 days), while the duration of the downturn phase has been more than half of the upstream phase (450 days). From the first two rounds of the price cycle, the rapid decline in prices occurred in the early stage of the downtrend phase. The price fluctuations of BTC in the second half of the downturn phase have been significantly reduced. The BTC price declines reached 61% in the first half and 74% in the second round of the price cycle, and the corresponding maximum declines in BTC were 94% and 84% respectively. In the current round of the price cycle, the biggest drop has reached 84%, so take it from now, even if the price is further down, the downside space is already limited.
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Note: The data of the third round of the price cycle and the total duration are up to March 12, 2019.
From the price dimension, the downside space of the current round of BTC prices is limited, and the maximum increase of BTC's fourth price-rising cycle will become smaller. In the first price cycle, the price of BTC increased by 10636 times, and fell by 93.76% maximum. In the second price cycle, the price of BTC increased by 623 times, and fell by 83.93% maximum. In the third price cycle, the maximum increase of BTC price was 98.57 times, and the biggest decline has not been confirmed. On February 6, 2018, BTC fell to a minimum of 3,191.30 US dollars per piece, drop by 84.07%, has reached the low of second round of price cycle, from the perspective of price adjustment, BTC price downside has been more limited. The maximum increase in the fourth price-rising cycle of BTC will be smaller.
From the perspective of risk, after a year of continuous adjustment, BTC prices have fully fallen, risks have been gradually released, and investor’s risk appetite has risen to create favorable conditions for BTC prices to stabilize. Beginning at the end of December 2018, the VIX index has fallen, and now it has reached 15 or below. The investor's risk appetite has gradually picked up, creating favorable conditions for the BTC price to rise stably.
Last but not least, from the perspective of capital, the mainstream institutions accelerated their entry and many positive signals were released. With the continuous improvement of related infrastructure and the gradual maturity of the market, the pace of institutional entry has shown signs of acceleration. Since 2018, on the one hand, the entry of mainstream institutions can bring incremental funds to the entire market, on the other hand, it also contributes to the formal development of the entire industry.
The value of the BTC's market value in circulation continues to increase, and the digital token embraces regulation. It is expected that the ETF will be the core trend in the fourth price cycle. As the value of the BTC and digital token market increases, their use will be more tied-up to legitimate use than illegal activities. According to the US Drug Enforcement Administration (DEA) data, only 10% of the current BTC transactions is related to illegal activities and 90% is used for legal transactions. BTC's increasingly large market value requires more financial support. Digital token will embrace supervision to absorb more funds, and ETF will be a viable solution. In the future, there is going to be an evolution from Crowdsale to ETF, from regulation to embrace supervision.
Note:
Although in this report, we try to predict the bottom and time of Token, especially BTC, by using time and space cycle, we would like to tell investors that it is very dangerous to invest basing on a specific dot and time. An investment shall base on the assessment of the value of the token.
Here are our suggestions: 1. Do not try to predict the market. Mistakes are liable to happen when you try to predict market harshly. 2. Feel the cycle. Cycle is always there, because of the constant human nature;3. Be with a good Token, which will bring you more chance to win. 4.Keep valuation in mind. The most important thing in value investing is to keep the valuation in mind. If the price is reasonable, everything is getable. The key is the difference between price and value (Absolute valuation method is not available with Token because of its specialty. However, a relative valuation method can be applied. Please refer to Token Toll’s report series).
Notions:
For some reasons, some definition in this report are not very defined, such as: Token, Digital Token, Digital Currency, Currency, Crowdsale, etc.
If you have any questions, be free to call us to discuss with us.

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submitted by Token_Roll to u/Token_Roll [link] [comments]

Start Here for Much Wallet WOW!

EDIT 2017-02-10: A word about Nodes

There is a discussion about nodes that came up today, where it seems I'm discouraging people from running the full QT/Core client. Yes and No. What I'm trying to make sure people understand is how things work, and that it is NOT mandatory to run a client in order to use Dogecoins (and yes, I realise that browser-based tools like coinb.in and wallet sweepers are 'clients' by strict definition).
That said, more nodes is absolutely a good thing for the network. Preferrably full nodes. How do you run a full node? Just run Core/QT and open up Port 22556 on your router so it can connect to more than 8 peers. What will it cost you? You need your machine to be on 24/7/365, you need enough storage for the full blockchain (currently about 20Gb. Bitcoin is over 120Gb) and enough bandwidth to keep it in sync and share blocks with peers. A couple of Gb a month, most likely. This is best done with a desktop on a wired broadband link. Or maybe a hosted VM in the cloud. :)

EDIT 2017-01-09: Wallets WITHOUT Clients

Since I started helping people on /BitcoinBeginners, I'm getting a lot of questions about how to use wallets without running clients or trusting third parties. So here are a couple of resources that will make that possible, and not just for Dogecoin:
Multi-Coin Wallet Generator Now supporting 129 currencies! Coinb.in Start by setting the currency, found in the gear wheel in the Broadcast tab. Dogecoin Wallet Sweeper Redeem 'paper' wallets containing up to about 100 UTXOs. Bitinfo Charts My favourite block explorer, handles a bunch of cryptos.
Using these resources, it is possible to hold, receive and spend coins in various currencies, without having to run QT or a 'lite' client. You can also download and run the pages on your own device.

EDIT 2016-11-23: SEMANTICS about MINING! :P

Even though there is already a section on mining below, it has been suggested given the huge number of posts on the subject that this needs to be made clearer. Since people get their panties in a twist over the word 'dead', lets change that...

MINING IS DEAD!

MINING DOGECOIN IS UNPROFITABLE!

Put simply, there is no way to mine Dogecoin and make a profit because of the massive hashpower provided by industrial-scale Litecoin miners. Mining Doge directly stopped being viable when our hashrate exploded with the introduction of AuxPoW. Mining with CPU's and GPU's died when ASICs were introduced. And mining with a laptop WILL kill your laptop and cost you a fortune to repair or replace. Mining Litecoin with an exchange that also mines Doge and others will earn less than the electricity consumed, and you won't recover your costs. Probably ever, but certainly not in any reasonable time.
Mining other currencies may be a thing, but that's beyond our scope here. This is /Dogecoin, not /GetRichMiningCryptos after all. If you want to mine the newest scamcoin for fun and profit, look elsewhere for advice. :/
Oh, and most important:

READ BEFORE YOU POST!

At any given time, there are half a dozen posts on the frontpage just like the one you're about to write, where the answers have already been given. Read them. Don't make people waste their time repeating themselves because you were too lazy to bother reading stuff. :P
So there I was, having a quiet Sundy arvo bludge, as you do, when 42points turned up on Facebook and asked me to write a new sticky post for /dogecoin. Why would he do this, when he should be having a bludge himself, I hear you ask? Well, seems he was doing exactly that, and wanted to fob off the work he’s too slack to do himself. ;) Ah well, being a sucker for punishment, I’ll grudgingly oblige I guess.
OK, first things first.

The Clients:

Dogecoin Core 1.10.0 2015-Nov-01
Bootstrap file for Core to save some download time.
Dogecoin Core Guide Wiki
MultiDoge v0.1.7 2016-Jan-31
Android Dogecoin Wallet 2.0.8 2016-Jan-18
Android Coinomi Wallet
Java Cate 0.14 alpha 2 Multicoin wallet 2016-Feb-14
Exodus multicoin wallet
iOS Doughwallet

Do you REALLY need a client?

Wallet ELI5
UTXO ELI5
Paper Wallet Generator
Sample HTML Wallet List
Dogetipbot subreddit and website
Dogechain Wallet
Block.io Wallet
Exchanges
BTC38
Poloniex
CoinSpot
ShapeShift - Not really an exchange, rather a currency trader.

Mining

Litecoinpool
Prohashing
Zpool

Explorers

BitInfoCharts - My favourite, has charts!
chain.so
dogechain.info
/dogecoindev where the devs hang out

More Info

Dogeducation
Technical Wiki
Preev currency value calculator

EDITS:

From peoplma
I was wondering if you could add just a couple things. A link to the coinomi android wallet, it's probably the best one out there. And a sentence somewhere along the lines of "if you need help with any dogecoin software you are welcome to make a post, but PLEASE include your OS, version number of the client, and any relevant transaction IDs that you are willing to share" if you can fit that in somewhere.
Also, if you want to link to Prohashing, I'm pretty sure it's the only Scrypt mining pool that will actually pay out in doge. The others I know of pay out in litecoin or bitcoin. And it's a profit switching multipool, so gives a better return than just mining ltc/doge.
And there's these two wiki articles I thought would be helpful to link /dogecoin/wiki/technical for those technically minded newbies or intermediate users who want to dig a little deeper. And maybe a link to /dogecoin/wiki/dogecoincoreguide next to the link for dogecoin core.
From pts2002
Finally a proper sticky post! Here's some other stuff you could add:
zpool.ca mining pool - You can get paid in pretty much any coin, and you can mine in multiple algos (currently mining lyra2v2 with my GPU). Doing about 500Ð/day
shapeshift.io exchange - My favourite exchange, quick and easy. No registration required!
Also, you should add some blockchain explorers!
chain.so - Support for bitcoin, litecoin and doge.
dogechain.info - Official blockchain explorer. Includes a wallet (already mentioned). Live update currently not working (?)
EDIT: Here's another thing I found!
preev.com currency value calculator - Easy way to check the value of your dogecoins (or bitcoins, or litecoins, or peercoins)!
submitted by Fulvio55 to dogecoin [link] [comments]

BITCOIN AIR: A COMMUNITY DRIVEN THAT STRIVES ON BRINGING AS MANY COMMUNITY VOTED CHANGES TO THE DEVELOPMENT AS POSSIBLE.


https://preview.redd.it/otudiayncb621.jpg?width=785&format=pjpg&auto=webp&s=df144a2bda2046e84c507488c30673aa8ebcfc68

Before we dive into the BITCOIN AIR review, let’s have a general look at the crypto market and the problems faced on exchanges.
The cryptocurrency market has seen vast expansion in the last two years with continued increase in market capitalization and in the number of cryptocurrency coins and tokens (which collectively total more than 1,850). This is a result of media hype and media coverage of the crypto market, as well as its unregulated nature that has allowed vast participation by even the most uninformed of retail investors.
This is not surprising as the crypto market far outpaced other markets by staggering amounts. Some cryptocoins gained as much as 20,000% between 2016 and 2017.

THE PROBLEM
The lure of quick and supposedly easy money has not only caught the attention of genuine companies and investors in this space, but has also attracted nefarious entities who want to grab a share of this market. With no regulation to check what is coming into this market as an investment product, a lot of scams have taken over. This poses a real problem in the crypto exchanges and the market at large.
We now have a situation where many scam crypto exchanges are mostly common, and the majority of crypto investors are afraid, unsophisticated investors without the knowledge of how to decipher the scam crypto investments from the real ones.
Lack of regulation in the market and exchanges has also created a situation where there is no trust entity to validate the thousands of new cryptocurrency-based products that are entering the marketplace on a daily basis.
Trusted and accurate information channels that can serve as valid sources of informative and educational content for the unsophisticated, retail investors are lacking.
What is the end result? Many cryptocurrency traders have lost and are still losing money in the crypto market.
High transaction fee after a successful trading is another challenge on the cryptocurrency exchanges, lack of security, liquidity, and so on.

THE SOLUTION
https://preview.redd.it/2s6ukklrcb621.jpg?width=528&format=pjpg&auto=webp&s=daea9e56088e342ceaf857ed0eff8033ccb25b94
By using the new design concept and leading technology to utilize the Bitcoin Air’s unique Air Protocol technology, users can choose to off chain the value of their Bitcoin Air, immediately locking in the USD value. The off chaining capability will preserve the USD value of any burned coins in USDAP (USD Air Protocol) through a bilaterally operating side chain that will gain its supply through the action of off chaining your Bitcoin Air to USDAP. What this implies in essence is that, it maintains peace of mind, knowing that the value of your Bitcoin Air is securely guarded by the Air Protocol.

THE MISSION OF BITCOIN AIR
Bitcoin Air’s mission is to design and produce the first viable attempt at tackling the key issues associated with cryptocurrency, small business and environmental risks at hand today. By producing the first Carbon Credit Asset-Backed Dual-Chain Blockchain, Bitcoin Air leads the way in pioneering the adoptability, scalability, and overall benefits of using the Blockchain. By combining this technology with Green Initiatives and a viable means of Asset-Backing, Bitcoin Air creates the first Living Ecosystem dedicated to reducing the Human Footprint, lowering the cost of living, and increasing the overall quality of life.
https://preview.redd.it/6zktiuwtcb621.jpg?width=1123&format=pjpg&auto=webp&s=240ab22e1d5e2539b7a259c13e38c31db627cdd6

EXPLAINING HOW THE BITCOIN AIR PLATFORM WORKS
Bitcoin Air is a bilateral dual-chain blockchain developed to deliver a means of indirect carbon emission reductions through decentralized, trust-less merchant or consumer interactions. Bitcoin Air plans to reduce carbon emissions through the development of a dual chain volatile/stable coin pair dedicated to creating the most versatile and scalable solution for merchant and consumer use. Merchants will be able to transact in cryptocurrency without the worry of profit loss due to fraud or technical issues within their conventional credit card processing equipment. Consumers will be able to transact in a multitude of ways including in person, over the web, or via AirCash Physical Currency!
The technology behind the Air Protocol was based on the idea of an off chain decentralized reserves system that could maintain the end value of a merchants earnings. Since the analysis of cryptocurrency shows that volatility has come to be the largest issue which is largely caused by market manipulation and in hand aided by low adoption, no regulation, and failed attempts at reserve systems. Bitcoin Air will defeat all of these issues by ultimately providing both a decentralized payment system and a decentralized reserves system that can operate 100% trust free and decentralized from any central power.
The storage of Air Protocol will be on a privacy focused side chain that will allow open access to your ledger. This in turn means that access to your ledger of mints/burns will be at your control at all times. Publicly permitted API’s will be developed to allow for even the most common bookkeeping and accounting softwares to integrate with your private ledger. The act of reentry into the market will be as simple as on chaining your USDAP to Bitcoin Air. This event will occur through the burning of USDAP and the minting of Bitcoin Air at the current market rate. This action, called on chaining, will cause a rise in circulating supply, along with a rise in market capitalization to make sure no other holder takes a negative impact by reentry to the market. Simultaneously, the burning of USDAP will lower the circulating supply and lower the reserves available on the static value side chain.
https://preview.redd.it/01ibbyixcb621.jpg?width=789&format=pjpg&auto=webp&s=76c96950a2148922714a46acb51136199df7d6b5

THE MARKET POTENTIAL OF BITCOIN AIR
Bitcoin Air hopes to create the balance that will open the doors for mass adoption by all small businesses world wide. The current financial impact of small businesses on the United States GDP alone is 46%, that would put the potential market at upwards of $8.5 Trillion according to the current United States GDP. To think mass worldwide adoption would put that current number to shame, but to start small and possible, even 1% of that current market flooding to Bitcoin Air through ease of access would mean a market capitalization of $85 Billion. Bitcoin Air seeks to develop an easy, user- friendly, rapid payment system that is accessible and secure enough for everyday use.

THE UP AND COMING FORK OF BITCOIN AIR
The official Bitcoin Air fork date will be announced at a later date as highlighted in the pre-fork road map (view the diagram under roadmap). The overall fork will take place by utilizing three different blockchains and in the end result creating two bilaterally operating blockchains.
The Peercoin Blockchain is what the entire development of this project will begin on, during this time, the Bitcoin UTXO will be added along with several core features including Lightning Network, Segregated Witness, and Atomic Swaps.
Upon successful finalization of the first blockchain test fork, the Haven Protocol will be forked to create a new off-chain DPoS reserves system dedicated to holding static value without being effected by the volatile states of the market.
The Peercoin supply will not be added into the fork and this means that purchasing Peercoin will not get you Bitcoin Air during the snapshot. The only users receiving Bitcoin Air at the time of the fork will be holders of Haven Protocol (XHV) and Bitcoin (BTC) at a ratio of 1XHV:(XHV x Current Price of 1 XHV)AIR and 7.5BTC:1AIR. This in turn will put the circulating supply around 2,500,000 AIR to begin, and no cap on the max supply to be open for minting and burning based on the Air Protocol usage. Holders of Haven Protocol will receive USDAP that can be minted into Bitcoin Air at current market value at any time.
https://preview.redd.it/jm6g5bi0db621.jpg?width=1038&format=pjpg&auto=webp&s=2025429a31bdbcee2e5e808b9bfffe3f6bb9a07e
This process will create new Bitcoin Air to create a private way for Haven Protocol holders to receive their Bitcoin without a need to expose their Private Keys to a public blockchain. This process would initially put our supply overall at around 5,000,000 AIR after the final holder of USDAP burns their USDAP and mints AIR on the side chain. At a later fork date, there will be additions to the Air Protocol including the ability to mint/burn into your local currency rate (EURAP, AUDAP, GBPAP, etc.) and mint to same value in AIR when needed.

BITCOIN AIR PRE-FORK ROAD MAP

https://preview.redd.it/g0v39352db621.jpg?width=1031&format=pjpg&auto=webp&s=41ec3beec769f1257114a908e42690562a80ff7f

https://preview.redd.it/yu1491d4db621.jpg?width=1030&format=pjpg&auto=webp&s=46e83f38a14ee615f9fe93ed37f2b0407caa5026

CONCLUSION
Beyond the basic abilities, Bitcoin Air plans to be the first to implement “Air Cash”. Bitcoin Air will have the ability to mint off chain and make sure value is maintained as the team plan to expand upon this idea extensively beginning with the ability to off-chain your Bitcoin Air to USDAP Air Cash. You will be provided a QR code to print out that can be handed over like real cash and swept into a Bitcoin Air wallet as Bitcoin Air. During this process, creating the Air Cash will burn circulating supply from Bitcoin Air, and mint equal USDAP on the side chain. This will in turn provide a randomly generated private key to the QR code that will hold the value of the USDAP. This balance will not be available in your wallet, and will instead be pegged to this piece of paper. The user can then hand it to a merchant to conduct a purchase, or hand it to any other party to conduct a in person trade. Upon the receiver sweeping the balance to their wallet, the private key and public address will be added to their wallet for usage permanently from then on. The paper document would then become useless, and the address can be disposed of along with the document. This will be the first approach to a fiat introduction for cryptocurrency.
Team is actively involved in this project and superb, Be part of this Revolution Now!

https://preview.redd.it/h0zvdwo7db621.jpg?width=1017&format=pjpg&auto=webp&s=1bb88e2f4af59efed4a97a3dc4d3bdbf18fea72c
Get connected anytime with the Project using the links below for more information, updates and participation:
WEBSITE: https://bitcoinair.org/
WHITEPAPER: https://bitcoinair.org/wp-content/themes/btc_aidownloads/ShortPaper.pdf
ANN THREAD: https://bitcointalk.org/index.php?topic=5044039.new#new
DISCORD: https://discord.gg/KWJUBy
TWITTER: https://twitter.com/BitcoinAirUSA
GITHUB: https://www.github.com/BitcoinAir
REDDIT: https://www.reddit.com/BitcoinAi
https://preview.redd.it/1u5mzorfdb621.jpg?width=881&format=pjpg&auto=webp&s=26f1738987c1b0d5ae3c25faf392039e67bcde68

WRITER'S DETAILS
BitcoinTalk Username: cryptoblezin
BitcoinTalk Profile URL: https://bitcointalk.org/index.php?action=profile;u=2178561;sa=summary
ETH Address: 0xC89b8Dd7e3E137DB108575EeAe301E52b6C72d9F
submitted by blessingsdrop to Crypto_General [link] [comments]

[PoSV] Release Candidate 2, Chess and Future

Dear fellow Reddheads:
In this post, I'm going to cover three topics: PoSV Release Candidate 2, a review of the current strategic position of Reddcoin and update on upcoming milestones.

PoSV Release Candidate 2

PoSV RC2 binaries are now available for download here . This is for testnet only. You shouldn't have to re-sync blockchain. Just replace existing RC1 wallet with RC2 and start it with testnet=1 addnode=108.174.49.42
Please run full nodes for staking, post your testnet wallet addresses, send each other coins and report any problem and bug below.

Current Strategic Position

With official release of PoSV around the corner (in a few weeks), it's good time to review the strategic position Reddcoin is in today. If you are a good player of chess or Go, you'd understand that to win a game, one has to build up advantage incrementally through each move. So where are we today?
  1. PoSV was designed to address multiple technical and economic issues as described in the white paper. It'll provide better network security and better aligned economic incentives among participants. It renders mining and ASIC obsolete. It rewards active stakeholders and provides a solid foundation for our ecosystem.
  2. All the existing vanilla PoS coins, to my best knowledge, trace their source code to Peercoin which was a fork from Bitcoin in 2012. The code base of Bitcoin has been under active development since then and few, if any, new features in Bitcoin made it to the code base of vanilla PoS. By comparison, PoSV has been implemented based on Reddcoin release 1.2.1.0 which already contained hundreds of commits from upstream Bitcoin. PoSV is uniquely positioned among all PoS coins to absorb any innovation in Bitcoin in the future. This gives us huge competitive advantage over time.
  3. Because PoSV has been written based on a different code base, I had to understand every single line of code in existing PoS and now have a very thorough understanding of the technical details. This allows us to gradually introduce more features to PoSV in the near future. This stands in stark contrast with coins which follow a fork-and-tweak-and-desert model.
  4. I've written PoSV in a way that deters copycats.
  5. Our next-generation social wallet is designed to work in synergy with PoSV to encourage user activities. It has a sleek GUI and built-in functionalities such as news feed and chat. It can also connect to remote daemons to provide better user experience for running full nodes.
  6. ReddAPI allows developers to create 3rd-party applications without having to deal with low-level blockchain details.
  7. The success of getting Reddcoin listed on Mintpal by mere voting demonstrates beyond any doubt the quality, will and power of our community. When we set our eyes on a goal, we work together and make it happen.
  8. Reddcoin is created for a niche market: to facilitate social interactions between people. It's a very ambitious project with a lofty goal. It's also like a giant jigsaw puzzle. As the dev team and the community continue to make progress on putting the major pieces in place, the entry barrier is increased on a daily basis.

Future Milestones

  1. I will officially release PoSV in coming weeks. New features for PoSV are already being planned for later releases.
  2. MathyV is spearheading the efforts to merge innovation from Bitcoin. Most notably we will see Hierarchical Deterministic Wallet and Multi-signature Wallet. Reddcoin will be one of the very first altcoins to provide these features.
  3. hoppipoppipolla is preparing the final release of the social wallet.
  4. lionzeye released the beta of Reddcoin plugin for Minecraft using ReddAPI and there is already a Minecraft server up and running. The project requires technical innovation and business acumen. If done right, the efforts will bear much fruit.
  5. I'm writing our next-generation social platform. Reddheads have shown us the most wanted social networks and they will be delivered. The social platform will also enjoy integration with our social wallet to provide the best social experience.
  6. devhen has been working on our social broadcast platform, which will be packaged and pitched to corporate clients for their online marketing campaigns.
  7. When it comes to marketing, the first priority is always to build the best possible products, to make products speak for themselves. We have commissioned a world-class video creator to work on our official video. Thanks to the extreme attention to details by Reddcoin, BTCillionaire and reddki, you won't be disappointed by the final results. We also have established and on-going dialogues with several PR firms.

Final Words

Great things take time to build. Patience and perseverance are valuable because they are rare. Less obsession with price. More productive usage of time. Together we can build a future that's worth living for.
Regards
laudney
submitted by laudney to reddCoin [link] [comments]

Suggestion for correcting Bitcoin's centralization problem

Argument of Bitcoin centralization: Bitcoin is a fascinating story; its mysterious origins combined with an open source, revolutionary method of distributing and securing information make it a really unique and promising technology the entire world can benefit from. When Satoshi began the first blockchain in January 2009 they envisaged a truly decentralized, secure network protected not by steel and concrete but by mathematics, combined with geographic diversity, so that anyone could use, contribute and be rewarded for securing the global decentralized fledgling blockchain.
As time went on industrious miners sought ever more efficient and powerful methods of cracking blocks. The financial reward for the development and implementation of; at first specialized software for GPUs, and later specialized hardware, massively increased the difficulty of finding new blocks. The average home user could no longer compete with their peers, turning instead to pool mining in an attempt to maintain profits and keep the Bitcoin flowing. It was at this point, where miners started pooling resources, centralizing mining efforts and entrusting their precious profits to pool operators that Bitcoin in its original concept began to fail.
The days in which anyone could download the wallet, contribute to network security and be rewarded for their efforts were over. As mining pools grew so did their total hash rate, bringing with it the threat of 51% attacks and chain forking; today the peace kept by pools artificially keeping their hashing power below 51% - a far cry from the mathematically secured, globally distributed system Satoshi envisaged at Bitcoin's inception. In recent months there has been an ongoing argument over block size. Back in the days when Bitcoin mining was highly distributed the community would vote as to which version they would run by running the code of their choice. As centralization wormed its way into the core of Bitcoin the large pools were given more power to decide over the direction development should take - leading to the impasse Bitcoin now faces broadly between miners and users.
All of the above has led to the inescapable conclusion that Proof of Work (PoW) no longer provides the highly distributed, ubiquitously inclusive security model that technology such as Bitcoin requires. This is not a failure of the technology behind PoW, but a failure of the humans (myself included) that employ it to turn a profit and drive the blockchain forward.
Proposal for change: One of the key benefits of Bitcoin in comparison to traditional monetary systems is decentralization. By removing a central issuing authority and placing the generation of new money and processing of transactions in the hands of the majority consensus, Bitcoin has provided hope to those seeking a fair monetary system that isn’t gamed by a controlling minority.
Due to some unforeseeable developments occurring after the launch of Bitcoin, the ugly head of centralization has made an appearance and some changes are necessary if we care to correct it. No longer can an individual run the Bitcoin software on their PC and participate in the Bitcoin network in an influential manner. Mining pools and farms have taken the average individual out of the equation and allowed big players to become the owners of blockchain transaction confirmation and the generation of new coins. Again we encounter control in the hands of the minority with all others forced to follow along, left without a voice. Sound familiar?
To fix this problem, I would like to propose an alternative to PoW for discussion as a solution, Proof of Stake (PoS). Not the traditional PoS you find in Peercoin and its clones, but an evolved and improved version that also addresses and corrects the problems found in traditional PoS. Proof of Stake Participation (PoSP) which is not just and idea, but is a tested and proven product currently employed in an alt coin, Crypto Bullion (CBX). The PoSP white paper can be found here http://cryptobullion.io/white-pape for further details.
Traditional PoS as employed in Peercoin (white paper can be found here https://peercoin.net/whitepaper) was created as an attempt to address some of the issues in PoW, primarily the vulnerability to attack, or manipulation that can occur resultant to centralized majority control. (Peercoin actually employs a hybrid system, which uses both PoW and PoS, but I am just going to discuss PoS.) Additional to this, PoS offers a far more energy efficient solution than PoW for generating new coins and confirming transaction.
Where PoW requires a high hashrate for security, PoS instead requires a high volume of coins being held online in the network to confirm and enforce honest transactions. The idea being that those with larger investment into the network, reflective by their ownership of coins, are most inclined to act honestly as nefarious activity hurts the value of the network and therefore their investment.
The problem however in the traditional implementation of PoS is that it rewards for behavior detrimental to network security. Coin owners are rewarded by interest that is paid on the coins that are held stationary in their wallet for a minimum of 30 days or a maximum of 90 days. Basically, if implemented in Bitcoin, you would have to hold your Bitcoin in your wallet for at least 30 days at which point you could connect to the network and compete to claim interest on the coins you own. A slightly higher interest rate reward would be paid to those who held their Bitcoin stationary for 90 days before connecting and claiming their interest. So instead of mining as we find in PoW, the creation of new coins in PoS occurs via interest payments used as an incentive to encourage coin owners to bring their coins online to the network to validate honest transactions. However since security is dependent on coins being held online at all times, the reward structure of traditional PoS is actually detrimental because it rewards for coins being held off-line.
In contrast, PoSP encourages and rewards for coins for being held online. In fact, only coins held online are eligible for earning the reward and those that are held offline forfeit their share to coins active on the network. This is accomplished first by changing the reward structure to a fixed amount per block instead of a variable based on percent of coins staked. PoSP takes a set annual rate of growth in money supply, divides it by the number of blocks set to be generated in a year and establishes that value as the block reward that is doled out to network participants at the generation of each block. So in order to compete and earn a block reward, one must a) own coins, b) have their coins online and c) accumulate 1-hour of coin age (time their coin is held stationary in their wallet – the 1-hour time requirement helps smaller wallets to compete with larger wallets). The reward encourages people to keep their coins online, and since all coin owners will not do this, it allows for an interest earnings rate that surpasses the annual inflation rate further benefiting those who secure the network and confirm transactions and encouraging more people to participate in the network and further enhance security. As an example, PoSP implementation in CBX averages payouts of about 8-10% per year to network participants while the overall inflation rate remains at 2%.
If employed in Bitcoin, this would allow everyone who owns Bitcoin and an Internet connection the opportunity to participate in the Bitcoin network confirming transactions and generating new coins – reviving the realization of decentralization.
The reward structure could be matched to Bitcoin’s current schedule for growth in money supply and once the 21 million-coin cap is reached, the block reward would transition to be composed solely of transaction fees. Therefore no change is necessary in Bitcoin’s scheduled money supply.
Regrettably, since centralization has already occurred to a certain extent, making this change now means it would have to be agreed upon by those who currently control the blockchain. These are unfortunately the beneficiaries of the centralization that has occurred so they of course will be hesitant to make this change. However, the push for a fair decentralized system is one of the keys that spurred the growth of Bitcoin to begin with, so to ensure longevity of Bitcoin through loyalty of the majority, centralization has to be dealt with and corrected.
edit: added argument to outline Bitcoin centralization claim, courtesy of FiniteRed
submitted by elambert_cb to Bitcoin [link] [comments]

[uncensored-r/CryptoCurrency] Be careful with RaiBlocks. It's a coin with a lack of notion of confirmations/finality. Your coin...

The following post by killerstorm is being replicated because some comments within the post(but not the post itself) have been openly removed.
The original post can be found(in censored form) at this link:
np.reddit.com/ CryptoCurrency/comments/7oax4e
The original post's content was as follows:
I'm sure I'll be accused of spreading FUD, so some brief notes about my bio:
  • I've been involved in cryptocurrency consensus and scalability research since 2011; I was the first to propose sidechains and sharding, back in 2011 when very few people were concerned about scaling
  • I co-authored two academic, peer-reviewed papers on consensus, on is called Proof-of-Activity, another called "Cryptocurrencies without proof-of-work" (Proof-of-consensus)
  • I identified weaknesses in Peercoin consensus algorithm back when it was released in 2012, which results in several consensus algorithm changes; I also pointed out flaws in Mastercoin, which led to changes in how development process is organized
  • so yeah, I "spread FUD" occasionally, but my FUD is well-justified
Now about RaiBlocks. I do not want to do a full review and identify actual exploitable weaknesses. I just want to point some red flags which I discovered why reading the whitepaper. Whether these problems are actually exploitable is another question...
So let's start from the fact that there are two white papers. When you google "RaiBlocks white paper", you can find the old one, here.
it defines a concept of confirmations. Some quotes:
  • When a node receives a send block to an account it controls, it first runs the confirmation procedure followed by adding the block into its ledger.
  • ... voting nodes will sign the block with their voting key and publish a confirm message. A message is considered confirmed if there are no conflicting blocks and a 50% vote quorum has been reached. If there is a conflicting block the node will wait 4 voting periods, 1 minute total, and confirm the winning block.
This is a clear definition of confirmation. There might be some subtle issues in it, but in normal case this algorithm will work. But it's, basically, a fantastically inefficient version of proof-of-stake, which requires orders of magnitude more bandwidth then necessary. Note that this paper doesn't describe delegation, so you have all nodes voting for each transaction, thus wasting millions time more traffic then necessary.
I think at some point Colin LeMahieu realised that he implemented a shitty version of PoS which doesn't scale, and tried to make it scale. You can find the new version of paper on Raiblocks.net web site. It's much more sciency looking. It seems that Colin was desperate to improve the protocol without changing the architecture. So you see some mental contortions. First:
Since agreements in RaiBlocks are reached quickly, on the order of milliseconds to seconds, we can present the user with two familiar categories of incoming transactions: settled and unsettled. Settled transactions are transactions where an account has generated receive blocks. Unsettled transactions have not yet been incorporated in to the receiver’s cumulative balance. This is a replacement for the more complex and unfamiliar confirmations metric in other cryptocurrencies.
So Colin tells us that we do not need a notion of "confirmed" and can use a notion of "settled" instead. So what's the difference?
Well, Colin is honest with us: settled doesn't mean confirmed. It only means that your node have acknowledged reception of coins, but that doesn't mean that coins are finally yours. There's no notion of finality of this system. Delegates can replace blocks with their votes on any time, so your money might disappear weeks after it was settled.
Without explicit voting on every transaction, you don't have a notion of confirmation or finality.
Another red flag:
... a fork must be the result of poor programming or malicious intent (double-spend) by the account’s owner. Upon detection, a representative will create a vote referencing the block ˆbi in it’s ledger and broadcast it to the network.
So conflicts, or forks, are resolved through voting. But how are they detected?
If a node can identify a conflict, it might be able to resolve it. But detection of discrepancy is one of major topics of consensus.
E.g. suppose Alice's node received version 1 of a block, while Bob's node received version 2. If they do communicate, they won't be aware of the conflict.
So how are conflicts detected in the RaiBlocks? The paper doesn't define this, but it mentions that block messages are sent between nodes, so a node can detect conflict when it receives different versions of blocks from different peers.
So conflict detection is possible in this model, but is it reliable? There's no evidence for that.
In theory, if you can guarantee that every message is delivered, you can achieve reliable conflict detection. But in practice, networks are not reliable. And you do not want full connectivity anyway (each node talking with each other node is fantastically expensive). And on top of that, RaiBlocks uses UDP network protocol, which is unreliable. There's no guarantee of message delivery. And if messages are lost, conflict might be undetected, thus Alice's node will think she received coins from Bob while the rest of the network will think otherwise.
This topic is not discussed in the paper.
RaiBlocks, not having a proper blockchain, also lacks a way to compare state of two nodes. In Bitcoin you only need to compare the latest hash: if hash is the same, then nodes are in perfect sync. But in RaiBlocks you have multiple "blockchains" for each account, so basically you have to compare state of every account to check that you are in sync. This is incredibly wasteful.
So, to summarize, I'd describe RaiBlocks as "UDP coin". It might work quite well if network conditions are good and messages are delivered. It can even tolerate some degree of packet loss. But there's no proof that it works in all conditions, in fact, the paper avoids the topic. There's no notion of confirmation. You never know if you received coins or not. There are probably many conditions in which the system would fail.
I'm not interested in finding an actual failure, it's not a good use of my time. So treat the above as an opinion of a guy who has significant knowledge about consensus algorithm upon reading the Raiblocks papers. Feel free to ignore it. :)
submitted by censorship_notifier to noncensored_bitcoin [link] [comments]

Ripio Credit Network RCN ‍ - Company Review and Price Targets (Global P2P Credit Network) - BITCOIN WALLET -RECOVERING A BITCOIN WALLET Mining City - Overview Presentation دوكوين مجانا New doubler site lunch runing day 0 doube bitcoin just 24 hours 200%

Bitcoin Tools: Android app (4.1 ★, 10,000+ downloads) → This App auto update the market prices. The ultimate Bitcoin Tools is an advanced bitcoin tools script, allowing... How many seconds peercoin will wait for a complete RPC HTTP request. after the HTTP connection is established. rpctimeout=30. By default, only RPC connections from localhost are allowed. Specify as many rpcallowip= settings as you like to allow connections from other hosts (and you may use * as a wildcard character): rpcallowip=127.0.0.1 Peercoin (PPC) will be hardforking to v0.8, which has the codename Mantis. The planned upgrade will take place tomorrow, October 1st, 2019. The v0.8 release will have the biggest code change in the history of Peercoin, with 1600 files changed and over half a million lines of code changed. According to Peercoin team, the new […] Envion claims to be the world’s most profitable standard of self-expanding crypto infrastructure. Find out how it works today in our review. What is Envion? Envion, found online at Envion.org, wants to be the future of “smart decentralized blockchain infrastructure”. The goal is to create highly-profitable, global crypto-mining infrastructure contained in shipping containers. Peercoin Android WalletSearch. The Affluence Network · Install Ethereum Peercoin Backup Restore Wallet: Unique address for a wallet featuring a cryptocurrency, there is no digital information held in As long as you have already run the peepcoin wallet, this folder will sync down in the corner of the wallet it says “0 active connections

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Ripio Credit Network RCN ‍ - Company Review and Price Targets (Global P2P Credit Network)

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