🤷 Opinions Katya Michaels

Scaling Blockchain by Going off the Block: Constellation’s Partitioned DAG

Opinions
Finding solutions to encourage widespread Blockchain adoption may require going beyond the block
Scaling Blockchain by Going off the Block: Constellation’s Partitioned DAG

While the crypto community continues to struggle with the implications and applications of Blockchain technology, cryptocurrencies and token sales are becoming more mainstream, creating the additional challenge of scalability. Ironically, the gradual increase of adoption reveals the obstacles to universal adoption.

Some teams are looking for a solution for Blockchain usability by moving off the block to a different kind of network. Two members of the Constellation team – CEO Brendan Playford and COO Benjamin Jorgensen – spoke to CryptoComes about their way of addressing scalability issues and envisioning the interoperable Internet of Blockchains.

Blockchain DIY

Katya Michaels: Before you set out to create your own network, you were building a project on Ethereum. What were some of the challenges that inspired you to work on a new solution?

Brendan Playford: I've been in the Blockchain space about four and a half years. I had the fortune of being a very early miner and managed to use mining to get myself out of the place that I grew up in the UK, where there weren’t very many opportunities for people like myself. I saw the way that Blockchain allows individuals to get economic mobility – I’m absolute proof of that, being in San Francisco now.

In 2016, I was listening to NPR around August and all I was hearing was coverage of fake news with Trump. It was relevant then and it's relevant now – monetizing and weaponizing ad arbitrage on Facebook with fake news purposefully produced by a network of writers. The appetite for fake news was so aggressive in 2016, you could publish whatever you wanted and the volume would decimate any legitimate news.

That was the genesis: to build a platform that would allow factual information to be incentivized and recorded in a way where it became self-regulating and self-sustaining. We quickly realized that the high volume and high throughput we needed was totally impossible to do on Ethereum.

In order to publish the 100 - 200 articles a day, have micropayments going out globally to individual contributors and notarize the content on the Blockchain – there was no solution available that could do that.

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Bring your own bandwidth

BP: The nature of Blockchain is synchronous. You have the state replicate across every node, but those nodes are not widely distributed between individuals. Very few people run a full node of Bitcoin or Ethereum. That has led to a somewhat centralized server system based around proof of work or proof of stake where a small selection of the network own it and maintain the state. Although it is very secure, it’s not as decentralized as it was envisaged.

I saw the future not as a synchronous Blockchain, but an asynchronous network that functioned like a graph, with node to node connections. It’s very hard to read a sentence if every word has to be shared between every participant before you can go on to the next one. That's synchronous Blockchain. In a graph, you have a conversation which gossips out to the network. To avoid the information getting distorted with Byzantine actors, you have to create some kind of consensus or architecture to maintain its state.

We set out to build a network that was a horizontally scalable Hylochain. Distributed data systems have been around for years, this technology is not that new. We could create a network with the characteristics of Bittorrent or Tor, that could scale as more participants joined and brought resources – a laptop or a mobile phone –  adding to the throughput of the network.

We have this notion of a mesh net of interconnected devices creating a new Internet. These devices provide bandwidth to the network, and the availability of those resources is incentivized in two ways. One – through the mining period of ten years, and two – by creating a two-sided marketplace where the resources on the network are available for computing services.

We would like to see people coming to the network to use these resources and pay the people providing the devices. That would unlock a huge amount of economic value that's unused right now and create more upward mobility in areas that are less economically developed.

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A different kind of chain: partitioned DAG

KM: The Blockchain’s blocks are what make the technology secure, transparent and immutable. Are the DAGs blockless systems?

BP: If we look at IOTA’s Tangle, I would say yes, that is very much blockless. Hashgraph as well, although it has a notion of direction and a linear transaction history. With our chain, we dove into some really novel new research that addresses scaling. One piece comes from TU Delft university in the Netherlands. It’s called extended trust chain – like a blocked DAG (directed acyclic graph). Effectively, you have a partition, a cluster of 1,200 nodes that all participate in consensus and have a certain scaling characteristic.

There is a checkpoint block that happens in the DAG which creates immutability. The checkpoint block does a locality-sensitive hash on the previous transactions. In that partition, we roll up all the previous transactions from consensus and they get blocked.

In our DAG, we have partitions of 1200 nodes, with the capability of having 10 partitions. Above that, we have a galaxy node that's built up enough reputation over time to be given the responsibility of validating larger blocks of transactions, and also send transactions out to cluster.

Proof of Meme

KM: You have said that networks based on proof of work or proof of stake consensus are like a plutocracy – more power is held by those with more resources. Constellation’s consensus is “proof of meme,” reputation-based, but reputation takes time to build. So the network has the potential to become an oligarchy, dominated by the few people who have been there the longest. It’s conceived as a meritocracy, but could become an oligarchic meritocracy.

BP: You are absolutely right. To address this, we have devised a clustering algorithm. Over time we're going to get a curve, almost like a histogram of reputations from zero to let's say a hundred. In the hundred block you have participants who came in at the beginning, in the zero block you have those who came in most recently.

How do we get those new participants up to the higher reputation while maintaining security of the network? We want to give them a fair opportunity to progress.

Imagine taking that histogram and clustering participants into cohorts – first year entry, year 1 to year 9, year 9 to year 20… We create a weighted algorithm that takes a portion of nodes from each cluster and puts those into consensus. You're always going to be taking some from the zero cluster and as they perform consensus properly, they will move up.

We actually have a test net out, modeling the clustering algorithm to see what it would look like in five years and make adjustments to that. We are looking for ways to avoid that oligarchy as much as possible. We are using the REGRET reputation model, but we may find that there's a better measurement we can use in our machine learning algorithm.

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Post-Blockchain?

KM: Some critics say that Blockchain is a solution looking for a problem. Despite many proposed use cases, they are not being realized. What will it take to bring real usability to Blockchain? Or are we in a post-Blockchain stage already, moving to more scalable technology?

BP:

I think a lot of negative press comes from the tendency to overpromise and underdeliver. As thought leaders and pioneers in the space, all of us need to be conscious of that and make sure that when we do say these things openly, that there is some substance behind them – whether with academic groundwork or actually delivering a viable product.

Hundreds of ICOs and dapps launched in the last year where the promises will not happen. They just won’t deliver. That exacerbates the problem.

Are we post-Blockchain? I don't think we are. I think we're about to enter into the Internet of Blockchains era. You will have Bitcoin for store of value. You will have Ethereum for certain uses, and Zcash for certain uses. Don’t underestimate the Bitcoin core guys. There is a roadmap that they have and it is highly likely we will not see all the solutions at once.

You want to bring about change gradually and slowly, and you want to bring about adoption in a sustainable way. What we’d like to see with our architecture is an underlying fabric that connects and mixes these chains. It's not one Blockchain to rule them all.

There will be individual solutions like Constellation that applications can interface with. Over the next 5, 10 years Bitcoin will still be around, Ethereum will still be around. There’ll be other technologies that will enable the interconnection of these chains.

Enterprise adoption

Benjamin Jorgensen: One of the main hurdles for adopting Blockchain is the cost benefit analysis for major enterprise companies to shift out of their legacy platforms and come onto Blockchains.

We look to the Fortune 500 companies to guide us, but if you consider the history of venture in Silicon Valley, you see that innovation is always done at the grassroots level.

Blockchain does solve problems. We've identified that it gets rid of middlemen. It allows for a distributed ledger so that people can own their own data, going back to what we initially set out to do. Major commercial banking isn't going to shift a significant portion of their business under the Blockchain because of the cost benefit analysis, hiring and firing new people, getting rid of services, the time it takes to ramp up. I think we're going to see a new era of businesses come to the forefront and actually recreate this new world.

KM: Perhaps it's a space for businesses that are going to be natively Blockchain.

BJ: Absolutely. We know that by implementing Blockchain you can significantly improve margins. The initiative is probably going to come from new businesses that are able to create something that's leaner, faster and stronger, and scale rapidly to catch up to those Fortune 500 companies. We've seen this before in the venture space with traditional startups.

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Internet of Blockchains

KM: Going back to having different Blockchains for different uses – obviously that depends on good solutions for Blockchain interoperability. Are we getting close to that in terms of technology?

BP:

Every Blockchain is just data held in a space where it’s notarized as factual and correct. If we can create some way of formally defining and verifying each chain in this ecosystem mathematically, every developer who builds on one chain or across chains will have a framework.

Think about banking – we have SWIFT for a reason. It is the standard that allows transactions between banks. We have to have a SWIFT for Blockchain. When you start to see those frameworks come out and be supported by native languages like Java with plugins for other compilable languages, that’s when we'll see an explosion.

BJ: You have to look at the implications of this - why does it matter to have Blockchain interoperability? Where Constellation’s transaction speeds are really coming to the forefront is around the IOT space. Connecting software devices, automation, AI, micropayments. They're going to have to be able to communicate in a seamless manner. Maybe it’s not a problem, but it's an opportunity.

Smart contract usability

KM: A lot of people have misconceptions about smart contracts – how they work, what they can and can’t do. A smart contract is limited to the Blockchain. In order to access relevant outside data, there have to be solutions for bringing that data onto the Blockchain. How close are we to real smart contract usability?

BJ: When you think of a smart contract, you think it's legally binding, when it's really just a document that says: these two terms have been met, let's exchange the value that comes in. Tennessee courts just reaffirmed that a certain document that's on a smart contract with certain verbiage actually can be upheld in courts. We're just getting to that point where it's going to have a legally binding impact.

BP: This goes back to appropriate use cases. What is a contract? It’s just written verbal logic. What is code? Code is logic. So we figured out this way of notarizing a bit of logic on a chain and then replicating that state across nodes.

Ethereum relies on oracles to provide this data, but there's no way that thousands of data points would be able to transact and go onto Ethereum with the current throughput without being somehow aggregated and centralized.

A chain like Constellation could collect that data together, creating a data marketplace that becomes the oracle for Ethereum in a cross-chain sense. Ethereum could call Constellation through an ACI (application chain interface) for that data, which will be known to be provable and factual, instead of relying on a sensor and a centralized server. If you're connecting to Constellation, that will give a decentralized source of truth.

How far are we away from a place where you could rely on sensor data to provide an outcome of a smart contract? I would say five years. There’s a curve with this kind of technology, Metcalfe's law.

We’ll start to see the first commercial applications, the beginning of a mesh network where there is a source of truth that connects everything, all underpinned and underwritten by reputation. That's what we're building.

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Vera Thornpike

How to Start an ICO- Step by Step Guide

How to launch your own ICO– Step-by-step Guide
How to Start an ICO- Step by Step Guide

An ICO (Initial Coin Offering) is becoming an increasingly popular way of raising capital– you don’t have to solve some legal issues, attract a lot of people, and have your project backed up by cryptocurrency payments, which is transparent and simple. However, if you want to reach the hard cap, you should know how to start an ICO, and whether you should start it at all. Let’s find out how to start your own ICO so that you could attract investors and offer something valuable instead.

What is an ICO?

Initial Coin Offering (ICO) is a way to raise funds for a new cryptocurrency venture. Typically, ICOs are organized by startups who want to bypass the laws and strict requirements to traditional capital-raising process. ICO campaign presupposes that some percent of emitted cryptocurrency is sold to the early investors in exchange for a legal tender, or some other cryptocurrencies.

Are ICOs equally suitable for all companies?

In fact, some ICOs end up pretty sadly because they are not appropriate for raising money in all cases. ICO is not a magic bullet- how to launch ICO, if you have nothing to provide contributors with instead? The primary requirement for such a campaign is to generate value for your investors, and, typically, it means offering some advanced blockchain technological solution backed up by a proprietary coin. Please, note that this coin should be organically integrated into your platform and serve for the purposes other than trading and exchange only.

Besides, your cryptocurrency initiative should be totally transparent and authentic– an ICO with the sole goal of making the owners rich won’t get enough attention. You should be able to offer something unique and truly valuable.

If you are 100 percent sure you can offer your clients something special, it’s time to learn to step by step how to start an ICO.

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1. Create the product and token

Probably, this is the most crucial aspect of your preparation that’s often ignored by people who simply try to raise as much money as possible. Do not repeat this mistake! “How do I launch an ICO without introducing a Blockchain platform and a new token?”– you may ask. The answer is always “There’s no way to do it.” If you’re a startup, you can create a platform with ‘Blockchain-first’ approach, while enterprises that have been around for years can leverage a Blockchain-based app to add to their infrastructure and boost its functionality.

When it comes to tokens, it’s easy. A token should be an asset that drives the existence of your business or platform. It’s not just an inner currency, tokens can represent any tradeable asset, such as:

  • loyalty points,

  • bonus points,

  • digital coin,

  • certificates,

  • IOU money,

  • and so on.

Before issuing tokens, decide how much you want to raise, sell during pre-ICO and ICO, and retain for the team and development. Besides, decide beforehand how you will issue the extra tokens.

How to launch an ICO on Ethereum-based Blockchain? In fact, it’s simple. Such platforms as Ethereum and Waves allow controlling the processes with the help of smart contracts. Ethereum is the most popular ICO platform

2. Solve legal questions

Any time you handle other people’s money, you need to be legally covered. You have to prove that your token is not a security, and you don’t try to deceive people. For this reason, you need to create documents explaining your formal legal opinion and a legal description of the ICO. Don’t hesitate to ask for professional help. There are three well-established law firms focusing on the ICO:

  1. Cooley,

  2. Perkins Coie,

  3. K&L Gates.

Please, note that you need to take into consideration both local and foreign legislation. Perform your own due diligence to comply with the relevant regulations and laws.

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3. Create your team

This is another important step that defines the success of your initiative. Of course, existing companies may have a well-established team, but what if you lack specialists from some certain sphere? How to start an ICO off Cardano, if there’s no member in your IT department specializing on cryptocurrency and coding? You should find specialists who are able to implement your ideas.

Establish friendly communication in your team

Practice shows that the best teams are the ones who include two to three top members with the close working relationship and complementing each other’s skills. But, of course, you’ll need someone else to perform mission-critical tasks. Search for personnel in Facebook, LinkedIn or post an advertisement on corresponding platforms.

It’s not exceptionally for Blockchain startups to be developed by geographically remote specialists communicating online. To establish a closer connection and make people more receptive, organize a visual conversation (at least via Skype, if you cannot meet in real life).

Do not forget to attract advisors– authoritative people from related niches. As a rule, ICO organizers rewards them with five to 10 percent of the tokens.

4. Write a whitepaper

How to launch an ICO without a whitepaper? This is an essential document that explains which problems your project solves, its technical aspects, the description of the team, and the scheme of token generation and distribution. In other words, it is the introduction to your project created for investors and potential users that combines your business plan, technical plan and marketing plan. Ideally, you should hire an experienced external writer to create the text, and have your technical specialists fill in some gaps. Ready templates will help you.

Write a whitepaper using ready templates

5. Go Social

That means creating your website and channels in social media (Telegram, Medium, Twitter, Facebook) to have your potential contributors on the lookout for news and important information. Post announcements, articles, interviews, reviews– anything that can catch audience attraction and bring you more potential customers and investors.

Do not forget about such forums as Reddit, Quora, and Bitcointalk– they can bring you a lot of hype and drive the momentum for development.

6. Take care of security

If you have already figured out how to start ICO and made a few steps in this direction, it’s time to take care of safety. Make sure that the Blockchain supports proper encryption and you’re ready to prevent hacking and data loss. Although Blockchain itself is a very safe solution, it must be backed up by some advanced technologies.

A short FAQ on ICO launching

Here are a few popular questions covered:

Can I attract investors from all over the world?

Yes, but some countries (US, Canada, China, South and North Korea) have strict policies concerning ICO and crypto.

How much does it cost to launch an ICO?

Be prepared to spend at least a few thousand dollars on development and marketing.

How to cut down on development costs?

Make an open-source platform that will be developed by the community – publish code on GitHub.

Should I launch a bounty program?

Yes, it’s a great chance to hire designers, translators, and promoters with minimal investments.

What should be avoided when ICO is launched?

Violating the law and losing the trust of your investors. Make sure you perform no fraudulent actions and comply with relevant regulations.

How do I make investors trust my ICO

Consider the options of premiums services and opportunities for early investors, an escrow wallet for them, and a process for returning the funds in case of failure.

Knowing how to start an ICO on Ethereum or other Blockchains, you can raise capital to drive the development of your project and reach your goals. Make sure that you have a truly valuable offer for investors and users, and you’re likely to reach the hard cap successfully.

Let investors know how you allocate the funds

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Darryn Pollock

$20,000 to $4,000 is Not Even Bitcoin’s Biggest Bubble, And Probably Not Its Last

The latest big dip in Bitcoin’s price is being wrongly heralded as the final bubble pop, when in fact, its decline from nearly $20,000 to now is not even its biggest
$20,000 to $4,000 is Not Even Bitcoin’s Biggest Bubble, And Probably Not Its Last

Bitcoin, having slowly declined to around the mid $6,000 mark from it’s all time high of about $20,000 in December last year, suddenly fell dramatically to worrying numbers of closer to $4,000 this past week. Many have panicked and proclaimed that this is the end of Bitcoin, and that the bubble has popped.

However, the Bitcoin price slump is only making major headlines because of its recent dalliance with the mainstream media, since about June of 2017. This so-called bubble pop is not even Bitcoin’s biggest fall, but it is certainly its most popular.

Not many people have been involved in Bitcoin for the majority of its history, and thus the collective memory of the 2011 bubble, or even the long lasting bear market of 2013 to 2015, is sorely lacking in these times of uncertainty and fear.

However, if these rises and falls were to be ranked, the fall from the all time high to today only ranks as Bitcoin’s fourth worst bubble.

Looking back at the bad

The three other big bubbles in Bitcoin's history have seen as much as 94 percent of its value wiped out.

From June to November in 2011, the price of Bitcoin was at a high of $31 but fell dramatically in less than six months to around $2, showing a fall of 94 percent. The recovery period for this collapse, and for Bitcoin to reach a new high of over $31, was just over 1.5 years.

The next big bubble saw Bitcoin go from $259 to a low of $45, and this fall only took two months towards the end of 2014 — an 83 percent fall in value. However, Bitcoin bounced back to over take its $259 mark in just seven months.

From there, Bitcoin quickly spiked up again to $1,141, but its fall into a bear market lasted almost two years as the price bottomed out at this time at $152 — an 87 percent fall. This recovery took over three years to get right, pushing Bitcoin all the way to its $20,000 mark.

As it stands, the fall from $20,000 to $4,000 is a drop of 80 percent, and thus comes in as the fourth worst rise and fall in Bitcoin's price.

Bitcoin is not even the worst stock

So, while the cryptocurrency has had four big falls in value, ranging from 80 to 94 percent, so have a lot of major companies that are hugely successful household names today.

EToro’s Senior Analyst, Mati Greenspan, posted a Tweet highlighting major losses incurred by big players during the dot-com bubble of 2000.

Companies such as Amazon have felt loses as big as almost 99 percent; in fact, all the ones he tweeted about lost over 96 percent of their value in the Dot Com bubble burst of the 2000s.

Been here before

The real takeaway from this latest publicised collapse in price is that the mainstream media is really only aware and cognisant of what has happened to Bitcoin since June of last year, when they started taking note.

For the rest of 2017, they reported on its huge growth for the first time, and now they are reporting on its massive drop for the first time — but this is not the first time this has happened, and it probably won't be the last, either.

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🎤 Interviews Katya Michaels

Adult Industry on Blockchain: Leah Callon-Butler Changes State of Play

🎤 Interviews
Applying Blockchain in the adult industry might just be the use case to drive mass adoption.
Adult Industry on Blockchain: Leah Callon-Butler Changes State of Play

While the adult industry has proven to be the driver of tech innovation and adoption - such as VHS and streaming - in the past, there is also a great deal of social stigma attached to both working in the industry and consuming its products, even when those activities are perfectly legal.

Among Blockchain developers and investors, too - few give serious thought to the disenfranchisement of adult business entrepreneurs and the lack of data security for users and providers. Just ask Verge, whose announcement of a partnership with Pornhub seems to have done irreparable damage to the asset…

But Leah Callon-Butler, co-founder and Chief Impact Officer of Intimate, a cryptocurrency and platform aiming to facilitate payment and trust for the adult industry, believes this to be an ideal use case for Blockchain - here’s why.

 

Social impact

 

Katya Michaels: Could you give me a brief story of how you became a Blockchain entrepreneur?

Leah Callon-Butler: I've always worked in emerging technologies and helping really early stage companies figuring out how they were going to find their first customer, across lots of industries but focused on sales and business development. When I was doing my MBA, I found that I had a real passion for the social impact.

It led me to work with a lot of really cool companies and startups, including the renewable energy industry. With that, I could see that it was completely centralized and I couldn't really see how that was ever going to change if we couldn't actually change the way that power was produced and shared with people across the markets.

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A few years later, my mentor introduced me to this case study, the Brooklyn Microgrid, which was essentially peer-to-peer energy trading between neighbors. And this had never been done before because for energy markets were always centralized power plants.

When I discovered this technology, it blew my mind. I couldn’t imagine a world where we weren’t controlled totally by centralization.

When I started to look into it, I saw that everyone was trying to apply Blockchain to everything because it was so hot right now, but at the same time it was kind of infantile and a needed really smart people around it to be able to apply it to an industry use case that really needed it.

So I got a bit obsessed with trying to find the right use case that needed decentralization. What I learned was that there was actually a lot of parallels between the issues that exist in the adult industry and what I've been working on with other projects around social impact. Particularly with things like gender equality, power inequality in the greater world, developing economies and concepts around identity and micropayments.

Actually, this is the perfect use case for blockchain where we can enable transactions, but at the same time empower people who have been neglected and stigmatized by society.

Mass adoption

KM: The adult industry has always been a driver of innovation and technology. Do you think that Blockchain for the adult industry is the key to mainstream Blockchain adoption?

LCB: There's probably no other industry in the world where you would see such a cross section of all walks of life - from workers to consumers to business operators.

This is a basic human need that is relevant to pretty much everyone across the world. Don't take it from me - one of our biggest investors, which is a large crypto fund called Alphabit, they put in over a million dollars into Intimate and they said that they were very inspired by this because this was the project that crypto had been waiting for in terms of a real use case and possibly the first to drive mass scale adoption.

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Pseudonymous reputation

KM: Cryptocurrency itself promises to provide privacy, transparency and ease of payment. What does the Intimate token do for the adult industry that cryptocurrency cannot?

LCB: This is one of the most common questions that we’re asked and I never tire of answering it, because I think we should actually ask this question of every single coin on the market. We should always be asking, in the first place, is Blockchain needed? And secondly, do we need another coin?

A lot of people confuse us with being a privacy coin. We are highly concerned about user’s privacy, but what we offer is pseudo anonymity. Where we go beyond something like Bitcoin or Monero or even just cold hard cash, is that Intimate has a reputation system.

Consumers want to be able to transact privately, but service providers and business operators need to be able to establish trust through data disclosure. How do you solve this? Through pseudonymous reputation.

Peer to peer networks are changing who we trust and why we trust them, but those existing systems, like Uber or AirBnb, despite their merits, are still centralized and controlled. There is no system that allows you to port your reputation from one platform to another.

What Intimate is doing is creating right from the start a reputation system that is industry wide. So no matter where you are transacting with various entities, you can build that reputation in one place and port it to another, but also be in control of that data.

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Voluntary disclosure

KM: One thing that I find continually fascinating about Blockchain is that it promises absolute privacy and absolute transparency at the same time. How do we make sure that what needs to be private stays private and what needs to be transparent stays transparent and not the other way around?

LCB: That's why we’re really clear about the fact that we don't provide anonymity. We've taken a really hard line on this and obviously you can't be the solution for everything.

Some people feel that cryptocurrency is designed to hide things and to help people hide their tracks. There was a certain point in time where that was true, but today some of the biggest proponents of Blockchain technology are banks and governments because they've seen what it could do to improve efficiency and transparency.

How can we take this technology and apply it to industries that people have traditionally thought of as “bad” because they've been run by underground shady characters? If we can start to bring some transparency and accountability to these industries while still applying the benefits of privacy, that is really powerful.

The point is that no one should have control over your information. So the key for me is voluntary disclosure, that you own your data and only you get to choose if and when to disclose it.

Trust and responsibility

KM: I feel like Blockchain is not just a technology, but a social construct. Do you think that people are ready to put their trust on the Blockchain, but also to take ownership of their data and take responsibility for their decisions?

LCB: That’s such a massive question. If I can relate it to what's happening right now, Mark Zuckerberg is in a lot of hot water because of the Facebook debacle. That’s actually been great for us because it makes very clear that data privacy is important to everyone, not just sleazy men who want to cover up something they were doing online.

It's great that we're having this conversation right now, because a lot of people are saying, “Hey, do you really have to right to own my data and who gave you that right and what are you going to do with it?”

But your question was, are people ready? I'd say no, they're not because Blockchain also puts all of the onus back onto the individual and that's what makes it so difficult. It seems great to get rid of trusted intermediaries, but they also provide a level of insurance and protection. If you lose your banking password, we can give you a reset button. If you lose your private key, sorry, you’re screwed.

There is also things like governments - a lot of people get upset about paying taxes, but taxes go toward paying for things that we take for granted in our everyday life, like schools, garbage trucks and police. That's why we need solutions that are gonna come in kind of halfway, take the benefits of what's there and take baby steps towards what the future could be.

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The state of play

KM: I just wanted to finish up by saying congratulations on the Golden Token nomination! What does it mean, to be nominated in that category, as Female Leader of the Year?

LCB: It means everything!

I got into this space because I saw that this technology had far greater power to be able to reimagine the state of play.

I guess I'm relatively new to this space and sometimes it's hard because you think - if I'm not a computer scientist or an engineer or a mathematician or a cryptographer, then maybe I shouldn't be here.

But I have different skills that I bring to the space and the social impact is something that I'm really passionate about - seeing more women in technology, more women recognized for what they do. Diversity and inclusion is one of the most powerful mechanisms of competitive advantage that we have.

Blockchain is a space where it's all about decentralization, it’s about giving power to the least represented and the most vulnerable.

To be nominated for an award like that is powerful for me because, let's be honest, I work in a controversial industry. Some people will not agree with what we're trying to do, but we push on despite that and we have a vision to change the world for the better.

I guess I was never one to really kind of take the road more traveled. The more that people want to push back on me and tell me that this industry shouldn't be respected and that there isn't a place for it, it only drives me more to keep doing exactly what we're doing. There's a big opportunity to do a lot of good here and that's what makes me leap out of bed every day.

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Darryn Pollock

Bitcoin’s Bubble Has Popped — What Can We Learn From History?

We can officially call Bitcoin a Bubble, but that does not mean its pop has doomed it forever, as history shows
Bitcoin’s Bubble Has Popped — What Can We Learn From History?

When Bitcoin was gaining in value by thousands of percent month on month, many called this a classic speculative bubble. There were also many who were vehemently against such assertions, stating that Bitcoin was marching to its own beat and could not be pigeonholed in such a manner.

However, now with hindsight firmly in place, it would be hard not to call this price movement from $1,000 in January 2017 to $20,000 on December 17, 2017, and now back down to the mid-$3,000 mark a year later, a price bubble.

However, bubbles are not that rare of an occurrence for us not to learn anything from them. There have been multiple bubbles across multiple markets. Some have ended in disaster and the death of an asset, but others have benefitted from such bubbles.

A look back historically at the nature of speculative price bubbles can give some insight as to where Bitcoin could be heading in the next few years.

Back in the day

Charles Mackay, in his book Extraordinary Popular Delusions and the Madness of Crowds, published in 1841, explains how whole communities could “fix their minds upon one object and go mad in its pursuit. Millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first”.

This is the very nature of the speculative bubble, and his prime example of the time is the Tulip mania that gripped the Netherlands in the early 17th century. Tulip bulbs soared in value to sell for up to 25 000 florins each (close to $35,000 in today’s money) before their price collapsed.

But, Bitcoin’s bubble has actually been seen to be one of the biggest based on the multiple values of the asset at the start.

Back in the day

Understanding Bitcoin’s bubble

It must be remembered that Bitcoin was sparked into existence off the global economic crisis of 2008, and what followed from that massive market downturn was an upward trajectory. Media attention, stories of 1,000 percent gains, surged interest in speculative investors who flooded into the Bitcoin market at an astronomical rate.

The news stories then turned to people who were buying the asset with credit, or even mortgaging their houses to get in on the frenzy. As this frenzy reached higher and higher levels, it started attracting more attention from regulators and governments who knew they had to start putting in some checks and balances and make a decision on how this wave would be incorporated.

The downturn

No one can really put their finger on what cause Bitcoin to suddenly, and sharply, turn from $20,000 and start its run down, but because the cryptocurrency market is such a liquid one, the fall was steep, and this added to the panic selling.

Speculators are easily scared off, and their sell off often causes a snowball effect which can be devastating. This was seen in other bubbles through history. The stock market crash of 1929 was a prelude to the Great Depression of the 1930s. The collapse in Japanese asset values after 1989 heralded a decade of low growth and deflation. The dot-com crash of 2000/2001 destroyed $8 trillion of wealth.

Where does this leave Bitcoin?

There are different ways that different bubbles can play out, and it usually depends on the asset itself. Obtaining a realistic estimate of Bitcoin’s intrinsic value is tricky because it is not an asset that generates a periodic cash flow, such as interest or rental income.

But it is also based on scarcity, and Bitcoin has a limited amount, which is in its favour.

However, Bitcoin is also based upon a technology, in Blockchain, and much like the Dot Com bubble, it is possible that the speculators can be flushed out by this price drop as the underlying technology (the internet in the Dot Com case) grows at a more sedate and steady rate.

It is possible that Bitcoin could not be the same as it was at its height going forward, but it is very unlikely that the entire cryptocurrency side of things will go away, predicated mainly on the importance of blockchain.

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Darryn Pollock

What Will Be the Next Event to Boost Bitcoin Up?

Many investors are waiting for Bitcoin next big break out as it creeps over $7,000, but will it be the ETF,a short squeeze or a global economic collapse that causes this?
What Will Be the Next Event to Boost Bitcoin Up?

As Bitcoin slowly crawls its way back over the $7,000 mark, there is some small optimism returning to the market. However, the massive rallies which investors got used to circa November and December of 2017 seem like a distant memory.

That is not to say that they cannot happen again, but in order to really kick-start the cryptocurrency back on a path of solid upward gains, something needs to catalyze the move.

Currently, there are a few things on the horizon that could spark Bitcoin back into life- such as the ETF decision or even a short squeeze, but there are also bigger socio-economic factors that could make Bitcoin a must-have asset.

Waiting on the SEC

The ETF decision by the SEC has become a major talking point for Bitcoin investors as institutionalized money movers wait to see if they can leverage a traditional tool in a non-traditional market.

The effect of this decision has already been felt as the SEC has denied and delayed a few applications already. This negativity has caused the markets to fluctuate and predominantly head in a downward trajectory.

The negative news from the ETF decisions may have caused some lows, but Bitcoin price has been strong enough to come back indicating that there is still strong sentiment in the market as it waits for a potentially big announcement.

A short squeeze

While news of an ETF could cause a massive spike in the price of Bitcoin, just like it did for gold a few years back, there is a more short-term instance that could help Bitcoin price get up and out of its position between $6,000 and $8,000.

A short squeeze is something that happens in commodities markets when there is an increase in value at a sharp rate. This then forces the short sellers to eliminate their short positions. Currently, there is steady growth in long positions on Bitcoin, and this could be a sign of things to come.

As more long positions are created, short positions start to suffer, and as the price goes up slowly, it could reach a critical point where the short squeeze comes in and the short sellers liquidate their position to cover the losses.

If this happens, there could well be a decent spike in price, but perhaps not the rally that many are looking for.

A global crisis

Bitcoin has also changed its path since it was sitting at $20,000. In December, Bitcoin was a hot commodity because it was so valuable

and ever-growing, however, its core function as a currency was lost. It was too expensive to use for transactions, as well as too slow.

However, Bitcoin is no longer slow and expensive, and although the scaling issue is not resolved, it can function better as a currency currently- and there are other coins that are working to that mantle in different areas.

But, if there were to be more economic woes across the globe- as was seen with the Greek crisis and the general worry in the Euro-zone, Bitcoin could again become a popular alternative, and with its advancements in such a short space of time, it may be even easier for others to adopt.

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