Yuri Molchan

Taringa! 27 Mln Users Social Network Based in Latin America Launches Its ICO

Taringa’s ICO concept is expected to be announced Tuesday in Buenos Aires
Taringa! 27 Mln Users Social Network Based in Latin America Launches Its ICO

Taringa! is a social network that some call the Reddit of Latin American users. Launched in Argentina in 2004, it boasts 27 million registered users who create and share thousands of life hacks, tutorials, recipes, reviews and opinions daily.

The ICO concept is expected to be announced Tuesday in Buenos Aires by Taringa’s CEO Matias Botbol.

Income charing

Taringa is a social platform similar to a sub-Reddit where people share, search and find all kinds of information, organized by communities that are created and shaped by the users themselves.

In 2015, they’ve put under the hood a system of income distribution, that paid users in Bitcoin a percentage of the revenue that their posts generated. The program started in Beta and have reached about 35 000 users, but they decided to suspend it due to certain technical and audit difficulties, that would have prevented its scaling should they decided to open it to the wider community. So they were reducing it slowly, so at the moment they have a tiny group of 2500 users that keep using the program.

The ICO press release says:

“In December, 2017, we have started to rethink the program introducing an utility token, that allowed to decentralize the platform and generate a self-sustaining economy based on our current concept”.

The idea of the system how it is described in the release is the following:

Feed

The system is developed on the basis of subscription to users or channels, so that any person can follow different channels in a personalized feed, where content is ordered by an algorithm, that highlights these content elements in the channels in accordance to their relevance. In that manner, the user can read the information on relevant topics, that also have been upvoted by other peers with similar interests, creating a democratically curated feed.

Channels (communities)

The channels are topical spaces that anybody can create, with two base rules that establish their economy and governance.

Within these channels, other users can generate posts, vote on them (positively or negatively), comment on them, report them for breaching the rules of a channel, and promote them (using the token).

The administrator or administrators of the channels can establish economic and governance rules. These can later be changed in the future, should a necessity to do so arise.

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Economic rules

The adminstrator(s) establish economic rules that facilitate the charging and payment for actions performed in the channel.The channel is only entitled to distribute revenue that have been charged in relation to actions within this channel.

The actions that can be charged or paid for are the following:

  • Subscribe to a channel
  • Create a post
  • Comment on a post
  • Vote on a post
  • Report a post
  • Moderate a post

Additionally, the very system algorithm, allows to promote a post for a fee (varies from channel to channel and is calculated automatically and mathematically), to position that post on a better location within the content feed. This is how any person or company that desires to highlight their content, or content of a third party, may pay to increase the exposure and relevancy of the post in question.

All revenues generated by charging of these activities are collected by the channel and distributed in accordance to pre-established rules.

Additionally, special rules of revenue sharing may be established for the posts that have been voted better (for example, those who have stayed on top positions of the feed during certain periods of time), or for users who voted or commented on the most highlighted posts.

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Governance norms

The administrator(s) establish the rules of governance for their channels, including a decision-making process of changing economic rules, rules of content, moderator staff and governance rules themselves. In that manner, both persons and groups can administer channels on the basis of democratic, hierarchical or other rules.

All this ecosystem will be developed on top of the existing Taringa! community, whose contents are already organized in that way, with channels, moderators, administrator, content generators and users who interact with all these.

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🕵️‍ ICO Watch Eric Eissler

Leadcoin Leads on Dive to the Bottom: Past-ICO Review

👁 ICO Watch
So you’re tellin’ me I can buy your lead?
Leadcoin Leads on Dive to the Bottom: Past-ICO Review

Leadcoin doesn’t seem to be leading the way for much, with a CoinMarketCap rank of 635 and a token price that plummeted from $0.087 initial price on March 27, 2018 to the current price of $0.005! Almost a 100 percent drop in value.

Despite poor token price performance, Leadcoin did manage to raise $50 mln in a 10-day ICO during March 1-11, 2018, on the premise that Leadcoin will revolutionize marketing and business practices. Haven’t we all heard that one before?

So you’re tellin’ me I can buy your lead?

The premise behind Leadcoin, founded by Shmulik Grizim, is to allow the buying and selling of hot, unused leads between businesses.

Sellers get value for their unused leads, leads find the right solutions, and buyers can buy hot leads. Everyone wins.

The everyone wins scenario finds its way into so many Blockchain-based companies these days. Sure it sounds like a good idea, but so do a lot of things until they are executed or attempted to be executed.

At this point in time, the system is not live yet so, we are in that awkward period after an ICO, where a company is sitting on a ton of cash but there is no product yet.

Sometime in Q3 2018, which is just around the corner, we should expect to see the launch of the first node, Webydo according to the website with integration to Salesforce and Hubspot by Q4.

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Leader of the pack

Shmulik Grizim is the Founder and Heads up three other technology companies within the SaaS, web design and digital marketing industries. Grizim’s most recent venture, Webydo, is a patent-protected web platform with a global network of more than 300K users. Essentially, it's a cookie-cutter website building platform without using code. Grizim specializes in building new technology corporations from the ground up, constantly searching for solutions that promote the creation of a better web for all. So he is building up new companies, letting them get started and then moving onto the next project. He is a serial Entrepreneur with his sights always set ahead on the next project. Hopefully with his sights still set on Leadcoin taking off.

Why the sharp decline in price?

We wanted to learn more about why Leadcoin dropped so much after the ICO and asked,  “Since Leadcoin’s token entered the market, the price dropped hard and then has remained at a low level and has gradually been in decline, can you give some reasons to why this is?”

While it could be market conditions or lack of confidence by investors, we were unable to get a response as to why the token has been suffering such a hard time.

Nevertheless, investment sites have given Leadcoin a “bad” investment rating and some giving it an “E-”. Perhaps, once the first node is turned on and the network starts to function it will start to increase in price, or as so many times we have seen in the crypto market, Leadcoin might continue this dumpster dive further, let’s check back after Q4.

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🎓 Trading Guide Andrew Strogoff

Best Cryptocurrency Trading Platform, How to Choose One

Trading Guide
Best cryptocurrency trading platform, the main criteria to choose them
Best Cryptocurrency Trading Platform, How to Choose One

Cryptocurrency exchanges are numerous nowadays. They offer different services and trading conditions to their clients. They have different level of security as well. Today we are going to tell you how to find the best cryptocurrency trading platform.

Why is it important to choose the best one? Those who start crypto trading, need to open an account with one or even several trading platforms. There are several criteria helping investors to make the right choice. One trading place has higher level of security, for example, but does not support fiat money. The other work with large amount of coins but have few deposit/withdrawal methods.

The importance of choosing the right place for trading is easy to explain. If the exchange does not meet your requirements, you will have difficulties when working with it. For example, you want to trade some rare coins, but the exchange does not offer big choice the its clients. You will need to look for another market to satisfy your needs.

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Main criteria to find the best cryptocurrency platform

There are several cryptocurrency exchanges currently and all of them try to attract clients as they earn via fees. In order to make the best choice, one needs some aspects to analyze. We would like to suggest several criteria that may be helpful for all categories of traders including beginner investors.

Reliability and reputation

The first thing everybody needs to pay attention to is reputation and reliability of cryptocurrency trading platform. This criterion is the main as if the platform fails (hacker attack, for example), your money (digital assets, tokens) will be stolen.

How to analyze security level of the platform? It is hard to answer this question as hackers always develop new ways to penetrate those exchanges. As for reliability, this information can be found on different websites and forums including Bitcointalk, Reddit and the others.

What kind of information do you need? Everything related to the cryptocurrency trading platform activity including troubleshooting, security measures, how platforms’ team solve problems and the other aspects.

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Another important thing is where the exchange holds clients digital assets. Earlier, most of those trading platforms used hot wallets in order to provide fast access to coins and transactions for their clients. However, the situation has changed with the growth of hacker activities. Many traders remember the situation with MT GOX and some other trading places, which were hacked. Clients lost huge amount of money there.

Most of the contemporary best cryptocurrency trading platforms use different security measures including cold wallets. They hold up to 90-95 percent of clients funds on offline servers and require multisig in order to protect users from malware that may come from administration.

Several exchanges recommend to use two factor authentication, which improves security level as well. This means that you need to receive a special code in order to do important steps when working with platform such as withdrawal, for example.

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Commissions  

All the best cryptocurrency trading platforms as well as the other trading places require commissions from their clients. The average fee is about 0.2 percent. However, recently exchanges changed their policies and establish dynamic commissions depending on trading volumes and some other important aspects.

When a trader looks for an exchange, he wants to earn more and pay less. It is logical and natural. However, we want to warn that lower fees do not mean better conditions for the trader. Sometimes such trading places with low commissions try to attract more traders as they have low liquidity.

The number of trading pairs

Different exchanges offer different number of trading pairs. The more coins are offered; the larger choice is for investors. However, we would like to mention that trading platforms may be divided into two groups here.

The first offer fiat money but low number of currency pairs. Those cryptos are interesting for those who want to start cryptocurrency trading and have no coins. Sometimes, traders choose those places first in order to buy popular coins like Bitcoin or Ethereum and then choose another platform in order to buy rare coins.

The second group of exchanges offer huge offer of different altcoins. However, there you won’t find fiat currencies.

When choosing one of those trading places you need to understand that the quantity does not mean the quality. The large number of coins is not necessary. It is better to find platform with those cryptos that trader is going to work with.

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Trading volumes

Liquidity is a very important criterion as trading volumes affect investors profits directly. Let’s suppose you choose a low liquidity coin with $500 daily volumes. It will be very hard to trade it especially when you have huge amount for trading.

This is the main reason why traders always try to find coins with higher volumes as they will be able to sell them without any problems. Exchanges have their liquidity as well. Those places with low volumes cannot provide you with high profits.

Payment methods

The best cryptocurrency trading platforms offer their clients a large choice of deposit/withdrawal including fiat money (via bank transfer), digital payment systems like PayPal, Skrill, Webmoney etc. Naturally, they provide traders with the opportunity to deposit any coin they offer for trading.

What kind of exchanges to choose according to this criterion? We think that the reply here is more than evident. The more payment methods are, the better is the exchange for every trader.

For those who do their first steps in crypto trading it is crucial to pay attention to those exchanges offering fiat money as they do not have coins and need them in order to start.

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Verification requirements

It is not a secret that almost all exchanges require verification procedure from their clients in order to abolish all limitations. Those who to stay anonymous, have less opportunities. Sometimes, they are limited in daily trading or withdrawal capabilities. However nowadays there are still those trading places where you don’t need to confirm your identity. Most of those exchanges work with large amount of coins and do not offer fiat money as deposit/withdrawal mean.

Trading platform

Those who come to exchanges in order to simply buy or sell their coins, sometimes do not need even a chart as their aim is to conduct one operation without forecasting the market. However, professional traders always need more tools to take decisions.

Several of the best cryptocurrency trading platforms give an opportunity not only to place buy or sell orders, but also to make technical analysis using different indicators, Japanese candlesticks, timeframes etc. It is important to mention than the wider the range of those tools is the more opportunities any trader has.

The majority of those full functional platforms offer Tradingview charts. Those web tools provide users with different analysis instruments including the most popular and effective indicators both trend and oscillators as well as different chart types.

Type of cryptocurrency trading platform

There are three main types of those platforms and traders or investors need to know which one to choose. The first and the most widely spread is trading platform with many features that allow clients to not only conduct their analysis and forecast future price fluctuations, but also to conduct other trading activities choosing orders types etc.

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The second type of exchanges is p2p platforms, which are designed to provide users with an opportunity to work directly with each others avoiding a book of orders. Here you find those who are interested in selling coins to you or buying them from you.

Finally, there are brokers who offer cryptocurrencies to their clients. Those companies mostly come from Forex. They offer several coins from the top 20 and huge amount of analysis tools as they are designed for professional traders and investors.

User interface

The best cryptocurrency platforms have everything traders need to improve their results. We have already mentioned technical analysis tools but there are also some other features that need to be described. In order to satisfy different traders’ categories needs, exchanges provide them with news, volumes, book of orders and other useful information allowing clients to examine market situation.

The interface should be intuitive as there are many traders who work seasonally or come there for the first time. However, user experience is subjective as different traders may enjoy different interfaces.

The best cryptocurrency trading platforms always offer best user experience and they grow faster in volumes as the others. Those trading places are able to boost in a short period of time.

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Country of residence

Another important aspect to pay attention to is country of residence of the exchange. Why is it crucial to know this? Some US exchanges do not allow traders from wide list of countries due to their regulation. The situation is the same with some Asian trading places.

Those platforms are only available for the residents of the countries where they are established. Localization is also a key moment in decision taking process. Most of exchanges offer English versions for their clients. However, some international trading places allow users to use multilingual websites including several European and Asian languages.

Support service

Finally, we would like to mention support service as one of the criteria that is important when choosing the best cryptocurrency platform. Before you take your decision, try to talk to the support service using different means that the website offers.

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Look at their reaction speed as well as at answers that they give. If they do not aspire to help their clients, it is better to choose another one.

Best cryptocurrency platforms

Now we are going to give you the list of the best cryptocurrency platforms according to our view. Check it out below:

  1. Binance

  2. OKEX

  3. Huobi

  4. HitBTC

  5. BitFinex

  6. CoinEX

  7. Upbit

  8. ZB.COM

Those exchanges have high day trading volumes and offer the best services in our opinion as those aspects are connected. The best service a trading platform offers, the more clients it will have in the future.

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SingUlarity Darryn Pollock

Dealing With Intangible Assets

SingUlarity
When it comes to company assets, intangible ones are dynamic and fluid, and are becoming vitally important when considering blockchain tokens
Dealing With Intangible Assets

Assets, commodities, and possessions in a business and financial setting have come a long way. From bartering crops and selling goods to stocks, bonds, and equities, the digitalizing of the globe has led to assets changing their face, and even their tangibility.

Now, companies and corporations are being valued on abstract concepts that fall under their intangible assets, and even determining that value through these intangible assets is starting to change. Company evaluations are shifting — they are no longer based just on pure equity but rather much more on their IPOs and publicly traded stock. This gives insight into a company that has a rich bank of intangible assets.

To this end, it is unsurprising that Blockchain assets for companies operating in this new space are starting to be viewed as a truer evaluation of the company. Cryptocurrencies can be viewed as an intangible asset, and as a new way of representing the value of a company. As these digital tokens grow in value and worth, they lend that growth and value to the overall stance of the business.

The way these intangible assets are shaping up and moving with the help of a new technological wave like Blockchain, it will eventually lead to a more distributed, transparent and thus truer and fairer reflection of a company's worth through these inclusive and attainable assets.

New intangible assets emerging

As a pure definition, an intangible asset is simply an asset which has no physical qualities to it. To be intangible means that one cannot touch, see, smell it, etc. But looking deeper into it, anything from goodwill, brand recognition and intellectual property — such as patents, trademarks, and copyrights — are all intangible assets.

However, even these assets are starting to be overtaken by another intangible asset that is emerging alongside a new technology. Blockchain companies are springing up, much like tech companies, with a solution to new problems, but these Blockchain companies come with their own assets.

Cryptocurrencies are the new intangible asset that is not only clearer and more transparent in terms of valuing their worth, but also generally better for the entire marketplace. The cryptocurrency worth of a Blockchain company can represent a much truer valuation than another company with traditional intangible assets.

In fact, the model of capitalism itself is in a state of flux. Tech companies have already tested its bounds in terms of equity and valuation, but as things move forward and more Blockchain companies spring up, the general idea of capital in a capital-free system will make valuations incredibly difficult and inaccurate. However, a cryptocurrency allows for market value to be attributed as a new form of intangible equity of a said company.

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A change in valuation

Companies are starting to be valued on much more than simple Assets - Liabilities basis. With this change comes the difficulty in valuing intangible assets. Putting a figure against brand identity is really an estimation and prone to purposeful inflation or deflation.

Tangible assets are easy to value, and thus easy to use to determine the equity of a company, but then there are some companies like Microsoft and other Tech giants that really own very little in the way of tangible assets. Their wealth is in intangible assets.

As Microsoft's founder Bill Gates puts it: “Products you can’t touch have a very different set of dynamics in terms of competition and risk and how you value the companies that make them.”

A lot of intangible assets are valued on the basis of public sentiment, and the metric for this is derived from things like IPOs and publicly traded stock. But the difficulties in determining the public sentiment from the excitement around stocks is equally difficult and often purposefully inaccurate.

Issues with the new standard in valuation

With IPOs and the resulting publicly traded stocks, the level of distribution and sentiment is often not a fair reflection. The system leaves the door open to big company investors like VCs and fund companies as well as big and wealthy individual investors that can use their money to move the markets.

These types of players always influence how the publicly traded companies work and how much their intangible assets are worth. Investment groups and companies can help prop up and lift companies, thereby influencing their true worth through their intangible assets in a way which can bring a swell of false public hype and frenzy.

In many ways, this is a form of market manipulation, as big money has all the power to pick and choose its own desirable companies to inflate. But, if stocks are being cherry-picked to inflate in order to grow the intangible assets of a company and thus give it a higher evaluation, the same cannot be said for cryptocurrencies.

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A Blockchain company’s desire is to distribute and include a vast and different arrangement for people to buy and invest in its cryptocurrency. Thus, if we take the same metric of a stock and use it against a cryptocurrency, the public sentiment is a far truer reflection because it is also on a market, but its price is heavily influenced by public sentiment.

And again, that public sentiment moves on an almost daily basis as this distributed group of ‘investors’ can easily buy and sell and trade their cryptocurrencies dependant on positive or negative news surrounding the blockchain company.

Inclusive, achievable intangible assets

Publicly traded stocks for traditional companies are technically open to all, but they are a lot harder to get one’s hands on as there is a level of exclusivity and exclusion that surrounds stock trading. Additionally, the model is not community oriented or decentralized, nor well distributed.

The more one looks at it, Blockchain assets are a much stronger and truer metric of company value. They are an intangible asset which is firstly easier to value as they operate on an open and transparent market, and secondly, they are a way to measure sentiment and growth in a company as they are far more distributed and liquid.

It allows these buyers of the token to be vested in the potential and possibility of the company; cryptocurrency assets often correlate strongly to the success of a company.

If a company is moving forward and hitting its targets on the way to its final goal, this is often predicated on the growing value of their token. It is also linked to an increase in interest and hype as more individuals buy the open and freely available token, which is then also well distributed.

So, if we consider these coins as intangible assets because they are not part of an asset which would determine equity, but they are a marker of success and sentiment in a company like a publicly traded stock, we can start to understand them a little more.

They do not have the difficulty of exclusivity, and thus are much more communal and therefore much truer as a metric by which to value a Blockchain company.

A decentralized community evaluation

People often call the cryptocurrency space a bubble since so many people are drawn to it and have bought into it, especially when it comes to ICOs and Blockchain companies. However, this is probably an unfair assessment of the space.

There is a creation of decentralized communities which are learning to accurately assess the intangible assets of companies. The shrewdness of a true distributed and decentralized collective is a determining metric that many mainstream tech companies cannot say they have as their basis for value.

Many tech companies may have had their value propped up by VCs and investment firms that helped kickstart them to success, but those in the Blockchain space have nowhere to hide. Their every move can be tracked and traced by the value of their tokens, which plays a part in their intangible asset worth and thus really in their total actual value as a business.

SingUlarity
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🕵️‍ ICO Watch Eric Eissler

Past ICO Review: Qtum Wants to be Ether, But it’s Built on Bitcoin

👁 ICO Watch
What financials show for a hybrid between Ethereum and Bitcoin protocols
Past ICO Review: Qtum Wants to be Ether, But it’s Built on Bitcoin
Contents

Throughout the many Past ICO Reviews, a common trend has emerged: many tokens are ERC20, which are built on the Ether Blockchain. This should not come as a surprise because many innovative Blockchains with tokens want to do something more than be a payment-services solution. To do that, smart contracts come into play and Ethereum is the smart contract’s king. So it is no surprise why so many companies build on Ethereum.

What is surprising is that Qtum is not an ERC20. It is built on Bitcoin’s unspent transaction output (UTXO) transaction model combined with a proof-of-stake consensus model. The developers stated that these elements of the Blockchain make it better suited for business-enterprise systems.

Financials

Qtum entered the cryptocurrency market early in 2017 with a March ICO that raised $15 mln. While it seems small compared to what has been raised over the past six to nine months, it was the fourth biggest ICO in terms of funds raised at that time in March 2017. Token prices debuted at $6.40 in March 2017 and at the time of writing are up 202 percent to $19.34. CoinMarketCap has it ranked at 18.

But now comes the questions that every cryptocurrency fears to hear: what is it good for? What can it do?

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Hybrid functions and subsequent tokens

One of the primary goals of Qtum is to be able to bridge the Bitcoin and the Ethereum world. What makes the software unique is that Qtum’s core technology combines a fork of Bitcoin Core, an Account Abstraction Layer allowing for multiple Virtual Machines, including the Ethereum Virtual Machine and Proof-of-Stake consensus aimed at tackling industry use cases.

21 Dapps and counting

Qtum has 21 Dapps on its page that are either working or a prototype. Many of them are their own coins and platforms such as Energo, which is built to measure and regulate clean energy produced within local microgrids- this model empowers consumers and allows community members to directly exchange energy in a system unburdened by the constraints of a traditional grid.

Designed with stability, modularity and interoperability in mind, Qtum is a toolkit for building trusted decentralized applications, suited for real-world, business oriented use cases. Its hybrid nature, in combination with a first-of-its-kind PoS consensus protocol, allows Qtum applications to be compatible with major Blockchain ecosystems while providing native support for mobile devices and IoT appliances.

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Quantum Team

Patrick Dai graduated from Draper University and was previously employed by Alibaba.                                         
Neil Mahi has 20 years experience developing software and has four years experience in the Blockchain space.
Jordan Earls has been developing software since he was thirteen. Jordan has reviewed over 100 altcoins and identified multiple exploits in coins.
Patrick Dai, Qtum Project co-founder, said that Qtum intends to become a smart contracts platform for business. The Qtum project will make it easier for companies and industries to develop practical applications on top of Qtum. The project envisions a future consisting of automated business practices and seamless machine-to-machine communication. In March 2017, it was announced that PriceWaterHouseCoopers (PwC) would partner with Qtum.  “Having PwC, which has broad expertise across industries and a global network, support Qtum will help us fulfill our mission,” said Dai. Furthermore, the hybrid nature of Qtum will allow it to interact with Ethereum- and Bitcoin-based Blockchains for better compatibility capitalization.

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🤷 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
Contents

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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