All posts by Thomas_Prendergast

Network Costs Bite As LocalBitcoins Introduces Deposit Fees

Network Costs Bite As LocalBitcoins Introduces Deposit Fees

    

LocalBitcoins has announced it is introducing Bitcoin deposit fees

from June 21 due to rising Bitcoin network fees. In an email to users on Tuesday, the P2P marketplace explained that the Blockchain space required to manage deposits outweighed withdrawals and that fees, therefore, needed to be levied on the process. “In the Bitcoin network managing deposits uses up a lot of blockchain space while handling a withdrawal uses up much less space.

This means that a large part of the old Bitcoin transaction fee was for covering costs related to deposits,” the email reads. “By introducing deposit fees customers who make many small deposits will pay a larger share of the overall transaction costs and customers who send out transactions will enjoy lower fees.” LocalBitcoins is only the latest Bitcoin business to introduce increased rates as a result of network usage costs.

While withdrawal fees are decreasing, a similar move this week from exchange Kraken came as a result of user backlash over its previously proposed fixed-rate Bitcoin withdrawal fee of 0.025 BTC ($6.20). LocalBitcoins’ new fee schedule will be dynamic, equal to “about 3x the amount of sending fees” – the reduced withdrawal fees. “LocalBitcoins is committed to improving the situation,” the platform continued on the topic of future developments. “We'll invest resources towards developing various offchain technologies, transaction batching and other tools to make using Bitcoin cheaper for our customers.”

Chuck Reynolds


Marketing Dept Contributor
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Bitcoin Volatility Reaches Fee Estimates As Prices Stay High

Bitcoin Volatility Reaches Fee Estimates As Prices Stay High

    

Volatility is not just affecting Bitcoin’s price itself;

it is also hitting Bitcoin fee estimates as transactions continue to be slow and expensive. Data added to Twitter by BitGo engineer Jameson Lopp shows a giant increase in spreads of BitGo’s estimated most appropriate fee level for a Bitcoin transaction since the end of May. The action contrasts markedly with previous data, which on a graph produces almost entirely flat lines.

Volatility appears to have increased in step with transaction fees themselves. According to 21.co’s fees calculator, the “fastest and cheapest” option on Tuesday is 390 satoshis per byte, down from the previous levels of 450, which also coincides with slightly reduced estimation volatility.

Not all were convinced of the interest of the data, however, one respondent to Lopp describing the findings as “rather boring” when the number of stuck transactions is taken into account. On that topic, the size of the Bitcoin mempool has, in fact, decreased in recent weeks, coming down from all-time highs seen mid-May. Reductions accelerated in line with a drop in prices on Monday but have since reversed as a correction hit.

Chuck Reynolds


Marketing Dept Contributor
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-Bitcoin.

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Repeating Bitcoin Price Fall With Ethereum Gain Will Cause Flippening: Bruce Fenton

Repeating Bitcoin Price Fall With Ethereum Gain Will Cause Flippening: Bruce Fenton

    

Ethereum will become the biggest coin if the past 24 hours’ performance repeats

Former Bitcoin Foundation Executive Director Bruce Fenton has said Ethereum will become the biggest coin if the past 24 hours’ performance repeats. In a tweet on Monday, Fenton said a reoccurrence of Bitcoin’s nine percent fall coupled with Ethereum’s 15 percent gains would result in the latter becoming the world’s largest cryptocurrency. Fenton added that those investors who pulled out following yesterday’s drop in price had likely performed a “bad trade” as a correction gets underway. Ethereum’s mammoth leaps have caused it to become the new focus of community attention, as various sides argue over its true value.

Flippening

On Sunday, Twitter commentator WhalePanda released an extensive post on ETH, arguing why it was inferior to Bitcoin on a technical level. Unlimited supply, ICO hype and other factors contributed to the view that the asset was more likely part of a significant bubble than Bitcoin. Nonetheless, Bitcoin’s dominance is slipping fast, by market cap now controlling only 40.5 percent of the total. With further robust trading, very little stands between here and what is known in the crypto community as the ‘Flippening’ – where ETH’s market cap usurps that of BTC.

Chuck Reynolds


Marketing Dept Contributor
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Blockchain Startup Stratumn Closes European Record $7.8 Mln Series A Round

Blockchain Startup Stratumn Closes European Record $7.8 Mln
Series A Round

    

Business-to-stakeholder Blockchain startup Stratumn

has raised €7 mln ($7.82 mln) in a joint venture with names including Nasdaq and Digital Currency Group (DCG). Stratumn, which launched in 2015, says the Series A round represents the “largest” such investment closure in the European Blockchain space.

“Our new investors will enable Stratumn to continue and accelerate its development and more effectively address growing needs in our markets,” CEO and Co-Founder Richard Caetano said in a press release this week. “We are especially happy with the continued and increased support from Otium Venture, who have accompanied us for a year, and excited to welcome CNP Assurances, Nasdaq and Digital Currency Group, who will help us reinforce Stratumn’s presence in the insurance and capital markets sectors.” DCG head Barry Silbert gave special welcome to the startup, which he described as having joined the investor’s “family” of projects.

Silbert added:

“Stratumn’s Proof of Process Technology solves critical challenges around verifying and auditing the integrity of data used to make critical business decisions, and we look forward to helping the team build partnerships across our network of blockchain service providers and enterprises.”

DCG-owned Grayscale Investments’ Bitcoin exchange-traded GBTC, meanwhile, is now trading as if the price per coin were around $5,220. As commentator Tuur Demeester noted on Friday, this represents an 85 percent premium over net asset value.

Chuck Reynolds


Marketing Dept Contributor
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Norwegian Investor’s “All-In” Bitcoin Buy Hits National Headlines

Norwegian Investor’s “All-In” Bitcoin Buy Hits National Headlines

    

A Norwegian investor’s decision to sell all his shares for Bitcoin

has seen the virtual currency hit the front page in the national press. Business newspaper Dagens Næringsliv reported on Friday how Kristoffer Hansen, by day an IT advisor from the town of Trondheim, turned in everything he had in return for Bitcoin as prices hover around $2,800. “I sold all my shares and put everything on Bitcoin. I’ve gone ‘all in,’” he told the publication. While the exact amounts at stake are not known, the event is a further example of Bitcoin’s increasing prominence among traditional fiat investors.

Like Hansen, who had been “watching” the cryptocurrency for the past five years, big players across the world have lately seized the chance to come on board as signs of a long-term price uptick remain. Exchanges from the US to Japan have seen up to 640 percent increases in new users since January this year. Last month, Australian billionaire Mike Cannon-Brookes also revealed he had taken a gamble on Bitcoin several years ago and that this was now “paying out well.” "Do not look at the small fluctuations, look at the long run, and think where Bitcoin is going to be in about five to ten years," Hansen meanwhile added.

Chuck Reynolds


Marketing Dept Contributor
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-Bitcoin.

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Russia Considers Ban On Tor, VPN Networks

Russia Considers Ban On Tor, VPN Networks

    

Russia’s state parliament the Duma is considering banning VPNs

if they do not agree to block access to online content blocked by the government. As reports Russian local news media, deputies are considering giving access to the state register of banned websites and obliging VPN operators to block them. The state communications regulator Roskomnadzor would be responsible for instigating the plans, which are currently at the first level of consideration.

“Should they refuse, the authors of the bill would impose a 30-day ban on such services,” Lenta reports. Separate initiatives are targeting mirror sites of those banned, as well as search engines of any sort, which would be required to remove certain content from results presented to Russian users. Roskomnadzor routinely blocks websites for Russian IP addresses, yet this often appears haphazard in its implementation, with sites disappearing and reappearing at random intervals.

Last year, popular cryptocurrency resource Localbitcoins was able to circumvent its ban in Russia using the Localbitcoins.net mirror site, something which in future might theoretically no longer be possible. The country has reversed its stance on cryptocurrency itself recently, going from suspicious to supportive in a matter of months. The bill’s creators also made reference to the Tor browser, arguing the methods of banning content nowadays were “ineffective.” It is not understood how lawmakers would go about imposing a ban on Tor itself.

Chuck Reynolds


Marketing Dept Contributor
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Fee-For-All: Kraken to Charge Almost $7 for Bitcoin Withdrawals

Fee-For-All:
Kraken to Charge Almost $7
for Bitcoin Withdrawals

    

The effect of Bitcoin fee increases on businesses

continues as major exchange Kraken announces BTC withdrawals will now cost $7. In a circular to customers on Thursday, Kraken, which together with Coinbase is one of the US’s largest cryptocurrency exchanges, said the move “brings the withdrawal fee more in line” with costs. “Kraken always pays a miner fee that is sufficient to ensure transactions are processed quickly,” it said.

“However, the average miner fee required to prioritize and confirm Bitcoin transactions has been increasing for some time without a corresponding increase in the fee we charge to clients.” The new withdrawal fee will be a fixed 0.0025 BTC per transaction, currently equivalent to around $6.75. Like Coinbase, Kraken is feeling the pinch from a combination of increasing fees and increased transaction numbers as a wave of new adopters come on board. Along with Bitcoin, the withdrawal fee for USDT tokens also increased, coming in at 5 USDT as the token utilizes the same network. Gnosis also came in for rises, this time to 0.004 GNO, Kraken saying this was due to a fall in the token’s value.

The move appears to be a precursor to what officials are calling “more dynamic” fees which will be active in future. These will track current miner fee rates, offering customers a suitable fee at the time of the withdrawal request along with more closely matching Kraken’s own costs. Reactions were predictably dry, with users suggesting trading and withdrawing other coins with lower fees, including Ethereum (ETH) and even Dogecoin, the latter attracting fees of around one cent.  Yesterday, Blockstream’s Adam Back suggested Bitcoin users would ultimately accept paying up to $100 per transaction.

Chuck Reynolds


Marketing Dept Contributor
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-Bitcoin.

TP

Bitcoin Users Would Pay Up To $100 Fees: Adam Back, Bruce Fenton

Bitcoin Users Would Pay Up To $100 Fees: Adam Back, Bruce Fenton

    

Blockstream developer and Hashcash creator Adam Back has said

he would pay $100 Bitcoin transaction fees, and “bets” users would too. In a Twitter post, Back responded to a similar assumption by ex-Bitcoin Foundation Executive Director Bruce Fenton, who considered users “would be willing” to pay $20 fees. Both added that lower fees would be “good” and “preferable” respectively.

The comments come amid continued broad frustration among Bitcoin users regarding high fees and associated long transaction processing times. Coinbase has come in for specific criticism, with multiple reports of higher fees for using the wallet and exchange service compared to others on the market, often with noticeable advantages.

Back’s comments produced mixed reactions. While some said $100 per transaction would not be accepted by users of a decentralized apparatus, entrepreneur Alan Silbert appeared to agree, responding that the security element of Bitcoin would see investors pay the price for peace of mind. Silbert added too that he “did not want to see” such high fees. Elsewhere, the vat of unprocessed Bitcoin transactions known as the mempool has been steadily decreasing in size so far this month, coming down from highs at the end of May.

Chuck Reynolds


Marketing Dept Contributor
Please click either Link to Learn more about
-Bitcoin.

TP

Cofound.it Completes World’s Biggest Presale With $15 Mln

Cofound.it Completes World’s Biggest Presale With $15 Mln

    

Decentralized startup incubator Cofound.it has broken the record

for the biggest presale ever, raising $14.8 mln and subsequently canceling its planned ICO. In a press release on Wednesday, Cofound said that all its CFI tokens had been snapped up by investors within 60 hours of the presale starting June 4. “Cofound.it offered pre-sale access exclusively to its most engaged supporters via its innovative Priority Pass mechanism. The highly-successful pre-sale means the token crowdsale scheduled to commence today will not take place,” the startup said. Plans for the ICO, released last month, included a roadmap based on the assumption token sales would reach $12.5 mln.

“As Cofound.it moves into the next phase of developing its distributed venture capital platform that connects exceptional startups with world-leading experts and investors, we would like to humbly thank our supporters and investors for helping us close out our pre-sale in such grand fashion,” CEO Jan Isakovic continued. “Together, we have set a new benchmark and set of best practices for startups to launch high-volume crowdsales.” CFI will be issued to investors seven days after Cofound performs an “audit” of the sale, and is expected to trade on “major exchanges,” details of which are yet to be confirmed

Chuck Reynolds


Marketing Dept Contributor
Please click either Link to Learn more about
-Bitcoin.

TP

An Introduction to Cryptoeconomics

An Introduction to Cryptoeconomics

The Concept of Cryptoeconomics

In this guide, you will be introduced to the concept of cryptoeconomics and how it has given birth to an entirely new digital multi-billion dollar industry.

What is Cryptoeconomics?

Cryptoeconomics is a concept as well as a new term and, hence, has no official definition yet. According to Ethereum developer Vlad Zamfir, cryptoeconomics is “a formal discipline that studies protocols that govern the production, distribution and consumption of goods and services in a decentralized digital economy. Cryptoeconomics is a practical science that focuses on the design and characterization of these protocols.” The Ethereum Wiki defines cryptoeconomics as “the combinations of cryptography, computer networks and game theory which provide secure systems exhibiting some set of economic dis/incentives.”

While the founder of TheControl, Nick Tomaino, explains cryptoeconomics as “the study of economic interaction in adversarial environments. In decentralized P2P systems that do not give control to any third party, one must assume that there will be bad actors looking to disrupt the system. Cryptoeconomic approaches combine cryptography and economics to create robust decentralized P2P networks that thrive over time despite adversaries attempting to disrupt the network.” In simple terms, cryptoeconomics is a new field of study that analyses economic interactions in the decentralized digital economy that was pioneered by bitcoin. It is the foundation on which cryptocurrencies and digital assets are built on.

How Cryptoeconomics Changed Peer-to-Peer Networks

The Bitcoin network was not the first decentralized peer-to-peer network. Before Bitcoin, we had peer-to-peer file sharing platforms such as Morpheus, and Kazaa, where users from across the world would share files with other members of the decentralized peer-to-peer network. However, what these file sharing platforms were missing was an economic incentive. Without economic incentives, there was little reason for users to keep seeding files that take space on their computers so that other users can download them. Aside from the legal aspect of sharing copyrighted material, a lack of economic incentive is what contributed to the demise of the above-mentioned platforms.  

Satoshi Nakamoto, the anonymous creator of Bitcoin, however, managed to create an economic incentive to uphold Bitcoin’s peer-to-peer network. He introduced Bitcoin mining rewards for those who used their computing power to secure the blockchain and to process bitcoin transactions. This was the birth of cryptoeconomics. Before bitcoin was created, it was believed that it was impossible to achieve consensus among nodes to develop a decentralized digital currency system due to the Byzantine General’s Problem. However, due to the implementation of the proof-of-work consensus mechanism that allows Bitcoin network participants to receive new bitcoins for enabling the network to function, this previously “unsolvable” challenge was resolved. Today, the Bitcoin network has become an internationally thriving peer-to-peer payment system that has a market value of over $45 billion dollars and a single bitcoin is worth more than a troy ounce of gold.

The Evolution of Cryptoeconomics

Bitcoin was the first technology to implement a rewards system to a cryptographically secured peer-to-peer network. Due to the network’s open-source nature, many other cryptocurrencies followed that were built on top of the technology that Satoshi Nakamoto has created. Many new “altcoins” were merely bitcoin clones while some had new features that improved on their pioneering predecessor. Litecoin, for example, provides faster transaction times than bitcoin while DASH and Monero provide complete transaction anonymity. These cryptocurrencies, however, all use a proof-of-work mechanism similar to that of their predecessor, bitcoin. A new blockchain that has introduced new concepts into the world of cryptoeconomics is the Ethereum Project. Ethereum was developed by Vitalk Buterin and officially released on July 30, 2015. Ethereum differs bitcoin in three key ways, which are also helping to reshape the dynamics of cryptoeconomics.

Proof-of-Stake vs. Proof-of-Work

The bitcoin network uses a proof-of-work consensus mechanism, which means that participants who want to earn rewards through bitcoin mining need to use their computational power to maintain the network by validating and processing transactions. For this work, they receive financial rewards in the form of new bitcoins. However, the proof-of-work mechanism is very inefficient. Not only is it expensive to maintain bitcoin mining hardware, it also requires a substantial amount of energy to keep the bitcoin network running. According to Vice Motherboard, the bitcoin network is projected to consume as much energy as the entire country of Denmark by 2020.

Ethereum, however, is addressing this cryptoeconomic inefficiency by moving towards a proof-of-stake consensus. A proof-of-stake consensus mechanism enables users that hold the cryptocurrency ether, to receive rewards for validating transactions without the need for electricity-intensive mining hardware to be used. Ethereum still runs on proof-of-work but it is expected to switch to a proof-of-stake consensus mechanism within the next two years.

Monetary Policy

Bitcoin has a hard coded monetary policy built into its network, which allows for 21 million bitcoins to be created in total and, thereby, limits the supply of bitcoins. Furthermore, the rate at which bitcoin are created halves every four years. Bitcoin miners (those who enable the network by validating and processing transactions) are rewarded with the newly created coins. Ethereum’s monetary policy does not involve a finite number of ether that can ever be created, which could be seen as a negative. However, as Ethereum moves towards proof-of-stake, the holders of ether will be the ones to receive new ether for validating transactions. This is considered a more inclusive way of distributing coins than Bitcoin’s proof-of-work approach, which favour large well-funded centralized mining operations.

Different Script Language

Ethereum also uses a different scripting language than bitcoin, which allows for decentralized applications and smart contracts to be developed on top of its blockchain. This makes Ethereum and much wider applicable blockchain than Bitcoin's and adds entirely new layers to the field of cryptoeconomics.

The Future of Cryptoeconomics

It is hard to predict the future of such a new field of social science. However, the developments in cryptoeconomics in the past decade or so are suggesting that cryptoeconomics has the potential to play a major role in society. Through the use of trustless peer-to-peer payment networks and self-executing smart contracts, intermediaries can be alleviated while payment speed and security can be increased. As technology becomes an increasingly important part of our day-to-day lives it would only make sense for economics to become part of that too.

Chuck Reynolds


Marketing Dept Contributor
Please click either Link to Learn more about
-Bitcoin.

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